Cultures in business vary between one company and the other. The set of values in business is created by the entrepreneurs and management throughout the years, and they determine the nature of decision-making, attitudes and behaviour within the company itself and in its relations with its various stakeholders. Most of the time, they reflect the ethos brought into the company by its founders.
The values of the founders and their successors are an extension of their upbringing in their families and their education. These values percolate in the organisations, in the selection of management and employees, followed by their way of thinking and actions.
Ethics is a reflection of the principles, values and standards of conduct that guide management in the way it conducts business. If the expectation is to corrupt politicians and public officers to do business, there is something fundamentally wrong in that company. If management deceives its clients, exploits its employees and is indifferent to the harm it causes to the environment, then the company lacks integrity, honesty, fairness, and has no idea of its ethical responsibilities towards society.
In his encyclical Laudato si’, Pope Francis describes the interconnectedness of economic, social and environmental issues, urging business to adopt practices that promote integral human development while respecting the world we are living in. He speaks of the moral obligation of business to contribute to the well-being of society, particularly by addressing inequality, poverty and environmental degradation. There is a moral dimension in business that needs to be aligned to the principles and practice of social justice, environmental sustainability and the common good, with a longer-term perspective, that of considering future generations.
The pope speaks of the moral obligation of business to contribute to the well-being of society, particularly by addressing inequality, poverty and environmental degradation
There is a case for compulsory courses in ethics in business. Managers should undergo training in ethics also to challenge decisions taken by their colleagues within the company. They set the tone for ethical behaviour in the company and have a say in the formation of its culture. Courses in ethics guide management in its decision-making and in fostering a culture of integrity, fairness and justice.
Ethics education promotes the right leadership, where managers serve as role models to their colleagues. They set a constructive guide to their team mates, leading to a more ethical company culture. They help managers navigate ethical dilemmas that the business is bound to face. These dilemmas may involve issues related to whistleblowing, conflicts of interest, suspicions of fraud, bad decision-making, and poor employee performance.
Ethical failures can result in significant legal, financial and reputational risks. With training in ethics, managers can be more prepared to face these dilemmas and can take preventive steps to mitigate against them.
It is natural that customers are more likely to trust and respect companies with a strong ethical foundation. Likewise, prospective employees find it easier to join companies that have a good ethical reputation. Managers who demonstrate a commitment to ethical decision-making and behaviour contribute to building trust and credibility both within the company and with its stakeholders.
Pope Francis has called for a more inclusive form of capitalism by means of responsible stewardship that serves the common good rather than just pursuing profit. Business has to understand that it has an ethical responsibility towards society and the planet.