8 steps to prevent common ethical failures in organizations
A review of case studies of ethical issues faced by various organizations shows that many common ethical issues faced by organizations stem from individuals protecting their own financial gain and/or the short-term economic goals of their clients. organizations and do not protect other key stakeholders of your organization. the company or organization. Organizations can avoid serious consequences by considering the consequences of their actions for six key stakeholders, including; business partners, customers, employees, opinion formers, community and authorities (Treviño and Nelson, 2005, p. 196). When analyzing decisions using these six groups as a guide; “One can begin to identify how a variety of calamities can affect a company’s reputation and brand value, and how much those calamities can cost” (p. 196).
By reviewing how companies responded effectively and ineffectively to serious ethical dilemmas, organizational leaders can identify 8 steps to prevent ethical dilemmas in their own organizations.
1. Top-down responsibility for ethical behavior must exist within an organization. The head of the organization must take responsibility for managing the ethical behavior of the organization. This responsibility cannot be delegated. Additionally, this responsibility cannot be downplayed to a lesser role than other key leadership responsibilities, such as short-term profit. Senior leadership must set the ethical tone of the organization. They must communicate their vision for ethical behavior to employees frequently and with as much emphasis and clarity as they do other organizational goals. The leader cannot leave the ethical tone of the organization to chance or to others within the organization.
2. Organizations must design a code of ethics for the organization. This code should be developed with input from a broad section of people within the organization. It should be distributed to everyone in the organization and mentioned often in training and other communication to employees so that it is not just a manual sitting on a file, but is seen as a valid document to answer questions about what is accepted. and not accepted as appropriate behavior within the organization.
3. Policies should be established and enforced in the organization on how to report ethical abuse. Employees must understand how to report problems and know that they can do so without fear of retaliation. Care should be taken that this is not just a theoretical exercise, but that actual reporting examples are provided and employees are rewarded for reporting ethical dilemmas.
4. Ethical responsibility must be taught to the members of the organization. This should be done in various scenarios, including new employee onboarding, ongoing workshops, business meetings, leadership roundtables, newsletters, websites, etc. The training should include case studies where employees examine and discuss the ethical dilemmas they face. they could realistically face and the possible actions they should take. These case studies should include actual cases that have occurred or theoretical cases that may occur in the organization so that people can understand the proper way to handle real-life problems. Employees must clearly understand that they have an individual ethical responsibility shared with each of the stakeholders along with the responsibility of the organization.
5. Practices must be incorporated to ensure that discussions of ethics are included in the decision-making process. For example, a “devil’s advocate” should challenge decisions to explore whether unforeseen stakeholders may be jeopardized as a result of the decision; o Decisions should be reviewed by an ethics committee or department to assess whether other stakeholders may be at risk. The practice of questioning decisions and openly exploring their consequences should be encouraged and rewarded.
6. All levels of the organization must take their responsibility for ethical behavior seriously. Unethical behavior must be punished and must not be allowed to continue. Ethical behavior must be rewarded. Performance management systems must include ethical behavior as well as other key aspects of job performance. Those higher up in an organization should be punished the same as those lower down in the organization. In fact, it might be justified to punish those higher up in the organization more severely than those in entry-level positions because they should know more and because of the example they set for others in the organization.
7. Organizations must act quickly to protect stakeholders when dilemmas arise. Contingency plans must be made to deal with a crisis in order to act quickly to protect stakeholders in times of emergency.
8. The members of the organization must know that their main responsibility is to defend and maintain the high reputation of the organization at all times. Leaders should encourage higher standards of behavior than are required by law. What is lawful should be considered a minimum standard; however, standards should be set above this minimum to enhance and protect the organization’s reputation. Behavior below that standard should not be accepted and rising to the highest level should be rewarded and recognized by senior leaders.
References:
Treviño, L. and Nelson, K., (2005). Corporate social responsibility and business ethics. Hoboken, New Jersey: John Wiley and Sons, Inc.