At its most base level, ethics is considered the ability to do the right thing; in a business culture, ethical leaders and their teams "take the 'right' and 'good' path when they come to ethical choice points," according to Charles D. Kerns. Overall, business ethics influence the culture of an organization. An employee making an ethical choice will make the established right choice every time, but an ethical business culture will encourage the right choice even if a brand new situation arises.
There are three primary vectors through which business ethics influence the culture of an organization: the behavior of employees, the policies and relationships with other companies, and the organizational solutions for customer support.
1. Ethical employees
A key tenant of ethics, according to the article by Dr. Kerns, is that values drive behavior. A large part of company culture is the choices that employees make over time. Employees, therefore, drive the ethics of a company's organization.
It's important to note that the written ethics of a company's culture are important, but ultimately it will be the behavior of other employees that will determine the company's overall ethical direction. For example, a company could have a stated policy stressing the importance of work-life balance, employees completing their work on time, and avoiding overtime on most occasions.
If, however, upper management stays late to work every single day, that change is going to become part of company culture, no matter what policy says.
To support ethical employees companies should develop strong and clear statements on ethics for the company at large. These statements should include clarity on how employees are expected to act overall, and management should be aware that they not only are not above these regulations, but will be held to them even more strictly than the average employee. Management must be above reproach in all ethical areas if they are to administer ethical policies.
2. Vendors and other third-party organizations
Another key component of an ethical business is the relationship with other companies. After all, if a company focuses carefully on being decent and appropriate to its employees, but goes out of its way to behave inappropriately with other business representatives, something is off balance in its ethics.
For example, a company could have a policy which states that all employees should be fairly compensated for their work. It could also have a policy which encouraged late payment on vendor invoices, using company power to force third party vendors to accept inferior terms for payment, or even to avoid paying bills or invoices entirely.
To support ethical business relationships companies should make sure that they treat other companies fairly, and their external policies mirror their internal ones. If a business creates a policy which they would hate to have turned on them, the policy is probably neither ethical nor ultimately good for business.
3. Customers and clients
Ultimately, businesses exist to serve their customers. Businesses that expect to serve their customers over time, grow their bottom line and their reputation, and even disrupt their industry, need to place a high priority on ethical behavior. Ethical behavior manifests in customer policies which ensure products and services are priced fairly, that products are of an appropriate quality for their cost, and that customers who experience problems or difficulties are responded to quickly and appropriately.
Some companies unfortunately treat their customers like a resource to be exploited instead of a valuable partner in their company. An example could be airlines, which are generally agreed to be squeezing their customers as far as possible with fees for absolutely everything, from baggage fees to cancellation fees.
While it's easy to say that customers could simply not fly, that isn't a realistic situation in a global society where business clients, in particular, are expected to be in many different cities at many different times.
To create ethical customer relationships, companies must make sure that they are providing a service or product which is fairly priced, and which customers can actually get. Charging one fee to get a product, then heaping on additional prices and costs to make the product functional, for example, is going to generate bad reviews, bad experiences, and can ultimately destroy a company.
In the age of social media, where one bad review or experience has the ability to go viral and completely take over a company's social media messaging, companies must ensure that their internal and external policies exemplify the very best the company has to offer. From employees to partners to customers, businesses must behave responsibly at all levels.
What advice would you offer to a new company building its ethics policies?