Why You Should Put Ethics at the Centre of Your Management Strategy
When we think about management strategies, we think about encouraging teamwork, bringing out the best in our people and ensuring that we have good communication and clear goals. But there’s another element which should be baked in right from the start, and without it you’ll struggle to implement your other goals. That element is a code of ethics.
You may groan at the idea of another long corporate document to create; the good news is that you don’t need one. A simple one page summary with your underpinning principles will do. For example: transparency; accountability; fairness; honesty; respect. Employees doing equal work will receive equal pay. Marketing will be honest. Employees should always be given a chance to state their opinion. Changes within in the organisation will be communicated at all levels. Of course, none of these examples are prescriptive, but you can see that they don’t require a lengthy set of documentation in order to hold value.
Here’s why it’s worthwhile.
It promotes an ethical workplace and instils confidence in employees
When your employees have confidence that their grievances will be dealt with fairly and that the company has a strong ethical underpinning, they are more likely to demonstrate trust and loyalty to the company. When employees trust their company, they work harder and are less likely to leave. As well as trusting management, employees are more likely to trust one another and feel the collective responsibility of acting ethically. If the company culture is established as ethical, employees live up to that standard.
It can give your business an edge
It’s been shown that business ethics are a catalyst to the success of a company. When management know that they’re being held to a higher standard, their decisions are less likely to be self-interested and the whole company profits. Employees who work harder and leave less often also contribute positively to the bottom line. And when outsiders are confident that a company is acting ethically, they’re more likely to spend money or invest in the business themselves.
Social responsibility is also an important piece of the ethical puzzle, which can help differentiate your business from the crowd. Companies who promote fair trade principles, donate a percentage of their profits to charitable initiatives or make a point of diverse hiring practices can benefit from that stance.
It makes management decisions easier
On a personal level, business ethics make it easier to manage even when those underneath you act without the boundaries. Ethics define the way in which you make decisions for your team and the principles that underpin those decisions. When tricky calls come your way, having a clear ethical foundation will make the process simpler and ensure that you’re managing things consistently.
What do you think?
Does your company have a code of ethics, and if so, what effect has it had on the company and day to day operations? Comment to share your experience.
This article was written by Tanya Ashworth-Keppel on behalf of the Australian Institute of Business. All opinions are that of the writer and do not necessarily reflect the opinion of AIB. The following sources were used to compile this article: The Balance, Startup Smart, Investopedia.