Article (April-2018)

Articles

Business ethics define moral principles and rules of conduct

Nadeem Kazim

Designation : -   CHRO

Organization : -  TIL Limited (Tractors India), Kolkata

01-Apr-2018

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BM Do you see a radical upward shift in doing business with ethical values in present scenario?
NK I strongly believe in the adage that "There is no right way to do a wrong thing". In a competitive market economy, the customer determines the whats, the hows and the whos of running a business. Businesses which disregard this and run on unethical business practices will have no chance of survival in the long run.
Businesses thrive on good reputation. Treating one's client unfairly strikes at the very root of a business' existence. Deterioration in reputation leads to decline in the number of clients, with adverse implications for its top and bottom lines. Therefore, it is fair to assume that there is a radical shift in doing business with ethical values.
Today, many companies are using managerial techniques that are designed to encourage ethical behaviours. Every organisation propagates a culture that it exercises, so that, it can influence the employees to follow the same. Employees pick up subtle hints and clues that tell them what behaviour is approved and what is forbidden. Therefore, an ethical business culture is a blend of ideas, customer traditional practices, company values and shared meanings that help define normal behaviour of everyone who works in a company.
BM Is there a perception building around that business profits can only be accumulated with unethical practices? If yes, how organisations can counter this?
NK Entrepreneurs face ethical dilemmas daily, when running their business. Whether you need to get a government clearance to get your business going or try to close an important deal with a potential client. It's easy to succumb to the temptation of finding a shortcut to reap profits for your business. The propensity to compromise on ethics to grow the business can be far higher in a start up company since you are just at the starting leg of your journey and there is a lot to accomplish to get anywhere close to your dream. While these practices may lead to short term gains, in the long run it will only be harmful for any given organisation. Success without integrity leads nowhere.
There are many options for business looking at promoting ethics :
1. Create a code of conduct and make sure it is followed by all employees.
2. Create an "Ethics Committee" to ensure regular audits and checks for all business processes.
3. Hire right people and coach them well to integrate with the ethical policies.
4. Build a culture of transparent and open communication channels.
5. Reward and recognize ethical behaviours.
6. Leaders must lead by example.
BM What is the role of HR in instilling business ethics in employees?
NK Paying attention to business ethics is the responsibility of all the verticals in an organisation. The human resources function deals with a variety of ethical challenges; being the department that deals directly with people andnumerous ethical pitfalls that can damage a company's reputation or financial sustainability if not handled properly.
The HR can influence the organisation ethics in the following ways :
1. Hire right : While identifying talent for the organisation, HRs must ensure that they hire people who are ethically aligned. While this is very difficult to ascertain, but probing conversations may reveal certain facets about an individual which can help in understanding the personality.
2. Educating employees about risks involved : Many employees do not understand or appraise the risks of operating in an unethical manner. However, there are numerous examples across industry where organisations have suffered major losses due to employee behaving unethically.
3. Be truthful to authorities : Create corporate culture in which employees feel free to speak to the authorities. At the same time, if am HR notices any aberrations, they should be able to communicate the same to the top management. To achieve this a culture of open communication should be ensured.
BM Should HR act as employees' champion or custodian of employer's business interest in times of ethical crisis?
NK Leadership without ethics is like navigation without a compass. Business Ethics have quickly become a major topic in corporations today since they define our moral principles and our rules of conduct. There are numerous examples of senior leaders in renowned corporations producing ridiculously shameful examples of unethical behaviour while running the business.
HR acts as a functional custodian charged with the responsibility of creating an organisation's "ethical alignment". This would mean promoting and fostering an environment of those ethical behaviours and actions that every organisation needs from each employee to achieve strategic goals.
1. Formulate a Code of Ethics : HR should define what Ethical Behaviour is at the onset. Only when we define the guidelines, can we expect employees to follow the same.
2. Ethics in Hiring Process : During the interview process, potential hires should be invited to discuss how the ethics code aligns with their personal ethics. They should be asked for specific examples where they have displayed ethical behaviour in their professional life.
3. Training and Development : HR must facilitate a comprehensive training program to ensure that the values detailed in the ethics code is instilled and ultimately followed by each employee. Induction Training should include this module too.
4. Aligning PMS with Ethics Code : HR must ensure that examples of Ethical behaviours are properly rewarded. This will also create positive examples in the organisation.
BM What are the challenges for HR fighting unethical practices in organisations?
NK In an organisation which has unethical business practices, it becomes impossible for HR manages to function smoothly. In such organisations it becomes extremely difficult to organize communication channels where employees feel comfortable to address their issues. Capable employees who are important for the success of business may leave the organisation. Such employees may also carry this reputation outside and can deeply hurt the "Employee Value Proposition" of the organisation. Retention will become a tough nut to crack.
Employees are the torchbearers of an organisations reputation. HR will not be able to attract talent in case the organisations reputation is marred. Additionally, maintaining employee discipline inside the organisation, which practices or indulges in unethical processes is virtually impossible.
BM What is the way forward for HR in performing as strategic business partner in unethical business organisations?
NK The idea of HR becoming the strategic business partner in most organisations is more a virtual idea than a reality. The need of the hour for HR is to transform itself from an administrative department to a business partner. The way forward therefore is :
1. Empowering employees : Promote a culture where employees feel safe and protected to be able to whistle blow any aberrations from Ethics code they might observe.
2. Continuous review of Ethics code and trainings : Keeping the code updated as per the law of the land is of utmost importance. Thus it is vital that the code is revisited after fixed intervals. Additionally, HRs need to ensure understanding of this code by each employee, therefore institute trainings to one and all.
3. Be fearless : HRs should be the first one to blow the whistle in case they notice any deviation from the ethics code.
Finally, if an organisation is beyond repair and unethical practices form the very core of the organisations business, an HR profession should look out for opportunities outside and leave the organisation with head held high.