The success of an organization is built off of the trust of customers, employees, and the general public. Show
According to a Gallup poll, “68% of adults worldwide believed corruption was widespread among businesses in their country…… and 60% of adults in the U.S. responded this way in 2017…..” The best way to gain that trust is to demonstrate ethics and integrity in business practices. Not because of legal requirements – but because it is the right thing to do. A great example is the infamous Enron Collapse and Bernie Madoff Ponzi scheme stories. Thousands of employees and investors were impacted. This resulted in corporate collapse due to unethical behaviors and business practices. Gallup research has shown that millennial-age employees, in particular, want their careers to coincide with their personal values; they view their jobs as sources of meaning and purpose, rather than just a way to make a living. The integrity of a business affects all customer groups and every area of business operations. This is why it is important to incorporate ethics and integrity into the core fabric of the organization. 7 Ways To Demonstrate Ethics and Integrity In Your Business1. Customer Value StrategyEthical standards in business are built off of a customer focus and commitment to providing value to its customers. When an organization is committed to improving the lives of its customers, it would be when there is a violation of that trust that would cause concern from a strategic perspective. For instance, the Facebook privacy and data sharing scandal caused mistrust of users. There were deception and users did not have a good understanding of how Facebook was using their profile data. Not something you would prefer if you are committed to providing value to your customers. 2. Accounting PracticesFinancial honesty and transparency is a basic expectation of shareholders, customers, and employees. It serves no one when organizations “cook the books” – whether it be intentional or accidental. Careless accounting practices limit an organization’s ability to operate with good financial management. How can an organization’s budget be accurate when there is not complete transparency in spending? 3. Truth-in-SellingWhen an organization markets a product or service, they are obligated to deliver what was promised to the customer. Whether it is a television ad or a print ad in the newspaper, the product described should be what is delivered to the customer. For instance, we responded to a furniture ad one time and when we went to the department store we discovered they were out of that particular item and the salesperson tried to sell us a similar item that was more expensive. Needless to say, we walked out of that store. Unfortunately, the sting of the “bait-and-switch” experience kept us from visiting that department store again. Not a good way to grow a customer base. You owe it to your customers to deliver what is promised. 4. Integrity in Management PracticesManagement practices are the underlying foundation for organizational integrity. Whether it is a commitment to good customer service or fair employment practices, a businesses’ reputation can be tarnished by unresolved service or product issues. Additionally, employees observe how leadership resolves issues and follows up on promises made. For example, SAS ranked number 1 out of the top 100 employers to work for in 2010. In addition to a very generous benefits package, and an industry-low turnover of merely 2%, the architect of its culture is based on “trust between our employees and the company” according to Jim Goodnight, SAS CEO. Influence integrity in managing by creating a code of conduct and ethics policy. Teach employees the importance of its content and the organization’s commitment to ensuring that all employees adhere to the policy. 5. Customer Service IntegrityService after the sale is what service integrity is all about. It is easy to make promises before a sale but following up and ensuring a great customer experience is what makes some organizations stand out. For example, we built a house a few years ago. The customer experience was over the top – until we closed on the house.  Unfortunately, it went from one of the best service experiences I’d ever had to one of the worst – after we closed the deal. Service after the sale is critical to providing great customer experience and growing a loyal customer base. 6. Personal IntegrityIt is important for business leaders to live a lifestyle of honesty, integrity, and high ethical standards because what these leaders do can harm the reputation of the organization. Two former Tyco executives, who have become the poster children for failed ethical leadership, are a good example of this. Both were sentenced up to 25 years in prison after stealing hundreds of millions of dollars from the company. The scandal sadly generated negative press for Tyco and ultimately affected the company’s value and profitability. 7. Product IntegrityProduct integrity is important to those of us who purchase products and services. This is when public perception and brand recognition come in to play. When we chose our home-builder it was because they were one of the largest in our area. Unfortunately, our experience with their service after the sale spoke volumes to us about the product integrity of this builder. If we would have known the service integrity would have changed so drastically after the sale we would have been a little more diligent at ensuring the language in the contract supported resolution of issues once we closed on the house. “Trust is like the air we breathe — when it’s present, nobody really notices. When it’s absent, everyone notices.” — Warren Buffett Organizations that operate with integrity do so intentionally and make it part of its everyday practices so that it becomes part of the culture. This climate of honesty and trust helps orient new employees to understand that operating with integrity is simply “the way things are done around here”. Organizations choose to make integrity an important part of cultural expectations. This focus sends a message to employees and customers that the priority is a sustainable success over short-term opportunism. In what ways does your organization demonstrate integrity and ethics? People spend much of their lives at work. An ethical workplace is key because it allows employees to feel a sense of purpose and integrity on the job. A recent survey found that 38% of employees consider “ethical standards” to be the first or second-most important workplace attribute. Companies benefit from ethical behavior in various ways. The stock price of the 100 most ethical firms outperforms their peers by 300%, according to the Society for Human Resource Management. A reputation for ethics also helps to attract and retain the best talent while minimizing the cost of turnover. When staff feel integral about their work, the company culture will thrive and, in turn, boost morale, motivation, and