Embedding Ethics in the Organization’s Strategy and Operations

Defining a business strategy to pursue is often very easy. Implementing a successful one often proves to be a challenging task for many leaders and managers. In my previous post Why Business Strategies Fail, I highlighted some of the reasons why well planned strategies go pear-shaped. What happens if managers and their employees choose to cut corners in order to achieve their goals?

Managers spend a lot of time trying to map the future of their organizations by finding solutions to some of these questions:

1. Why are we in this business?
2. Where are we now?
3. Where do we want to go?
4. How are we going to reach our destination?
5. Who are our competitors?
6. Do we have the necessary resources and capabilities to achieve our goals?

Managers have responded to these questions by crafting well-researched and brilliantly worded Mission and Value Statements and covering every wall on each level of the organization. In the book, Anatomy of Greed, based on the inside dealings and collapse of Enron. The author, Brian Cruver, a former employee of the company, brings to light how the walls on each level of the parking garage were covered in colourful, billboard-size messages of what life at Enron meant. Here are a few excepts of the messages from his book:

Level 1-“BOLD….enough to see the right answers and look for the right questions.”

Level 2-“INNOVATIVE…both in our quest for ideas and our creation of new businesses.”

Level 3-“SMART…enough to see a new solution, wise enough to judge its merits.”

Level 4-“UNITED…internally to reach our goals and with our clients to exceed their expectations.”

Level 5-“AMBITIOUS…to succeed because we know our work has a purpose and consequence.”

Level 6-“ACCOMPLISHED…because of us, ambition is only a measure of our ability to succeed.”

Level 7-“RESOURCEFUL…because the leader of the pack is usually the one that got to the front first.”

Level 8-“CREATIVE…because we believe if you’re not in a box, you don’t have to think outside of it.”

These values are meant to steer back the mind of both the leader and the employee of what the organization believes and stands for. However, instead of performing their original purpose, these value statements now form part of the decoration beautifying the walls. Organizations now crave too much success to the extent that they can do anything to achieve it. This shouldn’t be the case.

Ethics should be embedded within the overall business strategy of the organization. How reliable and trustworthy is your organization? Customers, suppliers, investors and other stakeholders value integrity as the foundation of trust. Good business ethics are the starting point for building excellent stakeholder relationships. These relationships are key to increasing sales revenue, referrals and building a positive reputation and brand image.

Not only will the business benefit from enhanced stakeholder relationships, there is also long term survival of the organization. After Enron’s unethical practices were brought to light, the life button for the former America’s seventh largest company was turned off. You might be able to get away with bad practices for now, but one day, everything will come out.

Good and honesty ethical practices will also save you incurring huge penalties. For example, in March this year, a State panel in Southern India asked multi-national company Coca-Cola to pay 50 million US dollars in compensation for alleged environmental damage. Activists and residents accused the company of depleting groundwater and dumping waste with a high metal content. They alleged these practices damaged agricultural land and the environment. This is a huge sum of money which could have been used for other profitable business
initiatives.

Good ethical practices also help in attracting and retaining top quality people. In addition to that, it fosters a more satisfying and productive work environment. Employees are always seeking assurance that they are not cutting corners when performing and achieving their tasks. This helps in maintaining a positive approach to work and a positive piece of mind.

How else can an organization benefit from good and honesty business practices?

Comments and questions are welcome.

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