Despite the fact that few people go through a business degree without completing at least one course on ethics, ethics is something that continues to be lacking across sectors. Over the past year alone, there have been several high-profile business stories that ultimately pivoted around ethical considerations.
First, late last summer, revelations about Amazon left customers and critics alike wondering whether the company’s desire for profit was a great strategy for squeezing the best work out of employees or simply unethical. If you’ve already forgotten the story, allegations that Amazon employees felt obliged to return to work only days after serious medical procedures and the death of close family members suggested that the company’s work/life policies may be bordering on sadistic. In September, another major company—Volkswagen—was thrust into the spotlight with revelations about their emissions scandals. Yes, the once green company had been hiding its emissions levels—they were more than 40 times those reported. Then, in October, revelations about Theranos left just as many people—including shareholders and corporate partners—questioning the company’s ethics. Was Theranos holding back information about their much-hyped new diagnostic technology? Indeed, glancing back on the 2015 business year, one might conclude that ethics was at the center of many of the year’s top business stories.
What are Business Ethics?
By definition, business ethics is an area of study focused on business policies and practices that govern controversial issues (e.g., insider trading, corporate social responsibility and organizational governance). However, business ethics is also far more complex. While business ethics are guided by the law, business ethics do not always simply follow the law to the letter. Furthermore, it is important to separate ethics from morality.
To illustrate, consider how some organizations addressed health benefits for same-sex partners prior to the recent legalization of same-sex marriage across the United States. Prior to the legal recognition of same-sex marriage, many employers already extended health benefits to same-sex partners. In short, many organizations decided that the ethical way to handle the question of same-sex health benefits—in lieu of a federal law permitting gay and lesbian couples to marry—was to simply offer domestic partner benefits. The problem is that domestic partner benefits, unlike spousal benefits, are considered taxable income. To address this discrepancy, some progressive companies also chose to pay the taxes on these health benefits to ensure that the small percentage of employees who were impacted were not being effectively penalized for a benefit enjoyed by all other employees. So in this case, one can conclude that by not following the law (only offering health benefits to married heterosexual spouses), organizations were operating in an ethical manner. But were they operating in a moral manner? This is a matter of opinion. After all, while some people argued that extending health benefits to same-sex couples was a good thing—even the right thing to do—others maintained that it was amoral (due to their personal stance on the morality of same-sex unions). What this example clearly illustrates is that being ethical in business may entail acting in accordance with the law and acting in a moral manner but that in some cases, an ethical stance may require questioning the law (if not breaking it) and may or may not appear moral from different people’s standpoints.
In addition to the above example, consider how ethics relates to compliance. In January, after allegations of racism, the Academy of Motion Picture Arts and Sciences voted to immediately create new board positions to increase the representation of visible minority members. The problem with this move was the Academy was in effect falling out of compliance with their own bylaws. Nevertheless, as many Academy members fired back, in this case, there was a strong case to be made for the fact that the Academy was still acting in an ethical manner by choosing to ignore its own bylaws. Again, like the above example of extending health benefits to same-sex couples, this example reveals why ethics matter but can raise extremely complex debates inside organizations.
Can Training Promote Ethical Business Practices?
Doing business or running a nonprofit organization in an ethical manner is a tremendous challenge, but training can help. Using case studies, managers can explore how best to respond to different ethical dilemmas that arise in the workplace and gain an appreciation for the fact that compliance, in some cases, is only the beginning. For more on ethics, see eLeaP’s course: Compliance is Just the Beginning: Ethical Situations to Consider.
Check out the How to Foster Employee Engagement through E-Learning white paper