Thursday, November 3, 2016

Your Company's Business Ethics: are you doing what’s right?

Having recently been challenged by a business situation where I believe the competing party was playing “outside of the rules”, I thought to reassess my own prospective on ethics and morality, as it applies to my business.

What we learned from Business School:  Ethics Refresher

Capitalism is believed to reward ethical behavior. Unethical corporate behavior often drives away customers.

Ethics are generally defined as “Rules of conduct recognized in respect to a particular class of human actions or a particular group, culture, etc.”

Ethics are rooted in a standard of what is right and wrong, based on what society thinks people ought to do. They consider our obligation to society, what benefits society rather than the individual, and being fair to others.

Business Ethics are further defined, subjectively as:

Employer-employee relations—how you relate to your employer or employees, with fair and honest communication being the goal.

Investor relations—the relationship with those who give financial support to your business.

Customer relations—how you take care of and relate to your customers.

Vendor relations—pertaining to suppliers.

Regulatory Authorities exist to protect the public. In our case, we are a member of OCP (Ontario College of Pharmacists) and as such, much of our ethics pertains to how we treat our patients.

What’s your ethical climate?

A positive climate leads to happier, more productive employees; harassment, aggression, and discrimination generally result in a hostile work environment. There are five types of ethical climates in workplaces:

Instrumental—actions by management are taken out of self-interest, with decisions made entirely to benefit the company or managers, with little or no consideration given to employees, customers or other stakeholders. This includes outright lying for personal or corporate gain, and actions to sabotage competition. It’s considered the highest level of immoral and unethical behavior.

Caring—the company is very concerned about employee well-being and fairness, with extensive support for employees and excellent leadership. The downside of the caring environment is that there can be a tendency to overlook rules to help friends.

Law and order—there are precise codes of conduct for employees and management, and laws are adhered to strictly. Employees follow rules out of fear of repercussion. This inflexible environment tends to ignore employee issues.

Rules—the organization has internal professional codes of ethics or policies. This system can stifle creativity, with employees afraid to bend rules even slightly.
Promoting Independence—employees have a great deal of latitude, allowing them to think “outside the box” to solve problems. Employees may drift toward unethical behavior if they feel there are no ramifications.

Most organizations are a blend of two or more environments. Punishment is threatened for any excursion from written policies, sometimes regardless of the reason.

Open communication between regulatory bodies, management and employees is essential to prevent ethical problems. Employers must ensure that self-interest is not the main thrust of corporate decisions. Ideally, employers have created a self-audit system to quickly detect and fix any issues, preventing the poisoning of the work environment with damaging unethical behavior.

To prevent ethical problems in the workplace, it’s important to have clear guidelines and education regarding the ethical rules that must be followed. Managers should consider themselves important role models on ethical issues, as leadership sets the stage for what is acceptable for employee behavior.

“Herd mentality”  refers to individuals taking behavioral cues from others in the workplace. An entire organization can easily take on the culture of the people within it, particularly that of the leadership.

Different ethical points of view, referred to as “ethical theories” can influence what an individual considers ethical versus unethical in the business world:

Deontology—following the rules, no matter what.
Consequentialism—believing that the end justifies the means.
Ethical relativism—right and wrong depend on norms in one’s culture.
Moral absolutism—believing that the same standards should be applied in all situations, regardless of culture or other factors.
Virtue ethics—the individual’s character, not actions, determines morality and should be considered when making judgments.
Care ethics—people are relational beings and require care in relationships. Consider not only rules, but people’s feelings.

One can readily see that it is difficult and perhaps unfair to rely on one moral code for all. Basic morality, formed through life experiences, is not the same for everyone. Laws and regulations give better standards that can be more consistently followed, with ethics being, not a replacement for laws, but guiding principles for our lives and professional practice.

Ethical behavior in business means acting in ways that are consistent with how the business world views moral principles and values.

It’s believed that ethical problems are caused by four main factors:

Lack of integrity—not showing fairness; using intimidation, harassment or lies. Customers, co-workers and employers must be treated with the highest level of respect and honesty.
Organizational relationship problems—a clear mission, goals and objectives are needed, and individuals must keep these above personal goals.

Misleading advertising—misrepresenting a product or service in order to secure benefit personally or for the company.

Conflicts of interest—when anyone takes advantage of a business situation for personal benefit. This includes accepting bribes and gifts in exchange for influence or favours, or taking any action whose purpose or end result is personal benefit at the expense of the company or another person.

To avoid ethical problems in business, experts recommend employers create a code of behavior, establish expectations and reasonable goals, and set up a system of rewards and punishments for ethical and unethical behavior. Setting clear and attainable goals for employees will prevent them from feeling pressured to conduct unethical activities to achieve quotas.

Employees, owners and managers all benefit from having a clear understanding of the types of actions that might be considered unethical in the business world.

Reviewing ethical expectations as part of employee performance reviews will help to educate individuals in the behavior that is acceptable in the workplace before it creates a problem, and would give employees the opportunity to discuss any ethical concerns they have with management and co-workers as well. It’s a conversation that all sides would benefit from.

This post has been adopted from Jeannie Collins Beaudin
Citation: canadianhealthcarenetwork.ca,   Jeannie Collins Beaudin


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