Business Ethics and Social Responsibility

Written by Max | Edited by Rory Hart
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    In addition to the articles on this current page, also see the following blog that has posts related to Ethics and Social Responsibility. Scan down the blog’s page to see various posts. Also, see the section “Recent Blog Posts” in the sidebar of the blog or click on “Next” near the bottom of a post in the blog. The blog also links to numerous free related resources.

    Library’s Business Ethics Blog

    About Ethics, Principles, and Moral Values

    See a video about managing ethical and legal risks and boundaries, and what to do if you encounter ethical or legal issues. (The video is in the context of consulting, but applies to leading, as well.) From the Consultants Development Institute.

    Simply put, ethics involves learning what is right or wrong, and then doing the right thing — but “the right thing” is not nearly as straightforward as conveyed in a great deal of business ethics literature. Most ethical dilemmas in the workplace are not simply a matter of “Should Bob steal from Jack?” or “Should Jack lie to his boss?”

    (Many ethicists assert there’s always a right thing to do based on moral principles, and others believe the right thing to do depends on the situation — ultimately it’s up to the individual.) Many philosophers consider ethics to be the “science of conduct.” Twin Cities consultants Doug Wallace and John Pekel (of the Twin Cities-based Fulcrum Group; 651-714-9033; e-mail at jonpekel@atti.com) explain that ethics includes the fundamental ground rules by which we live our lives. Philosophers have been discussing ethics for at least 2500 years, since the time of Socrates and Plato. Many ethicists consider emerging ethical beliefs to be “state of the art” legal matters, i.e., what becomes an ethical guideline today is often translated to a law, regulation, or rule tomorrow.

    Values that guide how we ought to behave are considered moral values, e.g., values such as respect, honesty, fairness, responsibility, etc. Statements about how these values are applied are sometimes called moral or ethical principles. (Extracted from Complete (Practical) Guide to Managing Ethics in the Workplace.)

    What is Business Ethics?

    The concept has come to mean various things to various people, but generally, it’s coming to know what it right or wrong in the workplace and doing what’s right — this is in regard to the effects of products/services and in relationships with stakeholders.

    Wallace and Pekel explain that attention to business ethics is critical during times of fundamental change — times much like those faced now by businesses, both nonprofit and for-profit. In times of fundamental change, values that were previously taken for granted are now strongly questioned. Many of these values are no longer followed.

    Consequently, there is no clear moral compass to guide leaders through complex dilemmas about what is right or wrong. Attention to ethics in the workplace sensitizes leaders and staff to how they should act.

    Perhaps most importantly, attention to ethics in the workplace helps ensure that when leaders and managers are struggling in times of crises and confusion, they retain a strong moral compass. However, attention to business ethics provides numerous other benefits, as well (these benefits are listed later in this document).

    Note that many people react that business ethics, with its continuing attention to “doing the right thing,” only asserts the obvious (“be good,” “don’t lie,” etc.), and so these people don’t take business ethics seriously. For many of us, these principles of the obvious can go right out the door during times of stress. Consequently, business ethics can be a strong preventative medicine. Anyway, there are many other benefits of managing ethics in the workplace. These benefits are explained later in this document.

    (Extracted from Complete (Practical) Guide to Managing Ethics in the Workplace.)

    Managing Ethics in the Workplace

    Managing Ethics Programs in the Workplace

    Organizations can manage ethics in their workplaces by establishing an ethics management program. Brian Schrag, Executive Secretary of the Association for Practical and Professional Ethics, clarifies. “Typically, ethics programs convey corporate values, often using codes and policies to guide decisions and behavior, and can include extensive training and evaluating, depending on the organization. They provide guidance in ethical dilemmas.” Rarely are two programs alike.

    “All organizations have ethics programs, but most do not know that they do,” wrote business ethics professor Stephen Brenner in the Journal of Business Ethics (1992, V11, pp. 391-399). “A corporate ethics program is made up of values, policies, and activities which impact the propriety of organization behaviors.”

    Bob Dunn, President and CEO of San Francisco-based Business for Social Responsibility, adds: “Balancing competing values and reconciling them is a basic purpose of an ethics management program. Business people need more practical tools and information to understand their values and how to manage them.” (Extracted from Complete (Practical) Guide to Managing Ethics in the Workplace.)

    Developing Codes of Ethics

    According to Wallace, “A credo generally describes the highest values to which the company aspires to operate. It contains the `thou shalt.’ A code of ethics specifies the ethical rules of operation. It’s the `thou shalt nots.” In the latter 1980s, The Conference Board, a leading business membership organization, found that 76% of corporations surveyed had codes of ethics.

    Some business ethicists disagree that codes have any value. Usually, they explain that too much focus is put on the codes themselves, and that codes themselves are not influential in managing ethics in the workplace. Many ethicists note that it’s the developing and continuing dialogue around the code’s values that is most important. (Extracted from Complete (Practical) Guide to Managing Ethics in the Workplace.)

    Developing Codes of Conduct

    If your organization is quite large, e.g., includes several large programs or departments, you may want to develop an overall corporate code of ethics and then a separate code to guide each of your programs or departments. Codes should not be developed out of the Human Resources or Legal departments alone, as is too often done. Codes are insufficient if intended only to ensure that policies are legal. All staff must see the ethics program being driven by top management.

    Note that codes of ethics and codes of conduct may be the same in some organizations, depending on the organization’s culture and operations and on the ultimate level of specificity in the code(s). (Extracted from Complete (Practical) Guide to Managing Ethics in the Workplace.)




    Resolving Ethical Dilemmas and Making Ethical Decisions

    Perhaps too often, business ethics is portrayed as a matter of resolving conflicts in which one option appears to be a clear choice. For example, case studies are often presented in which an employee is faced with whether or not to lie, steal, cheat, abuse another, break the terms of a contract, etc. However, ethical dilemmas faced by managers are often more real-to-life and highly complex with no clear guidelines, whether in law or often in religion.

    As noted earlier in this document, Doug Wallace, a Twin Cities-based consultant, explains that one knows when they have a significant ethical conflict when there is the presence of a) significant value conflicts among differing interests, b) real alternatives that are equality justifiable, and c) significant consequences on “stakeholders” in the situation. An ethical dilemma exists when one is faced with having to make a choice among these alternatives.

    Assessing and Cultivating Ethical Culture

    Culture is comprised of the values, norms, folkways, and behaviors of an organization. Ethics is about moral values, or values regarding right and wrong. Therefore, cultural assessments can be extremely valuable when assessing the moral values in an organization.

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    Ethics Training

    The ethics program is essentially useless unless all staff members are trained about what it is, how it works, and their roles in it. The nature of the system may invite suspicion if not handled openly and honestly. In addition, no matter how fair and up-to-date is a set of policies, the legal system will often interpret employee behavior (rather than written policies) as de facto policy.

    Therefore, all staff must be aware of and act in full accordance with policies and procedures (this is true, whether policies and procedures are for ethics programs or personnel management). This full accordance requires training about policies and procedures.

    Some Contemporary (Arguably) Ethical Issues





    General Resources Regarding Managing Ethics in the Workplace

    Social Responsibility

    Social responsibility and business ethics are often regarded as the same concepts. However, the social responsibility movement is but one aspect of the overall discipline of business ethics. The social responsibility movement arose particularly during the 1960s with increased public consciousness about the role of business in helping to cultivate and maintain highly ethical practices in society and particularly in the natural environment.

    Boards and Corporate Social Responsibility

    General Resources Regarding Social Responsibility

    There are many online resources in regard to social responsibility. The following will help to get your started.

    For the Category of Ethics:

    To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.

    Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.


    Max