Business Ethics Examples: Values for Workplace Excellence
Business ethics are important in ensuring that businesses conduct themselves professionally and treat all staff, customers, and shareholders with respect and consideration. Having a list of ethical standards can help companies remain focused on their vision, and maintain a high standard of service.
Organizations should embrace ethical practices, behaviors to increase productivity and uphold a good company reputation. An added benefit is that, when expectations are clearly stated in black and white, it makes it easier to recognize when workers deviate from the path of acceptable behavior.
In this article, we explain what business ethics are and give some examples of ethical conduct guidelines that you can apply to your business.
What are workplace ethics?
Workplace ethics are a set of values and moral principles that are incorporated into the policy of a business. That is, that employees must abide by these ethical practices or face a warning, or in the case of an extreme breach, termination. These ethics can usually be found in the company’s employee handbook and are introduced to new employees at welcome or HR meetings.
Rules and regulations surrounding ethical practices are often inspired by personal and business ethics held by the owner. They’re the moral compass that guides the company. The ethics code is about doing the right thing and treating people how you’d like to be treated yourself.
The code of ethics is combined with the employee code of conduct in most businesses. These are similar but not the exact same: the code of ethics is generally broad, giving employees an idea of what types of behavior and decisions are acceptable and encouraged within the organization. A code of conduct defines how employees should act in specific situations, for example when dealing with a difficult customer or whistleblowing policies [1].
Why do business ethics matter?
The Global Business Ethics Survey shares the reasons employees don't report misconduct:
- 74% are worried that the report wouldn't be confidential
- 63% fear being labeled a ‘snitch’
- 69% said they thought corrective action would not be taken
Furthermore, in the UK and US, only 50% of employees felt that their business was committed to strong ethical leadership [2].
Defining acceptable and unacceptable behaviors can protect employees from bullying, harassment, and discrimination. It can protect the business from insider trading, bribery, and unregulated corporate governance [3].
Business ethics promote teamwork and cooperation since all employees are expected to act in the same respectful manner. This directly encourages openness, partnership, and trust. Moreover, when employees know supervisors’ expectations they perform better in their jobs.
Having set guidelines will impact employee-customer relationships and co-worker relationships. When employees are honest, hardworking, and driven by principles of fairness and decency in the workplace, employee morale and performance are enhanced across the entire organization [4].
Business ethics examples
Below are some examples of workplace ethics that you can set in place in your business.
1 Transparency at all levels
Transparency impacts a number of vital areas of performance in a business. It’s also not something that comes naturally to a lot of people, as they fear consequences or judgment if they admit to a mistake or wrongdoing. However, transparency is essential for building trust, identifying areas for improvement, and more productive and honest communications within the workplace.
In a company where the business ethics and business principles align, there is no fear in raising or disclosing uncomfortable or difficult issues. Employees and managers can safely take accountability for mistakes, raise uncomfortable queries, and deal with problems and challenges openly. Transparency is also the organization being upfront and visible about the actions it takes, and whether those actions are consistent with its values [5].
For example, Stripe asks all employees to CC every email to various mailing list archives. These archives allow anyone in the company to access sent emails by topic. With access to relevant information at their fingertips, Stripe teammates have also achieved significant efficiency gains as a byproduct of this transparency initiative [6].
Transparency ethics also impact:
- Whistleblowing procedures
- Declining undue credit
- Admitting conflicts of interest
2 Prioritize job security and reduce layoffs
This policy is geared towards management and higher-ups in larger corporations and is inspired by Volkswagen. Volkswagen has pledged to rule out compulsory layouts until 2025, and encourage an enticing early retirement among the current workforce.
Volkswagen is committed to reducing its workforce by not filling empty jobs. For instance, if an employee retires, they do not hire a replacement. Meaning that 5,000 - 7,000 positions are freed every year, and current workers will not face layoffs. This saves VW 5.9 billion euros (6.7 billion USD) annually in labor, directly increasing their profitability margin [7].
Studies have shown that layoffs have a direct correlation with poor job performance, high employee turnover, lack of job satisfaction, inventory shrinkage, and decreased profitability [8]. Prevent these consequences by building trust with your employees, and show the same loyalty to them that they show to your company. Prioritize job security by implementing a strategy that commits to protecting employees from layoffs.
3 Place people before profit
Chron recommends a policy that impacts how employees speak with customers, the way in which products are advertised and described, and the times of day that potential customers can be contacted. This prohibits employees from lying to clients or purposefully misleading them in order to attract new customers or to attain a sale. It prevents unethical behaviors like harassing or plaguing clients into signing up for something against their will or promising more than what your company and product can deliver.
Instead, Chron recommends training employees in how to handle negative scenarios and providing examples of the type of professional conversations that employees should be having with clients for the best results [9].
The needs of your customers should always be placed before the need to meet sales targets or gain extra commission. If your current policy requires employees to achieve a certain number of new sign-ups a month, this might lead employees to push products that are unsuited to your customers’ needs. Employees should be able to tell the truth about a product, even if it means losing a sale. For best business values and better ethics, consider revising.
4 Environmental sustainability pledge
Take a stance on environmental protection that goes above and beyond what is required of your business by the law. A 2020 survey suggests 63% of customers prefer to buy from companies that have an obvious moral standing point and will avoid those that don't [10]. Further, climate change is a key issue that impacts people and businesses globally, and people are expecting more from businesses than the bare minimum.
Take steps that place environmental sustainability at the forefront of your priorities. Some examples include committing to reduce paper waste by switching to digital receipts and invoices, and more effective waste and recycling procedures for employees. Consider enrolling your restaurant in a food-bank scheme where leftover meals are donated. Or a clothing charity, where out-of-season retail stock is donated to those in need.
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