As important as a person’s own ethics are to his character, business ethics are equally important to help companies and organizations define their core values — something Washington State University Carson College of Business professor and researcher Jerry Goodstein believes businesses are getting better at all the time.

“What I’ve seen that’s most significant is a shift away from the reactive approach on the part of corporations, in particular, to a much more proactive (approach), or what I would call a strategic emphasis and corporate social responsibility,” Goodstein said.

Goodstein, who has dedicated nearly 30 years of his career toward business ethics, said that in the past, it usually took widespread public scrutiny (think Nike’s 1990s sweatshop scandal) to prompt a business to evaluate its ethics. But companies today, according to Goodstein, are becoming better at recognizing the importance ethics play in their day-to-day operations.

“I think that one of the drivers for the shift from reactive to proactive was pressure from stakeholders and constituencies on the part of businesses to be more responsive and to be thinking ahead,” said Goodstein. “I also think companies recognize that there is a lot to lose when they’re not proactive.”

However, while it’s typically the executives at the top of the food chain who determine how to handle issues of, say, environmental impact or human rights, Goodstein said business ethics aren’t just for CEOs — they’re for all parties, from employees and customers to stakeholders and other constituents.

“What I emphasize a lot in my teaching is an approach called ‘Giving Voice to Values,’” said Goodstein. “What that approach does is to sort of turn business ethics in some sense around. It’s about, ‘I know what the right thing to do is, now how do I put forth those values?’”

Goodstein said it’s important for employees at all levels to speak up when they see something happening that conflicts with their own personal values. However, Goodstein said, employees lower on the totem pole often have difficulty giving voice to their values, as it can stir feelings of insubordination.

“There’s a very real challenge in the workplace of authority and power,” said Goodstein, “where people feel like, ‘Well, it’s not my place (to say something), particularly if I’m speaking to someone at a higher-level position.’”

Goodstein said it’s important for businesses to create environments where employees feel comfortable speaking up.

“When people feel empowered to speak their values and act on their values, that’s one of the ways you create an ethical culture,” said Goodstein. “When you create an environment of fear where people are not able to voice their values, or when they do they are shut down, that’s when you get situations like what we’ve got in the news,” he added, sharing Wells Fargo’s recent fraud scandal as an example.

For growing businesses or those just starting out, Goodstein said it’s important to develop a clear mission early on. “Missions get talked about for larger corporations,” said Goodstein, “but I think even going in and starting up you should ask, ‘What’s the mission? What values do you want to promote in this organization?’”

By establishing a clear mission early, Goodstein said that as the organization grows, it will be easier to come back to that original mission and the values that coincide with it.

“That ultimately will benefit the organizations and the stakeholders that work with you to make the organization successful.”

Thumbnail photo Courtesy Washington State University.