Creating an Ethical Environment

One of the meanings of the term ethics is “the principles of code of conduct governing an individual or a group”. Another meaning is “study of morality “in which ethics investigate the morality. The ultimate aim of ethics is to develop a body of moral standards that are reasonable to hold, accept and apply to the choices that fill our lives. Since ethics govern all activities of human, there is no reason to exempt business activities from ethical scrutiny. Business ethics is the specialized study of right and wrong applied to business policies, behavior and institutions. Some may argue business ethics is not necessary as a separate discipline saying obeying law is sufficient for business and ethics is nothing more than obeying Law. They may say employees are obliged to serve employers’ self interest as they are “loyal agents” of employers. Similarly in a perfectly competitive market, by itself, will serve the society in the most efficient and beneficial ways. However, ethics and law are separate things, as law and morality do not coincide; some laws have nothing to do morality while other laws even may violate moral standards. Similarly perfectly competitive market is highly theoretical and there are several ways of increasing profit that will actually harm the society and on the other hand profit is not a drag for profit. Hence, even self interest organizations have good reasons to behave ethically as it will benefit them in the long run. We should note that there are evidences that many companies value ethical behavior by rewarding those who act ethically and punishing unethical behaviors.
But the question is how far the companies behave ethically and how can the companies create an ethical environment. I think the best answer can be found by researching the industry and the following summary is based on research interviews which focus business officials and their insights into how to foster ethical behavior and the positive consequences that this behavior has on their business environment.
Based on 172 interviews with high ranking business officials ranging from secretaries to CEOs who are from small companies to multinational companies, the most important steps towards ethical environment is developing and implementing ethical code of conduct and top management acting as a role model in behaving ethically. Code of conduct will be effective if it is discussed with employees and employees are aware of it and its importance. Hence majority managers emphasize importance of ethical training and constantly reminding employees in terms of regular briefing and seminars. Rewarding ethical behavior, such as monthly recognition, and punishing unethical acts must be essential according to most managers while creating sense of belongingness and good work environment with fair compensation is necessary. Dealings with problems at early stage are very crucial and good communication channels, where employees feedbacks are appreciated, are unavoidable. Managers must create a close relationship with employees and be transparent with them. Make decision with justice and integrity without any discrimination. Make employees familiar with Standard Operation Procedure (SOP) such as pasting them on the wall where they can see and monitor employees constantly. Encourage employees to respect and care each other and create “we” feelings by celebrating events like family days, annual dinners etc...Select and hire ethical employees and encourage employees to follow religion well. Though it starts from top management and they have the biggest role to play, each and every employee must try to promote ethical culture so that the organization can build an ethical environment.