Ethical business practices or sound business practices means conducting business in an ethical way and complying with clear principles.
Some of the underlying principles are:
1. Integrity & Transparency- Do what you say and say what you do
2. Leadership- Leaders are fair, principled, pro-active and take responsibility
3. Community- focus on the needs of the community and partners in the growth of all stakeholders along with the organisation.
It has been my endeavor to understand what is it that organisations must do if they wish to be ethical.
The research findings for my thesis identify 26 items (26 Ethical Business Practices).
Confirmatory Factor Analysis further reduced the 26 items to 12.
Below are the 12 ethical business practices (EBP) an organisation ought to work towards.
This provides the basis of an ethical index which will help organisations know where they are with regards to Ethical Business Practices.
12 Ethical Business Practices
The 3 factors are Company ethical policy oriented, Society oriented and Customer oriented.
Factor 1: Company Ethical Policy Oriented
1) There is fair opportunities in promotion and reward systems
2) Company is a member of associations which deals with ethics, corporate governance, even though it is not mandatory (eg. Global compact, transparency international)
3) Code for punishment of sexual harassment is clearly designed and communicated to all employees
4) It enforces Code of conduct for outsourced companies
5) Ethics hotline ( reporting misconduct over phone or mail) is functional and accessible to all employees
Factor 2: Society Oriented
6) It volunteers employee hours towards social projects
7) CSR is based on the urgent needs of the communities it works in
8) The organisation has a well thought out CSR policy, not just charity and donations.
9) The organisation spends a significant percentage of the profit on social development activities
Factor 3: Customer Oriented
10) Company ensures that the promises made to customers are fulfilled (delivery, services and after sales services)
11) It maintains customer information confidential
12) The company provides complete information about their products and services to the customers
Establish the 12 items if you would like your organisation to be proactive in its Ethics approach. Accrue the benefit of the Ethics advantage.
“Being good is good business” – Anita Roddick, Founder –Body Shop
Dr. Anita Shantaram - The author is Founder of Ethics Research & Consulting Pvt. Ltd.
The Asian Journal of PROFESSIONAL ETHICS & MANAGEMENT
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