The Keys to Running an Ethical Organization

What do Hewlett Packard’s spy operations, Wells Fargo’s fake customer accounts, and Mylan Pharmaceutical’s price-gouging all have in common?

A lapse in Business Ethics.

What does “Business Ethics” mean? The short definition is a moral code of conduct companies adopt and pledge to follow. “Ethical Standards forbid tolerance of and participation in activities considered immoral, unlawful, unfair, dangerous, irresponsible and generally harmful.” Businesses can lower the risk of becoming lawsuit targets by setting ethical standards.

First things first, Accountable Leadership is key to any business. Businesses that are considered to be “ethical” have a high moral code and expect honest and trustworthy behavior from everyone in their organizations. Whether they are Chief Executive Officers or other high-level company leaders, it’s required that they hold themselves accountable for following and enforcing the same ethical standards as their employees.

Author Laurie Haughey of “Athletes Off the Field: A Model for Team Building and Leadership Development Through Service Learning,” cites 5 high-standard goals of ethical leaders:

  1. Communication in which ethical behavior is both carried out and instilled in a company’s brand.
  2. High-quality products & services that everyone in the organization takes responsibility for producing.
  3. Collaboration with diverse groups of advisors.
  4. Succession planning in which future company leaders pledge to maintain ethical behavior.
  5. Tenure – which requires leaders to work for the company in the most ethical way until they decide to leave.

The next question you will want to ask is, “What does acceptable conduct look like?”

Through internal rules of conduct, businesses can maintain ethical workplace behavior. A good way for companies to establish rules of conduct, so that everyone is aware and is held to the same standards, is to publish a Rules of Conduct policy in their Employee Handbook and require employee’s to sign agreements stating that they read and understood the rules and consequences for violating them. It’s up to managers to run an “Ethical Office.” Companies who are considered to have an “ethical office” promote honesty and trust in communicating with employees, directors, stockholders, and customers.

A lapse in ethics has led some businesses to exaggerate their earnings, products’ capabilities, and stock values due to companies bending to the pressures of meeting sales goals. A lot of times, companies overpromise and under deliver their services. Nowadays, customers are more vigilant and less accepting of unethical behavior, leaving it up to organizations to conduct themselves based on a higher moral code.

HR can head up ethics initiatives in their organizations. HR knows how to help employers behave like good corporate citizens for their employees and the surrounding communities, and operate within the law.

Bolden-Barrett, V. (2017, March 17). The keys to running an ethical organization. Retrieved March 20, 2017, from http://www.hrdive.com/news/the-keys-to-running-an-ethical-organization/438355/

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About HR Strategies

HR Strategies is a private human resource management firm created to enable small business owners to focus on their core competencies, rather than the tedium of running payroll, providing employee benefits, or the many other facets of human resource administration. We allow business owners to concentrate on their passion, without being distracted by countless human resource responsibilities.

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