Elements of Business Ethics
Since ethical business behavior is good for both the business enterprise and society, it makes sense to discuss how the enterprises can foster ethics in their day-to-day working. Some of the basic elements of business ethics while running a business enterprise are as under:
(i) Top management commitment: Top management has a crucial role in guiding the entire organization towards ethically upright behavior. To achieve results, the Chief Executive Officer (or CEO) and other higher level managers need to be openly and strongly committed to ethical conduct.
(ii) Publication of a ‘Code’: Enterprises with effective ethics programmes do define the principles of conduct for the whole organization in the form of written documents which is referred to as the “code”. This generally covers areas such as fundamental honesty and adherence to laws; product safety and quality; safety in the workplace; conflicts of interest; fairness in marketing practices and financial reporting.
(iii) Establishment of compliance mechanisms: In order to ensure that actual decisions and actions comply with the firm’s ethical standards, suitable mechanisms should be established. Some examples of such mechanisms are: paying attention to values and ethics in recruiting and hiring; emphasizing corporate ethics in training and instituting communication systems to help employees report incidents of unethical behavior.
(iv) Involving employees at all levels: It is the employees at different levels who implement ethics policies to make ethical business a reality. For example, small groups of employees can be formed to discuss the important ethics policies of firms and examine attitudes of employees towards these policies.
(v) Measuring results: Although it is difficult to accurately measure the end results of ethics programmes, the firms can certainly audit to monitor compliance with ethical standards. The top management team and other employees should then discuss the results for further course of action.