Five key ethical issues

It’s important to understand these key ethical issues.

Ethics in the workplace is not a new topic. In theory, it should always have been applicable. However, in practice, ethics is often quite a recent focus area. Consequently, leaders and managers often don’t have the breadth of knowledge or depth of understanding about ethics that they have relative to many other areas of business. But, in order to manage ethics effectively, an understanding of five key ethical issues is imperative.

1. Ethics is a choice

Two core features of ethics are that it centres on matters that have a right-wrong or good-bad dimension and that, as such, ethics involves choices. It is important to recognise that within the workplace employees almost always already know what’s right and wrong, irrespective of what behavioural choices they make. The employee who steals the petty cash or solicits a bribe knows that his behaviour is wrong.

In order to achieve more ethical conduct, the primary focus should thus not be on ‘teaching’ employees what they already know. Instead, the management of ethics needs to actively strive to influence the ethical choices employees make via the factors that most shape those choices, namely the organisation’s values, its rules (including laws and the company’s regulations, code of conduct and policies) and its leadership (who, as role models, exercise the largest impact on building or eroding ethics).

2. Values: the leader’s role

Employees also have their own personal values, which can differ widely as they are affected by a variety of factors including upbringing and culture. While individuals are entitled to their personal values, this does not always apply in the context of the workplace and the employer-employee relationship. The company may welcome those with perfectly ethical values, but that does not apply equally to employees at the other end of the value spectrum.

To address this issue, leaders need to understand that their role is not to accommodate the diversity of values in the workplace. Rather, the leader’s role is to work towards aligning employees’ values behind those of the organisation.

3. Ethics involves others as well

Another defining feature of ethics is that it does not apply only to oneself. It is about the effect of ethics and the exercise of values on others as well. In the workplace those others don’t only mean shareholders. It means the individual employee as well as external stakeholders such as customers, suppliers, trade unions and those affected by the organisation’s operations.

A further facet of workplace ethics centres on the very purpose of business. Workplace ethics continues to move beyond the view attributed to Milton Friedman, the famous American economist, that “the business of business is business”. The current approach recognises that the business of business is sustainable business. This encompasses a triple bottom line, instead of merely a single, economic bottom line, that includes organisations’ responsibility for social development and environmental protection.

Although many organisations still engage in the exclusive pursuit of maximising shareholder wealth above all else, business leaders need to recognise that this is increasingly being judged against a more broadly ethical approach that views success in terms of outcomes for others as well.

4. The new ROI: return on integrity

Embarking on a path of building an ethical culture is likely to give rise to some challenging questions, such as, ‘Does ethics matter?’ and, ‘Does ethics make good business sense?’. Leaders need to understand and champion the benefits of an ethical culture to ensure that its value is widely recognised.

The benefits include attracting and retaining top employees and board members; greater levels of trust amongst internal and external stakeholders; increased employee engagement and commitment; enhanced loyalty and support from customers and other stakeholders; improved investor and market confidence; and enhanced corporate reputation and brand equity. A strong ethical culture is also a sound defense against misconduct, which serves to reduce the risk of ethical failures and the associated costs and negative consequences.

5. From theory and sound intentions to action

Understanding workplace ethics better serves little purpose if doesn’t move from theory and sound intentions to action. Leaders need to ensure that they make ethics ‘real’ – it can’t just be talk. This entails having clear ethical goals and a supporting ethics strategy that manages ethics on a proactive basis. It also warrants that the management of ethics follows an integrated approach, ensuring that company’s ethics initiatives are coordinated and mutually supportive to achieve the maximum impact on their followers.

By Cynthia Schoeman
Published in HR Future