Thought Leadership

Here’s How You Can Build An Ethical Organization

Building your brand’s reputation is one of the most important parts of running a successful company in today’s world. Not only does it build brand loyalty with customers but it also makes your organization a coveted business to work at. And by far, the best way to create a good brand image is by running an ethical organization.


Ethics in a business organization refers to the moral code of conduct that a company and its employees follow. From company policies and rules to the way that employees interact with each other, an ethical organizational culture is one that believes and enforces the standards of right and wrong.


Unethical behaviour can have a significant impact on an organization, no matter how renowned it is. The perfect example is the once-beloved German automobile brand Volkswagen that installed ‘defeat devices’ in over eleven million of their automobiles to cheat emissions testing in 2015. A dreadful combination of bad leadership and unethical behaviour, their decision led to the engines emitting nearly 40 times more nitrogen oxide, which led to breathing problems such as asthma, bronchitis, and emphysema. To date, Volkswagen has paid more than $23 billion in fines and settlements with federal regulators and is still facing additional suits. All it took was a blink of an eye to wipe away years and years of brand loyalty. Here are a few tips on how you can avoid these mishaps and build an ethical organization:


  1. Be a Role Model

The best way to encourage good ethics in your organization is to lead by example. As a manager, it is up to you to be a good role model for those who work under you, especially new employees and interns who are just starting their journey in the world of business. For example, when Alan Mulally, former CEO of Ford Motor Company, took over the company, he noticed that reports were forged to indicate that the company was on target to reach its goals. So he encouraged his executive team to send in the unadulterated reports during their next meeting. Once the reports started reflecting the truth, he and the rest of his team could pinpoint the problems and work towards solving them. So you see, if you believe in making ethical choices, your fellow employees are far more likely to follow suit.


  1. Encourage Your Values

If you’re a new business, take some time out to sit with your HR and team members to create a code of conduct that clearly outlines your business values and the ethical rules you wish to follow in your day to day activities. For example, Starbucks’ core values have been the key to their success. Some of their values include ‘creating a culture of warmth and belonging, where everyone is welcome’ and ‘Being present, connecting with transparency, dignity and respect,’ both can be seen the moment you enter into any of their coffee shops. Besides motivating your employees to pay heed to their actions and follow an ethical path, you can also set up seminars and interactive workshops to reinforce your company’s ethics and clarify any ethical dilemmas.


  1. Promote Raising Concerns

Snitches get stitches is a line we’ve all heard at one point or the other, but speaking up against

harassment, bullying, cheating and other unethical behaviour is something that should be encouraged in

your organization. It is easy for employees to feel intimidated, especially if they need to speak out

against one of their superiors. According to a study done by MIT Sloan, nearly 17.5% of employees do not speak up and voice their concerns regarding any problems. To solve this, you can hire a third-party ethics consultant, an ombudsman or an ethics officer who can create a sense of security for your employees to raise their concerns. Your company can also implement seminars where you educate employees about ethics and train managers on how to deal with unethical behaviour.


Running an ethical business isn’t as hard as it might seem. After all, we are all given the choice to choose between right and wrong. As businessman extraordinaire Warren Buffet once said, “In looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And, if they don’t have the first, the other two will kill you.” So, keep in mind the company values you wish to follow and follow them every step of the way. If you lead by example and enforce ethical behaviour, your company will automatically be moulded into an ethical organization.