Business ethics? Is there such a thing? As an ethics keynote speaker, author and consultant, I can’t begin to say how many times I have heard those flippant responses to the question of “What is the impact of ethics on business?”
Of two things, I am certain: business ethics has a huge impact on organizations and associations and when a sense of business ethics fails, organizations fail. Any organization serious about corporate social responsibility must also be serious about ethics in business.
Ethical impact
In a presentation at the University at Redlands School of Business & Society (October 2021), on 3 Reasons Why Business Ethics is important, one of the key points made was that business ethics drives employee behavior.
What is the impact of ethics on business? In the very least, it should drive employee behavior. Simply put, an ethical culture will help to create an ethical organization. The caveat being that an ethical business buy-in must go from the top-down. If an organization desires a reputation as a corporation or association that is socially responsible, the leaders must embrace good ethics, and be socially responsible not just in words, but deeds.
Under the heading of good business ethics, we must include (according to the University at Redlands), the following commitments: to commit to defining the ethical program mandate; to mitigate and monitor risks; to establish ethical policies and procedures; to oversee allegations of misconduct; to provide training and communications: to reinforce behavioral expectations and to manage the function of behavioral ethics.
As an ethics motivational speaker, ethics consultant and book author, I have learned that a commitment to training and a reinforcement of that training, encourages an ethical culture.
Skeptics? Bring them on!
What is the impact of ethics on business? Perhaps the best way of answering that business ethics question is to point out a few examples of unethical cultures that were allowed to be cultivated in major organizations.
Not all that long ago, technicians at Volkswagen brought an alarming situation to middle management. A new motor that was supposed to deliver emissions well below the EPA standard as advertised, failed to meet standard.
Middle management berated the technicians who warned them of the failure. They were basically told shut-up. Middle management then kicked the problem to upper management, and upper management, oblivious to good business ethics, decided to essentially fake the numbers.
The almost immediate consequence were massive fines and penalties, firings and an almost irreconcilable loss of reputation.
Remember the pressure upper management at Wells Fargo Bank Corporation put on their commercial banking people to open fake accounts? Suddenly, banking customers were getting multiple charges and notices about accounts they never opened. Why did this happen? Largely, to impress “Wall Street.” The executives who ordered this charade were terminated and/or censured and the result was a loss of business, reputation destroyed and many good employees who decided to leave.
And let’s not forget Theranos and their “magic black box” which supposedly could analyze 250 blood tests from a single drop of blood – except it couldn’t. The company and its CEO took nearly $1 billion from investors for a technology that was an abject failure. For her lack of ethics, the CEO is currently facing jail time. The company is boarded-up and all of the employees gone.
In the examples of unethical business ethics above, we see corporate cultures where the refrain “Business ethics? Is there such a thing?” was tossed around as though a “C-Suite” joke. They all learned it wasn’t.
In my role as an ethics consultant and speaker, I point out that ethics is not a tagline, but an imperative. Its impact is everywhere.
LEAVE YOUR COMMENTS!
