E-squared: Ethics and Entreprenuerialism

“Integrity without knowledge is weak and useless, and knowledge without integrity is dangerous and dreadful.” —Samuel Johnson

When it comes to business ethics, there often seems to be a lot more gray area than what might be expected surrounding dilemmas like employee theft and tax evasion, among others. Fortunately, those who operate their own enterprises have the ability to set their own standards when it comes to business ethics. Entrepreneurs can set limits on what sort of behavior is acceptable in the workplace and what will be considered as crossing the line.

Setting an example
In 2000, the Ethics Resource Center surveyed 1,500 U.S. employees in its 2000 National Business Ethics Survey (2000 NBES) regarding ethics in the workplace. One of the findings included the following:

“The modeling of ethical behavior by organizational leaders, supervisors and coworkers is positively related to ethics outcomes such as employees being more satisfied with their organizations overall and feeling less pressure to commit misconduct.”

To sum this up, ethical employees=happy employees. And if you’re a new entrepreneur who works independently or doesn’t have the means to hire additional employees yet, consider the increased sense of pride you will have knowing that you have done the best you can without acting unethically.

Entrepreneurs also need to realize the impact their decisions and actions have—or will have—on employees. If a new employee observes their boss cutting corners to solidify a deal or undercut quality to shave a few dollars off their production costs, he or she will be much more likely to make unethical decisions in the future.

Preventing unethical practices in the workplace The survey also outlined the five types of misconduct most frequently observed in the workplace. Entrepreneurs starting their own enterprises have a huge advantage: they can premeditate potential problems and develop personalized preventative measures to help reduce the frequency of such issues within their businesses.

1. Lying. Entrepreneurs should consider a policy regarding lying that outlines how to deal with those who might violate the policy. Something to consider is whether a certain level of fibbing can be deemed acceptable—or, at times necessary—when working with certain employees, co-workers, or clients. Some might consider all forms of lying absolutely unacceptable in the workplace. If this is the case, how severe is any given offense of lying, and, as the owner, what is the appropriate reaction?
2. Withholding needed information. This is an issue that has become more relevant as technology has made communication and electronic documentation more universal. Whether evaluating health capacity for labor or income made from other jobs, the internet makes it easier for business owners to find out more about current or potential employees. These days, it’s not surprising for potential employees to ask for access to the applicant’s social networking sites in order to fully evaluate personalities.
3. Abusive or intimidating behavior toward employees. On the whole, most professionals will agree that this sort of behavior should not be tolerated in the workplace, and yet it is still so frequently observed. As the leader of your enterprise, you have full control over the relationship that will exit between yourself and your employees.
4. Mis-reporting actual time or hours worked. This could cause concern in two opposite ways: employees over-reporting the number of hours they’ve worked or employers under-reporting the number of hours worked by employees. The former will need to be resolved by somehow tracking production more accurately. The latter often leads to another ethical issue of misrepresenting hours worked by employees in order to pay less taxes.
5. Discrimination. In our generation, this really should not be an issue—and yet, unfortunately, it is. Set an example by treating others the way you want to be treated. It’s logical, cliche, and yet, surprising difficult mantra for many professionals to grasp and then carry out. Don’t tolerate it among your employees, either. Whether race-based, gender-based, age-based, or others, discrimination in the workplace makes it an awkward environment for all, not just those directly effected.

Dealing with ethical issues in the workplace After considering these issues, entrepreneurs will probably want to further evaluate their stance on how they should address certain offenses. Which actions require some sort of punishment? For what can an employee be fired? Finally, how will you implement your ethical expectations? Some business owners simply have new employees sign a release form regarding ethics when hired and never again discuss the topic. Others might try to host sporadic, unproductive ethic seminars—think Michael Scott in The Office. A few businesses develop ethical mission statements to display throughout the workplace. Those with a great deal of resources can afford to organize a values/ethics team to promote ethical discussions and activities for employees. No matter your method, employees and clients will value the extra effort you make to establish yourself as an ethical enterprise.