IMPORTANCE OF ETHICAL BEHAVIOR
Would you copy a paper from the Internet and submit it to your teacher as your own work? Would you cheat on a test to ensure a higher grade? Is it okay for an employee to call in sick to justify a day off from work or to take office supplies from the company for use at home? Do you believe a manager should ever lie to an employee or ignore unsafe working conditions in order to save money or speed production?
Each of those situations describes an ethical decision you and others may face in your personal life and in business. Not everyone will have the same belief about what is ethical and what is not ethical. It is important for each business and those who work in the business to develop
agreement on behaviors that are acceptable and unacceptable.
Individuals and organizations develop reputations based on their actions and the decisions they make. You can identify people who are not trustworthy and companies that do not compete fairly. When an individual or a company develops that reputation, others will not trust them or want to work with them. Once a good reputation is lost, it will be difficult to rebuild. It is important for an organization to develop and enforce a climate of acceptable and ethical business behavior for all employees.
What Is Ethical Behavior?Ethics are the principles of conduct governing an individual or a group. Ethical business practices ensure that appropriate standards of conduct are maintained by everyone who is a part of the business and with anyone affected by the business. Ethical behavior is not just the responsibility of a company's executives and managers. It is expected for all decisions and actions of every employee.
Ethical behavior is made up of two parts: the decisions and actions of individuals and groups and the results of those actions. Ethical behavior meets several standards:
Would you copy a paper from the Internet and submit it to your teacher as your own work? Would you cheat on a test to ensure a higher grade? Is it okay for an employee to call in sick to justify a day off from work or to take office supplies from the company for use at home? Do you believe a manager should ever lie to an employee or ignore unsafe working conditions in order to save money or speed production?
Each of those situations describes an ethical decision you and others may face in your personal life and in business. Not everyone will have the same belief about what is ethical and what is not ethical. It is important for each business and those who work in the business to develop
agreement on behaviors that are acceptable and unacceptable.
Individuals and organizations develop reputations based on their actions and the decisions they make. You can identify people who are not trustworthy and companies that do not compete fairly. When an individual or a company develops that reputation, others will not trust them or want to work with them. Once a good reputation is lost, it will be difficult to rebuild. It is important for an organization to develop and enforce a climate of acceptable and ethical business behavior for all employees.
What Is Ethical Behavior?Ethics are the principles of conduct governing an individual or a group. Ethical business practices ensure that appropriate standards of conduct are maintained by everyone who is a part of the business and with anyone affected by the business. Ethical behavior is not just the responsibility of a company's executives and managers. It is expected for all decisions and actions of every employee.
Ethical behavior is made up of two parts: the decisions and actions of individuals and groups and the results of those actions. Ethical behavior meets several standards:
- It is lawful.
- It is consistent with company values and policies.
- It is not intended to harm some so that others can benefit.
- If the actions and results become public, it will not embarrass the company.
INCREASING ETHICAL BEHAVIOR THROUGH LEADERSHIPMost people want to do what is right. When they are under time pressures or facing a major problem, some people act unethically. That unethical behavior ends up harming the business and its relationships with customers and the community. Leaders must take actions to prevent unethical behavior.
Preparing the OrganizationIt is easier for employees to make poor choices when they do not view ethics as important. The day-to-day atmosphere of a business will usually suggest to employees whether ethical behavior is important or not. If employees see managers cutting corners, overlooking improper employee behavior, and approving activities that may be illegal, they will soon recognize that ethical behavior is not a priority. On the other hand, managers can create an atmosphere in which all employees know they are expected to act ethically. Employees must know they will be supported when they make ethical choices. Leaders also must demonstrate that unethical behavior is unacceptable and will be punished if it occurs. Managers can take several steps to develop an ethical environment.
Most organizations have a mission statement. A mission statement describes the reason a business exists and what it wants to accomplish. To make ethical behavior a part of a company's mission, many businesses develop a statement of core values. Core values are the important principles that will guide decisions and actions in the company. Figure 7-3 shows the core values of the Rite Aid Corporation. There is no standard form for communicating core values. Some companies use simple statements similar to those shown in Figure 7-3. Other companies convey their core values by using a list of single words such as integrity, leadership, passion, humility, and trust. In most cases, companies provide descriptions and examples to help employees see how the core values can be incorporated throughout the company. As a part of the planning process, managers should work with employees to develop core values that emphasize ethical behavior.
