The Cost of Ethics

Have you ever associated financial gain or loss with ethical decisions? An easy one is to look at the Gulf Coast and see what it is costing BP right now for not putting the safety features in place. However, there are many times that we may not see what our decisions cost us.

According to the Ethics Resource Center, when economical times are tough, ethic awareness is on the rise. People are afraid to lose their jobs. Companies are attempting to instill confidence in their products and services so the consumer will choose to put their dollars with the company. They have also found that when times are financially strong, the ethical indicator takes a nose dive. Companies make decisions for the dollar rather than the benefit of the customer. Employees see all the money flowing through and reach out to nab a little more for themselves.

There are many factors that are affected by ethical decisions. When ethics are lacking in a company they are found to have higher turn-over, more product returns, less satisfied customers, increased employee misconduct, and higher vendor costs. When the company's philosophy is to act in the best interest for stakeholders, others tend to come on board to that idea and the costs go down. Employee misconduct is lessened, products and services are of a higher quality, the customers are more likely to refer others, and the vendors/suppliers are more willing to negotiate pricing and services. There is a direct correlation between ethical behavior and cost. Unfortunately, it doesn't always manifest itself at the time of the ethical/unethical situation.

If you want to improve your bottom line, improve your ethics. Many organizations put emphasis on increasing sales and decreasing costs but forget that one of the best ways to do that is to improve your behavior. The way to do that is to establish a code of ethics:

• Determine what your company goal/mission/vision is
• Identify the stakeholders in your company
• Establish a code that aligns with your goals (can write it in terms of Do's or Don'ts)
• Determine what is considered a Wrongdoing (list examples)
• Appoint a compliance officer
• Check with legal counsel to approve it
• Have a meeting with the staff to help implement it
• Walk the talk

I think this quote sums it up quite nicely:

Nobody cares how much you know until they know how much you care. - Theodore Roosevelt

Start caring and prospering.