Despite the obvious value of business ethics a discussion on the topic elicits a range of perceptions and opinions.
A common response is to question whether there are such things as business ethics. Echoing this, it is often regarded as an oxymoron, reflecting the view not only that business and ethics are contradictory, but that business is generally not ethical.
This point of view warrants debate because it can be harmful, undermining the pursuit of an ethical culture and deflecting effective implementation of workplace ethics initiatives.
The view that business and ethics are contradictions in terms is supported by the many examples of unethical conduct. Exacerbating this is the tendency to infer that these behaviours afflict all businesses.
Countering this view are the numerous reasons why ethics make good business sense.
A primary rationale is that they promote ethical behaviour and create a more trustworthy workplace. The many advantages of this include faster and more consistent decision-making, greater confidence in top management action and more individual accountability with less need for policing.
Ethics and a strong ethical culture help to reduce unethical behaviour and support compliance with applicable laws, rules and regulations. This minimises the probability of ethical failure and decreases the risk of consequent loss and damage.
Stakeholder management is a reason why ethics make good business sense. This is because all the company’s stakeholders – employees, customers, investors and unions – constantly assess the ethical status of the organisation based on factors such as how stakeholders are treated, whether values and rules apply differently for different stakeholders, and press reports.
Conclusions about the ethical status of the organisation may rest on the stakeholders’ perceptions – those represent the reality that will be acted upon.
A negative view can be damaging, while a positive view lends itself to many benefits, such as the ability to attract and retain top staff and board members, improved investor and market confidence, reduced cost of capital and enhanced corporate reputation.
Competitive advantage is a crucial reason why workplace ethics make good business sense.
Although competitive advantage is critical for almost all companies, it is frequently limited because of the ease and speed with which many sources of competitive advantage can be copied.
A unique source of competitive advantage, which cannot be easily copied, therefore has far greater value.
Workplace ethics offer just such a source: ethic are not easy to copy, they cannot be bought or sold or owned, but must be lived every day. They are among a company’s most valuable intangible assets.
For these reasons, among others, the view that ethics make great business sense continues to gain ground.
The answer to the question of whether there really are such things as business ethics is, therefore, “yes”.
The benefits above should be viewed as the returns that can be gained from an investment in ethics and an ethical culture.
Reaping these rewards is not automatic. It rests on leadership commitment and the proactive, effective management of workplace ethics.
l Cynthia Schoeman is managing director of Ethics Monitoring and Management Services. The Ethics Monitor is a web-based ethics survey. Contact Schoeman at 011 447 7661 or [email protected] za. Visit www.ethicsmonitor.co.za