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Business ethics: The secret to gaining the competitive edge (Part 1)

Frew Murdoch

In a day, you'll probably hear between 20 and 50 lies. I heard this shocking fact during an episode of the documentary Head Games. This surprising revelation managed to wake me up from my 'TV-induced' coma and made me think that the idea of good business ethics sounds laughable. However, after hearing Cynthia Schoeman - the MD of Ethics Monitoring and Management Services – speak at the annual Assessment Centre Study Group (ACSG) Annual Conference - I realised that good business ethics is extremely beneficial in your employee management practices and to a company's bottom line. Keep reading to find out the secret to achieving a high ROI and a competitive edge for your company ... at absolutely no cost.

What are business ethics?
According to Business Case Studies, business ethics are moral principles that guide the way a business behaves. The same principles that determine an individual"s actions also apply to business.

A crucial feature of ethics is that it doesn't just apply to oneself, says Schoeman. It also applies to others who're affected by the organisation. "What is really important is to say: 'We've got this good/bad, right/wrong behaviour but what shapes that?'" she advised.

Ethics are influenced by three levers

There are three levers in the workplace context that influence and shape behaviour. These are:

  • Rules,
  • Regulations, and
  • Laws.

These are the formal mechanisms that are at your disposal in the workplace and can be referred to in legislation and/or company policy. "There is, however, an informal lever that is the most important shaper of ethics. But I'll get to that later," says Schoeman.

Create a desire for high ethical maturity

Ethics is always relative to something or someone else, especially in the business world. This makes the issue of ethical boundaries a very important point. "So I'd like to share just two of those concepts because it adds a real richness to the understanding of ethics in the workplace," said Schoeman.

The first one is low ethical maturity. And in fact we all experience this in many ways. It's where the ethical behaviour largely only follows because there are roles in place. It's still ethical behaviour but what we're looking at here is a very compliance-orientated arena. "Someone's doing it because they 'have to'," says Schoeman. "This creates problems because people with low ethical maturity are usually high maintenance as they have to be checked on constantly."

The second is higher ethical maturity. Ethics are driven to a large extent by shared values and belief systems. High ethical maturity is not about just doing the bare minimum because you're legally obliged to by an employment contract. You display high ethical maturity when you really believe that it's what you want and choose to do. It's a higher sense of purpose and a more fulfilling one as your actions are shaped by an inner desire – not just by rules.

Decide on your business' ethical boundaries

When looking at your individual ethical boundaries, ask yourself these questions:

  • Who is included within your company's boundaries?
  • Who is included to the extent that you would exercise your ethics and values towards that person?
  • Who's outside the boundary?

When you are part of a gang, says Schoeman, there would probably be great respect among the members of the gang and gang members would probably treat each other with great integrity. But is it an ethical organisation? It isn't an ethical organisation because their boundaries are so narrowly drawn that those values and ethics are adopted by such a small inner circle and everyone else is outside those boundaries.

"This is why it is important to set ethical boundaries because these rest on stakeholders and the triple bottom line. You need to decide what's included and what's excluded from your company's ethical boundaries," concludes Schoeman.

Look out for Business ethics: The secret to gaining the competitive edge (Part 2) on Tuesday 6 May.

Frew Murdoch is the assistant editor of HR Pulse. She has a BA degree in communications and English and a passion for HR technology.

Christine Botha, co-author of 'Ethics in HR Management: A guide for HR professionals and line managers', had this to say:

"I stumbled across your review of our Ethics Guide published 28 June 2012 and wish to thank you for the positive and complimentary comments made – this was a lovely surprise and most rewarding. I will certainly pass this on to all co-authors of the Guide."