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Lead Your Team Leadership

How Leaders Determine Workplace Ethics

image for fizkes / Getty Images
fizkes / Getty Images

Workplace ethics are not always top of mind in a profit-centric environment. However, the moral compass leaders establish for a company, and how they abide by those values, means a lot more than you might expect.

Andrew Selepak, an educator at the University of Florida and director of its MAMC Social Media program, is unequivocal in his definition of moral choices.

"Ethical dilemmas arise when you have to choose between two good choices," he said.

According to Robert Foehl, executive in residence for business law and ethics at Ohio University, before a company can pare down an ethical dilemma to two options, it must make an important decision.

"The first thing a business needs to do is establish what its values are in relation to society," said Foehl. In other words, how a company defines good, moral principles in society will color its ethical code.

Leaders don't just establish ethical standards in a business – they must also demonstrate them.

"The ethical standards of a company are top-down and bottom-up, and the employer sets the example," said Selepak. "If the employer does not act ethically, that trickles down to the bottom of the organization."

Leaders can set the company's ethical standards not only by creating a code of ethics but also with their management style. This includes these elements:

  • Sending appropriate messages
  • Remaining visibly on topic
  • Behaving in ways that match the company's stated ethical intentions

"[There is] no meaningful way for a business to act ethically unless leadership does so first," Foehl said.

"Leaders can't just lead by example or just by talking about [ethics]," he added. "Actions plus words demonstrating the value of ethics is how leadership affects the ethics of the group."

It's not just the top brass that sets the example, either. "Leaders at all levels, not just executive leaders" set the moral compass of a business, Foehl said.

To create a moral environment, company heads need to consider both their formal and informal behaviors. Formal behaviors are what they say, while informal behaviors are the actions taken by a business entity.

"[A company] must have both if it hopes to create an ethical workplace environment," the lack of which will lead to ethical lapses, said Foehl.

Not everyone's concept of ethics is the same. Some people adhere rigidly to the rules set out by management, while others have their own internal moral compass that guides them.

"We all have an innate ethic sense that lets us know the right thing to do, but we don't always follow it," said Mark Pastin, an ethics consultant and author of Make an Ethical Difference: Tools for Better Action (Berrett-Koehler Publishers, 2013).

Employees may go along with something they think is unethical because they fear the consequences of raising the issue, he said. He said people can be broadly categorized into four ethical personality types. In defining these four types, Pastin said each one handles workplace ethics differently.

  • The Conformist: This employee follows rules rather than questioning authority figures and tends to do things by the book. One might think this ethical type could be counted on to always do the right thing, but the Conformist might look the other way if leaders are acting unethically. That's because they tend to view managers as people to be obeyed no matter what. The Conformist will run into work-related ethical conflicts unless their organization has a set of rigid rules and well-defined consequences for not following them.
  • The Navigator: When confronted with a situation in which people are behaving unethically, Navigators rely on their innate sense of ethics to guide their actions, even if these decisions aren't easy. This ethical type has a generally sound moral compass, giving the Navigator the flexibility to make choices – even unpopular ones. The Navigator's moral sense imbues them with qualities of leadership, and others learn to respect and count on them. They succeed in most organizations and will leave a company that is unethical. 
  • The Negotiator: Negotiators try to make up the rules as they go along. When faced with a sketchy situation, such as a co-worker drinking on their lunch hour, the Negotiator might take a wait-and-see attitude to see if the incident affects their job in any way. For example, they may wait to see if the drinking worsens or anyone else notices. Navigators will encounter ethics-related trouble if their jobs require them to exercise judgment without guidelines, because they change the rules according to what seems easiest at the time.
  • The Wiggler: The Wiggler doesn't give a lot of thought to what is right, instead taking the route that's most advantageous for them. For example, Wigglers may lie to appease a supervisor but refuse to lie again if they sense that others are beginning to suspect them. Wigglers are mostly motivated by self-interest: getting on a manager's good side, scoring a better deal for themselves or avoiding conflict. They often run into trouble when others sense they dodge ethical issues to protect their own interests. 

