Specific rules and norms regulate all social relations. The set of these rules is called etiquette. In the business environment and any sphere of public life, there are their own rules of behavior, which are designated by two words – business ethics. For example, many large corporations today promote their commitment to ethical business standards in such variations as codes of conduct, ethics and compliance departments, ethics officers, as well as social responsibility reports or charters.
Business ethics is a set of moral and ethical principles. Thus, it can be concluded that business ethics in the organization establishes recommended norms and rules of employee behavior at work. The basis of business ethics is the understanding of work as a moral value. Such an understanding is acquired by an employee when work ceases to be only a way of earning money and becomes a way of forming human dignity.
In a successful organization, the concept of business ethics must be supported by documents. These papers can be called a set of internal rules that all employees (primarily the head) must follow. This documentation can be presented in any form and not even be drawn up according to all the rules. These papers should contain information on how to successfully organize and conduct negotiations, how to behave with clients and partners, how to maintain good relations in the team, and so on. As it has been already understood, the organization’s business ethics is entirely focused on creating the most favorable atmosphere for all employees, customers, and company partners.
There are eight main features of business ethics:
- Code of Conduct – Business ethics is a form of code of conduct. This allows us to know what to do and what not to do. Businesses should follow this code of conduct.
- Based on Moral and Social Values – Business ethics is a subject based on moral and social values. It offers some moral and social principles of doing business.
- Protection of social groups. Business ethics protects various social groups, including consumers, employees, representatives of small businesses, government, shareholders, creditors.
- It offers a basic structure – Business ethics is the fundamental basis for doing business correctly. It builds social, cultural, legal, economic, and other restrictions in which business should operate.
- Voluntary – Business ethics should be voluntary. This should be an independent practice and should not be carried out by law.
- Education and leadership are required – business people should receive proper education and recommendations on business ethics. Trade associations and chambers of commerce should be pretty active in this matter.
- The importance of reputation in business communication. Losing a reputation in the business world means the collapse of the company. The manager should value their names since it takes a lot of effort and time to gain a reputation among partners and clients.
- Relative term – Business ethics is a relative term. It changes from one business to another and from one country to another.
- A new concept – Business ethics is a relatively new concept. Developed countries are more exposed to business ethics, while poor and developing countries are relatively lagging behind in the application of business ethics principles.
In the team, it should be remembered that first of all, a person is part of a single organism that will function successfully only if there is well-coordinated work and clear interaction. Therefore, there is no place for selfishness and selfishness in the organization. Of course, everyone involved in the process should understand that each employee is a person. However, it is necessary to forget about personal interests and self-benefit in the workplace. It is the rejection of one’s selfishness in favor of the entire company that allows making the work pleasant and more productive. Moreover, business etiquette plays an essential role in the formation of a reputation. An unethical manager or employee can easily damage the company’s image. Therefore, it is imperative to ensure that the entire team knows at least the basics of business etiquette.
Ethical Competencies and Perspectives
An effective form of work aimed at forming ethical competencies among employees is agitation and propaganda activity, which aims to clarify and deepen ideas, teachings on the formation of moral competencies among the members of the organization. For their better formation, meetings and preventive conversations can be organized, which are aimed at forming an experience of behavior that corresponds to accepted ethical norms and traditions.
Five ethical competencies include:
- Commitment to personal and professional behavior.
- Knowledge of ethical codes/laws related to the profession.
- Use of ethical reasoning.
- Identifying and acting on professional values.
- Commitment to promoting those values in the workplace.
Creative and active discussion of such moral categories as duty, honor, conscience, personal dignity, justice has an essential educational and motivating effect on the members of the organization in the field of the formation of moral competencies. The discussion of these categories takes place during thematic conversations and educational events. These thematic events allow us to widely and purposefully disseminate moral knowledge, bring it to every employee, form a positive attitude to this critical knowledge, the desire to manifest it in everyday behavior.
An ethical perspective is how people look at life, situations, or their position in them; this is what they consider suitable. It is said that a person has an ethical point of view when he believes that his actions are beneficial. From this point of view, one’s concepts of good and evil are identified and differentiated, and it helps to identify problems through systematic thinking; it allows seeing reality from different points of view in order to make decisions.
