Ethics Is More Than Good Business by Michael Josephson

Ethics is a popular topic at corporate meetings today because management correctly sees the benefits. Good things tend to happen to companies that consistently do the right thing, and bad things tend to happen to those that even occasionally do the wrong thing. Being ethical is playing the odds.

Ethical companies have a competitive edge because people prefer to deal with firms they trust. They also benefit from high credibility; being believed is an enormous asset. In addition, ethical companies attract and retain employees better because they have higher morale. And finally, good ethics generates a good reputation, good will, and loyalty.

So it's true: Good ethics is good business.

Most companies try to motivate employees to be ethical by stressing how doing so will benefit the corporation. The problem is, this amoral rationale is grounded in self-interest rather than morality. It has nothing to do with ethics.

Doing the right thing to get something in return is an investment, not a demonstration of character. Ethics based on self-interest is situational; ethics based on moral convictions is reliable. It's the difference between acting ethically and being ethical.

Trying to motivate people to do the right thing by stressing benefits rather than values and virtue turns decision making into a cold cost-benefit analysis rather than a reflection of what's right.

But if a company encourages employees to make decisions based on the supposed advantages, why should anyone put the firm's interests above his own? In the absence of authentic moral conviction, why should employees refrain from unethical or illegal conduct if they think it will save their job or enhance their compensation? Clearly, what's good for an enterprise is not always good for its employees.

My point is, it's foolish and fruitless to expect most employees to sacrifice their financial well-being for the good of the company. On the other hand, many will do so in the name of honor, as a matter of conscience, and to earn the esteem and admiration of family and friends.

Corporations have a much better chance of deterring improper conduct by appealing to conscience and principle rather than risks and rewards.

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