Organizational ethics are the policies, procedures and culture of doing the right things in the face of difficult and often controversial issues. Ethics topics that challenge organizations include but aren't limited to discrimination, social responsibility and fiduciary issues. Ethics issues and how any organization practices ethics are more important than ever because social media readily exposes issues that might have been swept aside in previous generations.
Positive Corporate Culture
An organization devoting resources to developing policies and procedures that encourage ethical actions builds a positive corporate culture. Team member morale improves when employees feel protected against retaliation for personal beliefs. These policies include anti-discriminatory rules, open door policies and equal opportunities for growth. When employees feel good about being at work, the overall feeling in the organization is more positive. This breeds organizational loyalty and productivity, because employees feel good about showing up for work.
An organization can lose consumer confidence very quickly with a few bad online reviews. Organizations have to retain consumer loyalty through ethical practices that start with fair and honest advertising methods and continue through the entire sales process. One area that organizations can lose consumer confidence is failing to honor guarantees or negatively deal with complaints. This is why consistent policies and employee training is imperative. Companies must direct employees on how to treat customers according to its core values.
When an organization takes the time to identify what is important to consumers and its target market, it is better able to set value statements and protocols to meet higher ethical standards. For example, a coffee distributor that focuses on fair trade and farming sustainability, builds a brand supporting environmental and social responsibility.
Reduced Financial Liabilities
Organizations that don't develop policies on ethical standards risk financial liabilities. The first liability is a reduction in sales. For example, a real estate development company can lose customer interest and sales if its development reduces the size of an animal sanctuary. This doesn't mean a company must abandon growth. Finding an ethically responsible middle ground is imperative to sway public opinion away from corporate greed and toward environmental responsibility.
The second area of financial liability exists with potential lawsuits. No organization is exempt from a disgruntled employee or customer who claims discrimination. Sexual discrimination in the workplace is costing CEOs, politicians and celebrities their livelihood because they are not appropriately dealing with accusations and harassment claims. Organizations must maintain policies and procedures addressing various types of harassment and discrimination. Moreover, organizations must remain consistent in the execution of policies dealing with accusations. This helps reduce frivolous lawsuits that could bankrupt smaller organizations.
About the Author
With more than 15 years of professional writing experience, Kimberlee finds it fun to take technical mumbo-jumbo and make it fun! Her first career was in financial services and insurance.
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