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A Gem From Tom Zender – Ethics vs Morality in Business

Forget the rules. What is your “inner ethic” as a leader?

Hmmm? You mean doing the right thing? Maybe. How about doing the best thing? Keep reading. If you think that ethics and morality mean the same thing, there is an important difference.

Morality is an external social norm for behavior. Ethics is an internal code of behavior based upon our internal values – spoken by our inner compass, our inner voice. What else?

Neither ethics nor morality are geared to harm others. Better, ethics is a critical component of leaders (and others) making effective decisions. Decisions for the greater good of all.

Some history

Ethics has long been a spinoff of philosophy – the part that deals with right and wrong behaviors. Socrates and Plato saw ethics as the internal harmony of the soul – emanating as our inner voice. Ethics permeated many ancient cultures. Utilitarianism fostered ethics as the maximum good for all.

Evolution of ethics

While ethics began as an individual adoption of values that led to humane personal interactions, business also saw ethics as a critical part of how employees, customers, shareholders and others are treated.

Religions and spiritual organizations have long formed some of the bases for our individual values upon which we form our own code of ethics. Laws also have contributed to ethical foundations.

More recently, business ethics are taught in most universities – including the legal aspects of ethics.

Ethical decision making

We often hear the phrase, “Do the right thing.” Too often the center point of the “right thing” is the external, social, cultural morality. Not a bad thing – but there is a better thing.

“Do the best thing” for the greater good of all concerned has a higher purpose. It based upon the individual ethic of great leaders – the inner voice. Those who do their best to create good for the maximum number of people.

The use of atomic weapons to end WWII a long, brutal, expensive war – and saved many more lives in the process. This view was adopted by U.S. President Harry Truman when he made the decision to utilize an atomic bomb. The greater good was part of his “do the best thing” decision.

Two stories of ethics at work

Recently, we learned of a systematic bribing of top universities by wealthy parents in order to have their children admitted (when they were not necessarily qualified). Personal ethics were broken, and public moral laws were broken.

Also recently, the new CEO of Starbucks made an ethically-driven decision to close 8,000 stores for a day at great cost. Why? To retrain employees about the ethical treatment of people. One store had asked two black people to leave the store because they had not purchased anything – and then have them arrested for not leaving.

Gut check: how do you feel when you make a good decision? Comfortable? How do you feel when you make a bad decision? Remorseful?

Ethics and profits

JUST Capital tracks companies that have a high focus on ethics. Most of these organizations (per the Russell 2000 index):

Are more profitable
Pay 20% more workers a living wage
Created 1.8x more jobs
Recycle about 3 times more waste
Donate about 2 times as much of their profits to charity

The bottom lines:

Over 30 world religious and spiritual organizations profess the Golden Rule, “Do to others as you would have them do to you.”

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