What Is An Ethical Business Decision?
What is an ethical business? For some people the question of what is an ethical business is simply a question of good practice – something that everyone does, no matter what. For other people, however, the question of what is an ethical business is much more complex. That’s because there is much that is not considered ethical in business, and it is only by laying down specific ethical standards that any type of business can be said to be ethical or even called ethical.
In a business climate where many companies today seem to behave more like what terrorists do, it is important to highlight what is an ethical business in order to draw distinctions and draw attention to what is not ethical in certain types of behavior. Ethics of business can refer to the actions of companies to one level or another, but must ultimately be understood to pertain to how business is conducted and what is expected of the businesses involved. For example, it would be considered unethical for human resources to discriminate against potential employees based solely on gender, but this may actually be legal if the discrimination is a result of the failure to meet basic equal opportunity criteria.
Ethics of business, like all the various disciplines that are part of the larger field of professional responsibility, are extremely difficult to describe, much less teach in a classroom. Most managers are not taught about ethics and what constitutes an ethical business decision, so it falls to the organization itself to instruct its members about what is acceptable business behavior. The result is that most organizations are not even sure what is acceptable, so they don’t even try to do it in the first place. That leads to employee turnover. If ethics of business are not taught and enforced, the consequences can be devastating.
An increasing number of organizations, including law firms and hospitals, are recognizing the need to address unethical behavior and are requiring their partners and contractors to deal with these ethical issues. In addition, some small businesses are forming “ethics committees” to focus on the ethical issues affecting their small business. An increasing number of government agencies, such as the SEC, are requiring businesses to establish policies addressing these ethical issues.
One of the biggest problems with most businesses is that there is no formal organizational voice or code for business standards. Standards are the invisible, intangible things that make a business what it is. These standards are developed by leaders within the business community and passed down from top to bottom through a system of peer pressure and influence. Organizations that want to move toward the right thing in their industry need to have standards for what is an ethical business decision and what is an unethical decision. Without standards, it becomes easy to make decisions that are motivated more by what is the right thing to do rather than what is right.
Starbucks is one company that has a very public culture of striving to be an ethical company. They have a policy of only buying their coffee from the countries that they are producing and distributing. In addition, they offer a $15 dollar cup of their coffee for a social obligation at a local place of worship. This policy has helped to sustainably create a profitable business. It is important to understand that this is an ethical business decision because using coffee purchased from areas in the world that do not sustainedably support their local economies is not good for anyone. Starbucks has also decided to donate one cent of every cup they sell to a local program that provides housing for women in low income families.
Organizations that share a vision and values for how ethical consumerism should function have much more potential to become sustainable and ethical businesses. If an organization is dedicated to finding solutions to ethical issues that affect their business, their commitment will carry over into the products and services that they sell. These types of businesses are often more successful and profitable. There are some very committed businesses that have made ethical decisions even when it is not popular or profitable to do so. An organization that believes and is committed to social change is likely to find themselves with multiple streams of income. While the bottom line may be all about profit, the principles and ethics of the business are what drive the bottom line and the integrity of the business long after the money has changed hands.
When companies make what is an ethical business decision, they are able to impact society for the long term by building sustainable business relationships. These types of businesses can be a great way for many people to make a difference. By finding these businesses that have a vision and values for what is an ethical business decision, many people can begin to alleviate some of society’s problems.