In the complex global business environment of the 21st century, companies of every size face a multitude of ethical issues. Businesses have the responsibility to develop codes of conduct and ethics that every member of the organization must abide by and put into action. Fundamental ethical issues in business include promoting conduct based on integrity and that engenders trust, but more complex issues include accommodating diversity, empathetic decision-making, and compliance and governance consistent with a company’s core values.
Fundamental Ethical Issues
The most fundamental or essential ethical issues that businesses must face are integrity and trust. A basic understanding of integrity includes the idea of conducting your business affairs with honesty and a commitment to treating every customer fairly. When customers think a company is exhibiting an unwavering commitment to ethical business practices, a high level of trust can develop between the business and the people it seeks to serve. A relationship of trust between you and your customers may be a key factor in your company’s success.
Diversity and the Respectful Workplace
Your current and potential employees are a diverse pool of people who deserve to have their differences respected when they choose to work at your business. An ethical response to diversity begins with recruiting a diverse workforce, enforces equal opportunity in all training programs and is fulfilled when every employee is able to enjoy a respectful workplace environment that values their contributions. Maximizing the value of each employees’ contribution is a key element in your business’s success.
A useful method for exploring ethical dilemmas and identifying ethical courses of action includes collecting the facts, evaluating any alternative actions, making a decision, testing the decision for fairness and reflecting on the outcome. Ethical decision-making processes should center on protecting employee and customer rights, making sure all business operations are fair and just, protecting the common good, and making sure the individual values and beliefs of workers are protected.
Compliance and Governance Issues
Businesses are expected to fully comply with environmental laws, federal and state safety regulations, fiscal and monetary reporting statutes and all applicable civil rights laws. For example, the Aluminum Company of America’s (ALCOA) approach to compliance ensures no one at the company may ask any employee to break the law or go against company values, policies and procedures. The company’s commitment to compliance is shored up by its approach to corporate governance: the company expects all ALCOA directors, officers and executives to conduct business in accordance with its business conduct policies.
Some professions, such as health care and the law, have a clear code of ethics that spell out what a person should and should not do in certain situations. However, a great many of other professions don’t have guidelines to help someone navigate tricky situations. It’s then up to each organization – or even each person in some cases – to decide how to handle ethical issues.
Social Media Use
Whether you like it or not, social media is an important business marketing tool, and it’s likely an integral part of employees’ lives. The evolving nature of social media means that it’s becoming harder to distinguish between personal and professional in a social media setting.
To ward off any potential ethical issues, a small business owner should create a clear set of social media policies for employees. Policies can cover both how and if workers can use any social media programs while in the office, as well as what they are allowed to say about the workplace on public-facing social media pages.
Technology and Privacy Concerns
Today’s technology security abilities mean that employers can easily monitor their workers’ use of technology, such as emails and website history. However, a business owner might run into the ethical issue of how much privacy an employee can expect when on a company device, whether computer, tablet or phone. As with social media usage, employees should have a clear understanding of how much, if any, privacy they have when using a company-owned device. They should be alerted if the company leadership plans to read email or if their internet usage will be tracked.
Business Travel Ethics
Some businesses require both leadership and employees to travel on the company dime. Ethical issues can result when someone takes advantage of travel policies. Examples include using an allotted per diem to purchase alcohol when it’s stated in the employee manual that it’s not allowed or using a personal credit card to book trips to gain the rewards and pocketing the cash given to you by the company. While these actions aren’t illegal, they can be considered ethical issues if someone’s boss isn’t aware of what is going on or if the employee knows the action would be frowned upon.
Perils of Employee Favoritism
While it’s not unreasonable for the owner of an organization to have employees that they enjoy working with more than others, there can be ethical issues if the person in a position of leadership shows favoritism to an employee without any merit behind it. Giving in to playing favorites can cause a business to lose valuable employees. However, keep in mind that favoritism is different from forms of sexual harassment, which is not an ethical issue – it’s just illegal.
Bad Leadership Behavior
Sometimes, it’s not the employee who exhibits unethical behavior, but the owner or head of the company. Putting rules in place for employees but not following them yourself is an example of an ethical issue in the workplace. To keep your employees motivated and satisfied with their workplace, a leader should practice what he preaches and keep his own behavior ethical.
Ethics Management Key Roles and Responsibilities
Depending on the size of the organization, certain roles may prove useful in managing ethics in the workplace.
These can be full-time roles or part-time functions assumed by someone already in the organization. Small organizations certainly will not have the resources to implement each the following roles using different people in the organization.
However, the following functions points out responsibilities that should be included somewhere in the organization.
- The organization’s chief executive must fully support the program.
If the chief executive isn’t fully behind the program, employees will certainly notice — and this apparent hypocrisy may cause such cynicism that the organization may be worse off than having no formal ethics program at all.
Therefore, the chief executive should announce the program, and champion its development and implementation.
Most important, the chief executive should consistently aspire to lead in an ethical manner. If a mistake is made, admit it.
- Consider establishing an ethics committee at the board level.
The committee would be charged to oversee development and operation of the ethics management program.
- Consider establishing an ethics management committee.
It would be charged with implementing and administrating an ethics management program, including administrating and training about policies and procedures, and resolving ethical dilemmas.
The committee should be comprised of senior officers.
- Consider assigning/developing an ethics officer.
This role is becoming more common, particularly in larger and more progressive organizations.
The ethics officer is usually trained about matters of ethics in the workplace, particularly about resolving ethical dilemmas.
- Consider establishing an ombudsperson.
The ombudsperson is responsible to help coordinate development of the policies and procedures to institutionalize moral values in the workplace.
This position usually is directly responsible for resolving ethical dilemmas by interpreting policies and procedures.
- Note that one person must ultimately be responsible for managing the ethics management program.