Work Ethic: Navigating the Fine Line Between Productivity and Peril

In today's corporate landscape, the importance of ethical conduct within organizations cannot be overstated. Ethical behavior serves as the cornerstone for building trust among stakeholders, and clients, fostering a positive organizational culture, and ultimately ensuring sustainable success. This article attempts to understand the essence of organizational ethics, defining its core components—values, principles, and standards; and examining what aids the adherence to ethics and what are the characteristics that hamper an organization from achieving this.

Defining "ETHICS"

Ethics, as elucidated and defined by numerous scholars and institutions, finds its most apt and efficacious definition for organizations when it is defined as an encapsulation of values, principles, and standards that govern the behavior of individuals and groups within an organizational framework.

At its core, business ethics serve as guiding principles that steer and manage organizational activities toward proactively avoiding harmful behaviors. Thus, the three fundamental pillars of ethics are values, principles, and standards which collectively shape the ethical fabric of an organization in its true spirit. Let's look at these fundamental elements in detail.

Values

Values represent the intrinsic beliefs that motivate individuals to act in alignment with specific standards or ideals with which we evaluate certain actions, people, things, or situations.

For instance, the Founder of an Institution started the Institution, founded on the principle of providing education at an affordable cost to all.  This embodies a core value inculcated in the Organization's policy and its entire activities need to be aligned to achieve this.

Similarly, the Founder of a tourism agency is driven by the vision of providing people accessibility to all parts of the world, then the people of the Organisation work to achieve this aim, and its policies are made to evolve to achieve this.  

Principles

Principles constitute the fundamental truths or propositions that form the foundation for a system of beliefs or behaviors or a chain of reasoning.

For instance, in the service industry, the saying "customer is king" underscores the principle of prioritizing customer satisfaction and delight.

Likewise, principles governing human resource management emphasize equitable treatment of employees, timely compensation, and opportunities for professional growth which are some basic principles to be followed by an HR department within any organization.

Further, for a procurement wing the principle will be to procure at the right price and pay the vendor on time and for a sales wing, delivering quality products and providing customer delight would be the principle.

Standards

Standards are benchmarks established by authority, custom, consensus, or consent, serving as models or examples for organizational conduct.

These encompass adherence to statutory regulations, compliance with industry standards, and commitment to international quality benchmarks. By adhering to established standards, organizations ensure accountability and credibility in their operations.

Challenges Faced to Ensure Ethical Behaviour

Despite the imperative of ethical conduct, organizations encounter various challenges that impede their adherence to ethical principles:

“Get it at any cost”

Pressure to achieve targets may lead employees to resort to unethical practices to meet objectives, compromising integrity and values.

The above is a dangerous statement most frequently uttered by the managerial position down to their people.  This makes the employees to sometimes follow unethical activity to get the desired result.

Unreasonably High Business Targets

Imposing unattainable sales targets can incentivize unethical behaviour among sales personnel, undermining trust, and customer relationships.

This is one more area where salespeople fall prey to following unethical behaviour in achieving unreasonable business sales targets set for them.

Production demands superseding quality

The pursuit of meeting high production demands may compel compromises in product quality, jeopardizing customer satisfaction and brand reputation.

These are areas where in order to meet sales demands, production is done knowing that the product is not of good quality but is still forced to pass the quality check and be cleared for sales.

Employee censured for pointing out unethical issues

Employees who raise concerns about unethical practices may face retaliation or marginalization, discouraging transparency and accountability.

Some managerial employees do not like to be cornered when such issues are brought to notice, instead of correcting or rectifying they resort to penalizing the employee or side-lining the employee.  Such action will deter honest/true employees from following ethical practices.

Conculsion

Ethical compliance is not merely a moral imperative but also a strategic asset for organizations. Though it may be difficult at the beginning but in the long run it will always benefit the organization and will create customer confidence and happiness about the organization and their products. By prioritizing ethical conduct, organizations foster trust, credibility, and long-term sustainability.

Upholding ethical standards requires a concerted effort from top management to last-level employees, with a commitment to transparency, accountability, and integrity in the true spirit and process. Establishing mechanisms such as whistleblowing systems further reinforces organizational integrity and mitigates unethical conduct. Ultimately, organizations that prioritize ethical behaviour not only thrive in the marketplace but also contribute positively to society at large; and organizations that follow unethical behaviour are bound to collapse in the long run either on their own or being pulled up by the statutory bodies.

How we can help?

We, at Sharp & Stellar, offer comprehensive assistance to organizations by conducting internal behaviour reviews to identify potential ethical lapses, enhancing control mechanisms to mitigate risks, and delivering tailored training programs and cultural workshops aimed at fostering a workplace environment that prioritizes ethical behaviour. Through these initiatives, we help businesses identify and address gaps in their controls, ultimately promoting a culture of integrity and ethical conduct among employees.

Disclaimer. This article constitutes a part of the Firm's internal resource materials and is made accessible on the Firm's website with the intention of offering knowledge and awareness to its employees and clients. Any party other than those explicitly mentioned above should seek prior written advice from the Firm or the article's author before relying on the content for the purpose of making any commercial decisions.