Ethical decisions

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.

How can businesses stop ethical lapses?

A company’s culture is a direct reflection of the ethical behavior of that organization. Begin by observing what your organization does when no one appears to be looking. You have to indirectly assess your culture, because if you ask people directly, they are less likely to be honest. They are going to give you the answer they think you want, not the answer they would normally give.

Then, if necessary, take steps to change the culture to make sure it is consistent with your organization’s objectives. This is the critical mistake about business ethics owners and managers typically make — they fail to ensure that ethics and objectives run parallel to each other. Once you’ve addressed ethics/objectives alignment, then the business owner has to be sure to model the behavior. People have to see it reinforced. It’s one thing to tell people they need to behave ethically. But if they don’t see it being reinforced at all levels, it simply falls through the cracks as unimportant or inconsistent with ‘true’ expectations.

Managers have to make an exceptional effort to make sure they are modeling how they want employees to behave. People will absorb whatever actions they see others take. If the actions are toxic to the organization, they will adopt that pattern as well.

How can people learn to make better ethical decisions?

As a manager, it’s important to realize that so much of ethical behavior is simply being aware of how your organization makes decisions. Because we’re bombarded with a tremendous amount of information each day, we develop mental shortcuts as a stress reliever. However, when using these shortcuts, we’re not necessarily aware of when something exceptional may be happening. Then, a number of ethical lapses begin that can silently build in intensity.

I encourage my students to become more aware of their environment and make a conscious effort to be aware of everything around them. They come back amazed. That’s the first step, because when you are aware of surroundings, behaviors and decisions, you’re more conscious about the things you do on a regular basis. Periodically asking yourself why you do something breaks that routine you’ve settled into. Think about what you may have ignored in that process. In a business environment when you are dealing with transactions on a daily basis, it’s very easy to overlook things.

The second step is introducing ethical frameworks. There is no such thing as a right answer, or good ethics or bad ethics.

There’s no definitive truth for every situation, but they find that business ethics is about picking a model and remaining consistent to that model. If you’re consistent, then you can sleep at night without worrying about the decisions you made, or what is going to be on the front page of The New York Times tomorrow about your organization.

Jim Triplett is a faculty member at University of Phoenix’s Cleveland Campus. University of Phoenix, the largest private university in North America, serves a diverse student population, offering associate’s, bachelor’s, master’s and doctoral degree programs from campuses and learning centers across the U.S. as well as online throughout the world. University of Phoenix’s Cleveland Campus serves students online and at locations in Independence, Beachwood and Westlake/Crocker Park. To learn more, contact University of Phoenix at (216) 447-8807 or (800) MY SUCCESS or www.phoenix.edu.