Ethics and its Importance and Management

The more moral the people are in their business dealings, the less paperwork you need, the more handshakes you can have, the more the wheels of capitalism work better because there’s trust in the marketplace. Business ethics is not a joke. And, in fact, I think most businesses that I’ve dealt with encourage exactly that type of behaviour”.Rick Santorum

There is no argument about the fact that morality and ethics should play a vital role when making decisions concerning right and wrong. Within an organization especially, where crucial decisions are taken each day by either individuals or groups of people, ethics takes on an even more critical role. They must make decisions that not only align with the values of the company but also be personally responsible for these decisions such that they do the right thing each time – irrespective of whether they are being watched or not. Ethics is about making decisions that are not centred at one’s own personal short term gains at the cost of losses, damages or problems to the company and others that work there. In a previous exposition, we spoke about corporate social responsibility – this would be part of the ethics of a company.

The fact is that ethics and its importance cannot be overemphasized as all those that partner with a company or persons, need to know that the ‘partner’ is trustworthy and will not take advantage of the relationship. If a company is known for following ethical practices and continually reminds its people and partners that any unethical practices would not be tolerated, such a company will reap many short and long term benefits. Customers would be easily attracted to the ethics of the company which in turn would mean more revenue and profits and we know that happy clients will provide repeat business and refer the company to those they know. On the ‘inside’ of the company the employees would be a happy lot – low attrition, high productivity, collaborative and cohesive teams and a task force that truly cares for the company and its customers. In addition, the company would continually be able to attract the best talent in the market – they would have the requisite skill sets and knowledge base thereby reducing recruitment time and costs and also costs on basic training. Other stakeholders like vendors and investors would also mean that the company remains secure and saves a lot of energy and costs on trying to attract these two key groups.

All those associated with a company that has high morals and follows all the rules of work ethics will be happy in the knowledge that their efforts, money, resources and time will not be wasted on used in any way that would cause them problem. Even employees of an ethical company would maintain their own personal standards of ethics and would always remain mindful of their behaviour. Customers would be able to ‘see’ the ethics in the customer service, products, payment options and other value added services offered by the company.  CSR activities are often associated with the ethics of a company – for example if a company claims that they invest in sustainability they could show it by using basic packaging for their products. Customers would also need to pay less since very often packaging costs are often woven into the product cost raising the overall price of products but with minimal package these costs are significantly reduced.

As a company acquires a reputation of following ethical guidelines other people in the ‘market’ also respect and emulate it. Such companies are at much lower risk of being fined for malpractices and poor quality. A solid reputation of a company really is one of the most prized possessions and assets a company can claim to have. It becomes a major responsibility for any company to protect its reputation since once trust is lost it takes years to re-build and also may never be built again spelling doom. Sustaining reputation, for a company, is about maintaining ethics and means keeping their promises made to all the stakeholders and partners. Any divergent behaviour would damage the trust of these key groups and lead to a number of problems for the company. For example if a company claims that some part of their earnings go to uplifting the marginalized of society and do not have any projects or results to show, it will ultimately lose repute in the market and people would begin to break their association with it. However, it must be remembered that ethics should be maintained irrespective of any external reasons.

A company must understand that if it is to be known for its ethics, this feature must be inextricably woven in the framework of the company. The policies, strategies, culture and values and other aspects that form the framework must have ethics as the underlying principle. Each person in the company must completely understand the importance of ethics and ethical behaviour and know that behaving in opposition to this would be grounds for strict punitive action even leading to termination. To strengthen its stand on ethics, a company must ensure that they measure the outcomes and results of practicing ethical behaviour and maintaining the standards. As companies see positive results they would be motivated to keep the standards high and also have something tangible to show their employees, customers and other stakeholders. Ethics will not just be something talked about but they would have proof that the company is actually ethical and therefore trustworthy.

We have previously discussed the importance of getting feedback and opinions for any company. The company may believe that they follow ethical practices but if their customers, employees and others, who partner with them, don’t believe so, there could be problems that would be difficult to deal with. Gaining feedback can be done by surveys, inviting comments via email or social media or both. Based on the feedback, a company can assess what their actual strengths or weaknesses are and immediately put in place actions to raise the standards of their ethics and do away with those portions that would in any way affect these standards.

A very large company with a range of different businesses is extremely profitable and blindly trusted in the market mainly because they have built a robust reputation of being a highly ethical company. Their rules on ethics for employees, customers, vendors and anyone associating with company are extremely stringent and non-negotiable. Over the years they have built their clout such that their word holds good. For all their partners they have a checklist of work ethics and integrity that must be signed at the beginning of the association and then every six months. This practice has been on for years and people fully understand what is expected of them and what the consequences of non-compliance would be. Their profit graph – a straight line upward for the past many years and continues to be so.

The company referred to above is so successful in maintaining its ethics since they have continually shared this understanding and its importance with all their ‘partners’. Irrespective of highly diverse ‘partnerships’, people follow their values even if at times these may be diverging from their own moral values. Completely understanding a company’s stand on ethics strengthens the bonds and ties that people have. Employees respect each other, treat their customers well and are willing to go the extra mile to ensure that the company they represent is successful – this is because the company treats them with respect and care. Customers receive great service, high quality products and have an open and honest relationship with the company that over time translates to trust and loyalty.  Any company that can boast of a loyal customer base is firmly set on the path of success.

It is not difficult for people, associating with the company, to understand the ethics and practices of the company and therefore it would be tough to fool people. With so much competition, access to information and the need to be ‘global’ – companies cannot afford to jeopardize their chances of success by following unfair practices and conducting themselves unethically. On-going assessment, relentless reinforcement and exemplary behaviour will provide the necessary confidence in a company’s partners that they are working with and dealing with a company that will stand firmly rooted in ethics and will not let them down.

Learn about a new approach to better customer service!

Interactive Guides for Superior Customer Service

Create interactive decision trees for customer service management, cold call scripts or self-service. Improve sales performance metrics and customer delight across your call centers.

Interactive Decision Tree