Thirty to fifty percent of US employees report witnessing unethical conduct and in the past 15 years, companies have paid record fines for fraud and other unethical practices. Considering ethical organizations perform better financially, why are so many companies failing to establish a healthy culture? To learn more, check out the infographic below.

good ethics infographic image

Attributes of Ethical Business Cultures

Three things stand out in companies that foster an ethical culture: accountability, fairness, and motive-based trust. Having accountability means that the organization sets its ethical expectations up front. The company’s values are clear to each individual working for it. Everyone is expected to stay true to these values and is held accountable for their actions.

Fairness is the perception of the greater majority that the policies in place inside the organization are reasonable and impartial. Employees should see justice in the daily practices of the company as well. They must view themselves and the work receiving fair treatment in all aspects from pay to promotions.

Motive-based trust pertains to the way that employees assess the character of the people that they work with inside the company. Each must be able to have a certain level of confidence in the other for them to be able to succeed in their tasks as these usually require teamwork.

As for the leaders, employees are looking for individuals whom they can trust based on their character. People want to follow managers that are able to listen to criticism instead of just shutting things down. They must be quick to take responsibility for their ethical mistakes. They must also practice humility — not above asking for forgiveness and taking corrective action.

Values Corporate Leaders Should Ingrain in their Companies

Integrity, respect, self-transcendence, loyalty and compassion are all values that managers should champion in their capacity as thought leaders. Integrity is vital as it is the cornerstone of the trust placed by customers and vendors on the company. Dealings must be fair and honest in all facets. The prices given must always be competitive, the payments made in a timely manner, and the products manufactured with high standards.

Leaders should be the first ones to show respect to their followers. Managers demonstrate their respect for employees by listening to their thoughts and opinions, acting on them if the situation calls for it. They should treat each of them equally with no hint of any favoritism that might compromise their judgment.

Self-transcendence is the ability to look beyond one’s self and consider the well-being of others. Leaders should exhibit values such as concern and a sense of responsibility to uphold the rights of every person, especially those working for them. This can also extend to nature with environmental protection being a big part of corporate social responsibility.

If employers are loyal to their employees, then the latter will repay the former in kind. This type of loyalty is increasingly rare in a business environment where the movement of individuals is often dizzying quick. Those who recognize their good fortune of having a dependable leader will want to stay and work harder to ensure an enduring partnership.

Compassion is the concern for all of those that are affected by the business whether it is a person or creatures in the environment. If people see this in their leader, they will follow the example.

The Statistics on Unethical Conduct

Surveys among US workers show interesting figures regarding ethics in the workplace. About 41% of them admit to seeing unethical conduct while on the job. The majority of these involved an individual in a managerial position. It is no wonder then that only 28% of the respondents believe that businesses follow ethical practices and just 15% of Americans trust their leaders to tell them the truth.

These unethical practices have tangible results. A study shows that among the ten largest corporate bankruptcies since 1980, more than half were the result of unscrupulous dealings. Examples of these include Enron, WorldCom and Lehman Brothers. The failures are not isolated to the owners as the economy as a whole suffers from the fallout. It is estimated that the cost to the economy is at $1.228 trillion, which is nearly 10% of US GDP on 2011. In 2012, fraudulent companies paid almost $8 billion to the government in fines.

Benefits of Strong Business Ethics

On the flip side, strengthening ethical behavior leads to a positive workplace culture, which translates into stock market success. These companies also benefit from lower turnover as workers enjoy their environment. They feel less stressed as they don’t have to compromise their own personal values. This is crucial in wanting to continue to work for an employer.

Employees in these companies also have higher job satisfaction ratings compared to the average in their industry. They are more motivated to commit to the organization and its goals. They are also more engaged in their work and are willing to push themselves harder to complete their tasks.

Learn More

As the nation’s oldest private military college, Norwich University has been a leader in innovative education since 1819. Through its online programs, Norwich delivers relevant and applicable curricula that allow its students to make a positive impact on their places of work and their communities.

Norwich University’s online Master of Science in Leadership program is designed to help you demonstrate the skills and knowledge needed to lead teams and inspire progress, while also growing your career. The program is practical and pertinent, allowing students to apply leadership concepts immediately to their careers.

Learn More Today

Complete the form on the next page to request more information about our online programs.

Request Info