Doing the right thing is a principle many of us are taught at a young age. This foundation is something business owners or leaders rely on to ensure their company is on a growth trajectory. Ensuring decisions are made with ethics in mind is critical.
Telling the truth, being authentic, and demonstrating a value for honesty are important parts of establishing a business that will have long-term success. While this may seem obvious to some, it is critical for leaders to expand the scope of how they think about ethical decisions in the workplace. In other words, it’s not just about making the right choice. It’s about how to approach making decisions.
“We like to say that ethical decision-making is a combination of both financial and social responsibility,” said Dr. Erin Bass, associate professor at the College of Business Administration at the University of Nebraska at Omaha. “I try to focus on “and/and” thinking rather than “either/or” thinking that has dominated business for so long.
“That is, how can we address financial concerns and social concerns? How can we be responsible to our shareholders and our people? It’s a more complex way of thinking, but one that promotes more responsible decision-making in organizations.”
Ethics Takes Practice
Organizations likely have core values that guide the decisions made by leaders, to ultimately reach the goals set by the leadership. Operating with an ethical mindset should be at the very foundation of those values.
Javier Fernandez, CEO of Omaha Public Power District, noted that the first step to teaching individuals how to make ethical decisions as employees is through training. At OPPD, employees review a code of ethics and agree to operate by those, but they also undergo situational awareness training that provides an understanding of which types of ethical situations they may face while at work.
“Training to make ethical decisions is much like training your physical body,” he said. “The more you exercise your ‘moral muscle,’ the more prepared you are to make ethical decisions when confronted with them. The more we prepare our employees, the more automatic ethical decision-making becomes.”
Dr. Anthony Hendrickson, dean and professor of business intelligence and analytics at the Heider College of Business at Creighton University, said that building trust is one of the core principles of ethical decision-making.
“Trust is one of the hallmarks of successful organizations,” he said. “No one wants to do business with, work with, or live next door to someone you don’t trust, and we simply don’t tend to trust unethical people.
“Organizational success depends upon people being able to collaborate and work together. In other words, teamwork … teamwork requires confidence in your teammates and that cannot happen if you lack confidence that they will do the right thing. The ‘X’s and O’s’ of organizational strategy become irrelevant if you don’t have confidence in your teammates to act ethically.”
Dr. Hendrickson noted that once a leader has the confidence, the groundwork is there, but they must be committed to walking it out intentionally.
“Successful business requires confidence in your teammates to do the right thing,” he said. “But what is the right thing? The right thing may vary depending upon the constituency you represent. Shareholders may desire the firm to produce as much profit as possible, while customers may desire the lowest price possible.
“Good ethics is about attempting to balance those two objectives simultaneously. This is probably the biggest challenge facing businesses. How do you find the right balance? Creating the optimal profit, while providing a safe and desirable compensation and work environment for employees and producing a high-quality product or service that is fair to the consumer may sound simple, but it is extremely difficult to execute and requires constant attention and recalibration of fairness and equity.”
Fernandez reiterated the importance of balance and teamwork.
“Our very mission requires us to approach decision-making with balance,” he said. “OPPD strives to provide affordable, reliable and environmentally sensitive energy services to our customers.
“Those three goals can compete with one another at times, so we must work to balance all three considerations with a long-term perspective in mind. This is something we take very seriously, and we know the communities we serve count on us to make the best possible decisions. To ensure we get to the best decisions, OPPD encourages all our employees to bring a questioning attitude to the workplace and expects respectful debate when difficult decisions need to be made. This approach helps employees navigate ethical situations with clarity, compassion, and integrity … by their very definition, ethical decisions often do not have a clear ‘right’ or ‘wrong,’ so making a point to understand different perspectives can help us find common ground and the path to an ethical outcome.”