Introducing ethics in business operations

Bradwell Mhonderwa Business Ethics
Unethical practices are rife in most organisation which is an indication of the lack of clear cut ethics management processes in their operations. Ethical challenges that are inherent in most organisations are there because of value conflicts that pit their short term needs against their long term interests.

Left unattended for a long time, unethical business practices have the potential to tear organisations apart bringing untold suffering to those who are dependent on them.

Unethical practices result in loss of employment, spiraling costs for firms, loss of potential investors, capital flight, loss of revenue for the state, a battered reputation, and widespread employee disillusionment.

Linda Trevino, an ethics expert and professor of organisational behaviour identified what she called the eight steps organisations must adopt to prevent ethical lapses in their operations, and these are discussed below.

She will be the keynote speaker at South Africa’s national ethics conference to be hosted by the Ethics Institute of South Africa on May 26, 2014 in Johannesburg.

Step 1
Professor Linda Trevino suggests that leaders must be responsible for shaping the ethical behaviour of their organisations with the CEOs being at the centre of driving the whole process.

This means the CEO must never downplay the ethics responsibility and give it a lesser role than other key leadership responsibilities he/she holds in the organisation.

The CEO must set the strategic tone regarding organisational ethics and he/she must ensure management do the same with employees.
Managers must communicate to employees the ethics message with as much emphasis and clarity as they do with other operational processes.

Step 2
Organisations must design a code of ethics to provide guidelines and direction to employees on expected ethical behaviour.

Dr Trevino observes the centrality of the code of ethics in forming the ethical culture and suggests that the code crafting process should secure input from a broad section of constituencies within the organisation including employees and external stakeholders.

The code should then be accessed by every member of the organisation, and it must be referred to often in training and other forms of communication to employees so that it becomes an important document that answers questions with regard to what the organisation wants to achieve.

Step 3
Policies and processes on how staff should report ethical lapses and resolve ethical dilemmas must be established and reinforced in the organisation.

This means employees must be fully aware of the procedures to follow when reporting ethical concerns and they should as well have the assurance that they can do so without fear of victimisation or retaliation.

Ethical employees must be rewarded for their exemplifying behaviour and those who are unethical should be punished.

Step 4
Ethics is everyone’s responsibility, meaning business ethics training should cut across all staff levels and positions of authority and operation in the organisation.

Ethics training must be conducted in various settings such as business strategic meetings, periodical ethics workshops, during induction of new employees, in departmental meetings, etc.

Business ethics training should include case studies where employees must examine and discuss ethical challenges that they regularly face and possible actions they should take to remedy the situation.

Step 5
The practice of questioning decisions must be encouraged to ensure ethics are embedded in all decision making processes of the organisation.

Decisions must be challenged and scrutinised in order to limit as much as possible the chance that stakeholders may be jeopardised as a result of the decision. The practice of questioning decisions and openly exploring their consequences in group discussions grows the ethical being of staff and intrinsically motivate them.

Step 6
Professor Trevino explains that accountability for ethical behaviour must be taken seriously at all levels of the organisation.

This means unethical behaviour must be punished without fear or favour, and that unethical behaviour must never be seen to be rewarded in the organisation.

Performance management systems should incorporate ethics measurement besides measuring the usual aspects of job performance. There should never be excusable unethical practices perpetrated by senior members of the organisation because everyone look up to them for exemplifying behaviour.

This means senior executives should hold themselves to the highest standards of behaviour because the real culture of an organisation is set not by company listed values or mission statement, but by how the bosses behave.

Step 7
When ethical lapses occur, organisations should act swiftly to protect stakeholders. Contingency plans to deal with crises of this nature should include apologising to stakeholders and offering compensation where necessary. Step 8

Staff at all levels in the organisation must know that their primary responsibility is to defend and maintain the reputation of the organisation at all times.

Leaders should encourage standards of behaviour to be set higher than what the law requires and it must be clear to all and sundry that any conduct below that standard is unacceptable.