While a relatively small percentage of companies do formal business planning, far fewer make the conscious effort to embed business ethics into their strategies.
Ethics = Legal + Moral
Business ethics are the values that define acceptable business conduct and should stop a company from pursuing business owner/shareholder interests at the expense of all other considerations. Ethical decisions are simultaneously legal…and moral.
Companies Embrace Ethics by Degrees
There are degrees of ethical business behavior in companies:
- The unscrupulous company…Wants to succeed at any cost.
- The lawful company…Anything short of breaking the law is okay.
- The responsible company…Believes being ethical may be rewarded.
- The ethically involved company…Wants to be ethically principled, but ethics not yet fully assimilated into the organization.
- The ethical company…Good business ethics are consistently practiced throughout the organization.
Only the truly ethical company will have deliberately entrenched good ethics into their core business strategies.
Google’s Manifesto…”Don’t Be Evil”
Google’s ethics manifesto… “Don’t Be Evil” (actually created by two employees and stated in the company’s 2004 IPO prospectus), is an effort on the part of Google’s executives to express their ethical belief that long-term gains and user satisfaction are more important than short-term profits. The company believes this philosophy benefits both users and shareholders and that Internet companies don’t need to exploit users to make money.
Deliberate and Ongoing Effort
Business ethics covers a much broader set of issues than Google’s manifesto. Deliberate effort is needed to plan for all the conceivable ethical challenges, defining a predetermined approach for each. This is a huge step forward for most companies…and it can begin with the formal business planning process. Ethics must be embedded throughout the company’s business models, organizational strategy and decision-making processes.
How to Be Ethical?
So, how are business ethics incorporated into formal business plans?
It is probably most clear to have a separate section of the business plan that defines the company’s relationship constituencies which will be impacted by ethical behavior, including (but not limited to):
- Relationships with customers
- Relationships with shareholders and investors
- Relationships with employees
- Relationships with suppliers
- Relationships with government and local community
- Relationships with competitors
The process of placing ethical intentions into the planning process is a very good first step, but to take decisions about ethical behavior into reality requires a lot more. Senior management needs to walk-the-talk in a very open, clear and public way.
Employees should be recognized, celebrated and possibly rewarded, for choosing the most ethical path and they should be encouraged to challenge the ethical conduct of the company, supervisors, managers and executives as directly as possible, with absolutely no fear of reprisal.