Why Business Ethics

Ethics is a set of values or standards that oversee behavior that help us choose how we should act in a variety of situations. 

Unfortunately, people and organisations are not behaviouring and acting appropriately. 

Winning at all cost...

In 2018, members of the Australian cricket team were caught on TV deliberately cheating. Three players – including the Captain and Vice-Captain – were stood down and sent home.

When explaining their behavior, the players said that the team were under constant pressure to win and to keep winning.

Last week Cricket Australia released the official report on this scandal. While there were several findings & recommendations, I thought that the key comment of the report was that the team’s focus on winning was “…not about winning at any cost but winning without counting the cost.” This resulted in an attitude where almost any behavior that resulted in “winning” was acceptable.

Unfortunately, this attitude is also very common in business. Individuals are respected and rewarded for their results, rather than the behavior underlying the results. It seems people generally know the difference between right & wrong, but some are willing to ignore this to achieve their goals.

Ultimately there is a cost for everything. People & Institutions are now reconsidering appropriate corporate behavior and the actual cost that is incurred achieving goals. Research is showing that these achievements are often short term and that the actual cost of the behavior is long term and can be measured in the billions of dollars per year.

Traditionally, corporate behavior was viewed through the lenses of Business Ethics . 

What is Business Ethics

At its most simplistic, business ethics refers to organizational principles, sets of values or standards that oversee behavior that help us choose how we should act in a variety of situations.

An ethical dilemma is when we are faced with situations where we need to make a difficult choice between options that may challenge our ethical & moral standards of “right & wrong”. In the case of the Australian Cricket Captain, the need to win, out-weighed the need to play within the rules.

Positive individual & organizational behavior can create trust and high-quality relationships, nurture higher job satisfaction and commitment, and lower counterproductive behavior in our peers.

When faced with a difficult situation, it often helps to ask yourself the simple question - Would I have done things differently, if I had seen the bigger picture and recognized the consequences of my actions? If the Australian Cricket Captain had asked this question, he may have counted the actual cost of his decision to try to win by cheating - loss of personal, team and national reputation.

Fundamental Areas of Concern

There are 4 basic areas of concern in Business Ethics –

• Conflict of interest - when a person’s business or professional responsibilities are impaired or prevented by personal interests or activities.

• Individual Rights & Responsibilities - an individual’s basic rights are protected by law and are also respected by social convention – good manners and respectful behavior – to ensure people retain their personal dignity.

• Information & Confidentiality - data belongs to the business and is proprietary. It was given to us to help complete of our mission and for no other purpose.

• Customer & Supplier Relations – ensure that relationships are kept professional without the need to give or receive inappropriate gifts and favors. 

How to address an ethical problem?

To make sound ethical decisions you require an understanding of ethical issues and a methodology for exploring the ethical aspects of a decision and weighing the considerations that would result from our choice of action.

Philosophers have over time developed several approaches that can be used to make decisions to solve an ethical dilemma. These include –
• Utilitarian Approach – my decision would produce the greatest benefits and the least harm.
• Rights Approach - my decision would not infringe on the rights of others; for example, rights to the truth, privacy rights
• Fairness or Justice Approach – my decision would ensure "equals are treated equally and unequals unequally” (Aristotle).
• Common Good - my decision would be for the good me and for the good of the community; for example, affordable health care.
• Virtue Approach – my decision would include certain ideals so that I strive to develop my humanity. For example, Honesty, compassion, generosity, integrity, fairness.

Having an understanding and a methodology will not make you more ethical, however, you will have the tools to make better decisions. As with any skill, practice is needed to reinforce this behavior, but it does mean that over time you can and will approach ethical business problems with more confidence.

While everybody generally agrees that an understanding of Ethics is essential in today’s business environment, it is often seen as difficult to understand and to teach to others.

To be able to measure your ethical understanding and to learn how to resolve ethical problems, EDCentral runs practical and realistic workshops using an online simulation. They highlight ethical problems and the required solutions to resolve them.