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The Importance of Business Ethics - YouTube
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what would you do if you're in a store
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paying for an item and the cashier gives
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you back more money than you are
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supposed to receive
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would you walk away happy that you got a
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better deal than you're supposed to or
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would you correct the cashier and give
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the money back
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hey guys travis stewart here and welcome
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back to the business mindset
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we are faced with ethical dilemmas
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almost on a daily basis
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and unfortunately some people don't
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always follow the moral code of doing
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what is right
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they don't consider the cause and effect
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of their actions putting their own
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benefits before anyone else
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going back to the example of the cashier
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if you walked away with the extra cash
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thinking well they should do their job
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better or
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it's fine the company factors in for
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human errors what if that wasn't the
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case
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what if the cashier had to personally
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pay back any differences when cashing
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out at the end of the day
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or worse what if they lost their job as
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a result let's do another classic
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example of an ethical dilemma
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let's say that you controlled a switch
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on a set of train tracks the train is
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currently going to hit and kill
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five people on that track if you switch
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it it'll only kill one person
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but here's the dilemma you are now
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responsible for the death of that person
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what do you choose not an easy choice is
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it likely most of you would save the
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five over the one but let me add another
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factor to the trained dilemma
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what if that one person on the other
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track was someone that you knew if that
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person was your mother your spouse or
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your child
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is your answer still the same each year
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one in seven large corporations commit
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some sort of fraud where they put their
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personal gains before those who would be
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impacted by the unethical action taken
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we've seen this in the banking industry
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with wells fargo where employees created
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millions of savings accounts for people
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without their permission
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car companies like volkswagen lying
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about their car's emission results
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oil and gas companies such as enron that
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had billions of dollars in debt from
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their financial statements
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as well as facebook who provided users
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personal data to cambridge analytics
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without their users consent so why is it
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there are some companies putting the
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cart before the horse when it comes to
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ethical behavior
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is it ego they don't want to show
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weakness was it the pressure from
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shareholders to meet or exceed quarterly
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or annual results
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despite the ever-growing regulations to
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stop unethical decisions from being made
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these type of unethical business
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decisions are still happening today
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of course the examples i gave are from a
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general outside perspective of large
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companies
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but consider the impact of a lack of
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ethics within all levels of an
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organization
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not only at the executive level a lack
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of ethics has a negative effect on
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employee performance
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there are cases when employees are so
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concerned about getting ahead and making
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money
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they ignore protocols of their work
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which can lead to errors that impact
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various departments in the organization
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because
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the work has to be done again the right
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way there are also times when employees
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have the mindset that acting ethically
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and following the rules will not get
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them ahead
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so they're demotivated which also leads
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to a decrease in performance
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a lack of ethical behavior can also
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cause tension among employees
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if some employees are breaking the rules
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to get ahead it creates a culture where
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you can't trust
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anyone out of the fear that they take
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advantage of you to satisfy their own
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desires
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this is incredibly damaging to a
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business since most businesses rely on
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teams or departments
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collaborating to make the company
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successful worse yet
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if a manager shows a lack of ethical
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behavior he'll likely lose the respect
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from his staff
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as i'm sure you know it's difficult to
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run a successful business without
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leaders who are well respected within
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the organization
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it's far too common when managers and
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supervisors use their position and power
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to mistreat and disrespect others
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there's little protection against
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abusive behavior in the workplace
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unless the situation you're in involves
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race gender or ethnic origin and even
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this will vary depending on the country
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you're working in
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the quickest way to lose trust with your
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employees is to lie to them but
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employers do this all the time one out
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of every five employees reported that
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their manager or supervisor has lied to
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them within the past year
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i don't know the severity of the lies
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from the statistics some consider white
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lies as being acceptable in cases where
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you're protecting someone's feelings
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but in the end lies always reveal
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themselves and at some point the
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employee will still lose trust with you
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for not being honest and straightforward
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with them and if a lack of business
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ethics becomes known by the public
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the business will lose credibility and
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trust which is very difficult to
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overcome because
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the brand will be associated with that
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negative action for years into the
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future
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especially today when there's an
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increased focus on corporate social
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responsibility
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and their impact on labor practices the
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environment discrimination etc
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some businesses are able to overcome a
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negative public image however
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it comes at a price the time and the
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money spent on advertising campaigns to
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rebuild the image in a positive way
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most companies still lose a large amount
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of their customers and in many cases
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never win back the customers that they
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lost
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for example nike was faced with a
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negative public backlash about child
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labor in developing countries
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starbucks was hit with a negative
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headline for violating fair trade
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agreements on coffee beans
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this kind of media can have detrimental
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consequences for a brand because
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even if they rectify the problem the
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brand has still been associated with
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that unethical action which
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remains in the minds of consumers
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despite the several cases of unethical
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business practices there's still hope
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at the beginning of the video i
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mentioned that there's one in seven
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companies that commit some sort of
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unethical business action
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what about the other six companies what
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keeps them on the path of ethical
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business practices
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according to economist alexander wagner
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the driving force of ethical behavior of
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individuals is what he calls protected
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values
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where these values are so deeply rooted
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in the individual they can resist the
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temptation to giving in to unethical
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behavior
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and do what's morally right the reason
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for this is because
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acting according to your protected
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values holds more meaning intrinsically
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if you find ways to earn money that's
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consistent with your protected values
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rather than
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finding shortcuts or taking some sort of
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unethical actions to make a quick gain
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mr wagner conducted an experiment where
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individuals would flip a coin
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four times in a private room
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participants were instructed that they
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would receive five dollars for every
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coin flip that landed on tails
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because the experiment was anonymous the
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participants could provide any answers
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they wanted
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although the probability of flipping
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tails four times in a row is very low
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forty percent of participants reported
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flipping tails four times which
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is still higher than the probability
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however what was interesting was the
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other sixty percent of participants who
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didn't report flipping tales four times
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they could have
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no one was watching them and there was
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no penalty or disciplinary action for
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falsely reporting
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these individuals hold much stronger
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regards for their ethical values than
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the other 40
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which is mr wagner's conclusion although
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that one in seven companies commits some
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sort of fraud there are six
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companies that follow ethical business
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practices because they're protected
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values which is
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a part of their organization's culture
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when management is leading an
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organization ethically
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employees will follow accordingly
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because they're holding those protected
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values
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employees make better decisions in less
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time with business ethics as their
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guiding principles
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this results in an increase in
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productivity and a much higher employee
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morale and pride in the company they
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work for when employees can work in a
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way that is based on honesty and
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integrity the whole company benefits
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employees who work for a corporation
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that demands high standards of business
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ethics in all areas of operation
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they're more likely to perform tasks at
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a higher level and are more likely to
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have loyalty to an organization
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business ethics doesn't only improve
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employee morale loyalty and culture
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it directly impacts the company's
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short-term and long-term profitability
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a company's reputation in the public
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also plays a major role when looking for
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investors
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if a company is perceived as operating
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unethically investors are less likely to
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purchase stocks because
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the reputation will then be associated
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with them as well i hope this video gave
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you a lot to think about when it comes
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to ethical
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decisions in your organization and the
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effects it has on your employees
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customers and your reputation
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if you like this video let me know by
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hitting that like button and subscribe
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if you haven't already
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let me know your thoughts on business
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ethics if you have examples positive or
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negative
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on ethics in your workplace let me know
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in the comments section below
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that's all for today see you in the next
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video
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you
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