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The Business of Ethics: 5 Tips About Organizational Ethics

January 29, 2021
business students working around table

For the first IncubatorCTX Speaker Series of 2021 at Concordia University Texas, Joel Coffman presented "Build Ethics Into Business From the Start."

Coffman serves as the sales and marketing vice president for TyRex Group Ltd, a manufacturing company. He is also the executive director of RecognizeGood, which is a nonprofit that shares stories of great examples of goodness in the community to celebrate the accomplishments and encourage individuals and organizations to pursue good.

CTX is well acquainted with RecognizeGood. The University partners with the nonprofit to help with the Ethics in Business Awards, a 20-year-old program that recognizes businesses for their commitment to ethical actions. Each year, a group of Concordia students screen award candidates, asking them questions and requiring organizations to prove how they act ethically.

With experience in both the nonprofit and for-profit world, Coffman offered helpful tips about business and ethics.

But the first thing we need to do is define what "ethics" means.

Defining the Standard of Ethics

Merriam-Webster defines ethics as "the discipline dealing with what is good and bad and with moral duty and obligation" and as "the principles of conduct governing an individual or group."

This definition makes ethics appear to be subjective, that each person or a society decides what is moral and what is not. But this is not the case. There is one objective standard: God's Word.

As a Christian institution, we believe that what is good and bad is clearly defined by God in the Bible. The Ten Commandments in Exodus 20:1-17 summarize God's perfect moral law. When asked which commandment is the greatest, Jesus responded that all of them are.

Matthew 22:37-38 (NASB)

And He said to him, "'YOU SHALL LOVE THE LORD YOUR GOD WITH ALL YOUR HEART, AND WITH ALL YOUR SOUL, AND WITH ALL YOUR MIND.' This is the greatest and foremost commandment."

The greatest commandment Jesus states is a summary of commandments one through four in the Ten Commandments.

Matthew 22:39 (NASB)

"The second is like it, 'YOU SHALL LOVE YOUR NEIGHBOR AS YOURSELF.'"

The second commandment summarizes commandments five through ten.

With the unchanging biblical standard for ethics, believers can apply the commandments to all areas of life, including a business environment.

With that in mind, let's take a look at Coffman's tips.

Tip #1: Make Ethics A Habit

An organization needs to build its policies and procedures around ethical behavior. When ethics are ingrained within the very foundation of an organization, ethical actions become standard operating procedure.

Investopedia defines business ethics as "the study of appropriate business policies and practices regarding potentially controversial subjects, including corporate governance, insider trading, bribery, discrimination, corporate social responsibility and fiduciary responsibilities."

While laws dictate many of these policies, organizations committed to ethics go above and beyond the law, requiring ethical behavior in every facet of operations.

Tip #2: Set Accurate Expectations

Employers should clearly express to job candidates the importance of ethical behavior, and job candidates should seek employers who possess ethical standards and follow them.

Coffman encourages employers to focus on the type of work job candidates do and any volunteer opportunities with which they're involved. He encourages job candidates to research the company and check reviews (online, former employees, etc.).

A simple example Coffman provided illustrated how ethics, or a lack thereof, can be demonstrated. If you're an employer interviewing a job candidate who is currently employed and the candidate offers to begin work right away (without giving the current employer adequate notice), this may be a good indication that the candidate has questionable ethics.

The same applies when the roles are reversed. If an employer asks a currently employed job candidate to begin work the next day, this may be a good indication that the candidate should hesitate to join the organization.

Tip #3: Hire the Right People

Flowing out of tip #2, employers must find and hire the right people who share similar values.

When a person's ethical standards don't align with the organization's, it can create a problem of high turnover.

"Turnover hurts businesses," Coffman said, "so it's important for organizations to make sure they hire the right people and keep them on track."

A frequent benefit of having employees that align with the organization's ethical standards is employee loyalty.

Loyalty benefits an organization because its employees know the organization's products/services and are fully trained. It also benefits employees because they have a stable job in which they can grow.

Tip #4: Reinforce Ethical Behavior

Employees are more likely to meet the organization's ethical standards when they see that employees are both rewarded for ethical actions and reprimanded for unethical actions.

Coffman explained that it's critical for an organization to consistently reward ethical behavior.

You can recognize an employee's ethical actions in a meeting, send them a thank you note, reward them with a small gift or take some other action to show the organization's appreciation.

Just as important, an organization must address unethical actions with the appropriate repercussions.

Tip #5: Communicate Consistently

Ethical standards should be addressed frequently, not just at orientation.

Coffman explained that different employees communicate in different ways, so it's important to present a concise, coordinated message about the importance the organization places on ethical behavior.

Join us for the next IncubatorCTX Speaker Series.