This morning, I read about a company using on-line auctions to defraud customers. Granted its employees, customers and suppliers lose money because of this situation but then they all find a replacement company and continue on with their futures. When good conduct and morals are applied in all the levels of an organization’s structure, that is, from the junior employees to the management staff, the company is most likely headed for success.
However, a primary goal of transparency in performance management is to achieve visibility, alignment, and accountability across the organization’s goals and objectives. However, it may be said that any individual who does not practice business ethics cannot be personally ethical even though the reverse may not also be true.
Although not all strategic decisions can be played out in a public forum for competitive and confidentiality reasons, the outcomes of those decisions (changes to organizational structure, design, resource allocation, product direction etc.) should be communicated as thoroughly as possible including the rationale and criteria behind the decision to help employees understand the decision and make a better connection between the firm’s espoused values and those used to make important decisions.
Ethical behavior doesn’t always insulate a firm from lawsuits, bad publicity, or other such negative and costly conditions, but it can certainly reduce the probabilities or mitigate the damage. Institute of Management Accountants Standards of Ethical Conduct (IMASEC) applies to all facets of financial management and accounting.
Practices and social responsibility programs are more accessible and more interesting for small business enterprises. In many businesses, having ethics is frowned upon or thought of as a negative subject. Because of the huge amounts of money available and accessible to people in the financial industry it is easy to understand how they can be tempted into criminal actions.