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Hypothesis: Practicing Ethical behavior improves business operations
Abstract
This paper discusses about how observing ethical behavior in the workplace develops or improves business operations. It delves into the workplace culture and introduces the positive and negative ethical practices that affect its processes. It also points out the research gathered about the codes of conduct and behavioral standards that contribute and further advance the company’s undertaking.
Ethical behaviour goes beyond the legal requirements placed on a business; it is also concerned with discretionary decision-making and conduct.
Ethical behaviour is an important function in integrating business and society, by promoting the legitimacy of business operations, through critical reflection of employee behavior.
In this paper, varied researches can be found with the goal of deepening the reader’s understanding of ethical behavior and its role in promoting and improving operations in businesses.
I.Ethical Behavior
A.Introduction
One of the tough and complex problems that business organizations are facing is managing ethical behavior.
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Ethical behavior in the workplace is a standard of conduct expected of or adopted by a business. It involves characterizing moral principles including honesty, fairness, interpersonal equality, dignity, diversity, and individual rights.
B.Importance
Ethical behavior helps maintain quality and productivity in the business. What is ethical is legal and with it, it assists the organization to comply with laws and regulations. It has the ability to attract investor and customers and ensures good and proper relationships with them. Also it promotes teamwork within the organization whereby employees can work together more effectively and efficiently.
Similarly, with people practicing ethical behavior in the workplace encourages making decisions in an ethical way. Conducting the business complying ethical behavior brings more benefits to the company’s improvement and the basis for long-term success in most businesses.
II. Ethical Workplace Culture
Ethics in work place are cultures that a company imposes to make each professional more productive and cooperative. This makes each professional more responsible and hardworking to their duties. Complying with ethics in the workplace makes the company successful and knowledgeable in their field of business.
A.Positive workplace behavior ethics
-According to Don Rafner, Demand Media (2014), your employees face ethical dilemmas every day in the workplace. They might be tempted to leave work early, take credit for the work of others or lie to a potential client to get him to sign the insurance policy, order the service or purchase the product that they are selling. The key to fostering strong business ethics at your company is to create an ethics policy that clearly spells out what is acceptable and unacceptable behavior.
EXAMPLES
Cheating the Company
A solid ethics policy should clearly outline the procedure employees should follow if they need to take time off, leave early or start late. If you don't spell out these procedures, employees might be tempted to handle these matters on their own. They might claim to be meeting a client at the end of the workday when instead they are leaving early to catch a ballgame on TV. They might claim to be at a workshop for the first half of the day when instead they are sneaking in some extra sleep. Make sure your ethics policy contains a provision telling your employees how they can request time off even for personal matters. Open communication is a far better alternative than the sneaking around required when employees try to cloak the reasons for their late starts or absences.
Working with Clients
Your ethics policy also should make it clear that your workers must treat clients and customers fairly and honestly. This means prohibiting employees from lying to potential clients or providing them with misleading information. Employees shouldn't hide the true price of a service, policy or product in an effort to trick customers into signing up. They also shouldn't promise more than their service or product can deliver. Employees should never bully or harass potential clients. Your ethics policy should state how often your workers can contact potential customers, at what times of the day and what exactly they can and cannot say during their conversations. Ethics in our workplace makes professional the best and this benefits both the employer and the employee.
B.Possible negative ethics
-Not all ethics in workplace is good, sometimes it can harm you.
EXAMPLE
You have discovered that your workmate is starting up business the same to your company and started to get costumers from your company so you decided to tell your president regarding what your officemate is doing after your officemate was caught he threaten you that he will do something not good to you. You have disregarded what he has said, after one month your daughter was kidnap. Realizing that your office really did what he has said.
III. Ethical Principles
President Theodore Roosevelt once said that, “To educate the mind without the morals is to educate a menace to the society.” Ambition, competitiveness, and innovation are essential factors that lead to business success but these must be controlled by core ethical principles. According to Josephson (2013), ethical principles are universal standards of right and wrong prescribing the kind of behavior an ethical company or person should and should not engage. These principles provide a guide to making decisions but they also establish the criteria by which your decisions will be judged by others.
