Ethical business is a must—not an oxymoron

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People sometimes comment to me that “business ethics” is an oxymoron, but in fact it is a necessity. Business depends on trust and integrity, on the keeping of one’s word between client and professional, customer and provider, and employee and employer, within organizations of all kinds and governments at all levels.

Despite what some say, it is not just about “decision-making.” Decisions to act ethically or unethically are made by people—people who have developed attitudes, dispositions and habits that make up their, or our, character. Aristotle said it well: the “virtuous” are those with “states of character” that make both them and their work good. They have become accustomed to ethical behavior through good actions they have long practiced. Their values have become their virtues—they live what they say they believe. They now think and act through their character. It has become the foundation for their judgments and practical decisions about what ought and ought not to be done. Businesses are inherently ethical, filled with people of good or not-so-good character, and characterized by good or bad ethics.

So what can we do to encourage ethical behavior in our businesses and organizations? The answer is simple, but involves sustained effort to carry out. We can encourage ethical habits through our policies and the customary, day-to-day ways we carry out our work. Through these we create and instill organizational states of character with their own ongoing moral or ethical force that forms the basis or foundation for critical decision-making when we are confronted by difficult circumstances or choices. Here are some possibilities:

First, we might practice generosity. In our occupations we, of necessity, focus on growing the bottom line, achieving profit margins or meeting sales or service goals. One way to balance the habits we acquire while looking to benefit ourselves is to personally and organizationally practice generosity. The possibilities of this are nearly endless. We can adopt a charitable campaign with a reputable organization such as United Way or the American Cancer Society, or encourage giving by employees to local social or charitable agencies by matching gifts. When we balance the habit of acquisition and meeting goals with the habit of generosity we enable ourselves to better withstand the desire to cut corners for our own benefit or to cut others out. We might find our organizations happier, more positive places as a result.

Second, match policies to values. In past years we have been encouraged to review and state our “core values.” The next step is to ensure that our policies reflect those values. If we say we value our customers, have we also established goals for our sales team for not only finding new customers, but also retaining the customers we have? If we say we value service, have we also modeled that service to our employees? If we say we value health and safety, have we also balanced cutting costs on projects by encouraging healthy and safe work?

Third, reward ethical behavior. Management guru Ken Blanchard counsels us to ‘catch people doing something right’ if we want to encourage a particular organizational goal or practice. Why not then reward integrity? We might make it a part of our organizations to reward those among us who correct mistakes even though it costs them time and energy, or who give credit to a colleague for an idea or effort that was mistakenly attributed to them. We might promote those who have earned the trust of their colleagues, rather than those who are aggressive at getting the job done, but are known for shaving the edges or playing favorites with other employees. The small consistent costs of rewarding ethical behavior will never add up to the costs of law suits, high employee turnover, or property or funds lost or stolen.

Our success in business or any profession depends upon the trust others put in us to perform as we say we can, to deliver what we promise to deliver. That trust has to be earned, and reflects who and what we have become as individuals and as organizations. It is based upon our personal and organizational states of character, the results of daily practices, habits and the consistent outworking of our policies. If we want to make the right decisions when tough choices arise, we will be helped if we are standing on a firm foundation of ethical behavior practiced, rewarded and established. Then we will be able to say, “Ethical business? Of course.”

Stephen Varvis is director of business and civic relations at Fresno Pacific University . He is also teaches business ethics, is a member of the history faculty and served as university business manager for several years.

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