Ethics in Business – 6 Examples of Business Ethics and Integrity

by on October 4, 2011

The success of an organization is built on the trust of customers, employees and the general public. The best way to gain that trust is to demonstrate ethics and integrity in business, not because of legal requirements – but because it is the right thing to do.

The infamous Enron and Bernie Madoff Ponzi scheme stories that affected thousands of employees and investors, after unethical business practices were discovered, are great examples of corporate collapse due to unethical business practices. The integrity of a business affects all customer groups and every area of business operations which is why incorporating ethics and integrity into the core fabric of an organization is critical.

6 Examples of Demonstrating Business Ethics and Integrity


1. Accounting Practices

Being honest and transparent with finances is a basic expectation of shareholders, customers and employees. It serves no one when organizations “cook the books” whether it be intentionally or accidentally. Careless accounting practices limit an organization’s ability to operate with good financial management. How can an organization budget be accurate when there is not complete transparency in spending?

2. Truth-in-Selling
When an organization markets a product or service, they are obligated to deliver what was promised to the customer. Whether it is a television ad or a print ad in the newspaper, the product described should be what is delivered to the customer. We responded to a furniture ad one time and when we went to the department store we discovered they were out of that particular item and the sales person tried to sell us a similar item that was more expensive. Needless to say we walked out and unfortunately the sting of the “bait-and-switch” experience kept us from visiting that department store again.

3. Integrity in Management Practices
Management practices are the underlying foundation for organizational integrity whether it is commitment to good customer service or fair employment practices. A businesses reputation can be tarnished by unresolved service or product issues and employees observe how leadership resolves issues and follows up on promises made. SAS ranked number 1 out of the top 100 employers to work for in 2010. In addition to a very generous employee benefit package, and an industry low turnover of merely 2%, the architect of its culture is based on “trust between our employees and the company” according to Jim Goodnight, SAS CEO.

4. Customer Service Integrity

Service after the sale is what service integrity is all about. It is easy to make promises before a sale but following up and ensuring a great customer experience is what makes some organizations stand out over others. We built a house a few years ago and the customer experience was over the top – until we closed on the house. It unfortunately went from one of the best service experiences to one of the worst after closing the deal. Service after the sale is critical to providing a great customer experience and growing a loyal customer base.

5. Personal Integrity

It is important for business leaders to live a lifestyle of honesty, integrity and high ethical standards because what these leaders do can harm the reputation of the organization. Two former Tyco executives who have become the poster children for failed ethical leadership are a good example of this. Both were sentenced up to 25 years in prison after stealing hundreds of millions of dollars from the company. The scandal sadly generated negative press for Tyco and ultimately affected the company’s value and profitability.

6. Product Integrity
Product integrity is important to those of us who purchase products and services. This is when public perception and brand recognition come into play. When we chose our home-builder it was because they were one of the largest in our area. Unfortunately, our experience with their service after the sale spoke volumes to us about the the product integrity of this builder. If we would have known the service integrity would have changed so drastically after the sale we would have been a little more diligent at ensuring the language in the contract supported resolution of issues once we closed on the house.

Organizations that operate with integrity do so intentionally and make it part of its everyday practices so that it becomes part of the culture. This climate of honest and trust helps orient new employees to understand that operating with integrity is “the way things are done around here”.

Ways to Incorporate Ethics and Integrity into Business Practices

Values Statement

Developing a values statement is a great way to articulate the core principles and values that dictate how the organization operates and how decisions are made. It also serves as a tool to help employees understand what influences the decision making process.

Code-of-Conduct
A Code-of-Conduct Statement establishes boundaries and sets the expectation for employee behaviors. This includes things like conflicts of interest, confidentiality, respectfulness of each other, legal compliance, etc.

Employee Training
Employee training and orientation to the organization is critical to ensuring they understand the behavioral expectations. Employees come from varying backgrounds and it should never be taken for granted that they naturally adhere to the same ethical values. This can be done through a structured new employee orientation process and ongoing communication through employee town-hall or general assembly meetings.

Simple Employee Reporting Process
It is not easy for employees to ‘blow the whistle’ if they observe questionable behaviors which is why it is important to create a simple and confidential process for reporting dubious business practices. This can be done by establishing a confidential hot-line, email or employee comment boxes – regardless, employees need to feel confident that there will be no repercussions for reporting.

Building integrity into the culture of an organization is the foundation for ethical business practices. Organizations that strive to do the right thing benefit by establishing a reputation for being credible and operating with integrity. Most would agree, when there is a choice, choosing to do business with an organization that demonstrates ethical business practices will always be the preference.

What ways do you ensure employees operate with honesty and integrity? Please comment.

 photo by:  glsims

{ 1 comment… read it below or add one }

Sri Vatsan October 8, 2011 at 4:24 am

With reference to the above topic – attention is invited to a reference material – a free download publication of the ICAI (www.icai.org) titled `Study on Investigative Audits’. The contents would be of relevance to business ethics in Indian conditions.

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