Ethics in Business: In some situations, where an organisation or industry is accused of poor practices or of being unethical, the majority view may be that the situation was brought on by collective malpractice. Recent examples of this might include the banking crisis. However, in many other situations, it is less the case of individuals or collections of individuals purposefully doing the wrong thing and more the result of ‘mistakes’.
These mistakes are often the result of:
- Focusing on a limited number of options and considering only one or two ideas.
- Failing to think widely enough: what if there was a significant change in the industry, regulatory environment or economy?
- Assuming that the best decision for the business is the best decision for all interested parties.
- Favouring short-term gains over long-term losses.
- Justifying the potential ‘harm’ to other stakeholder groups as necessary to achieve the organisation’s goals.
We feel these issues can be addressed by:
- Examining some key performance indicators and how they link to or might indicate ethical or non-ethical decision-making.
- Creating a culture where individuals are encouraged to think wider than their immediate job role and are given a process to help them consider the potential consequences of their actions.
Our thinking is based on linking three key business drivers, Leadership Trust, Return on Capital Employed and Corporate Reputation. We believe ethics in business is important, if a business performs well when measured against all these it will improve its chance of achieving long-term success.