The Ethical Organization focuses on the extent to which it is possible for an organization to be ethical and the impact this has on its workforce. Ethical decision-making and leadership are the basis of ethical organizations.
Trust, Effective communication, Openness, Objectivity and fairness, Integrity, Transparency, Values are the characteristics of an ethical organization.
Strategy for an Ethical Organization
Few organizations considered ethics to be a lawful topic for enterprise planning and strategic thinking. Those at the top of an enterprise regularly spent time developing their organizational and functional strategic plans, their growth strategy, brand strategy, but ethics and regulatory compliance was merely an issue for the finance department, legal counsel, and possibly human resources.
Organizational ethical behavior requires serious attention, at both the board and executive level. Widespread organizational misbehavior and criminal activity have made the creation of a formal ethics strategy a high priority for all enterprises, irrespective of their size or structure. Many larger organizations have established a position for an Ethics Officer, and smaller organizations turn to consultants that specialize in ethical consultation.
Organizational outcomes and benefits from ethical leadership
More and more leaders of businesses and other organizations are now waking up to the reality of social responsibility and organizational ethics. Organizational behavior good and bad is more transparent than ever globally. Injustice anywhere in the world is becoming more visible, and less acceptable. Reaction to corporate irresponsibility, exploitation, dishonesty and negligence is becoming more and more organized and strong.
Employers, businesses and organizations of all sorts especially the big high profile ones are now recognizing that there are solid effects and outcomes driving organizational change. There are now real incentives for doing the right thing, and real discouragement for doing the wrong things. There are huge organizational advantages from behaving ethically, with humanity, compassion, and with proper consideration.
Better staff attraction and retention - the best staff want to work for truly responsible and ethical employers. Failing to be a good employer means good staff leaves, and reduces the likelihood of attracting good new-starters. Aside from this, good organizations can't function without good people.
Investment – The investors will invest into the company and will get associated with the company for their ethical behavior. Few investors want to invest in organizations which lack integrity and responsibility, because they don't want the association. By this the performance will eventually decline.
Reputation - It takes years to build organizational reputation but only one scandal to destroy it Ex: - Satyam company. Ethical responsible organizations are far less prone to scandals and disasters. And if one does occur, an ethical responsible organization will automatically know how to deal with it quickly and openly and honestly. People tend to forgive organizations who are genuinely trying to do the right thing. People do not forgive, and are actually deeply insulted by, organizations who fail by not addressing the problem and the root cause. Arrogant leaders share this weird delusion that no-one can see what they're up to. Years ago maybe they could hide, but now there's absolutely no hiding place.