Who Are You?
What’s your company culture? Your value system? Who are you and what do you stand for? It’s important to set some guidelines to let employees and those invested in your company to know what’s what. Create a list of values, explain what they are and, most importantly, lead by example. This way everyone is on the same page and you can hold one another accountable and create a great environment for employees, customers, and yourself.
How to Create an Ethical Firm:
Firms have to follow the law and the law is black and white. Being ethical in business is a choice and the rules are often in the gray area. Understanding what it means to be ethical in business, and realizing the rewards, can start you on the road to establishing guidelines in your firm.
What it means to be an ethical firm Take this example: A company sells bottled water and a devastating storm hits its area. People are desperate for water. If the company increases prices too much, it’ll be in violation of laws against price gouging; this is a black-and-white area. But should the company take advantage of supply and demand and raise prices at all? This is an ethical question.
Sometimes it appears that it costs more to act ethically (e.g., foregoing potential profit from a small price increase as in the previous example can be costly). However, the contrary is true. Studies have shown that ethical companies are significantly more profitable (see e.g., Corpedia’s Ethics Index for public companies). Think of the goodwill that the company in the example could engender by giving away its bottled water for free in the aftermath of the storm?