Ethics is of paramount importance in business as a constituent of the basis for decision-making. In turn, integrity, honesty, and fairness constitute the basis of business ethics due to their focus on homogenous ethical standards and the promotion of behaviors that allow for building trust in the business setting (Schroeder et al., 2019). Although adhering to the principles of integrity, honesty, and fairness might seem impossible in the modern business environment, they create long-term benefits for developing business relationships and creating strong economic ties.
The three concepts in question might seem similar; however, there are several nuances to their meanings. Shu et al. (2018) define corporate integrity as unity and agreement with corporate goals among managers and staff members. In turn, honesty implies conducting key business transactions in a way that matches the principles of openness and truthfulness (Schroeder et al., 2019). Finally, fairness is the implementation of equality and equity standards in the corporate environment (Ferrell & Fraedrich, 2016). Following the specified notions, an organization will foster strong loyalty both in its staff members and target customers. Moreover, the notions in question can help address ethical issues in the organizational setting.
For example, corporate integrity may apply to the scenario where managers and employees, as well as any other group of stakeholders, have incompatible objectives due to the lack of agreement with corporate goals, such as differences in the approaches to conflict management (Huberts, 2018). In turn, corporate honesty should be used when an organization has made a major misstep, such as a massive production issue, in order to admit a mistake publically and make a recall. Finally, fairness can be applied in the scenario involving the uneven distribution of resources between staff members based on favoritism.
When implementing ethical decision-making, a leader must take especially careful notice of corporate culture. Defined as the set of beliefs and the resulting choice of behaviors in the organizational setting, corporate culture plays a major role in ethical decision-making. Namely, corporate culture provides the values and ethical principles based on which a decision will be made, hence the need for the notions of integrity, honesty, and fairness mentioned above (Gravina et al., 2018). In this respect, ethical leadership as the leadership stance that promotes ethical decision-making must be applied in the organizational setting since it fosters the necessary values in employees and sets ethical criteria (Leicht-Deobald et al., 2019). In turn, ethical leadership requires the presence of respect within an organization, as well as strategies for medication, communication, and conflict management.
Testing the efficacy of corporate ethics and compliance with it among staff members is vital. For this purpose, ethical audits as the processes for assessing the outlined issues are implemented. Ethical auditing typically consists of nine steps. First, company values are assessed to ensure that they coincide with the existing ethical standards. Second, the accepted code of conduct is assessed to ensure that it aligns with the standards in question. The third step implies assessing risks associated with the dents found in the corporate ethical code. Then, business conduct policies are evaluated to test their compliance with the code in question (Shu et al., 2018). The fifth step suggests determining the extent of ethical awareness in employees, thus, determining whether they follow the ethical code. Sixth, mechanisms for reporting breaches of ethics are assessed, which helps to prevent instances of major ethical violations. Then, a communication program is developed based on identified problems. Finally, after the program is evaluated during the eighth step, the ninth and final one suggests developing leadership commitment to the promotion of ethical standards.
Despite seeming to be a slightly naïve approach toward managing business interactions in the modern corporate environment, integrity, honesty, and fairness must be viewed as indispensable elements of ethical corporate decision-making due to their long-term effects. Specifically, the specified principles allow an organization to represent itself as a highly reputable entity in the target market. Therefore, these characteristics must be recognized as vital elements of business ethics.
Ferrell, O. C., & Fraedrich, J. (2016). Business ethics: Ethical decision making & cases. Cengage learning.
Gravina, N., Villacorta, J., Albert, K., Clark, R., Curry, S., & Wilder, D. (2018). A literature review of organizational behavior management interventions in human service settings from 1990 to 2016. Journal of Organizational Behavior Management, 38(2-3), 191-224. Web.
Huberts, L. W. (2018). Integrity: What it is and why it is important. Public Integrity, 20(sup1), S18-S32. Web.
Leicht-Deobald, U., Busch, T., Schank, C., Weibel, A., Schafheitle, S., Wildhaber, I., & Kasper, G. (2019). The challenges of algorithm-based HR decision-making for personal integrity. Journal of Business Ethics, 160(2), 377-392. Web.
Shu, W., Chen, Y., & Lin, B. (2018). Does corporate integrity improve the quality of internal control? China Journal of Accounting Research, 11(4), 407-427. Web.
Schroeder, D., Chatfield, K., Singh, M., Chennells, R., & Herissone-Kelly, P. (2019). The four values framework: fairness, respect, care and honesty. In Equitable research partnerships (pp. 13-26). Springer, Cham.