How to Avoid the ‘Ethical Slide’ That Leads Companies Astray

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Company managers have likely heard the old quip: Business ethics is a contradiction in terms. That’s because too often, business is viewed as a hard-hearted enterprise, driven by getting ahead at all costs, even if that means cutting ethical corners. 

But that attitude is seriously outdated, says Harvard Business School visiting professor J. S. Nelson in her new book Business EthicsWhat Everyone Needs to Know, which will be released on April 21. Nelson, a Villanova University law and business faculty member, co-wrote the book with Cornell University professor Lynn A. Stout, who died in 2018 while the book was in process. 

Today, strong ethics are a central issue for business leaders, knowing consumers are drawn to companies that do the right thing while steering clear of businesses that break ethical boundaries, Nelson says. As business leaders navigate a fluid marketplace, a solid ethical practice is the best compass, she advises. 

“The world is changing around businesses,” Nelson says. “There is more pressure to make profits, and at the same time to respond to environmental, social, and governance issues.” 

And, she says, good workplace and customer ethics aren’t just trendy promotional talking points for companies. Rather, they’ve become crucial for a corporation’s success. As the authors write, “Organizations and societies with high ethical standards tend to flourish, while those with weak ethics often fail.” 

‘You have to live it’

Business Ethics is written in a question-and-answer format that’s accessible for everyone from C-suite executives to business students. It covers a wide range of topics, from the basics of ethical behavior and legal liabilities to the cultivation of best practices and the role of whistleblowers. 

One overriding message emerges from the book: Good ethical practices don’t just happen; everyone within a corporation has to continuously work on them. 

“People are not always comfortable talking about ethics,” Nelson says. “Some have been dismissing ethics as, ‘I don’t have to think about [those things].’ But making ethical choices has got to be conscious. You have to put the work in. You have to live it … Cultivating positive ethics within our companies is among the most important things we can do.” 

Surveys show plenty of work still needs to be done. Nelson and Stout write that unethical behavior arises from the “ethical traps” of opportunity, motivation, and rationalization, and typically can be seen through measures of at least five types of misconduct: abuse, lying to employees, discrimination, health and safety violations, and stealing. 

Worldwide, 20 percent of employees say they’re pressured to bend the rules; in the US, that figure is even higher, at 22 percent. And managers are responsible for 60 percent of all misconduct, with nearly a quarter of it coming from senior managers.

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