Ethical behavior refers to acts that are consistent with what individuals and societies generally consider are right. Ethical behavior is necessary particularly in business. It involves showing respect for important principles that are moral and acceptable. In the recent past, big organizations such as Arthur Andersen, Health South and Enron have lost their glory by ambitious and intelligent leaders whose behavior was unethical. Other organizations such as Fannie Mae, AIG and Freddie Mac are on the verge of collapse. Charisma and intelligence without character and conscience in today’s highly technological, inter-dependent and competitive business world is a formula for personal and economic failure. Innovation, ambition and competitiveness are crucial for success. However, they must be controlled by fundamental ethical principles.
Fundamental Ethical Principles
These are widespread standards of what is right or wrong that guide the behavior of an individual or a corporate. They provide a framework of decision making and establish the procedure through which other people judge such decisions. The way people judge the character of others in business is important for sustaining success because it forms the foundation for credibility and trust. These critical assets can easily be damaged through actions that are or are seen as unethical. Successful business leaders therefore have to be concerned about their reputation and character. Essentially, character refers to who you really are while reputation is generally what other people think about you. Therefore, a person’s reputation is purely a product of people’s perceptions of your actions and intentions. Character on the other hand is a function of a person’s actions as measured against ethical principles. Some important ethical principles include honesty in actions and communication, personal integrity and keeping promises. Other important ethical principles are treating others with respect, being concerned about other people’s well-being and fairness and justice in dealings with people.