What actions can a strategic leader take to establish and maintain ethical practices within a firm?
Ethics play a major role in modern business and can impact everything from brand reputation and public perception to employee productivity and overall profitability. According to the Society for Human Resource Management, “Companies that work to build and maintain ethical workplace cultures are more financially successful and have more motivated, productive employees.” For this reason, it’s in your company’s best interest to implement some key ethical practices. Show
What is Business Ethics?Investopedia defines business ethics as, “The study of proper business policies and practices regarding potentially controversial issues, such as corporate governance, insider trading, bribery, discrimination, corporate responsibility and fiduciary responsibilities.” Upholding certain values and moral principles is important to the success and longevity of your business because poor ethics can hurt your culture, lower your retention rate and sour relationships. Unethical practices also greatly increase your odds of incurring penalties and open the door for litigation. While the specific approach to business ethics will vary from company to company, there are five common ethical practices that should keep your business on the straight and narrow. 1. Develop Ethical StandardsAn integral first step is to formalize your expectations and make it clear about which behaviors are and aren’t acceptable. If you haven’t done so already, create a code of ethics section in your employee handbook that outlines proper business conduct. This should eliminate any confusion and ambiguity about your company’s ethical practices and keep everyone on the same page. 2. Ensure Leaders Exhibit Proper BehaviorBehavior often trickles down from top to bottom within an organization. It’s therefore crucial that your leaders act virtuously and serve as examples for the rest of your staff. After all, if managers demonstrate questionable ethical behavior, why should anyone else be expected to act with moral conviction? When leaders practice what they preach and uphold a high standard of ethics, the rest of your staff will have a positive role model. 3. Be Diligent About Enforcing PoliciesLet’s be realistic. Not everyone is going to uphold every single ethical expectation 100 percent of the time, and rules will inevitably be broken. It’s important that you don’t tolerate unacceptable behavior and show that there are consequences. Holding employees accountable should prevent the perpetuation of any unsavory behaviors and nip them before they get out of control. 4. Praise Positive BehaviorJust as it’s important to stomp out unethical practices, it’s equally important to praise your employees for following best practices. This doesn’t have to be anything over the top, but you should make it a point to acknowledge individuals who live up to expectations. Doing so should serve as positive reinforcement, which can have some long-term benefits for your business. 5. Promote Community InvolvementWhat’s a common thread among some of the world’s most ethical companies? Most tend to place an emphasis on community involvement and are genuinely interested in having a positive impact on the world. Whether it’s raising money for local causes, establishing volunteer programs for employees or donating to worthy charities, this can be huge. Following ethical practices is important for many reasons and a major selling point to many of today’s consumers. By taking measures to promote ethics in your workplace, you can create a better culture, improve your brand reputation and simply feel good that you’re doing something positive. Ethical leadership means that individuals behave according to a set of principles and values that are recognized by the majority as a sound basis for the common good. These include integrity, respect, trust, fairness, transparency, and honesty.
Ethical leadership must be a conscious decision. As Fred Kofman writes in his book Conscious Business, “To be conscious means to be awake, mindful. To live consciously means to be open to perceiving the world around and within us, to understand our circumstances, and to decide how to respond to them in ways that honor our needs, values, and goals.” He continues, “To be unconscious is to be asleep, mindless… Consciousness enables us to face our circumstances and pursue our goals in alignment with our values. When we lose consciousness, we are swept away by instincts and habits that may not serve us. We pursue goals that are not conducive to our health and happiness, we act in ways that we later regret, and we produce results that hurt us and those we care about.” Why is it essential to be an ethical leader?There are many good reasons to be an ethical leader. From a collective perspective, leaders can inspire those around them to behave ethically. By setting an example and giving the direction for ethical behavior, others will observe and act similarly. In this way, ethical leaders can positively influence many others, presenting them with a set of actions that they can adopt for the greater good. On a personal level, being an ethical leader is essential for credibility and reputation. If one aims to be a leader, it is a long game. Behaving unethically can automatically take a leader out of the A-league and may heavily damage their personal or company brand. Moreover, unethical behaviors often deteriorate one's self-esteem, leading to a suboptimal outcome and a missed opportunity to express one’s full potential. 6 elements that define ethical leadershipEthical leadership encompasses many things but ultimately boils down to these six main elements.
Which are the traits of an ethical leader?“The best way to do is to be.” – Lao Tzu Leaders play a crucial role in corporations, as they have been chosen to guide others. What do great ethical leaders do, and what ethical traits do they have in common?
7 ways ethical leadership can affect an organizationEthical leadership provides enormous benefits to organizations, in many ways.
How to improve your ethical leadership skills?Great leaders know there is always room for improvement. Here are some ways you can become a better ethical leader.
Examples of good ethical leadershipWant to see what ethical leadership looks like in action? These ethical leadership examples will demonstrate some real-world scenarios.
An ethical leadership example in actionImagine you’re on a call with your biggest customer, alongside your boss, and the customer is extremely dissatisfied. Your product had an outage that severely impacted their business and they want to make sure it doesn’t happen again. Your boss assures them this is a one-time occurrence, and that it won’t be a problem in the future. When you hang up, you remind your boss that this issue has been occurring among customers with increasing frequency and that a fix is still in the works. Your boss nods and says, “Yes, but they don’t need to know that just before their contract renewal.” Fast forward a couple of months, and your customer calls to cancel their contract following another outage. Your boss again gets on the line to say how sorry they are and that this is a rare occurrence, but that they can’t cancel their contract without ample notice. Is that the kind of person you want to work for? Or do business with? They knowingly put their customer in a bad position, so they could get credit for a contract renewal. This not only creates a strained relationship with your customer, but it also demonstrates to everyone on your team that this sort of behavior is expected. As others emulate this behavior, your company begins to get a bad reputation, lose customers, and struggle to find new customers. Now imagine if your boss had owned up to the outages, promised to keep the customer in the loop about fixes, and sincerely asked the customer to stay onboard. The customer may or may not renew, but they wouldn’t be leaving with bad blood. They may even come back at a later date or refer other potential customers. That’s the difference ethical leadership can make. It may literally be the difference between survival and failure. Final thoughts on ethical leadershipEthics and leadership go hand-in-hand. While some tend to think there is a choice to make between being profitable and successful, or behaving ethically, That’s simply not the case. Ethical people and leaders are necessary drivers for success. What actions can leaders take to promote ethical behavior?How can you be an ethical leader?. Define and align your values. ... . Hire people with similar values. ... . Promote open communication. ... . Beware of bias. ... . Lead by example. ... . Don't be afraid to admit mistakes. ... . Find your role models. ... . Embed corporate social responsibility into your business strategy.. What are the three actions leaders should take to make sure that their decisions are ethical?The answer is discussing three critical principles for ethical decision-making: transparency, responsibility and empathy. These principles are essential for all leaders to consider as they navigate the challenges and opportunities of the digital era.
What steps can be taken to create and maintain an ethical culture in a business organization?Here are six simple ways in how to create and maintain an ethical workplace culture environment:. Integrate core values into the day-to-day. ... . It begins at the top. ... . Reinforce the message. ... . Create a safe, open space for communication. ... . Reward good behavior. ... . Partner with ethical vendors.. What strategies can companies put in place to ensure that they operate ethically?Here are our Top Tips for raising the bar and creating a more ethical workplace:. Create a code. ... . Engage with your employees and customers. ... . Reinforce the benefits of the code. ... . Be a good role model. ... . Train your employees. ... . Promote your ethical behaviour. ... . Reward ethical behaviour. ... . Learn from your mistakes.. |