Definition of Ethics

Ethics in Decision Making:
Does it play a role?

A definition of ethics is, at a simplistic level, to 'do no harm'. An understanding of the definition of business ethics and ethics in decision making is important in today's business environment. Once you've gained that understanding, it is necessary to consider the impact of ethical decision making and problem solving on your business.

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What is the definition for business ethics? And why is it important to business owners and managers?

Ethics is also called 'moral philosophy'. This area of thought seeks to understand fundamental values, both personal and professional, and how to effectively facilitate business actions that reflect those values.

The importance of ethics to business is because the values that you use to build and manage your company need to be rooted in ethical decisions and strategies.

Recently, there has been a lot of media attention given to ethics in decision making; particularly in the workplace. Consumers and society as a whole want to see more corporate accountability. Additionally, we want business to more actively think about not only how a company treats employees, but also how a company's code of ethics extends to all of its stakeholders, such as customers, suppliers, and community.

From the time a business begins its operations to the time it delivers a service or product, there are a lot of choices to be reviewed, problems to be solved and decisions to be made. The manner in which those choices, problems and decisions are handled speaks volumes about the business' ethics.

As a small business owner or manager, it is your responsibility to ensure that your organization follows ethical practices and behaviors; and to ensure that your vision, mission, and value statement are ethically aligned and understood by all your employees, suppliers and other stakeholders.

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Ethics in Decision Making:

All ethical questions are focused on making a decision.

So how does one go about framing that choice? Initially, of course, a person (or the organization) has to recognize that an ethical issue exists. The issue could be a legal one, or more of a judgment call, but in both cases the question of 'what is in the greatest good' for all stakeholders must be asked (and answered).

In determining right versus wrong, we have to remember that those terms are subjective. That's where understanding the definition of ethics, and relying on a corporate code of ethics, can be very helpful. The code is the baseline by which a person, group, or organization can measure the facts of a case (including whether a determination can be made impartially). It is also important to develop an organization's value statement to reflect your ethical values as well; this will help employees understand your commitment and direction.

When analysis and evaluation begins, the rights of the individual and group, the equality of treatment, and the steps taken to remedy the issue or situation in a way that best serves the organization's vision or identity must all come into play. By examining each of these elements, a decision that's cohesive, consistent and appropriate will begin to form. Finally, that decision must be implemented (otherwise you're spinning your wheels).

Ethical reasoning can be focused on answering two kinds of questions:

1. Definitive questions (defining the facts relevant to the question);
2. Reasoned judgment (somewhat intuitive).

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Four Questions to Focus on When You Have to Make an Ethical Decision:

1. What are the other competing, interpretations of the situation or problem? (Consider other perspectives or points of view.)

2. What is the cash value of the situation or problem? (Both from a risk and benefit perspective.)

3. By reviewing your vision, mission and value statements and company policies, is how you handle the situation clear? (If not, revise those statements and policies.)

   For example, if your statements clearly indicate a strong commitment to a respectful workplace, yet one of your customers has been abusive, bullying and disrespectful, your decision in dealing with that situation is clear: you need to advise your customer that you cannot accept that behavior and that if they can't accept your policy then you can no longer be a supplier to them.

4. As the individual who needs to make the ethical decision, are you committed to doing the right thing?

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What is the Definition of Ethics:?

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