What is Business Ethics?

What is Business Ethics?

The term “ethics” is literally defined as “moral principles that govern a person’s or group’s behavior. “  The word itself is derived from a Greek word “ethos” meaning “custom” or “habit.”  Extrapolated to the business community, “ethics” means the set of systems or belief systems that guide our practices. In short, what we believe is “right” and how we go about achieving our goals. 

How do we Think of Ethics?

Ethics is often analogized to playing by the rules in sport.  An athlete or team has many different means of getting to the end.  Some baseball players are interested in the bottom line and choose to bend or break the rules to achieve greater statistical success, thereby increasing their bottom line and their earning potential.  Others believe in the history of the game, or the greater good for growing the sport through achieving their means in a “clean” fashion. 

How will Your Organization Achieve its Ethical Goals?

The means by which a business achieves its goals for success are the very ethics that guide it.  By adhering to an ethical code of conduct that “plays by the rules” businesses not only set themselves up for long-term success (often at the cost of short-term profits) but also gain reputational capital in the form of a good name in the industry or community in which they operate.  There is certainly value to be derived from being known or referred to as a company that “does it right” or “plays by the rules.” 

What can we do to Improve Adherence to Ethical Standards?

In the present it is more important than ever to implement policies and practices that demonstrate an adherence to standards of ethical conduct that are widely accepted in the industry or business community in which you operate.  By training your managers and executives in the ethical philosophy of the business you can create a solid foundation upon which your business can operate in the present – and grow in the future, both in profits and in reputation. 

Although it may sound simple to “play by the rules,” there are often close calls that arise that an untrained manager may not be prepared to deal with.  Indeed, the black and white situations usually are obvious; if the business has policies in place promoting the aversion of illegal behavior it is generally simple to police your managers from engaging in overtly illegal conduct.  But what about the “grey” areas? You need to determine what is most important to your business, short-term profits or the potential for long-term gains and reputation within the community.  By examining what is most important you will often find that the risks of engaging in questionable conduct will outweigh the potential reduction in short-term profits.

Syntrio is a leader in both the employment law and ethics and compliance field, with an innovative philosophy towards compliance program design and engaging, entertaining, and thought-provoking content. Contact www.syntrio.com for more information about our ethics and code of conduct online courses and remember to follow us on Facebook, TwitterGoogle Plus and LinkedIn for daily updates on employment law and compliance that impact your company!

Written by Jonathan Gonzalez, Chief Counsel for Syntrio.

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