A few years ago the news was all about Enron and how the “books were cooked”. Today we are going through an economic downturn with a major issue in sub-funded home loans. Many home owners will not only lose their homes, but will be faced with financial issues for years to come. In addition, many mortgage companies have folded and employees have lost their positions and it has gone on to affect banks and financial institutions.
What is wrong with this picture? I believe it is a breakdown in not only individual ethics but a disregard of business ethics and business conduct. Business ethics and conduct is all about values and principles and help businesses define who they are as an organization (and also as an individual). I believe every organization should have a business ethic policy, communicate it to their employees and clients, and follow it very carefully.
What is a business ethic policy? It is a statement of what your organization believes in, how they treat one another, and how they do business. It is not just a compliance issue – it is the integrity of the organization and a statement of support and belief in that integrity.
Employees need to have this policy and that the company they are working for has set high standards that are important to them and that the employee is supported by management if they are faced with a difficult ethical decision.
I believe that in the case of Enron and the mortgage debacle we are currently going through, the collapse of organization’s business ethics and code of conduct is the primary reason for the failure. This failure cost the business to collapse, their employees to lose their jobs, and in some cases resulted in legal repercussions that are still being felt today. If these businesses had policies in place, they ignored them.
What can employers and employees do? I believe there are several steps that we can take:
1. Reach an agreement as to what each of you mean by business ethics and what conduct will be appropriate in your place of business.
2. Train employees in how to conduct business and respond to requests and let them know the consequences of not following your policy.
3. Define and explain conflict of interests so there is no misunderstanding of how employees are to conduct business either in or outside of the organization.
4. Provide assistance and support in reviewing how to identify and deal with potential conflicts of interest.
5. Protect your own business secrets and product information with non-disclosure documents so that every employee understands that certain information is proprietary and important to your business.
Business ethics and conduct are too important not to be a major statement within an organization. Make sure your organization has one.
Lola –
I like your 5 steps. If I could add to #2: it’s even more powerful when a company’s senior leaders conduct the training, instead of HR or the company lawyer.
I do accept as true with all the ideas you’ve offered on your post. They are really convincing and will definitely work. Nonetheless, the posts are very short for beginners. May just you please lengthen them a bit from next time? Thanks for the post.
Thank you for your comment. I will think about a more detailed blog on some of the topics.
Hello Lola Kakes,
Nice to meet you here 🙂 Hope you a are doing good.
These are some really good add ups for setting our business at a higher level.
Business involves lot of work out to be done with.
Key points which you mentioned were the real ethics we need to apply in our work surroundings.
Since I am not planned up for setting my own’s business, but these would be mark, so does it
helps me out in the coming time.
Thank you for share 🙂
Keep Sharing.
Shantanu sinha