Organizational ethics are standards that regulate human behavior in an effort to avoid harmful behavior or harm to the organization. There are various approaches to creating these standards, ranging from laissez-faire to highly proactive methodologies. The burden for ethical compliance can rest with the individual or be specified in detail, but there are risks to both approaches.
Organizational ethics are the standards that address human behavior, promoted and respected by organizations and businesses. The standards attempt to quantify and regulate human relationships in an effort to avoid harmful behavior or harm to the organization. Defining and managing the values of a collective group of people within an organization constitutes the practical application of organizational ethics.
There are various processes an organization can use to create these standards. If regulatory laws address ethical concerns, these requirements are often detailed in ethical standards. Ethical areas and concerns that may affect stakeholders in the organization will likely be considered. Stakeholders can include shareholders, customers, neighbors, and those in the company’s supply chain.
Ethical standards for an organization attempt to quantify and define behaviors that produce beneficial effects in the organization and the organization’s sphere of influence and to avoid harmful behaviors. An organization’s approach to ethics can range from laissez-faire to a highly proactive methodology that spells out specific behavioral expectations in detail. In a proactive approach, the organization attempts to eliminate gray areas that can cause ethical lapses.
When an organization adopts an ethical approach to laxity, it essentially enables employees and management to make ethical decisions based on their own judgments and moral standards. Because members of the organization may collectively disagree about what ethical behavior is, the entire burden for ethical compliance rests with the individual. There may be little or no ethics training for employees or managers. People are supposed to do the right thing, but the “right thing” is not specifically defined. The problem with this approach is that each person may have a different way of defining what is ethical and what is not.
At the other extreme, organizational ethics can be defined in great detail, specifying the exact ethical behavior expected in relationships. For example, an employee handbook might have a list outlining such ethical actions as maintaining customer confidentiality, not spreading rumors about other employees, and never using company property for personal use. This is a compliance approach to organizational ethics and typically enforces specific penalties for non-compliance. One problem with this approach is that those gray areas in ethical behavior are not explained.
In between these two extremes are organizational ethical approaches that employ general exhortations to do the right thing, or to be honest, or to be honest. There are also risks to this approach. While ethics training may be offered, people from different backgrounds may define honesty and morality in different ways.
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