KEY POINTS:
Deb Gilbertson, director of 'innovation consultancy' Te Kaihau Ltd, answers questions about ethics and business.
How would you define ethics?
Ethics is more than making decisions between right and wrong. More often it is about making the best choice between two right decisions. It is also about proactively taking actions for the greatest good.
How can a focus on ethics change an organisation?
Organisation culture is all pervasive and outlasts individuals. We are accustomed to walking into an organisation and getting a feel of what the place is like. We humans are gifted at modifying our behaviour to fit into the prevailing norms and barely know we are doing it. So an organisation that has a strong ethical focus will be felt by staff, customers, suppliers and stakeholders. Ethical companies tend to attract better and more loyal staff with higher productivity, customers are attracted and more loyal, relationships with suppliers, the community and the Government improve, and ethical companies are less likely to face court action.
Does good ethics in a company mean lots of rules and regulations?
No more so than an ethical family is bound by rules. It is more likely to be full of discussion on the curly issues with two competing right possibilities. There will be case studies and company legends that staff will draw on. Issues will be open. In some cases there will be hard and fast rules such as, "we never offer bribes", or "any gift worth more than $20 is the property of the company".
What if my industry is one where ethics take a back seat? Won't I lose business being honest?
Yes, in the short run. I spent some time working on trawlers. There were eight fish wholesalers, each outdoing the other in skulduggery. The fish cases were weighed 10kg too light, the cheque was less than earned, some good species were declared useless. Except for one fish wholesaler who was honest. In time all of the independent vessels supplied this wholesaler.
Isn't it preachy for a company to try to tell workers they must behave in a certain way?
Yes, unless the managers are also role-modelling the behaviour. Then it just becomes an expression of "this is how we do business around here".
Surely everyone has different ideas of what ethical conduct is? How can rules be enforced?
Being ethical is more often about trying to make a decision between two competing right answers than deciding between right and wrong. Ethics is also proactive. Does the organisation actively care for the environment, train staff, pay bills on time, create a family friendly workplace, support the local community?
What does research show about the profits or performance of companies that focus on ethics?
Of the 50 major academic studies linking ethics to financial performance, 33 showed profits improved, 13 showed no impact and four showed profits declining.
Are ethics more of a problem in big organisations, or are they important in smaller firms too?
In many ways big firms are more ethical - they face more public scrutiny. Management textbooks were written for large organisations to allow process to replace human interaction and judgement. In New Zealand, where nearly 97 per cent of firms have less than 20 staff, it is easier to build relationships and inspire stakeholders with the dreams and values of the founders.
