By LARRY BIEHL
I recently had the opportunity to speak to students in a Masters class in Entrepreneurship about the topic of “business ethics”. What is “ethics”, and why is it important to discuss ethics to potential business founders who need to be more innovative, resourceful and quick-to-act than their competitors?
First of all let’s be clear about what ethics are not! In short, ethics are not: feelings, religion, the law, culturally accepted norms, nor science. The definition is not what’s good for an individual or makes “common sense”, Ethics is all about how an individual’s actions effect others; communities of people, societies…all of mankind.
Ethics are the product of a “community-conscience”: well founded standards of right and wrong behavior, standards supported by well-founded reason. These “standards” can come from five different sources within the community conscience:
- Utilitarian (What produces the most good and least harm?)
- Rights (What respects and protects one’s moral rights?)
- Fairness & Justice (Do actions treat people equally; and if unequally, is there a defensible standard?)
- Common Good (What’s best for a community of interlocking relationships?)
- Virtue (What dispositions and habits enable us to act according to our highest character potential?)
Is one “source” more reliable than the other…more appropriate given the people involved and the behavior displayed…more acceptable given our judgment and personal experience…more popular given where we live or work?
The reason there is more than one source for “acceptable standards” against which to measure whether or not one’s actions or behavior are ethical is that the “context” – the set of facts in each situation – may influence which source – or combination of sources – should prevail when rendering a verdict. Therefore, we must establish an Ethical Decision-making Framework with which to consistently judge each ethical controversy we address.
Five stages in our Ethical Decision-Making Framework:
Stage 1: Recognize the ethical issue needed to be addressed (Is what you are addressing a real ethical issue or merely a behavior you disagree with?)
Stage 2: Get the facts (What is known to be truth, who is affected and how, what are my options when confronting all the facts)
Stage 3: Evaluate alternative actions to be taken in dealing with the situation (How will each of the 5 sources of ethics affect each potential action?)
Stage 4: Make a decision on what to do; then test it and evaluate the results (Determine whether or not it worked the way you wanted it to.)
Stage 5: Act, then pause and reflect (How did it turn out and what was learned from the process that will help you in the future?)
In addition to being a business leader responsible for managing employees, satisfying customers’ needs, and pleasing shareholders, you must also be the one person in your company that everyone can look to for ethical leadership. You are the one who must be the role model for ethical behavior for all company stakeholders.
If you are the person modeling character and value, how do you appear to the world at large? Are you considered to be a “good guy”? Are you someone to be trusted and respected? Do you speak for everyone or just yourself?
Are you clearly and unequivocally expressing your company’s mission, its shared core values and it’s responsibilities within the community?
Do you encourage ethical behavior by rewarding the intent of your employees’ actions not merely the money to be made from them?
Are you disciplined in acting out your role and taking responsibility for what may result from your company’s actions?
Do you regularly clarify your corporate culture by revisiting your company’s mission and values, and ensure that personal and corporate goals are aligned?
Have you designed and implemented an Ethical System at your company which uses your corporate goals, mission and values to train employees what behavior will be acceptable and provide personal development?
In short, are you creating an organization where the mission is clear, where employees are aligned with the organization’s values and both employees and organization are committed to achieving the same goals and a common purpose?
Especially in these times of heightened social media activity, no bad deed will be go unnoticed. Trust, respect and loyalty – traits all companies would like to embody when appealing to their customer base – are traits that are not bestowed, but have to be earned. Ethical behavior will help you – and your organization – earn those admirable personal qualities.