Know what’s right; Do what’s right
Does your organization have a Code of Ethics? Do you have a personal Code of Ethics? And is there a difference between business ethics (“It’s just business”) and personal ethics (“I have my moral compass.”)?
Ethics is a set of moral concepts and principles that guide us in determining the right behavior. In a broad sense, ethics is knowing and doing what’s right. Does ethics matter in business? Of course—particularly in terms of reputation and trust, which impact:
- Customers’ willingness to work with you or buy your products and services
- People’s desire to work for you, and employee morale and satisfaction
- Other companies’ willingness to partner with you
- How the general public perceives you
- Company valuation and stock prices
Ethical vs. Legal
Ethics concerns right and wrong, while legal is about lawful and unlawful. Something can be both unethical and illegal (like offering or accepting bribes or kickbacks) or one or the other.
For example, it may be unethical to charge a very high price for a new tire when someone is stuck in the desert with a flat, but it’s not illegal. And while it may be ethical for a whistleblower to reveal certain information about a company’s wrongdoing, how that information was obtained may be illegal, for example if it required hacking into the company’s computer system.
Business ethics involves going beyond what is legally acceptable to encompass principles like:
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How do you determine what’s ethical?
“If what you did was the headline on the front page of the Washington Post, would you be proud?”
That’s a simple (but accurate) standard for ethical behavior. But there are also different schools of thought on ethics.
- Non-Consequentialism says that certain acts are morally wrong no matter what good they produce. In short, the ends do NOT justify the means.
- Consequentialism believes the ends justify the means. The more “good” consequences an act produces, the better or more “right” that act is.
- Utilitarianism, a form of consequentialism, holds that the most ethical choice is the one that will produce the greatest good for the greatest number.
Coming to terms with gray area
As a leader, you are expected to not only act ethically, but also ensure that those you lead are acting ethically as well. This isn’t always cut and dried. Deciding whether something is ethical may require understanding your organization’s code of ethics as well as doing some investigation of your own.
If you’re navigating an ethical dilemma:
- Clarify – Ask detailed questions to understand the situation and close assumption gaps.
- Pause & Think – What do I think is wrong in this situation? What is the risk? Should I ask for advice (from a colleague, leader, legal representative)?
- Explore & Suggest Alternatives – What could you do? What should you do? What other possibilities are there? What are the company guidelines?
- Detail an Action Plan – What is the “right” thing to do? What will you do?
- Document where appropriate
- Escalate if necessary
Remember, when they get to Step 4, people are going to make different decisions based on their beliefs. Your ethics may not be someone else’s. But always, if you think or feel that something is unethical, stop and check.
