Business ethics set the standard for how your business is conducted. They define the value system of how your operate in the marketplace and within your business. With legal scandals concerning insider trading and employee theft making the news, it is no wonder that businesses are increasingly giving attention to the ethical basis of their business and how to lead in an ethical way.
While the examples above seem to be clear cut breaches of ethics, many ethical dilemmas that not so clear cut are faced on a daily basis in business. In fact, there may not even be a "right" or "wrong" answer to the dilemma, but how you deal with it will say much about you and your business. These decisions are often referred to as being in the "gray" area. They are not black-or-white, but could be argued appropriately either way.
Here is an example. Jane has been operating a consulting business for about a year and has been doing very well. About a month ago, she decided she needed to hire someone to help her. After interviewing several candidates, she decided to hire the best one of the group, Sara. She called Sara on Monday to tell her she had gotten the job. They both agreed that she would start the following Monday and that Sara could come in and fill out all of the hiring paperwork at that time.
On Tuesday, of the same week, a friend of Jane's called her to say that she had found the perfect person for Jane. Jane explained that she had already hired someone, but the friend insisted. "Just meet Kim. Who knows, maybe you might want to hire her in the future!" Rather reluctantly, Jane consented. "All right, if she can come in tomorrow, I'll meet with her, but that's all." "Oh, I'm so glad. I just know you're going to like her!" Jane's friend exclaimed.
And Jane did like her. She like her a lot. Jane had met with Kim on Wednesday morning. She was everything that Jane had been looking for and more. In terms of experience, Kim far surpassed any of the candidates Jane had previously interviewed, including Sara. On top of that, she was willing to bring in clients of her own which would only increase business. All in all, Jane knew this was a win-win situation. But what about Sara? She had already given her word to Sara that she could start work on Monday.
And yet she only had the resources to hire one person at this point. Clearly, the best business decision was to hire Kim. But what about the ethical decision? If her business did poorly or Sara couldn't provide enough support, the business would suffer. As a result, her family would suffer. Money was already tight, what with two boys in college. And yet she knew Sara also had a family she was supporting. Plus, she had been so enthusiastic about starting to work.
Obviously, Jane had a problem - an ethical problem. Should she hire Sara (whom she'd already given her word) or Kim (who was obviously the best person for the job)? Questions like these touch on our deepest values. Depending on who you would ask, you would get strong arguments for both decisions. This is what we mean when we talk about "gray" area. So what is the answer?
According to Kenneth Blanchard and Norman Vincent Peale, authors of The Power of Ethical Management, there are three questions you should ask yourself whenever you are faced with an ethical dilemma.
Is it legal?
In other words, will you be violating any criminal laws, civil laws or company policies by engaging in this activity?
Is it balanced?
Is it fair to all parties concerned both in the short-term as well as the long-term? Is this a win-win situation for those directly as well as indirectly involved?
Is it right?
Most of us know the difference between right and wrong, but when push comes to shove, how does this decision make you feel about yourself? Are you proud of yourself for making this decision? Would you like others to know you made the decision you did?
Most of the time, when dealing with "gray decisions", just one of these questions is not enough. But by taking the time to reflect on all three, you will often times find that the answer becomes very clear.
Many businesses are developing an Ethics Policy to clearly state what employees and customers should expect. This not only defines for your employees what you consider to be inappropriate actions, but also sends a clear message about who you are and what is important to you. A number of the resources listed below in the "Related" section provide further information about training in ethics, setting up ethics policies, and ethical dilemmas faced by others and how they handled them.
Research indicates that the integrity demonstrated by your business can have a positive effect on your bottom line. The challenge is to not only believe and voice your ethical principles, but to also practice them in all your business transactions. When the world knows that your business can be trusted to act ethically, you will see the results in lower employee turnover and better customer relations - both well-documented as being critical to business survival. The old adage that "what you sow, you will reap" also supports this premise. Sow the seeds of ethical values in your business and you will see it return in value to your business.
Action indeed is the sole medium of expression for ethics.
- Jane Addams (1860-1935)