Ethics and business are intrinsically intertwined. A company that operates according to the set of ethics its consumers expect typically performs more strongly than a company that does not publicly operate according to a specific ethical code, and companies that maintain pro-employee ethical codes tend to have healthier workplace environments and retain more talented employees than those that do not.
The Importance of Business Ethics
Making ethical considerations in business is not just important for developing a positive public image for a company. It can also help the company avoid lawsuits and the potential consequences related to them, such as fines and negative media coverage.
Committing to certain ethical positions, like only working with vendors that pay their workers fair wages, can also help improve workers’ lives around the world. When making an ethical decision, a company leader has to think beyond the decision’s immediate repercussions and consider all of his decision’s potential outcomes.
Business Ethics Theories
There are many different approaches leaders can take to making ethical decisions. Three common frameworks for tackling ethical issues in business today are:
The consequentialist theory requires the decision maker to consider every possible consequence of her decision and then take the action that would do the least amount of total harm.
The virtue theory operates on the principle of “what would a virtuous person do?” With this framework, the decision maker considers whether the course of action she is considering is one a virtuous person – whom she may define as a kind, fair, compassionate or responsible person – would take. The duty framework posits that we all have certain duties, such as the duty to help others, and that we should act in accordance with the duties we are expected to perform.
Examples of Ethical Issues in the Workplace
A few examples of ethical issues in the workplace that can arise include:
- Environmental sustainability.
- Transparent internal and external communication.
- Respect for human rights.
- Fair wages for employees and vendors.
- Complying with OSHA workplace standards.
- Fair treatment of employees and contracted workers.
- Compliance with industry regulations.
- Compliance with state and federal laws.
Creating a Business Ethics Code
To ensure that its employees make ethical considerations in business, a company can craft an ethics code according to the principles it deems to be important to its mission. An ethical code is not a set of procedures but a set of guiding principles to which the company’s employees refer when making ethical considerations in business.
Once a company has its ethical code in place, it can use the ethical code to develop other guidelines, like its code of conduct. A code of conduct is a set of expectations the company has for its employees, its vendors and any other entities with which it interacts, like nonprofit partners.
Ethical Issues in Business Today
Companies face many ethical issues in business today that they did not face in the past. These issues are related to the realities companies face now that they did not face before, like adapting to a global economy and wrestling with the ethical challenges related to doing business online, like how to handle consumer data.
As technology advances and social expectations change, companies should be prepared to adapt their ethical codes to cover modern employee needs and consumer needs. A few examples of ethical issues in the workplace of which companies have to be cognizant today are how to react to employees’ questionable social media posts and whether to provide gender-neutral restrooms.
In many situations where an ethical framework has to be applied to determine the right response, there are no clear-cut answers. Rather, companies have to rely on their ethical codes to guide them toward the right responses.
- the balance is an emblem of justice image by Pali A from Fotolia.com