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Ethical Conduct is Good Business

October 22, 2014

Good Business

Smart businesses recognize the value of managing their operations in an ethical manner.  While we all have an inner guide that steers us – you can’t rely on everyone’s trust to maintain high ethical standards when it comes to business.

Although modeling ethical behavior may not the first goal you have for your business, you are making a mistake if you do not maintain ethical behavior up there with your top five organizational goals.

An Ethical Culture

There are many good reasons for cultivating an ethical culture in your organization.

  1. Your reputation, stupid. Is there anything more important than your reputation? Develop a fine reputation and it will enhance your standing in the business community; act ruthlessly and you might as well close your doors.
  2. Do the right thing. There are many choices we get in business. Choosing to do the right thing will make you feel good inside. Showing employees you care about doing the right thing motivates them to follow the rules.
  3. Avoid client/customer short-cuts. Your staff will translate the good values into good deeds. You do not want your staff to cut corners with customers or clients.
  4. Value your vendor relationships. Your business doesn’t operate in a vacuum. Your relationships with vendors are as important as how you deal with your customers. Your vendors keep you in business.  They communicate what is on their minds to other vendors and if something doesn’t feel or look right to them, they will be the first to notice it.

Implementing the Culture

There are many methods to maintain a high level of business behavior. And these are easy to implement, without compromising your business goals.

  1. Start from the top down. Your senior team needs to model the right behavior. Many organizations preach ethics but their leadership team does not practice what they preach. This is deadly to setting the right business culture. You and your team  need to model doing what is right – this will enhance your  reputation internally and externally.
  2. Perfect the principles. Identify the principles that lead to good business practices. Every industry has certain standards of behavior. Make it your business to learn and follow them.
  3. Develop written policies. Many of our clients have developed a customized  a Code of Business Conduct (Code) , independent of their Employee Handbook. We can assist you  in drafting such a Code. We would include (critical) provisions dealing with ethical standards, equal treatment of employees, acceptance of gifts, privacy, recordkeeping, improper payments to government officials and other policies.
  4. Have a reporting mechanism. Establish a reporting mechanism to address Code concerns. Identify the consequences of Code violations. Have your employees or entire management team sign the Code once a year and affirm they will follow its principles.
  5. Train them and they shall follow. Train your employees on the tenets of the Code. Make your policy a living breathing statement of your core values.

The Reward

As your parents taught you, the reward is inherent in doing the right thing. Maintaining and cultivating  an ethical culture in a natural way, with underlying policies and without any fanfare, will go a long way to developing a strong reputation for you and your leadership team. And the by-product: your organization will gain both admirers and customers from your efforts.

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