Ethics and Corporate Social Responsibility – Leadership

Ethics comes from the Greek word ‘ethos’ which means ‘moral character and is concerned with what is right and what is wrong. Ethical decisions are generally based on local laws and the beliefs of the person involved. This means that they may vary between individual people and cultures.

What may be OK in one country may not be OK in another.

What is business ethics or Corporate Social Responsibility (CSR)?

This is concerned with the way that business operations make a profit and also look after the people concerned with or affected by its operations (their stakeholders).

It is important that business leaders ‘do the right thing’ for the benefit of everyone. They are expected to follow social norms and make the right ethical decisions which serve and protect the interests of groups other than themselves. They must ensure that their activities, products and actions do not harm others.

Why is business ethics important?

Being a socially responsible company often has many benefits. The main ones are:

  • It can help to improve the company’s image. This will also help to build its brand by showing how the company cares for the world and its customers.
  • It can improve employee morale and motivation. Employees who feel that they are doing something worthwhile and of benefit to others will be more motivated and productive.
  • Customers are increasingly concerned with making their purchases based on the ethical standing of a company. Having a good track record in social responsibility will help to improve sales and customer loyalty.
  • Businesses that actively promote a socially responsible culture as part of their brand, have increased customer loyalty, improved employee motivation and retention and increased profits.

What are ethical questions based on?

Ethical dilemmas occur when there is a choice of options but none of them results in an acceptable ethical outcome.

  • Value-based conflicts: These are caused by incompatible belief systems. Conflict can arise when one person forces one set of values on others without allowing for different belief systems.
  • Equally justifiable alternatives. 
  • Significant consequences on “stakeholders” in the situation.

The 6 codes of business ethics

  • Trustworthiness
  • Respect
  • Responsibility
  • Fairness
  • Caring
  • Citizenship.

See our Clever Article: Developing Good Working Relations for more.

How to create an ethical work culture

As with any business culture, it starts at the top. Leaders must behave ethically by making the right decisions based on the benefit of all. They must build trust and respect and include everyone in the process.

Lead by example

Leaders must demonstrate to others what is acceptable behaviour and what is not. They must not exploit others and must always make decisions and take actions that will make a positive difference to others – not just to profits.

Face those ‘grey areas’ – Ask difficult questions

Discuss difficult questions openly. Ethical questions faced by managers are often highly complex and have no clear guidelines.

Leaders need to look at all angles and gather all the information available to help them make the right choice. Leaders may have to face the fact that profits and ethics often go against each other.

Leaders may need to look for alternatives and support others in making the correct ethical decisions.

Develop a business culture based on ethical decisions

Doing what is right must be encouraged on a daily basis. It must include everyone; employees, customers and stakeholders. This will generate a general business culture based on making and prompting ethical decisions and practices.

Be the best – set the example

You should not just meet any legal requirements. You must show your commitment by doing more and show your commitment through all of your actions.

Include everyone in meeting your ethical expectations

You must include everyone and ensure that they understand and meet your expectations. This goes beyond your place of work and includes your suppliers, agents and associates.

Highlight good practice

All leaders and managers should make recognize good practice when it occurs. It highlights good ethical practice, reinforces standards and expectations and sets an example for others to follow.

Don’t stop.

The world is constantly changing and business operations and the decisions behind them must be in a constant state of change just to keep up. This means that everyone is involved in making positive ethical decisions on a daily basis. Ethics is not just a subject in a training session. It must be included in all actions all the time.

More Cleverness:  Main Page

See our ‘About Us’ page and share your Cleverness with the world.

Main Image: Image by Gerd Altmann from Pixabay 

To add to this post please use the comments box below or click below to go to our Clever Contributor page and promote your business for FREE.

Share Your Cleverness With Our Clever Community

We love to hear from you.

Share The Cleverness:
Posted in Entrepreneur, Human Resource Management, Leadership Series.