Elements of Business Ethics

Because ethical business behaviour benefits both the enterprise and society, it is worth knowing how enterprises can foster ethics in their day-to-day working. The basic elements of business ethics are:

• (i) Top management commitment: Top management has a crucial role in guiding the whole organisation towards ethically upright behaviour. The CEO and other senior managers must be openly and strongly committed to ethical conduct, giving continuous leadership to develop and uphold the organisation's values.
• (ii) Publication of a 'Code': Enterprises with effective ethics programmes define the principles of conduct for the whole organisation in a written document called a 'code'. A code typically covers: fundamental honesty and adherence to laws; product safety and quality; health and safety in the workplace; conflicts of interest; employment practices; fairness in selling/marketing practices; and financial reporting.
• (iii) Establishment of compliance mechanisms: Suitable mechanisms must be set up to ensure that actual decisions and actions comply with the firm's ethical standards. Examples: paying attention to values and ethics in recruiting and hiring; emphasising corporate ethics in training; auditing performance regularly to check the degree of compliance; and setting up communication systems through which employees can report unethical behaviour.
• (iv) Involving employees at all levels: It is employees at different levels who actually implement ethics policies and make ethical business a reality, so their involvement is a must. For example, small groups of employees can be formed to discuss the firm's key ethics policies and examine employees' attitudes toward them. …