What Is Business Ethics: A Tutorial for Aspiring Leaders
4 Min Read
Unethical behavior occurs in the workplace more often than you might think. In fact, 56 percent of employees have witnessed at least one act of unethical behavior at work. From misrepresenting hours worked and stealing office supplies to lying to the boss and misusing the internet, one recent survey reflects a variety of unethical behavior that has become commonplace in today’s business world.
As this article shows, these unethical behaviors pale in comparison to some of the corporate scandals that have grabbed recent headlines. But before we explore those ethical shortcomings, let’s define business ethics.
What is Business Ethics and Why is It Important?
Ethics relates to an understanding of right and wrong, and it demands that individuals behave in ways that limit harm. Based on this thinking, what does ethics mean in business? Put simply, it involves holding your company to a high standard and not deceiving customers, workers, or regulators. As such, ethics and business are closely linked, and not simply because companies have an obligation to follow the law. In fact, committing to ethics in business offers many advantages, according to The Street. For instance, an ethical business can:
- Build trust: Ethical behavior serves as a marketing tool because consumers often select businesses they consider honest.
- Assure investors: Investors may question the viability of businesses that engage in questionable activity.
- Attract employees: Talented professionals are drawn to brands with strong ethical reputations.
Examples of Ethical Shortcomings in Business
Toshiba made headlines when company executives admitted to padding profit statements by $2 billion over seven years. Volkswagen came under fire when the company admitted installing software on cars to trick EPA testers into believing certain vehicles were more eco-friendly than they actually were.
Even the sports world isn’t immune to unethical behavior. Executives working for FIFA, the governing body of soccer, were indicted by the FBI in 2015 for racketeering and fraud for allegedly taking bribes in exchange for broadcasting rights.
How to Commit to the Key Principles of Business Ethics
Let’s look at some of the actions business leaders can take to ensure their operation is committed to ethical behavior.
Discuss ethical questions
Ethical problems linger in every project, and it’s important to address these issues as needed. Leaders should discuss ethical challenges on an ongoing basis and talk about ways to limit issues, according to the American Management Association. It’s important to weave the topic of ethics into daily work conversations, so employees can identify and avoid unethical behavior.
Lead by example
Leading by example is the tried-and-true mantra of many business leaders, according to Business News Daily. As a leader, your employees watch what you say and do, which is why executives must exemplify the kind of honest behavior they want to see in the halls of their business. It’s not enough to talk about ethics; leaders must practice it.
Create a trusting environment
Leaders who hunt for unethical behavior at every turn aren’t going to foster trusting relationships. The best way to build trust in your employees is to give them the benefit of the doubt, according to a Chief Executive article. In other words, engage them with confidence, not suspicion. Extend this courtesy to your employees, and the majority of employees will return the favor.
Encourage employees to report unethical behavior
If employees see unethical behavior, they must feel comfortable enough to report it. Questionable behavior often lingers because employees fear repercussions for shedding light on situations of business malpractice. Make sure your business encourages employees to speak to managers, no matter how high up the chain of command they are, if they see an ethical breach.
Consider an anonymous reporting system as well, like a tip line that employees can call and leave information for executives to investigate.
In addition to taking the steps above, encouraging employees to further their business education can provide the sound ethical leadership that every business needs.
The online Master of Business Administration at Queens University of Charlotte can help prepare you for these and other challenges in today’s business world. Powered by the McColl School of Business, the online MBA’s focus on business leadership — which encompasses corporate governance and ethics — is evident throughout the curriculum. Online MBA students will develop into leaders based on the program’s 3Cs model:
- Competence
- Character
- Commitment to Community
To get more details about the online MBA experience, request more information here.