Debates over ethics have been around for centuries, so it's not surprising that there are several objectives of business ethics. Setting ethical goals helps keep the company acting in an ethical manner. It avoids the damage that comes from doing the wrong thing. It builds loyalty from customers, investors and employees.
TL;DR (Too Long; Didn't Read)
The objectives of business ethics include avoiding negative publicity and keeping you on the right side of the law. To be a genuinely ethical business, you have to do more than the minimum, and you and your team have to commit to following through on your objectives.
Ethical Issues in Business Today
Everyone faces ethical issues in life. Some issues are specific to the business world:
- Harassment. Employees shouldn't have to endure insulting comments about their race or religion or put up with sexual come-ons from their supervisors. The power a company has over its employees makes this one of the big ethical issues in business today.
- Discrimination. Do you reject potential hires based on race or gender? Do you make a conscious effort to avoid bias when you decide who on your team can handle a difficult assignment?
- Compliance with the law. Every business operates under laws and regulations. Do you comply with them, even when they hurt your bottom line? Does your company culture encourage employees to comply or ignore it when they bend the rules?
- Accounting issues. Accounting looks objective, but there are many incentives for companies to fudge the figures. Some do it to reduce their taxes, while others want to present themselves to investors in the best possible light.
- Employee theft. Employees who line their pockets at your expense are not only unethical, but they also hurt the bottom line.
- Fairness. Do you pay employees as little as you can get away with or pay them what they're worth?
- Product safety. Would you sell a product that you know could harm consumers?
- Legal strategies. Outsourcing your labor to countries with weaker environmental and labor laws may be legal, but does that make it the right choice?
Making the wrong call on many of these issues isn't just unethical – it breaks the law. In 2008, the Peanut Corporation of America sold salmonella-tainted peanut butter that caused nine deaths and hundreds of cases of illness. The court gave the CEO a 28-year prison sentence because he knew about the contamination and allowed the sales anyway.
Benefits of Business Ethics
Ethical issues associated with business aims are a challenge because they put self-interest against doing what's right. Presenting your finances honestly may discourage investment, and firing a key employee for sexual harassment costs you his services. It's often tempting to compromise, but there are benefits of business ethics too:
- If employees know you won't tolerate sexual harassment, it builds employee loyalty and makes your company more attractive to talented workers.
- Knowing you run an ethical business can increase customer loyalty as well.
- Investors who know your business is scandal free and follows the law can have confidence that their money won't be wasted.
Start With Basics
As long as you're within the law, you're free to set any ethical objectives that you want for your business. If you're unsure where to begin, go back to the basics and think about how they apply at your company:
- Honesty. Lying in business is always unethical. It may save you short-term pain, but in the long run, it will come back to bite you. It's particularly important to keep any promises you make.
- Accountability. If you screw up, accept the consequences, and don't pass the buck. Let your employees see that you expect the same of them.
- Loyalty. Stand by your employees when they're in the right. Protect them against abuse and harassment.
- Respect. Everyone deserves respect, even employees you have to fire. Treating people like dirt or allowing your staff to do so is never ethical and looks very bad.
- Integrity. You have to be able to walk the walk so that people inside and outside the company can see that you live by the ethical objectives you want your company to follow.
Fraser Sherman has written about every aspect of business: how to start one, how to keep one in the black, the best business structure, the details of financial statements. He's also run a couple of small businesses of his own. He lives in Durham NC with his awesome wife and two wonderful dogs. His website is frasersherman.com