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Our actions affect not only ourselves, but also those around us. Many of our professional decisions involve ethics. If we tell a lie, we can lose someone’s trust and undermine our own integrity. If we use shoddy materials or workmanship on the job, we can jeopardize the safety of others.

Questions of morality and ethics can be found at all levels of society. Ethical behavior is equally important in the workplace as it is in our personal lives. Everywhere business is conducted, ethics matters.

A successful business depends on the trust of various parties—employees, managers, executives, customers, suppliers, and even competitors. Six ethical terms form the foundation of trust upon which ethical business practice is built:

• Ethics
• Values
• Morals
• Integrity
• Character
• Laws

Ethics

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Ethics refers to a set of rules that describes acceptable conduct in society. Ethics serve as a guide to moral daily living and helps us judge whether our behavior can be justified.

Ethics refers to society’s sense of the right way of living our daily lives. It does this by establishing rules, principles, and values on which we can base our conduct. The concepts most directly associated with ethics are truth, honesty, fairness, and equity.

While ethics is a societal concern, it is of critical importance to the professions that serve society. Because professionals such as physicians, attorneys, engineers, and property and facility managers provide services that affect our welfare, they develop professional codes of ethics that establish professional standards for behavior.

Examples of the types of standards found in professional codes of ethics include:

• An attorney or physician maintaining client-patient confidentiality
• An accountant not using client information for personal gain

GSC Library Article:

Treviño, L. K., Weaver, G. R., & Brown, M. E. (2008). It’s lovely at the top: Hierarchical levels, identities, and perceptions of organizational ethics. Business Ethics Quarterly, 18(2), 233-252.

http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=31883734&site=eds-live

Values

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Values are defined as the acts, customs, and institutions that a group of people regard in a favorable way. Statements of value typically contain words of approval, disapproval, and obligation. Some of these words might be good, bad, should, and should not. However, value judgments do not have to contain specific value words. “That is a lie” does not contain a particular word of disapproval, but the implication that a lie is wrong is understood.

Values are what really matter to us most—what we care about. For instance, family devotion, respect for the environment, and working hard for a day’s pay are three values that can evoke a response in many people.

Morals

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Morals are a set of rules or mode of conduct on which society is based. Certain moral elements are universal, such as the laws forbidding homicide and the basic duties of doing good and furthering the well-being of others. With morals serving as the underpinning of society, there are four points we should remember, says philosopher Robert C. Solomon.

• Moral rules are important: In general, moral rules are rules that help society function in a civilized way.
• Morality consists of universal rules: They apply to everyone, everywhere, and are recognized by everyone as being necessary.
• Morals are objective: They do not consider personal preferences. Right is right and wrong is wrong.
• Morality affects other people: Morality involves considering the well-being of others as reflected by the Golden Rule: Do unto others as you would have them do unto you.

Integrity

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To have integrity is to be honest and sincere. Integrity is defined as adhering to a moral code in daily decision making. When people and businesses possess integrity, it means they can be trusted. On the other hand, companies that lack this quality and mislead customers with inferior products or false advertising will suffer the consequences.

Character

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Ethics is not just how we think and act. It is also about character. Character drives what we do when no one is looking. Each person has the ability to build, change, or even destroy his or her own character. We can build our character through the way we live—by thinking good thoughts and performing good acts. Similarly, bad thoughts and behavior can destroy our character.

A person with character has high morals and will act morally in all situations by choice, not force. A person with character will honor his or her commitments. Character pertains to organizations, as well. A company with high character is worthy of trust and respect, acts honestly, and stands by its promises.

Laws

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The law is a series of rules and regulations designed to express the needs of the people. Laws protect people from the most blatant and despicable affront to morality, such as murder, rape, and theft.

Laws frequently provide us with a sense of right and wrong and guide our behavior, but not always. While murder is against the law, the law does not always stop someone from killing another out of hatred, anger, or in defense of a personal philosophy.

Laws are instituted as notions of justice and tend to be specific, yet diverse within different societies. Laws have always had a strong connection to morality, ethics, and values. But, not all laws are ethical.

Laws have legalized slavery, segregation, sexism, and apartheid. Although these laws might have reflected society’s values at the time they were enacted, they could not nor will they ever justify immoral behavior. Likewise in business, it is not unlawful to lie to a coworker or on a job application, but both are ethically wrong.

These six concepts—ethics, values, morals, integrity, character, and laws—form the foundation of trust upon which ethical business practice is built.

Professional Codes of Ethics

Many professions and corporations have developed codes of ethics to address their unique business situations. In fact, 90 percent of Fortune 500 companies and nearly half of all corporations have codes of ethics that can be applied to all employees. By developing a code of ethics, an organization makes it clear that employees and members cannot claim ignorance as a defense for unethical conduct.

Benefits of a Corporate Code of Ethics

Codes of ethics help employees strike a balance between the ends and the means used to obtain them. This balance may be one of the most challenging aspects of being an ethical organization.

The Federal Sentencing Guidelines for Organizations provide an additional incentive for having corporate codes of ethics and ethics training. Companies that have made a strong effort to prevent unethical and illegal behavior are likely to receive less severe punishment should an employee be found guilty of breaking the law. The unethical conduct of just a few employees can affect an entire corporation.

Benefits of a Professional Code of Ethics

A professional code of ethics sets a standard for which each member of the profession can be expected to meet. It is a promise to act in a manner that protects the public’s well-being. A professional code of ethics informs the public what to expect of one’s doctor, lawyer, accountant, or property manager. As long as professionals adhere to these standards, the public is willing to have their professional associations create and enforce their ethical codes.

In cases where these codes are repeatedly and grossly violated, the public’s likely response is to demand protective legislation. The Sarbanes-Oxley Act of 2002 was enacted in response to such violations and the ensuing public outcry. Most professionals would prefer to police themselves, rather than have an externally imposed set of regulations. That is a major reason why they create codes of ethics in the first place.

Successful Implementation of a Code of Ethics

Within a corporation, top-down support is critical. If senior management does not act ethically and support others who do, an organization’s ethical code will have little meaning. It is critical for managers and executives to:

• act consistently with the company’s ethical standards
• apply those standards in dealing with employees

Acknowledging and rewarding those whose behaviors are consistent with a company’s code of ethics proclaims to all that ethical behavior is truly valued. On the other hand, promoting and providing bonuses to employees whose successes are due in part to unethical behavior sends an unwanted message.

Remaining ethical is not a static issue. It requires review and evaluation. Companies need to periodically review their priorities and make necessary adjustments. Otherwise, their standards and training become outdated.

Ethics are the principles and values an individual uses to govern his activities and decisions. In an organization, a code of ethics is a set of principles that guide the organization in its programs, policies and decisions for the business. The ethical philosophy an organization uses to conduct business can affect the reputation, productivity and bottom line of the business.

Creating ethical cultures in business: Brooke Deterline at TEDxPresidio

References

Andrews, K. (1989). Ethics in practice. Harvard Business Review (Sept- Oct): 99-104.

Lau, C. (2010). A step forward: Ethics education matters! Journal of Business Ethics, 92(4),

565-584. doi:10.1007/s10551-009-0173-2