Why having good ethics makes good business sense

Why having good ethics makes good business sense

What does behaving ethically mean to you? The Oxford English Dictionary says that ethics refers to the “moral principles which govern a person's behaviour or the conducting of an activity.”

The values and principles which guide our decision making should be just as important at work as they are in our personal lives because behaving ethically makes good business sense.

It makes sense because employees want to work for a company which they are proud of and with colleagues, they know to act with integrity. Strong values and ethical behaviour lead to a high performing team. New employees are also more likely to want to work with organisations which are known to have a strong ethics policy and a code of conduct because those values set them apart from others. 

With so much choice and availability, potential clients are also more likely to choose a company which can showcase how they behave ethically because it provides the added ‘feel-good’ factor to any business transaction. That’s why CSR strategies are so popular.

Many professions require us to work to a Code of Practice and it is common for organisations to identify a set of values to guide how employees work together and engage with customers or society. Strong company values can be really inspiring. For example, clothing company H&M believe in boosting ‘entrepreneurial spirit,’ Ikea values ‘togetherness and enthusiasm’ while the Build-a-Bear brand like to ‘reach, learn, give and colla-bear-ate!’

However, it’s shocking to read the results of surveys such as one carried out by the Chartered Management Institute which showed that:

  • Two-thirds of UK managers want to be seen as ethical but over 80 percent of workers don’t think their manager sets a good moral example
  • 35% of managers confess to telling a white lie every day in the name of career progression
  • Only 17% of employees are aware of their organisational values

These are all things which can be resolved easily if managers or those in positions of authority do more to set a good moral example and if they communicate what their company's bespoke values are.  And if you don’t have any values – now is the time to engage with your colleagues to understand what values reflect your business and how you can communicate them better.

RELATED: Top Ten Tips on communicating effectively in your business

In reality, we’re all human and don’t perhaps always do things in the most virtuous way. This may be because we’re trying to resolve something quickly because we don’t have all the information we need to make a sound decision or we simply don’t think carefully enough about the impact of our actions. 

Often it’s not until later that we realise we perhaps didn’t act as ethically as we could have but is there a benefit for businesses in promoting ethics?  What does business ethics add to the bottom line?

First and foremost it can be argued that business ethics is simply good PR; having a reputation as an ethical employer or supplier can be a great marketing tool when it comes to being an employer of choice or when trying to attract customers who want to deal with companies who have values they admire.  

Ethical behaviour cascaded from the top of the organisation can be one of a number of things which impact on the measure of employee engagement; employees who feel they are being treated fairly are more likely to be more engaged with the organisation and feel more motivated.

RELATED: Top Ten Tips for Employee Engagement

It could be argued in both cases – external and internal to the business – that ethics should be built naturally into the way of going about our business; a way of being. But on the other side of the table, there are those who struggle to see the added value and whose key focus is simply on profits.

Unfortunately, the value of ethics is often not realised or understood until something goes wrong, often resulting in reputational damage which can take years to repair and overcome.

We need to work towards a culture of instilling ethics as a matter of course. It should be as common as having good HR policies and a fair wage.

So how does your organisation address ethics? Are they communicated well? Is there room for improvement? Contact cHRysos HR if you need help developing organisational ethics and values.

Julie Gordon is Managing Director of cHRysos HR Solutions, a Doncaster based HR training and consultancy company providing CIPD and CMI accredited qualifications and HR Consultancy Services, nationwide and overseas. Contact Julie on info@chrysos.org.uk or call +44 (0)1302 802128.

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cHRysos HR Solutions is a Doncaster based HR training and consultancy company providing CIPD accredited qualifications, Apprenticeships, Training and HR Services to SMEs nationwide. For more information about how cHRysos HR can help you or your teams successfully achieve further qualifications, contact us on info@chrysos.org.uk or call +44 (0)1302 802128.