The main ethical points of view can be classified according to the answers to life questions and the ethical position that is considered correct:
- An ethical perspective of commitment, which should be based on a predetermined set of rules of what is right and what is wrong. From this point of view, people should be faithful to the norms of what they consider suitable, and this is imposed by the need to conform to personal values.
- The ethical perspective of a character or the ethics of virtue. This point of view of ethics emphasizes the character of each person as the dominant element of the thoughts and decisions that he makes, always striving for those ideals that he considers suitable for the progress and development of humanity. From an ethical point of view, a person’s character, virtues, character, and morality stand out more when deciding.
- The ethical perspective of virtue is present in ancient Greek philosophy in the works of Plato and Aristotle.
- Ethical perspective of results or utilitarianism.
This is the point of view of ethics, in which the morally correct is based on its usefulness to society; it recommends always acting in such a way as to ensure the greatest possible well-being for the world. The creator of utilitarianism was Jeremy Bentham. It is established that human well-being should be maximized; the ethically correct choice is the one that brings the greatest happiness and the least unhappiness for the most significant number of people.
Ethical points of view are critical because they are classified as a discipline of life; people should always try to apply them in all spheres of life because they are related to the principles of morality, truth, utility, and justice.
Why is business ethics important?
Business ethics is essential for various reasons. First of all, it allows a business to operate within the legislation, guaranteeing that it does not commit offenses against its workers, clients, or other participants. If companies are conscious of business etiquette, they have some priveledges that can assist them in achieving the desired success.
An organization could create confidence among businesses and consumers. If clients sense that an organization can be reliable, they are increasingly plausible to select this organization its rivals. Some companies prefer to utilize specific aspects of business etiquette as a market instrument, especially if they choose to allocate a widespread social problem. Reasonable use of business ethics can lead to an increase in the brand’s capital as a whole.
Ethical business conduct attracts investors and shareholders. They are prone to invest in the company since following the standard ethical standards of doing business and using them correctly can be the way to achievement for a number of enterprises. Compliance to business etiquette could also be useful for the company’s workers and procedures. It is much easier for ethical enterprises to attract the best talent. Workers will appreciate a socially knowledgeable manager and will also apprehend it as a business that can work in the concerns of the staff members. This helps to increase the number of dedicated employees and reduce recruitment costs.
Corporate ethics in companies is the most crucial emotional component for all employees. The nature of the environment in which all integrations between workers, between departments, and just between people take place actively affects productivity and forces the company to spin in the desired rhythm so that no process is lagging behind and everyone is satisfied. Corporate ethics also helps companies improve their HR branding because a company with a good reputation is always viewed online, and many people talk about it.
Most often, employees report discrimination based on gender and age in matters of hiring, promotion, and remuneration. The article “Why women over 50 can’t find jobs” (Doerer, 2016) says that in the past, after the 2008 crisis and the subsequent recession, it became much harder for women over 50 to look for work. In particular, The Federal Reserve Bank of St. Louis published a report, the data of which show that more than half of unemployed women over 50 are long-term unemployed. In almost any of the jobs, women receive a lower salary compared to men.
Implementation of Ethical Behavior
The introduction of ethics in modern entrepreneurship, marketing, and management contributes to a significant improvement in the quality of life and increases the degree of subjective satisfaction with life, i.e., increases the number of happy people and the quality of society as a whole. As the research results show, ethics is highly relevant in various contexts – individual, organizational, social, and global. In a particular context, there is an acute need for a creative and socially responsible subject.
A socially responsible business leads to a better realization of resources, to an increase in the degree of social well-being, and an increase in the social capital of the trust. In the activities of an individual organization, ethics serves as an additional incentive to increase overall efficiency and obtain a better overall result. On the other hand, the harm of unethical and dishonest business behavior, which is felt not only by consumers but also by business partners, society as a whole, in total far exceeds the possible fleeting individual or group benefit. If the norms of ethics are not observed, then economic and entrepreneurial activity brings harm, the size of which is many times higher than the material profit received.
