As businesses grow in today’s increasingly digital world, one field, in particular, is starting to take on increased prominence as businesses seek to succeed in their industries. Business ethics is forming an arm of the challenges that many businesses face when trying to be successful in competitive global markets – however, it is often misunderstood by those that wish to apply it.
Let’s explore some of the ways that business ethics can be viewed in your Master’s of commerce coursework, and how it applies more broadly to the businesses we engage with, each and every day.
Ethical Leaders – Representing Industry
As the world addresses serious issues, such as supply change shortages, cyber intrusions, severe climate events, and the effects of the COVID-19 pandemic, business leaders and their actions have come under increased scrutiny.
For example, consider the ethical risks that a company such as Medibank Private faced as a result of a cyber attack that stole the private customer data of approximately ten million customers. While not paying a ransom may have been an appropriate decision from a business standpoint, understanding the ethical implications of such an action can be critical to understanding corporate culture.
Another scenario to consider may be the ethical implications of delaying or putting off a product recall when social media posts demonstrate that a product is unsafe or dangerous. The way that a business acts when it becomes aware of issues can be a way for them to improve its standing within the community by stepping up and taking responsibility. Alternatively, ignoring an issue and the ethical issues can result in potentially risky situations, such as a whistleblower leak painting a business in a murky light.
Corporate Social Responsibility – The Bigger Picture
In business, corporate social responsibility is a measure of how an organisation makes effort to exceed compliance standards in fields such as gender and workplace diversity, climate change and equality. Increasingly, investors are reviewing the actions of businesses to understand whether a company’s CSR standings are in line with business behaviours, and appropriate ethical business conduct.
Even more interesting is the role of activist investors in forcing businesses to consider practices that are not simply profit-seeking, and to work toward improving corporate ethics from exterior roles. Consider how Mike Cannon-Brookes and his investment arm, Grok Ventures, have sought to increase the prominence of climate change on the board of AGL Energy. The individuals that both he and other activist shareholders have made have forced a renewed focus on ethical business actions in Australia.
Ethical Teams – Representing the Workplace
It’s important to note that ethics don’t just sit at a corporate level. In fact, there are stakeholders from all areas of a business that may hold ethical values. Consider, for example, your own beliefs, ideologies, and values – what do you find to be ethical and unethical in the workplace?
The notion of personal ethics can be a powerful part of business operations. An individual with strong personal ethics may be negatively impacted by an environment that lacks ethical conduct standards, particularly in situations where guidelines may be beneficial in understanding the most appropriate approach to a problem.
With more than one-fifth of all employees reporting that they’ve experienced at least one form of discrimination in their working lives, and the increased popularity of community platforms such as Reddit and Twitter to discuss negative or unethical behaviour, it’s now more important than ever for a business to be mindful of not just their own corporate ethics, but the views and values that their own teams have in the workplace.
Understanding where business ethics may be failing in the workplace can also provide a vital opportunity to respond and do better in the workplace. This not only benefits shareholders but also those that hold a stake in the places where we live, breathe, and spend our spare time. Ultimately, behaving in a manner that’s in line with ethical conduct doesn’t just benefit the individual, but it benefits the community around them, whether that be through actions such as reduced carbon emissions, or improved employment conditions.
Why is business ethics essential? Ultimately, while a business can make a profit, it will increasingly find itself under pressure to perform in a way that meets community expectations. As such, a business should consider acting in line with, or surpassing, a community’s ethical expectations, in order to succeed in the long term.