What are Business Ethics?

Of 462 executives who were asked, "What characteristics are needed to be an effective leader today?" 56 percent ranked ethical behavior as an important characteristic, followed by sound judgment (51%) and being adaptable/flexible (47%). Source: American Management Association, New York, NY

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Unethical behavior, in which people deliberately intend to harm themselves or others, springs from, and is reinforced by, destructive and painful mind states such as fear, greed, anger and jealously. Ethical behavior, on the other hand, enhances the well-being of everyone because it comes from, and reinforces, motives and emotions such as love, joy, generosity and compassion.

Ethical cultures are the result of diligent effort--frequent, scheduled conversations between leaders and employees about what the standards of your company really are according to Laura Hartman, a professor at DePaul University.

A biennial survey of the nonprofit Ethics Resource Center found 25% of nearly 2,000 U.S. employees said they had observed their colleagues or their companies lying to customers, suppliers, workers or the public--up from 19% in 2005. The industries in which people are most likely to bend the truth: hospitality and food (with 34% of employees observing falsehoods), arts, entertainment and recreation (also 34%), and wholesalers (32%).

How ethically vulnerable is your organization?

Just go around and ask people what the core values are that define your company. You may be surprised at the variety of the answers.

As a leader, you have to set the standard yourself, constantly keeping your actions above reproach. Talk through hypothetical scenarios with the staff so that they'll know what to do when they come up against an ethical dilemma and you're not around.

Knowing what is right is absolutely critical to personal and business ethics. Yet, ethics only happens when good beliefs lead to good behaviors. Without the action part, all you have are good intentions.

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Here is an ethical action test for 'rightness' before implementation:

1. Is it legal?

2. Does it comply with my/our rules and guidelines?

3. Is it in sync with my personal and our organizational values?

4. Will I be comfortable and guilt-free if I do it?

5. Does it match my commitments and promised guarantees?

6. Would I do it to my family or friends?

7. Would I be perfectly okay with someone doing it to me?

8. Would the most ethical person I know do it?