Five Key Principles to Business Ethics

A recent study performed by the Institute of Business Ethics found that companies displaying a ‘clear commitment to ethical conduct’ consistently outperform companies that do not display ethical conduct. The director of IBE, Philippa Foster Black stated, “Not only is ethical behavior in business the right thing to do in principle, we have shown that it pays off in financial returns.” Part of your commitment as a business leader is to create and maintain the processes and a culture that dictates ethical behavior. Ethical behavior is not an easy path, nor is it a path taken without thought and consideration. As a leader, decision with value connections will be presented frequently. Examples could include employees stealing from the company, doing personal business on company time, modifying accounting records, or extending a customer discount that was not earned, etc. Clearly defined organizational goals and clearly stated organizational values are integral to your ability to make the best decisions and take the right actions. As you deal with different types of situations you are being evaluated very closely by your team. As you lead by example, you become a champion for the organization’s commitment to ethical behavior.

As you look to enhance the ethical policies and processes within your company, take into consideration the following five principles.

  • Be trustful: Recognize that customers and employees want to do business with an organization they can trust. When trust is at the core of an organization, it is easy to recognize.

  • Meet obligations: Regardless of the circumstances, do everything in your power to keep commitments and obligations to employees and customers. An incredible amount of trust is built when an organization honors its commitments. If unforeseen events stand in the way of meeting an obligation, immediately communicate the challenges and work together to find resolution.

  • Reevaluate all documents and materials: Make sure all department and organizational documents and literature are clear and precise. Make sure they don’t misinterpret or misrepresent.

  • Have documented processes: Every organization is structured differently. However, having documented processes and policies on how your organization interacts with customers and employees is critical. If processes are properly documented there is no question what a product or service should be or whether a customer exception falls within the acceptable guidelines. Take a hands-on approach to all accounting and record keeping as it will allow you to end an inappropriate action in a timely fashion.

  • Be respectful: Treat employees and customers with respect regardless of differences, positions, titles, ages, or diversity. Always treat others with respect and courtesy even if you agree to disagree.

Successful implementation of these five principles becomes a leader’s daily commitment and responsibility. Oprah Winfrey said it quite simply,

Real integrity is doing the right thing, knowing that nobody’s going to ever know whether you did it or not.”

 

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