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Head off ethics violations for your company’s well-being
By John Carroll
Contributing Writer
In the first of this two-part series, we looked at examples of business ethics applied to internal relationships.
Now we’ll look at potential causes of ethical pitfalls, as well as ways to avoid them in your organization.
Rational lies
A health care professional discovers that his assistant in charge of handling cash and insurance claims has been pocketing portions of deposits and falsifying deposit slips for more than a year. A single mother, this person sees her financial needs as much higher than that of her compensation.
Despite documented procedures in virtually every other area of the practice, no safeguards are in place to prevent the theft. This ethics transgression goes indefinitely until detected, untouched by milestones, including end-of-year financials and more.
The offender is quite careful by taking small sums at first and increasing them over time. Total damage is estimable only by guessing.
Termination, prosecution, a new cash handling process and a change of accounting firms address the issue and prevent a repeat performance.
The rationalization many use as the basis for stealing from the workplace ties into a deeply held belief that they are worth more than they are paid.
Driving on the wrong side
Two wrongs don’t make a right, as the saying goes. In the case where two sides vie for who can get away with the most while incurring the least notice and punishment, there are more than two wrongs at work. In a sense, these organizations are driving on the wrong side of the street.
First, leadership is primarily responsible for the practices of the organization, both internally and with external organizations and customers.
Where theft and other unethical practices flourish, leaders have either missed the subtle or not-so-subtle traffic signals of wrongdoing or they resign themselves to living with a certain level of otherwise unacceptable behaviors and systems.
The wrong, then, is the failure to address the condition directly and emphatically.
Second, misperception plays into many of these instances.
Managers may feel they can say and do whatever it takes, short of stealing from the company, to get their jobs done. A small promise to the newly hired associate certainly doesn’t make much difference in the big picture.
The wrong at work here is the lack of education to create a clear understanding about ethical practices and their importance as a foundational pillar of any organization.
Ethical street smarts
Just what are the rules of the road where internal business ethics are concerned?
How do leaders and managers ensure that proper standards are met?
How does the individual associate feel good about handling things ethically and properly?
Clearly communicate expectations and consequences. Every manager and associate should know without a doubt that certain behaviors are unacceptable within the organization.
A values statement, such as “We keep our promises—period,” can be helpful.
Lead by example. Know that your walk is much louder than your talk. Be above reproach in all matters where people, policy and resources are concerned.
When suspected violations surface, stick to your own code of ethics by doing what you promised or threatened to do. That includes imposing consequences, regardless of a person’s position.
Investigate promptly and resolve quickly. When you find suspicion of wrongdoing, give immediate, undivided attention and action to stop it and prevent the perpetrator from further acts.
Teach business literacy to prevent misconceptions. Most owners are dismayed at the level of financial understanding of the business not only by their associates, but also by their managers.
If you believe your organization is immune to this condition, make up a true-false quiz of 10 basic financial statements about your business. Give the quiz to your managers and check the scores.
Once you recover from the shock and understand the typically low level at which your managers understand company finances, it will become abundantly clear how much less your associates really know about the true numbers required to operate the company and how many pennies of net profit are typically left from each dollar of sales revenue.
Participate in and share comparative compensation studies. Check with your local chamber of commerce and/or business school and participate in local or regional compensation surveys to see where you fit with pay levels for roles in your organization.
Navigating the streets of solid business ethics for your organization must include sound practices.
Make sure that you consider all facets of internal practices and look at them regularly so that no dark corner becomes the breeding ground for larger problems.
John Carroll is a business consultant, speaker, author and president of Unlimited Performance inc. in Mount Pleasant. E-mail him at jcarroll@uperform.com.
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