A.Code of Conduct
Definition
As stated by Vitez (2014), codes of conduct usually describe the required behaviors, responsibilities, actions or attitudes employees should have in an organization. This conduct policy ensures all individuals are on the same page and have a clear understanding of the business’ mission statement and values.
Functions and Features
Businesses may include basic employee working guidelines in their code of conduct policy. These guidelines can include dress standards, avoidance of drug or alcohol use, arriving promptly to work on time and keeping the employee’s workplace neat and clean. Companies use these policies to develop and promote a safe and courteous work environment. A code of conduct can also be created to govern the owners and managers of large and small businesses. Business owners and managers are often held to a higher standard because they have more power in the organization.
Considerations
Implementing ethical values into a code of conduct can help companies strengthen these policies. Ethical values include self-discipline, honesty, integrity, fidelity and charity. Companies use ethical values to promote their conduct policies as individuals may have different personal ethical values. Creating a standard ethical system helps companies promote the values they see most important in business. Business ethics commonly fall in line with the business owner’s view of ethical standards.
B.Behavioral Standards
As described by Abraham Lincoln, character is a tree and reputation is a shadow. Your character is what you really are; your reputation is what people think of you. Hence, reputation is purely a function of perception while character is determined by ones actions. The following are the 12 ethical principles enumerated by Josephson (2013):
1. HONESTY. Be honest in all communications and actions. Ethical executives are, above all, worthy of trust and honesty is the cornerstone of trust. Ethical executives do not deliberately mislead or deceive others.
2. INTEGRITY. Maintain personal integrity. Ethical executives earn the trust of others through personal integrity. Integrity refers to a wholeness of character demonstrated by consistency between thoughts, words and actions.
3. PROMISE-KEEPING. Keep promises and fulfill commitments. Ethical executives can be trusted because they make every reasonable effort to fulfill the letter and spirit of their promises and commitments.
4. LOYALTY. Be loyal within the framework of other ethical principles. Ethical executives justify trust by being loyal to their organization and the people they work with. Ethical executives place a high value on protecting and advancing the lawful and legitimate interests of their companies and their colleagues.
5. FAIRNESS. Strive to be fair and just in all dealings. Ethical executives are fundamentally committed to fairness. They manifest a commitment to justice, the equal treatment of individuals, tolerance for and acceptance of diversity.
6. CARING. Demonstrate compassion and a genuine concern for the well-being of others. Ethical executives are caring, compassionate, benevolent and kind. They seek to accomplish their business objectives in a manner that causes the least harm and the greatest positive good.
7. RESPECT FOR OTHERS. Treat everyone with respect. Ethical executives demonstrate respect for the human dignity, autonomy, privacy, rights, and interests of all those who have a stake in their decisions; they are courteous and treat all people with equal respect and dignity regardless of sex, race or national origin. 8. LAW ABIDING. Obey the law. Ethical executives abide by laws, rules and regulations relating to their business activities.
9. COMMITMENT TO EXCELLENCE. Pursue excellence all the time in all things. Ethical executives pursue excellence in performing their duties, are well-informed and prepared, and constantly endeavor to increase their proficiency in all areas of responsibility.
10. LEADERSHIP. Exemplify honor and ethics. Ethical executives are conscious of the responsibilities and opportunities of their position of leadership and seek to be positive ethical role models by their own conduct and by helping to create an environment in which principled reasoning and ethical decision making are highly prized.
11. REPUTATION AND MORALE. Build and protect and build the company’s good reputation and the morale of its employees. Ethical executives understand the importance of their own and their company’s reputation as well as the importance of the pride and good morale of employees.
12. ACCOUNTABILITY. Be accountable. Ethical executives acknowledge and accept personal accountability for the ethical quality of their decisions and omissions to themselves, their colleagues, their companies, and their communities.