productivity. Despite the value of ethical behavior, it can be difficult to encourage ethics in the workplace. Here are 4 ways to foster an ethical workplace that reaps the rewards of good behavior: Leaders must model the behavioral norms they expect employees to follow. To demonstrate their company’s ethics, leaders can: Leaders who act ethically set a positive tone at their company and also reap additional benefits. For example, when Intel decided to stop sourcing material from conflict zones, it wasn’t without cost. But as “the right thing to do,” the decision earned positive responses from consumers, activists, and allowed the microchip producer to secure a more sustainable supply chain. “Ensuring the ability to source from multiple regions of the world is a good thing,” said Gary Niekerk, Director of Corporate Citizenship at Intel. “It was done because it is the right thing to do, but as you back out, you see additional values,” he concluded. A reputation for ethics helps companies to attract and retain quality employees. These individuals then foster and grow a work culture that’s built around shared values. Job seekers often choose the company whose ethics most align with theirs, especially in fields with little difference in job description. “The first thing students looked for when choosing among accounting firms is which one shared their values,” said Jane Cote, Academic Director and Associate Professor at the Carson College of Business. Principles are exceeding pay as the deciding factor for many graduates. “The question for the students was, ‘How can I find a firm that aligns with the kind of person I want to be?’” Cote concluded. “The question for the students was, ‘How can I find a firm that aligns with the kind of person I want to be?’” Ethical leadership creates a trickle-down effect that helps to attract and retain the best employees, develop a reputation for sound ethics, and implement more sustainable practices. Workshops and training help staff to recognize many ethical dilemmas, but these resources often fail to grasp the reality of many ethical breaches. According to a study published in the Harvard Business Review, most ethical breaches aren’t from bribery, corruption, or anti-competition. The study found the most common and recurrent quandaries to be interpersonal, extra-legal, and full of grey areas, such as: Resources that consistently encourage ethics are most effective, unlike trainings and one-off events. In the following example, the software company Adobe uses its blog to exemplify the ideal company culture. The blog is a vivid and regularly-updated model of what’s expected from Adobe employees. A wide range of blog topics, from ethics to inclusivity, illustrate the values that are best for the company, fellow workers, and the wider world. Documenting the ethical behaviors of other employees is a powerful form of social proof. The social influence of peers reinforces the idea that individual ethics are active and essential to the company culture. In moments of uncertainty, the blog is a constant reminder of what others would do and should be done. Other resources that actively encourage ethics are: Ethics are a living part of the best companies — whose workplaces thrive as a result of the values and integrity within. Ethical decisions are made one person at a time, one decision at a time. Laws and compliance regulations are often geared toward larger transgressions, however, and can overlook smaller ethics violations that can nonetheless damage the company. Many ethical dilemmas are interpersonal, carry the potential for repercussion, and are therefore hard to navigate. It’s often easier for employees to do nothing than to make a tough decision. Planning ahead helps to encourage follow through when employees are faced with an ethical dilemma. “When it comes to ethics, we think it’s a test of our moral identity, which makes us more emotional, less effective, and vulnerable to self-deluding,” said Mary Gentile, author of Giving Voice to Values and Professor at Babson College. Ask employees to keep a personal code of ethics, a list of unethical things they will never do. Also prompt them to write about how they would, ideally, respond to unethical situations that might arise in the workplace. For example, ask employees to keep a document that details how they would react to: If staff keep a written code of ethics at hand, they will be more likely to act with integrity. Rehearsing the exact language needed to confront an ethical transgressor can strengthen employees’ resolve prior to a difficult exchange. “The key is to practice ahead of time, before a situation arrives, so you’re ready when it does,” concluded Gentile. Peers are the greatest source of influence on employee ethics. Only 25% of employees trust their peers to model and practice the right ethical behaviors, according to Gartner. Personal integrity leads to a robust company culture that drives ethical behavior. For example, the staff at Google staff recently signed a petition to divorce the company from a contract with the Pentagon. Employees felt that “Google should not be in the business of war,” and rallied 3,100 signatures to protest a project with technology that could enable drone warfare, as seen below. Employees with a clear code of ethics are more likely to express their opinions. Companies benefit when staff are open, honest, and offer critical feedback. 4. Reward Ethical BehaviorWhat gets rewarded gets repeated. People spend more time at work than ever, so it’s critical that employees feel a sense of honesty and integrity in the workplace. Recognize when people do the right thing and also make clear that a win-at-all-cost mentality will not be tolerated. The ethical lapses of companies like Nike, Facebook, and Wells Fargo can be used to illustrate the importance of moral best practices. Companies can incentivize ethics in various ways:
Offering incentives helps to reinforce the value of ethics. Intrinsic motivations are more powerful than extrinsic motivations, so provide benefits that foster a sense of pride and agency within the company. For example, offering a front-row parking space or travel perks would confer a visible status boost without increasing expense too much. Before you can reward ethical behavior, the employee code of conduct must be well-known and available. To maximize the visibility of your code of conduct:
Companies Can Encourage Ethics in the WorkplaceCompanies can encourage workplace ethics by preparing and supporting staff to act right. Good intentions and proclamations aren’t enough, so leaders must both model and reward ethical behavior in employees. A company with a strong code of conduct will attract and secure employees with ethical behavior, which benefits the company culture and the bottom line. |
What steps will you implement to ensure the company functions in line with ethical standard and moral values?
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