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test whether or not they are indeed ethical in their day-to-day business conduct.
This checklist is based on a paper written by Hersley H. Friedman and Linda W. Friedman.
Hersley Friedman is a Professor of Business and director of business programmes at the University of New York, while Linda is with the Department of Statistics and Computer Information Systems at the same university. The checklist is as follows.
Servant leadership
Company leaders need to be warm, responsive, caring, and humble. Leaders are supposed to be fair, show compassion and be sensitive to all stakeholders.
Servant leaders empower their subordinates and are facilitators, and are against personal aggrandisement.
They care about workers and want them all to be successful. According to Spears (2004) there are 10 characteristics that define a servant leader.
Listening intently and receptively to what others say and being accessible. Having empathy for others and trying to understand them. Possessing the ability to heal the emotional hurts of others.
Possessing self-awareness
Having the power of persuasion, influencing others by convincing them and not coercing them.
Seeing themselves as stewards or as individuals whose main job is to serve others.
Possessing the knack of being able to conceptualise and to communicate ideas.
Having foresight, which also includes the ability to learn from the past and to have a vision of the future. Being firmly dedicated to the growth of every single employee.
A commitment of building community in the institutions where people work.
Respect for employees
Employees should never be seen as factors of production that should be discarded like worn out machinery.
They should be seen as partners in building an organisation with ethical values.
Workers want to experience real purpose and meaning in their workplaces and successful organisations should be built on the recognition of this.
All ethical organisations should take cognisance of an individual employee’s desire and right to be treated with dignity at work, to grow and learn, to be connected to others, and to be a whole integrated person who cannot simply be sacrificed for economic expediency.
Organisations should be anchored on empowered employees who work together and share knowledge where one employee will compensate for others’ weaknesses as is the case in a successful sports team.
There should be a culture of tolerance of mistakes and a willingness to experiment and operate outside the box in the organisation.
Employees treated well in an organisation have the ability to renew, regenerate, and revitalise all production processes in the organisation.
Leadership integrity
Integrity and honesty must be exhibited right at the top of the organisation. Unethical behaviours like conflict of interest, insider trading and corruption should be dealt with decisively in the organisation to ensure company leaders remain exemplary and role models to their staff.
Excessive compensation of executives should be avoided particularly in situations of constrained company productivity, and executive compensation must be fair and should meet the dictates of equity.
Paying executives outrageously excessive perks while cutting the pay of employees will result in reduced productivity and widespread employee disillusionment characterised by increased employee misconduct in the workplace.
Customer satisfaction
An ethical organisation truly cares about its customers and clients. In fact current business wisdom postulates that customer satisfaction is the most important measure of business performance.
It is difficult for a firm to succeed when its products are substandard, much as it is difficult for a firm to fail when it is anchored on providing customers with the best products in the market place.
Caring about customers also includes listening to them and hearing what they have to say.
Listening to customer complaints is a good way of coming up with ideas for improving product quality.
When an organisation makes a mistake it should not be afraid to apologise and show remorse.
Apparently the strength of an apology is in acknowledging the mistake, communicating in a humble and sincere manner, explaining why the mistake was committed, and offering compensation where necessary.
The environment
The buzzword in corporate circles these days in relation to the effect of business to the natural environment is ‘going green’.
The rate at which the earth is being depleted has seen world attention focusing on the globe’s preservation for posterity.
The war cry is let us all be responsible when it comes to mother earth. The world over firms that advance environmental preservation issues are now able to secure a competitive advantage over their competitors.
The general public has become very much concerned about the environment and wants to do business with companies that care for the environment.
Corporate strategy
An ethical organisation must examine its corporate strategy to ensure it is embedded with an ethics thrust for its own good.
Corporate strategies and mission statements should not only discuss profit, growth, and maximising shareholder value.
They should embrace the needs for all stakeholders that include customers, employees, communities in which they operate, the general society, etc.
The corporate strategy should thus be used to energise the entire organisation and provide direction so that employees, customers and all other stakeholders know exactly what the organisation wants to achieve.
Corporate strategies should be supported by comprehensive ethics management programmes to be fully effective.
The local community
An ethical organisation should establish and maintain its strong ties with the local community in which it conducts its business.
It should hire employees from the local community and do business with local companies.
After all, many of its customers will come from the surrounding areas and it follows that when a local community thrives, this will benefit the business as well.
Improving the health delivery system and schools of the community is a practical way of ensuring that a firm will have an adequate supply of healthy, competent, and literate employees.
l Bradwell Mhonderwa is the Managing Consultant of Business Ethics Centre, a Corporate Governance and Business Ethics Management firm. Phone 04-293 2948, 0712 420 090, 0912 913 875, or email [email protected]