Source: Image of sign post, manager, employee with folder, abstract crowd of people, office building, hand holding sign, images by Video Scribe, License held by Jeff Carroll; Image of storefront, Public Domain, http://bit.ly/1l51GoG.
Hi, I'm Jeff, and in this lesson, we'll explain why ethics matter in the workplace and how we develop our code of ethics. We'll also learn about the responsibility of a business to consider managerial ethics and have a program in place to address ethical issues. So let's get started.
Ethics are the principles of right and wrong and of the morality of the choices. And as you might expect, business ethics are those principles of right and wrong and of the morality the choices made in the business world. In either case, ethics are guiding principles that are applied whether the person is inside or outside the workplace.
And we should discuss what ethics are not. They are not principles of law or science or the norms of a culture or a religion, and they are not decisions made upon emotions. They are applied at all times, not just when it suits a particular social convention.
Managerial ethics are the principles of right and wrong and of the morality of the choices made in the context of management. Managerial choices impact employees in a number of ways through their hiring and firing, through the adjustment of wages, and with the control of working conditions. Ethics guide the behavior of managers as they make these choices, but it's not just employees who are impacted.
A manager's behavior toward the organization is also guided by ethics. Managers can have conflicts of interest, which is a circumstance in which the judgment of an individual or a group may be impaired because of a difference in primary and secondary interest. And managers often deal with areas of confidentiality by keeping private trusted data out of the hands of the public and other people. In fact, ethics impact behavior in all areas of business relationships, and they can have economic impact, too whether it is behavior with customers, with competitors, or with suppliers. And in a corporation ethics should guide behavior with stockholders and behavior with economic systems, too.
Businesses interact with other businesses also in ways that are ethical or not. For example, one unethical way businesses can interact is collusion, which is an attempt by businesses to conspire to the detriment of customers, other businesses, or the general public. As has been seen throughout history, this can have dramatic impact on a business's future and on the economy as a whole.
A business should establish processes that encourage ethical behavior. Here are some steps to follow. Step 1, listen and learn to collect the facts. Step 2, analyze the facts. Take the time to appropriately relate moral values to the findings. Three, make it clear judgment based on the rightness or wrongness of the evaluation. And step 4, optionally edit business processes in order to limit the likelihood of repeating the same mistake.
Ethical norms should be considered also. Examples of these are utility-- what is best for the organization-- fairness-- what is fair and just-- rights-- what are the rights of the individuals-- and care-- what is the thoughtful way to be responsible and kind to all parties. These should be considered for every decision case though some decisions may not clearly be driven by this process. Other factors might also impact the ethics.
Individual factors such as individual experience, personal values, and personal goals might be considered when evaluating the facts and social factors such as cultural norms, the influence of co-workers, the relationship between all parties involved, and even the impact of technology. Certainly other factors beyond these might need evaluated for ethical behavior. So it's important to consider as many variables as necessary to reach a decision.
It is the responsibility of owners and managers as the agents of a business to encourage a culture of ethics. Unfortunately, they can also discourage this culture. Here are a few steps businesses can use to encourage the culture.
It's important to have a code of conduct in place, which are organizational rules to encourage responsible and ethical behavior. Companies must have an environment in place that rewards ethical behavior. Appoint an employee or a committee to be responsible for ethics. And establish a company wide ethics program. Whether the business is large or small, ethical behavior will have an impact on your operations.
Ethics can become a core value in an individual also. For this to occur, an ethical person must follow a core set of values and beliefs regardless of circumstances, always behave in ways that match those core values, encourage the right values and discourage the wrong ones, and advise others to behave in ways that match your core values.
Nicely done. In this lesson, we learned about ethics and how they are part of every area of business. We reviewed how managers use ethics in their choices. We discussed the processes that support ethical behavior including the consideration of ethical norms and factors when making decisions. We learned how a business can encourage a culture of ethics, and we reviewed how an individual can use ethics to develop a core set of values. Thanks for your time and have a great day.