By Amanda Webster
Managers sometimes make the mistake of assuming they are acting in an ethical manner as long as they are not breaking any laws. However, just because a specific act is legal, it may not necessarily be ethical. Ethics can be based on a variety of subjective factors, including laws, religious views and individual feelings. However, the key to recognizing whether a specific behavior is ethical is to ask yourself if it violates another person’s rights in any way.
How Do I Know if It’s Ethical?
According to a panel of experts at Santa Clara University’s Markkula Center for Applied Ethics, ethical behavior consists of actions which “are supported by consistent and well-founded reasons.” Of course, these include refraining from obvious unethical actions covered by the laws of church and state, such as murder, rape, theft, fraud, assault and slander. Commonly accepted virtues such as honestly, loyalty and compassion should also be considered. Perhaps the key to understanding ethics is to remind yourself that if a specific action will benefit the organization or an individual manager at the expense of others, it may not be ethical.
Benefits of Ethical Management
Managers should care about ethics for a variety of reasons. Of course, there are the obvious reasons such as keeping one’s job and staying out of jail. However, ethical managers can also have a huge positive impact on the organization’s bottom line. For example, the ethical management of an organization can lead to an increase in employee engagement and productivity.
Tom Monahan, CEO of the Corporate Executive Board, says, “If an employee works for a company they consider having a strong ethical culture they work harder, stay longer, and are less likely to leave. Collectively, this data points to a 9% productivity boost from ethical leadership in the management ranks.” (Reference 3) Conversely, ethical failures can lead to the complete disappearance of even the largest of organizations as illustrated by Arthur Andersen, once considered one of the “Big Five” accounting firms in the U.S. prior to its involvement in the 2001 Enron scandal. (Reference 4)
Ethical Responsibility to Stakeholders
Managers are often forced to make difficult decisions. As a manager, you have an ethical responsibility toward all stakeholders in the organization. To meet this obligation, you may occasionally have to perform unpleasant duties, such as laying off workers in difficult economic times. You might ask yourself how it can be ethical to fire an employee just to benefit the organization. As an individual, you may feel as though you are making a decision that benefits the organization at the expense of the employee.
How to Be Ethical, Even When It Hurts
Ethical dilemmas may be tough to overcome. In such a situation, it is important to determine whether the choice to let workers go is made according to “consistent and well-founded reasons.” If so, the next step is to choose an ethical way of implementing layoffs. For example, you might offer a transition program where an experienced human resources representative meets with individual employees to review their resumes and offer job hunting advice. You might also request that supervisors write letters of recommendation for laid-off workers to aid in their job search.