How Can Businesses Be More Ethical

When the average American is asked why businesses exist, the most common answer is unsurprisingly “to make money.” By the same token then it should come as no surprise that the top answer is not “to be ethical,” but ethics as they relate to businesses is becoming a higher and high priority. Gone are the days where companies, especially those with high profiles or in industries that focus on customer service, could get by with just following the law. People are now keeping track of which companies are ethical and which are not and word travels faster than ever thanks to the Internet and social media. But some companies are still coming to terms with what that means; and not always because they are “bad” or unethical. When it comes to acting legally, companies typically have a pretty straightforward standard: obey the law. How does a company know what is ethical and what is unethical? Answering this question and more will help a company become more ethical.

Similar to other characteristics of good corporate culture, it is vitally important to have ethics be easily visible among leaders within the company. This needs to be the case day-to-day, but a true test will be a big decision where the choice will be between an ethically responsible choice (that has less profit attached) and a less-ethically responsible choice (that has more profit attached). The company may not always have to choose the less-profitable option, but the less frequently that it does, the more likely people are going to wonder how ethically-driven the company is.

Another characteristic of a company that prioritizes ethics in its business practices is having a core value statement, separate from a mission statement, that discusses ethical goals of the company. This is no substitute for having the leaders of your company demonstrate ethical behavior, but it is still a key thing all employees, leaders or otherwise, can point to when asked about the company’s stance on ethics. Similarly, companies seeking to be known as ethical leaders would do well to not behave in a way that frequently contradicts their core value statement or it may have the opposite of the intended effect.

Lastly, a company can communicate a commitment to ethical business practices by focusing on people and business relationships over exclusively focusing on the bottom line. That is not to say the bottom line doesn’t matter, but again, it demonstrates that other organizations can expect a higher level of loyalty and honesty in their business dealings with your company than the average company.