The Ethics in business is (and should be) an act a priori that includes all those involved: managers, investors, executives, collaborators, suppliers and clients. It is assumed that all of them will conduct themselves under a social protocol that implies not abusing, cheating, stealing or lying. However, the reality is different, very different and even… cruel.
Before beginning the article, it is pertinent to take into account these two concepts: ethics and morality, which will be implicit throughout the text.
On the one hand, ethics is a philosophical branch that studies human behavior and social relationships, analyzes what is right, what is wrong, happiness, virtue, duty, among other aspects. While morality is an item applicable to a social group, which as a whole adopts certain customs and norms, which seek to preserve harmonious coexistence and human organization.
The 3 approaches to ethics
These concepts are related to other fields of knowledge such as religion, culture, anthropology, sociology, psychology, among others.
In this sense, ethics covers a broad field of study, which has been subjected to analysis from various approaches, resulting in three main branches:
- metaethicsof a genealogical nature, breaks down the basic concepts and the meaning of this subject.
- Normativewhich analyzes the standards of human conduct, such as civil codes, theories of duty, among others.
- applicative. It studies specific controversial facts or situations and its field of study is broad, covering professional, organizational, environmental, and social ethics, among others.
In short, talking about morality and ethics can be laborious and extensive work, so for the purposes of this article, we will only talk about application ethics, specifically organizational ethics.
The true importance of ethics in business (sad but true)
To illustrate the importance of ethics at the organizational level I will describe a brief history.
Warning. Any resemblance to reality is mere coincidence:
An entrepreneur managed to promote his project that went from a micro to a small business. Based on his effort and dedication, he was able to consolidate the foundations for it to be a profitable business with profits, even beyond what was expected.
Following a natural logic, this entrepreneur knows the macro and micro processes that are generated inside and outside his business, therefore, he appointed himself the company’s CEO.
In his quest to drive business growth, he assembled a staff of collaborators who are in charge of the most important operational and administrative processes.
lose the floor
However, his level of hierarchy (and a bit of egocentrism) made him “lose the floor”, so he decided to hire a personal assistant, not only for the company’s own tasks, but for other purposes.
A young, attractive and professional woman was selected. She quickly adapted to the work environment and began to perform functions in accordance with her profile.
After a few months, the director began to send him messages asking him to carry out activities outside his role, later, invitations arrived outside working hours. Finally there were insinuations of a sexual nature. That situation escalated to the point of becoming workplace harassment.
The assistant reported this situation to the corresponding authorities, but without sufficient evidence, something that reached the director’s ears.
From his managerial position, he did not want to be co-responsible for the risks it represented for him and his project, so he made the decision to fire her and eliminate the root problem.
What he did not consider was that the former assistant had the support of his former colleagues. The work environment in that SME became tense and harsh, since her collaborators described the dismissal of her partner as an injustice, in addition to the fact that they did not “lower” him as a harasser.
Spoonful of your own medicine
The collaborators sensed that at any moment another workplace abuse would be committed and that they would possibly lose their job, in addition to being conditioned not to support the colleague with her complaint.
This led to some colleagues agreeing to “give the entrepreneur a taste of his own medicine”, which aggravated the situation.
In the business, cases of ant theft, absences, low productivity and an increase in rumors began to be registered, which impacted the profitability of the business.
In a critical state, the entrepreneur was forced to fire other employees and restructure processes, as well as rethink the dynamics among workers, including himself in that category.
What is the moral of this story
Ethics and morality in business is directly proportional to the sustainability of the business, simply because it focuses on one of the vital aspects: people (vital force for organizations).
How to design the guidelines of corporate ethics?
Thinking about organizational ethics applied and grounded in a situation like the one described above would lead us to resort to the services of a transnational consultancy or a buffete of corporate lawyers that helps us as managers to have the ability to resolve it without falling into legal or administrative sanctions, but that is not entirely true.
The reality is that any entrepreneur or manager can design their code of ethics, define their policies and procedures, as well as design integrity plans that convey to their collaborators the “best” way of conducting themselves and what the sanctions will be in the event of incurring in an unethical or illegal act.
One of the first steps is to define the mission, vision and values, but not in a merely bureaucratic sense or following what theory dictates. These documents should be a reference so that your representatives know where the company is headed, but more importantly, how and under what conditions it will get to that point.
Another essential aspect is to determine the policies that are presented as the guidelines and directives that will regulate the rules of conduct within an organization.
No less important will be the sanctions and prohibited conduct, which must be traceable and detectable according to the risks of the business.
The 3 biggest crimes in companies
According to the 2022 edition of the National Business Victimization Survey (ENVE) prepared by the National Institute of Statistics and Geography (INEGI), the three biggest crimes suffered by companies are: extortion (28.9%), ant robbery (12.9%) %) and acts of corruption (10.8%).
Based on the above, we can have a reference to classify illegal acts and the possible sanctions that we can apply within organizations.
Finally, it is advisable to consult an expert, especially for specialized issues such as: corporate investigations, layoffs and administrative sanctions, in addition to other situations that may arise in the Human Resources area.
Benefits and advantages of business ethics
Consultants such as Deloitte, KPMG, EY and PwC agree that the application of business ethics obtains real results such as the following:
Solid corporate image
It translates into the confidence that it inspires in the interest groups of the organizations, this means that, by implementing an ethical system, the company is concerned about the social dynamics that occur among its collaborators, therefore, it creates a solid and reliable.
favorable work environment
The implementation of a channel for reporting illegal acts favors the work environment, since it eliminates rumors and gives certainty to the voices of those who seek to solve problems in a manner consistent with institutional statutes and, above all, that they are valid.
raise the level of compliance
The application of ethics at a corporate level organically increases the level of compliance, that is, the company endorses the commitment to respond to authorities and to its collaborators.
In the case of Mexico, the organizations that implement an ethical system respond to legislation such as the federal labor law or especially to regulations such as 035 that seeks to prevent psychosocial risks for workers.
Ivan Solis Rivera Enthusiast of business, projects and innovation. Master in Administration with orientation in Marketing. Professional trajectory: Communication and Journalism. The right combination to create and build valuable content about companies and businesses. Motto: to progress you have to share.