V. EFFECTS OF PRACTICING ETHICAL BEHAVIOR
A. Advantages
A.1 Employees
•Positive Work Environment
- Ethical employees are perceived as team players rather than as individuals just out for themselves. They develop positive relationships with co-workers. Their supervisors trust them with confidential information and they are often given more autonomy as a result. Employees who are caught in lies by their supervisors damage their chances of advancement within the organization and may risk being fired. An extreme case of poor ethics is employee theft. In some industries, this can cost the business a significant amount of money, such as restaurants whose employees steal food from the storage locker or freezer.”(Brian Hill) A.2 Business
•Build customer loyalty
- “Having a loyal customer base is one of the keys to long-range business success because serving an existing customer doesn’t involve marketing cost, as does acquiring a new one. A company’s reputation for ethical behaviour can help it create a more positive image in the marketplace, which can bring in new customers through word-of-mouth referrals.”(Brian Hill)
•Retain Good Employees
- Talented individuals at all levels of an organization want to be compensated fairly for their work and dedication. They want career advancement within the organization to be based on the quality of the work they do and not on favouritism. They want to be part of a company whose management team tells them the truth about what is going on, such as when layoffs or reorganizations are being contemplated. Companies who are fair and open in their dealings with employees have a better chance of retaining the most talented people.”(Brian Hill)
•Avoid Legal Problems
- At times, a company’s management may be tempted to cut corners in pursuit of profit, such as not fully complying with environmental regulations or labour laws, ignoring worker safety hazards or using substandard materials in their products. The penalties for being caught can be severe, including legal fees and fines or sanctions by governmental agencies. The resulting negative publicity can cause long-range damage to the company’s reputation that is even more costly than the legal fees or fines. Companies that maintain the highest ethical standards take the time to train every member of the organization about the conduct that is expected of them (Brian Hill).
•High Employee Performance
- A lack of ethics has a negative effect on employee performance. In some cases, employees are so concerned with getting ahead and making money that they ignore procedures and protocol. This can lead to additional paperwork and careless errors that result in the task having to be completed again. Additionally, employees who feel acting ethically and following the rules will not get them ahead in the business sometimes feel a lack of motivation, which often leads to a decrease in performance (Stacy Zeiger).
•Company Credibility
- If a lack of ethics in a business becomes public knowledge, that business loses credibility. While some businesses survive public knowledge of a lack of ethics through reimaging and advertising campaigns, many lose a key customer base. Even if a business recovers from news about its lack of ethics, it takes a lot of time and money to restore its image and consumer confidence (Stacy Zeiger).
•Competitive Advantage
- Business ethics offer companies a competitive advantage. Consumers learn to trust ethical brands and remain loyal to them, even during difficult periods. The company followed its credo, a set of ethical organizational values, and the result was a boost in consumer confidence, despite the contamination scare. Society benefits from business ethics because ethical companies recognize their social responsibilities (Lynne MacDonald).
•Asset Protection
- A strong ethical culture within your business is important in safeguarding your assets. Employees who abide by your workplace ethics would be able to protect and respect your business’s assets. For example, they would avoid making personal long distance calls using the business’s lines. Workers can only respect company property when you treat them with respect and dignity, which makes them feel proud to be working for your business. Ensure that your workers perform in an environment with integrity and strong ethics. It increases employee pride and discourages them from stealing supplies or equipment (Alejandro Russell).
•Productivity and Teamwork
- Workplace ethics is integral in fostering increased productivity and teamwork among your employees. It helps in aligning the values of your business with those of your workers. Achieving this alignment requires that you encourage consistent dialogue regarding the values of your business, which enhances community, integrity and openness among employees. Ethics enable your workers to feel a strong alignment between their values and those of your business. They show such feelings through increased productivity and motivation (Alejandro Russell) .
•Public Image
- You earn a lot of respect and cultivate a strong image in the public domain when you make ethical choices. For instance, you can fulfill your corporate social responsibility by reducing waste discharge from your business. The public would consider your business to be operating with honor and integrity while valuing people over profits. Building a strong public image through ethical conduct also earns you more clients. Customers would develop trust in you and do business with your organization (Alejandro Russell).