While no one wants to be perceived as the office whistleblower, employees naturally act more ethically when they sympathize and empathize with the people affected by their actions, said Pastin. He added that ethical dilemmas are often resolvable if employees and managers are open to discussing them.

"Most ethical issues that arise in the work environment can be solved if raised in a timely manner," Pastin told Business News Daily. "The problem is that many people avoid speaking in terms of ethical concerns. Welcome disagreement and controversy in the office to foster a more ethical work environment."

Transparency with the public about the company's operations is essential to establishing a business's code of ethics, said Selepak. However, that transparency can come at a cost.

For example, does the business want its employees to act as brand advocates, perhaps even on social media? If so, Selepak urges corporate leadership to make it clear to the public that the posts are nothing more than the opinion of the writer, not necessarily reflective of the company's morals and values.

If a company allows any of its employees to act as a brand ambassador, it needs to be selective as to whom it extends that privilege. Moreover, if any staff members are empowered to post anything relating to the company online, they must be transparent about their association with the brand, said Selepak.

"Since we know people are influenced by the media they see, you want to be truthful in your company messaging," he said.

To what extent does a company with any sort of blemish on its reputation rewrite its history while remaining loyal to its ethical code?

For example, said Selepak, the carbonated beverages known as Fanta were created by the Nazis. It could be tempting to conceal this information, but the lack of transparency could be perceived as unethical. The right decision is not always so clear.

"If you hide that history, you make more sales [and] more people have jobs – or should the company be upfront about its negative history, if it has one, and face the consequences?" Selepak said.

He suggested a company makes the information available to the public to the extent that "repeating it is not necessary."

The deletion of negative comments on a company's social media platforms is another form of rewriting history. The brand's leaders need to decide if they will remove the comments or allow them to remain.

A primary consideration is "what is the [company's] standard?" said Selepak. For example, is the post spam, racist or homophobic? Comments that violate these standards could be ethically removed, while critical comments that do not should remain visible.

"There needs to be an ethical standard set to decide how to respond based on the company's code of ethics," Selepak said.

There is no time like onboarding for educating new hires about the company's code of ethics, said James Bailey, professor of leadership at George Washington University.

Moreover, that process should be both formal and explicit, he said. Story examples are a fantastic way to connect with a person perusing the code, so Bailey advises companies to use them.

He also suggested informing an employee about company culture in relation to ethics during the interview process. That way, he said, the "employee is immediately apprised of what is expected."

A company's code of ethics should be in writing and respected, he added. "A code not adhered to is a shell."

However, a code of conduct cannot possibly cover every ethical consideration in detail. "The values [of a company] are its North Star" but not an instruction manual, said Foehl.

With the proliferation of the internet, consumers are better equipped to research a company's past behaviors than they were in the past.

"With the internet, there is an unprecedented amount of transparency," said Foehl.

Many customers shop with their hearts, and today's American consumer is gaining interest in corporate behavior.

"We see a lot more people making decisions about where to invest money based on the behaviors and ethical standards of the businesses they support," said Foehl.

He even pointed to anecdotal evidence that people are willing to pay more to work with companies whose behaviors align with their values.

"Companies with a strong moral and ethical compass end up doing better," Foehl said. "[They are] stable, stronger, and have less employer turnover."

An increasing number of American corporations and businesses are in the process of reacting to society's shift in morals and values, he said.

"We are seeing more companies realizing their past behavior of ignoring ethics and conduct with a shift in the way businesspeople and leaders are thinking about business," Foehl said. "Part of that is due to a shift in societal expectations."

Nicole Fallon contributed to this article. Some source interviews were conducted for a previous version of this article.  

Tami Kamin Meyer

Tami Kamin Meyer is an attorney and freelance writer in Columbus whose byline has appeared in Forbes, Next Avenue, Better Homes and Gardens, and Ohio Magazine. She is the marketing chair of the American Society of Journalists and Authors and tweets as @girlwithapen.