Business ethics is often dismissed as a topic that requires passing reference in meetings, little more than just being sure to include a routine paragraph in your employee handbook.
However, Jim Triplett, a faculty member at University of Phoenix’s Cleveland Campus who teaches management coursework on building a culture of business ethics, says that making it a core value of your business can actually provide your company with a method for gaining an advantage over your competitors.
When everyday decisions need to be made outside the borders of the established procedure, that’s when a commitment to business ethics starts paying dividends.
“When the environment changes and gets beyond the scope of your regulations, you’re left in a Wild West environment, hoping your employees will make the right decisions,” says Triplett. “We’ve all seen how the wrong decision can not only be costly, but catastrophic to the organization’s very survival.”
Smart Business spoke with Triplett about how to create an environment that ensures your employees will make the choice that’s best for your business when that time comes.
Why is ethics important in business?
Evidence suggests that in the absence of an established and appropriate formal structure rules, policies and procedures that exist within the organization or among legal/regulatory bodies that dictate how people should behave it is ethics that ultimately determines how individuals will behave.
What will employees do when faced with dilemmas that don’t fit into previously established rules and guidelines? How do they make that choice, and will it be a choice you’re comfortable with? The external environment and competitive landscape changes much faster than our ability to create new internal rules and guidelines. So you have to rely on your culture and business ethics to ensure people will behave appropriately.
How can focusing on ethics change the way businesses make decisions?
It ensures employees behave in appropriate ways that avoid legal trouble, as well as embarrassing situations that impact the products and services your company provides. Creating that additional mindset among your employees is important.
This is particularly critical for small-business owners that tend to be spread in so many directions because of the size of their businesses. With responsibility and involvement in everything from the finances, sales, and production to making sure people are behaving consistently with the employee handbook their attention to each task is by definition much more diminished. They have to trust their employees to do the right thing.