•Decision-Making
- Ethical conduct in the workplace encourages a culture of making decisions based on ethics. It also enhances accountability and transparency when undertaking any business decisions. During turbulent times, a strong ethical culture guides you in managing such conflicts by making the right moves. It can help you to introduce change successfully in your organization, which can be a challenge. Ethical conduct within the business sensitizes you and your staff on how to act consistently even in difficult times (Alejandro Russell).
B. Disadvantages
B.1 Employees
•Inequality
- Codes of conduct are often drafted, in part, to ensure that all members of an organization are treated equally. However, often those in upper-level management and creative positions are given a "bye" on certain codes, like those restricting how the worker talks about the company or to what degree employees are allowed to have personal relationships outside of work. According to CNN Money contributor Eleanor Bloxham, if companies are going to have codes of conduct they should reconsider any code that cannot be applied equally (Miranda Morley).
•Unethical Corporate Behavior
- In some cases, codes of conduct may facilitate unethical corporate behavior. Codes of conduct that limit employees' ability to speak out against the corporation can keep them quiet for fear of job loss or legal retribution even if the company is engaging in an unethical practice. Further, codes of conduct can be used to set ethical-looking rules that managers are instructed not to follow so if any misconduct occurs it is the individual employee, not the corporation that will be blamed (Miranda Morley).
B.2 Business
•Lack of Management Support
- One of the disadvantages of an ethical compliance program is that it requires the comprehensive support of management to be effective. If members of the management team decide to apply their own version of corporate ethics to the way they manage their departments, then this clash of principles can cause confusion in the workplace. For example, a manager who tends to look the other way when his employees are committing sexual harassment sets a precedent that can start to undermine the entire corporate culture.( George N. Root III) http://smallbusiness.chron.com/advantages-disadvantages-ethical-compliance-organization-20548.html
•Costly
- Developing, implementing and maintaining an ethics compliance program within your organization can be expensive and time-consuming, according to attorney Michael G. Daigneault, writing for the Maryland Association of CPAs. Ethics policies need to be continually updated to reflect changes in workplace laws and changes in your company culture as the organization grows. Proper administration of an ethics program often requires the hiring of an ethics officer and the commitment of company financial and personnel resources.( George N. Root III) http://smallbusiness.chron.com/advantages-disadvantages-ethical-compliance-organization-20548.html
•Reduce Company’s Freedom
- Business ethics reduce a company's freedom to maximize its profit. For example, a multinational company may move its manufacturing facility to a developing country to reduce costs. Practices acceptable in that country, such as child labor, poor health and safety, poverty-level wages and coerced employment, will not be tolerated by an ethical company. Improvements in working conditions, such as a living wage and minimum health and safety standards, reduce the level of cost-savings that the company generates. However, it could be argued that the restrictions on company freedom benefit wider society.( Lynne MacDonald)
VI. CONCLUSION
Within the business world, ethical decisions are made each day that have an impact across all organizations. Conducting yourself ethically as a business owner and encouraging your employees to engage in ethical business conduct brings about several benefits for your company.
Business ethics tend to be overlooked by entrepreneurs as they have other priorities such as ideas for the business, marketing strategies, and financial matters. However, business ethics have a more powerful influence on the existence and improvement of business operations than most people think. It can create a positive image of a business, to mention one of the many, which can greatly contribute to the improvement of the business operations that can lead to its growth and boost in sales. Alongside with the advantages of practicing ethical behavior are disadvantages. Essentially, if you don’t practice ethical behavior in your business then you are in a position with more freedom than if you do, thus, reducing a company’s freedom to maximize its profit.
Practicing ethical behavior improves business operations despite it having disadvantages as it brings about more benefits to your business than not performing ethical business conduct. Besides the moral, social, personal and cultural imperatives to tell the truth, it’s increasingly evident that ethical practices protect and even boos the bottom line (Johnson, 2008). Customers will patronize your business not because you are on the number one spot among your competitors but because you give value as to how you claimed that spot.
Ethical behavior. (2016, May 01). Retrieved from https://studymoose.com/ethical-behavior-essay
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