The Enron debacle hasn’t exactly boosted public confidence in large corporations. As Andersen and friends plod their weary way through the courts, the tide of cynicism rises around them — and washes over the corporate world. Journalists, meanwhile, sharpen their pens for the next case study in corporate greed. Who will take the walk of shame tomorrow?
The silver lining, if there is one, may be a resurgence of interest in business ethics. Business ethics examines the conduct of business toward clients, staff, other business, professional organizations, regulatory bodies and the public. It’s a mistake to dismiss ethics as a frill or an afterthought, corporate leaders are now saying. In response to pressure from clients, shareholders, boards of governors, regulators and the public — as well as their anxiety to avoid media scrutiny — a growing number of businesses are learning to regard ethics as an investment.
Employees make myriad choices every day, choices which — if unethical — can damage a company’s productivity, profits and reputation. So, where to start? An organization’s leadership must understand what ethics can, and cannot do for corporate culture: how to formulate a corporate code of ethics and — this is the hard part — how to implement it. Without implementation, the best code of ethics is empty rhetoric.
Ethics is concerned with what ought to be done in any particular situation. It determines standards for behaviour. Behaviour in the marketplace begins with the very premise of profit making, and addresses all business practices, including marketing and advertising. Duties and responsibilities attach to the generation of products and services, the employment of staff and the development of markets. Just when you think you’ve worked it all out, new avenues for production, employment or marketing — the Internet’s an obvious example — throw up new ethical dilemmas.
Asked to identify the ethical issues in their workplace, most managers will think of nightmare crises. But not every ethical issue in one’s working life presents a watershed moment. Many are ordinary, everyday struggles. Because they occur so often, managers may not always recognize the ethical nature of their moral problems, but there is an ethical component to virtually every decision a manager makes.
Managers may be struggling to balance the obligations of their professional role against organizational responsibilities, or to set a standard for assessing conflicts of interest such as accepting benefits from clients and moonlighting.
Managers of human resources may find themselves embedded in thorny ethical thickets when downsizing or re-engineering, when deciding to appoint new staff rather than run a competition, when implementing an employee incentive program. Issues of seniority and job protection may prove morally sticky. Ethical challenges are sometimes straightforward and can be readily resolved. All too often, however, they loom too large for the lone warrior in the corner office.
Corporate Code of Ethics
Recognizing responsibility to prevent harm that may result from their operations, some corporations develop a corporate Code of Ethics. This is a good idea for the emerging business. Corporations that fail to act responsibly face the potential of public ridicule and legal sanctions, including fines, revocation of licences and societal withholding of patronage.
Several benefits accrue from a relevant code:
•it articulates the values of the corporation;
•it provides guidance in decision-making; and
•it provides potential employees with a concise tool by which to determine if their personal values are in conflict with professional values.
But a Code of Ethics will not make employees intrinsically moral, nor will it cast a golden light over long-established business practices that may turn out to merit, unfortunately, systemic overhaul. The code is a standard. It will need to be upheld by human beings who may need to steel themselves to defend it. And it may need, from time to time, to be updated. What a Code of Ethics will do is give managers a concrete means to enforce a value system for the corporation, by providing a collective sense of right and wrong against which specific issues can be systematically assessed.
Business faces increasing pressure to provide competitive products or services in an ethical manner. The trend toward more public and more intensive evaluation of — for example, hiring and firing practices — means that HR managers are among the growing company of working professionals who need to substantiate their decisions. Should you find yourself standing in such a spotlight, that course in business ethics may prove surprisingly handy.
Peter Allatt is a clinical ethicist at two hospitals in the Toronto area, and teaches health-care ethics at the University of Toronto and Humber College. He may be contacted at [email protected]. Barbara Mains is a freelance writer.
The silver lining, if there is one, may be a resurgence of interest in business ethics. Business ethics examines the conduct of business toward clients, staff, other business, professional organizations, regulatory bodies and the public. It’s a mistake to dismiss ethics as a frill or an afterthought, corporate leaders are now saying. In response to pressure from clients, shareholders, boards of governors, regulators and the public — as well as their anxiety to avoid media scrutiny — a growing number of businesses are learning to regard ethics as an investment.
Employees make myriad choices every day, choices which — if unethical — can damage a company’s productivity, profits and reputation. So, where to start? An organization’s leadership must understand what ethics can, and cannot do for corporate culture: how to formulate a corporate code of ethics and — this is the hard part — how to implement it. Without implementation, the best code of ethics is empty rhetoric.
Ethics is concerned with what ought to be done in any particular situation. It determines standards for behaviour. Behaviour in the marketplace begins with the very premise of profit making, and addresses all business practices, including marketing and advertising. Duties and responsibilities attach to the generation of products and services, the employment of staff and the development of markets. Just when you think you’ve worked it all out, new avenues for production, employment or marketing — the Internet’s an obvious example — throw up new ethical dilemmas.
Asked to identify the ethical issues in their workplace, most managers will think of nightmare crises. But not every ethical issue in one’s working life presents a watershed moment. Many are ordinary, everyday struggles. Because they occur so often, managers may not always recognize the ethical nature of their moral problems, but there is an ethical component to virtually every decision a manager makes.
Managers may be struggling to balance the obligations of their professional role against organizational responsibilities, or to set a standard for assessing conflicts of interest such as accepting benefits from clients and moonlighting.
Managers of human resources may find themselves embedded in thorny ethical thickets when downsizing or re-engineering, when deciding to appoint new staff rather than run a competition, when implementing an employee incentive program. Issues of seniority and job protection may prove morally sticky. Ethical challenges are sometimes straightforward and can be readily resolved. All too often, however, they loom too large for the lone warrior in the corner office.
Corporate Code of Ethics
Recognizing responsibility to prevent harm that may result from their operations, some corporations develop a corporate Code of Ethics. This is a good idea for the emerging business. Corporations that fail to act responsibly face the potential of public ridicule and legal sanctions, including fines, revocation of licences and societal withholding of patronage.
Several benefits accrue from a relevant code:
•it articulates the values of the corporation;
•it provides guidance in decision-making; and
•it provides potential employees with a concise tool by which to determine if their personal values are in conflict with professional values.
But a Code of Ethics will not make employees intrinsically moral, nor will it cast a golden light over long-established business practices that may turn out to merit, unfortunately, systemic overhaul. The code is a standard. It will need to be upheld by human beings who may need to steel themselves to defend it. And it may need, from time to time, to be updated. What a Code of Ethics will do is give managers a concrete means to enforce a value system for the corporation, by providing a collective sense of right and wrong against which specific issues can be systematically assessed.
Business faces increasing pressure to provide competitive products or services in an ethical manner. The trend toward more public and more intensive evaluation of — for example, hiring and firing practices — means that HR managers are among the growing company of working professionals who need to substantiate their decisions. Should you find yourself standing in such a spotlight, that course in business ethics may prove surprisingly handy.
Peter Allatt is a clinical ethicist at two hospitals in the Toronto area, and teaches health-care ethics at the University of Toronto and Humber College. He may be contacted at [email protected]. Barbara Mains is a freelance writer.