In order to improve the ethical behavior of managers and ordinary employees, the following measures and methods can be used:
- Ethical codes describe a system of shared values and ethics rules that, in the opinion of the organization, its employees should adhere to. Ethical standards should be developed to describe the goals of the organization, create a standard ethical atmosphere and define ethical recommendations in the decision-making process. Ethical standards in the guise of a code are presented to employees in the form of printed or electronic materials.
The company’s code of ethics performs the following main functions:
- Building trust in the company on the part of external reference groups.
- Regulation of the behavior of the company’s personnel in various complex ethical situations. For example, regulating priorities when interacting with external groups, indicating unacceptable behaviors, determining the order of decision-making.
- There is also a development of corporate culture since the code of ethics is designed to ensure that the company’s core values are communicated to all employees, to focus on common corporate values, to enhance corporate identity, and with its help, behavioral models are set, as well as standards of joint activities and relationships within the team.
Since the code is a management tool, although relatively new, it is necessary to teach employees how to use it. It is important not just to get acquainted with the book called “Code of Corporate Ethics” but also to learn how to resolve complex ethical situations. The explanation of the expediency of introducing an ethical code in the organization, the significance of these norms, both for the organization and the employee, takes place in a preliminary and accompanying internal PR company. This is a way to attract attention to it and launch it into a live discussion.
- Ethics cards. This is a set of ethical rules and recommendations that specify the corporate code of ethics for each employee of the company. They must also contain the name and phone number of the company’s ethical consultant.
- Ethics committees. The creation of such a body contributes to the assessment of everyday practices from the point of view of ethics. The members of such committees are usually elected from top-level managers. The role of the committee is to develop a judgment on ethical issues related to the actions of the organization, as well as to perform the function of the “social conscience” of the organization.
- Social audits can be implemented to evaluate and report on the social impact of the organization’s actions and programs. Reports of this type can indicate the level of social responsibility of the organization.
- Training in ethical behavior. To improve the indicators of ethical behavior, special training is conducted for managers and ordinary employees. At the same time, employees get acquainted with business ethics, which increases their susceptibility to ethical problems that may arise before them. Embedding ethics as a subject in training courses in personnel management and public administration is another form of teaching ethical behavior, thanks to which students begin to understand these problems better.
- Ethical expertise. This method provides a comprehensive analysis of a specific aspect of the organization’s activities that causes concern to senior management, staff, or the public and may affect the image and prospects of the organization. The result of such an examination is a system of proposals aimed at improving the moral respectability of the organization, as well as making adjustments to the practice of the organization’s activities.
- Ethical consulting can be applied when the organization itself cannot solve the solution of an organization’s problem, or there are no appropriate structures in it due to complexity. They are also used when situations involving specific moral dilemmas are contradictory. In such cases, competent, independent business ethics specialists from outside are invited.
The rules of ethics adopted in a particular organization are adopted at a general meeting of the team so that employees perceive them as their own. They can also be adopted by the administration, but they must be approved by the general meeting or conference of employees. The content of the rules can be very different; they often begin with the address of the head of the organization to the employees. The adopted rules do not have the status of a regulatory legal act, and legal sanctions and disciplinary measures cannot be applied for their violation.
The use of the norms and rules of ethics of corporate relations is perceived favorably by others in any case, even if a person does not have sufficiently developed skills in applying the rules of ethics. The perception effect is amplified many times if ethical behavior becomes natural and unintentional. This happens when the rules of ethics are an internal psychological need of a person.
Ethical standards in organizations are the values and rules of ethics that the organization’s employees must adhere to in their activities. The rules contain the rights, obligations, and responsibility for non-fulfillment of obligations or excess of rights. The rules and norms of ethics adopted in the organization act as a regulator of relations, which will either contribute to the successful activity of the organization to achieve its goals or create obstacles, leading to the collapse of the organization. The effectiveness of implementing ethical standards in a directive manner is extremely low. To become individual life rules, they must be deeply embedded in the daily practice of a person’s relations with the surrounding world.
Doerer, K. (2016). Why women over 50 can’t find jobs. PBS. Web.