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The concept of business ethics denotes what is right or wrong in the workplace and doing what’s right. Attention to business ethics is critical during times of fundamental change. In such times, values that were previously taken for granted are strongly questioned. Previously, there were no ethical rules that could guide leaders during complex dilemmas about what is right or wrong. Attention to ethics in the workplace sensitises leaders and staff on how they should act. A company’s success does not only depend on its financial statements. Organisational culture, management philosophy and ethics in business each have an impact on how well a business performs in the long term.  Thus business ethics is one of the crucial aspects in the growth of the organisation.

Law is the most vital factor for any business. Famous business tycoons have their own statement of business principles which set out their core values and standards. A business is also responsible to abide by the codes of practice that covers its sector. Many companies have created voluntary codes of practice that regulate practices in their industrial sector. These are often drawn up in consultation with governments, employees, local communities and other stakeholders. It sets out principles and practices for safeguarding the security of its employees. The management is accountable for the entire company’s day-to-day enterprise. When the prevailing management philosophy is based on ethical practices and behaviour, leaders within an organisation can administer employees  and guide them in making decisions that are not only advantageous to the individual but also to the organisation as a whole.  Building on a foundation of ethical behaviour helps to create long lasting positive effects for a company, including the ability to attract and retain highly talented individuals. Running a business in an ethical manner builds a stronger bond between individuals related to the company.

When the management abides by the codes of conduct, employees follow their footsteps. Employees make faster decisions and proper planning that enhances productivity. When employees complete work in a way that is based on honesty and integrity, the whole organisation profits. They perform their duties in a responsible manner and remain loyal to their company. Business ethics resolves conflicts. Circumstances are often presented in which an employee is faced with whether or not to lie, steal, cheat, abuse another, break terms of a contract. An ethical dilemma exists when one is faced with having to make a choice among these alternatives although ethical dilemmas in the top level services of any organisation are far more complex. They can be handled better with business ethics.

Proper training required

The ethics programme is essentially useless unless all staff members are trained about what it is, how it works and their roles in it. The nature of the system may invite suspicion if not handled openly and honestly. Even with established policies, the legal system will often interpret employee behaviour (rather than written policies) as de facto policy.  So all staff should be aware of and act in full accordance with policies and procedures. The consistent ethical behaviour nourishes public image and positive reputation. To retain a positive image, businesses must be committed to operating on an ethical foundation as it relates to treatment of employees, respect to the surrounding environment and fair market practices in terms of price and consumer treatment.

The Founder of the Institute for Global Ethics, former columnist, and author on the subject of international ethics, Rushworth M. Kidder, in his book, ‘How Good People Make Tough Choices’, lays out a framework for resolving ethical dilemmas for both the lay person and the corporate executive.

1. Recognise that there is a moral issue.

2. Determine the factor. Whose moral issue is it?

3. Gather the relevant facts.

4. Test for right-versus-wrong issues. If the choice is between a right vs. wrong issue, it is a legal issue and not a moral one.

5. Test for right-versus-right paradigm. This helps bring the focus on the fact that it is a real dilemma that pits two deeply held core values against each other.

6. Apply the resolution principles. What is the line of reasoning that seems most relevant to the dilemma?

7. Investigate the “trilemma” options. Is there a third way out of the dilemma – a compromise? This question can be asked at any time.

8. Make the decision. Then revisit and reflect on the decision.