The staffing function offers another chance for managers to emphasize the importance of ethical behavior. The company's commitment to ethical behavior should be made clear when each
new employee is hired. In employment interviews, prospective employees should be questioned about ethics and asked to describe how they would handle situations involving ethical behavior. New employee training should include information about the company's commitment to ethics and values.
In the day-to-day operations of the business, managers and supervisors should often stress the importance of ethics. They should look for situations that might encourage employees to act unethically and take preventive action before problems occur. Individual employees and work teams should be encouraged to develop ethical solutions to problems. Employees should also be encouraged to speak up when they become aware of any behavior or decision they believe may be unethical.
Ethical behavior should be a part of employee evaluations and promotions. Managers and supervisors should recognize and reward employees who display high ethical standards. They also need to be quick to identify and correct ethical problems if they occur.
Modeling Ethical BehaviorThe most important action leaders can take to emphasize the importance of ethical behavior in an organization is to always act ethically. If employees read the core values of a company but do not see managers living up to those values, it will be clear that ethics are not that important. On the other hand, if employees see their manager acting in ways that demonstrate the company's values, they will be encouraged to act ethically as well.
When managers show respect for each employee, it demonstrates that everyone in the organization is valued. When a manager forcefully rejects a decision that is illegal or damaging to the company's reputation even though it would be profitable, employees know that ethical behavior is a core value of the organization. Being an ethical role model inspires others to do the same.
Preparing the OrganizationIt is easier for employees to make poor choices when they do not view ethics as important. The day-to-day atmosphere of a business will usually suggest to employees whether ethical behavior is important or not. If employees see managers cutting corners, overlooking improper employee behavior, and approving activities that may be illegal, they will soon recognize that ethical behavior is not a priority. On the other hand, managers can create an atmosphere in which all employees know they are expected to act ethically. Employees must know they will be supported when they make ethical choices. Leaders also must demonstrate that unethical behavior is unacceptable and will be punished if it occurs. Managers can take several steps to develop an ethical environment.
Most organizations have a mission statement. A mission statement describes the reason a business exists and what it wants to accomplish. To make ethical behavior a part of a company's mission, many businesses develop a statement of core values. Core values are the important principles that will guide decisions and actions in the company. Figure 7-3 shows the core values of the Rite Aid Corporation. There is no standard form for communicating core values. Some companies use simple statements similar to those shown in Figure 7-3. Other companies convey their core values by using a list of single words such as integrity, leadership, passion, humility, and trust. In most cases, companies provide descriptions and examples to help employees see how the core values can be incorporated throughout the company. As a part of the planning process, managers should work with employees to develop core values that emphasize ethical behavior.
The staffing function offers another chance for managers to emphasize the importance of ethical behavior. The company's commitment to ethical behavior should be made clear when each
new employee is hired. In employment interviews, prospective employees should be questioned about ethics and asked to describe how they would handle situations involving ethical behavior. New employee training should include information about the company's commitment to ethics and values.
In the day-to-day operations of the business, managers and supervisors should often stress the importance of ethics. They should look for situations that might encourage employees to act unethically and take preventive action before problems occur. Individual employees and work teams should be encouraged to develop ethical solutions to problems. Employees should also be encouraged to speak up when they become aware of any behavior or decision they believe may be unethical.
Ethical behavior should be a part of employee evaluations and promotions. Managers and supervisors should recognize and reward employees who display high ethical standards. They also need to be quick to identify and correct ethical problems if they occur.
Modeling Ethical BehaviorThe most important action leaders can take to emphasize the importance of ethical behavior in an organization is to always act ethically. If employees read the core values of a company but do not see managers living up to those values, it will be clear that ethics are not that important. On the other hand, if employees see their manager acting in ways that demonstrate the company's values, they will be encouraged to act ethically as well.
When managers show respect for each employee, it demonstrates that everyone in the organization is valued. When a manager forcefully rejects a decision that is illegal or damaging to the company's reputation even though it would be profitable, employees know that ethical behavior is a core value of the organization. Being an ethical role model inspires others to do the same.