FAQ — Ethics

Essentially, "business ethics" is a term representing the application of accepted norms of "right and wrong" in business situations. More formally, I find the following sources useful on this subject:

1. Business ethics is the branch of ethics that examines ethical rules and principles within a commercial context; the various moral or ethical problems that can arise in a business setting; and any special duties or obligations that apply to persons who are engaged in commerce... it takes the ethical concepts and principles developed at a more theoretical, philsophical level, and applies them to specific business situations.
   [ wordiQ.com»]    [See also: "Typical Issues in Business Ethics"»]
   
   
2. Business ethics. The examination of the variety of problems that can arise from the business environment, and how employees, management, and the corporation can deal with them ethically. Problems such as fiduciary responsibility, corporate social responsibility, corporate governance, shareholder relations, insider trading, bribery and discrimination are examined in business ethics. [ InvestorWords.com»]
   
   
3. Business ethics. [See also: http://www.bnet.com/topics/Business+Ethics»]

In the best of all worlds, these two concepts should be strongly related and in balance with one another. As each moral person strives to apply his/her personal code of conduct to his/her daily activities, interactions, and decisions. So, too, moral business leaders and organizations strive to interpret and apply both personal and social codes of conduct (ethics) in business situations. This is not always easy due to strong pressures to perform, produce, and increase profits within an organization and the world of business at large. However, as most of us discovered with our mothers (who always seemed to have eyes in the back of their head), unethical behavior is usually found out in the end. Unethical business practices usually hurt more people than they help. They undermine trust and can destroy individual careers and corporate reputations. Once lost, that trust is rarely, if ever, recovered.

In a theoretical sense, business and personal ethics should, and do, have a lot in common. The biggest differences between them are related to the situations in which they are respectively applied. Most people bring their personal ethics with them into the world of business, but they must learn to apply those ethics with a different set of situations, circumstances, and pressures than they might otherwise experience in their personal lives.

In my experience, individuals with a strong understanding of, and commitment to, ethical behavior on a personal level tend to join, form, and support corporations/organizations with a strong ethical foundation reflected in their day-to-day business practices. Those with weak or non-existant ties to a solid code of ethics tend to be less concerned with ethics in business and their businesses pay a price for such lack of standards &mdash in poor productivity, shady dealing, misappropriated funds, and the like. This is s very short-sighted way to conduct business, and it often comes with a heavy price tag in the long run (even if short-term outcomes seem appealing).

If you want to be an exceptional leader and a good human being, then the simple answer is "Yes!" Personally, I believe in the value of conducting business ethically. It may not always be easy, but it is certainly simpler and, ultimately, less destructive than pursuing business in an unethical manner. However, be prepared for some continuous struggle and sleepless nights as your career develops annd expands.

The more responsibility you have, the more power you wield, the greater the opportunites annd rewards. On the flip side, the more responsibility and power you have, the greater the ambiguity and the temptations on many levels. You will feel the pull to take short-cuts to meet expectations; to tell the occasional "white lie" to a customer, boss, or the media in order to reduce the visibility of problems; or to act in your own best interest, regardless of anyone or anything else, so you can survive (or just because you can). These are only a few of the complications that confront a leader over time.

You cannot know how to navigate beyond these temptations if you never spend time thinking about business ethics and what ethical behavior in business means for you and your team(s). Continually postponing consideration of what constitutes ethical behavior and decisions until a moral dilemma presents itself is not only short-sighted, it will also make your decisions and choice of action much more difficult. Even if you have a business mentor or coach, I do not recommend that you rely solely on these august personages to steer your course through the minefield of ethical dilemma.

A business mentor or coach may not be required to live with the consequences of your decision and choices; you, on the other hand, will be carrying a portion of those consequences (in the form of memories — if nothing else) around with you for the rest of your life. And that doesn't begin to address the blows to your reputation, your sense of self-worth, and your credibility (naming only a few burdens among many more) that you may be forced to experience when you make the wrong (unethical) choices (even when made with the best of intentions).

So, do yourself a favor and give some serious thought to business ethics. Acting in a moral manner can be both frustrating and stressful at times. However, developing your moral business compass early on in your career is essential if you want to be one of the best and most successful leaders out there. I guarantee, you'll ultimately sleep better at night and your conscience will have less to nag you about.