All You Have Is Your Integrity

Why Business Ethics Matter

When it comes down to right and wrong, everyone knows, right? Wrong. People disagree about what is right and what is wrong all the time. Ethics is always making a come back in the news. According to recent reports by the Washington Post, leaked papers describe over 30 ongoing ethics probes being conducted by the House Ethics Committee and the new ethics office. If everyone knew right from wrong, this just would not be happening.

The business world is not very different from the political world. Recent events have hit the headlines describing the next Enron, Arthur Anderson, or WorldCom. This is just too much to ignore. Business ethics is an issue. Even more fog covers the issue when the right answers – those that meet the needs of the most stakeholders: employees, customers, potential employees, shareholders, and board members – lie somewhere between the whitest white and darkest black. As much as we would like it to be different, this is not a world of black and white.

Challenges to Ethics in the Business World

Think about the following scenarios that happen every single day.

• An accountant tells a supplier that their “check is in the mail” while he hasn’t even written the check.
• A store misrepresents the quality of functionality of an advertised item.
• A salesman marks parts as “sold” in the company database denying others the opportunity to sell the parts, even though his sale is not certain.
• An employee surfs the Internet shopping for personal items on company time.
• A plant manager decides to ship product to a customer regardless of known quality problems, which the customer probably will not notice.
• An employee spends several hours a week on her cell phone talking with her children and their associated caregivers, schools, and friends while on company time.
• A manager shares important company information with a competitor for his potential gain.
• An employee takes office supplies home to stock his home office.
• A finance officer accounts questionably for purchases and expenditures.

This kind of stuff happens everyday in the business world and no one seems to take a second look. These aren’t the only things that happen either. Are the people doing these things “bad” or are they “good people” making questionable ethical choices?

Are they even considering whether these choices are ethical? Certainly the plant manager may think the most important issue is on-time delivery. An employee might rationalize surfing the web on business time because of all the over-time and time spent outside work hours thinking about the job.

Let’s consider the potential positive affect a working code of business ethics might have on an organization. It’s not about the subjective fields of philosophy, religion or academia either.

Developing a written code of business ethics will guide the decision making and actions of all stakeholders. Trust will build on a foundation of ethical behavior and integrity – a very good place for establishing successful relationships with customers, employees, the community and stock holders.

Certainly a code of business ethics will not stop unethical behavior but it will give people something to measure against, something on which to assess personal behavior.
The foundation for a functioning code of ethics is in the hands of the organization’s executive leaders. It is these people who must commit to developing the business code and leading its implementation. They must continuously emphasize the use of the code as a measurement or guideline.

Next week, I'll touch on the process of developing a code of business ethics.