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Why be ethical?

Why be Ethical? Lost wallet on the street
Why should we be ethical?  We are really asking two questions in one: what compels us to act with ethical intention and what are the consequences of our ethical behaviour. Here are some of my own favourite answers.
Ethical behaviour engenders trust
When your actions demonstrate that you are considering the interests of others, those others are much more likely to trust you. A work environment in which trust is present tends to be more creative and productive than one characterized by mistrust and defensiveness.
Ethical behaviour promotes reciprocity
People tend to behave towards others as they perceive others acting toward them. When you engage in ethical behaviour, you set the tone for how others are likely to respond to you and the organisation where you work.
Ethical behaviour is the underpinning for business transactions
In almost every business transaction, someone must give up something of value in exchange for receiving assets in return. For example, if I use a debit card to purchase goods from an on-line retailer, in turn I expect to receive some merchandise. The seller's reputation for ethical behaviour assures me that I will receive the goods that I have paid for, and the goods will be of the quality promised.
Organisations that develop a reputation for unethical behaviour soon find that they have either no customers, no stakeholders, or problems with the law.
Ethical behaviour promotes an ethical environment
Managers and decision-makers help shape their organisation's culture through their own behaviour. Employees who see their superiors behaving unethically are likely to find little reason to behave ethically themselves. This leads to an attitude where employees and their managers excuse unethical behavior by saying, "Everyone else does it."
Ethical behaviour promotes a positive reputation and laudable image
Beneficiaries, investors, employees, and other stakeholders look favorably upon organisations that are known to operate ethically. This leads to distinct advantages:
  • We prefer to do business with organisations that we believe act ethically and are socially responsible;
  • Employees appreciate being part of an organisation that is seen as ethical and whose purpose benefits society; and
  • Communities and governments are more likely to react favourably to organisations they see as being ethical and socially responsible.
Ethical behaviour anticipates problems and broadens perspectives
When you can identify the ethical issues in a situation you face, you widen your perspective. Not only can you anticipate and make plans to deal with problems that you might not have otherwise recognized, you may also find ways to benefit from the situation that were not apparent otherwise.
Ethical behaviour is not only proper and beneficial to others, it also supports an organisation's self interest. The bottom line is that ethical behaviour can be financially advantageous. Organisations that promote ethical behaviour are likely to:
  • Develop more creative and productive work environments;
  • Promote stakeholder and customer loyalty and trust;
  • Reduce internal costs associated with unethical behaviour;
  • Enjoy the financial benefits associated with a positive reputation and image;
  • Enhance their ability to anticipate expensive problems; and
  • Broaden their problem-solving abilities.
That's how I like to answer the big question of "Why be ethical?"  Now, what do you think?
Joan Elise Dubinsky, Board memberJoan Elise Dubinsky, Board member