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Running an enterprise according to a rational code of ethics brings enormous benefits for two main reasons.

Firstly, when managers are ethical – when they manage their staff fairly, when they show integrity by honouring their promises, and when they are open and honest with their staff – an atmosphere of trust develops throughout the organisation. The effect of this on the employees is very motivating. Unethical management on the other hand has a very discouraging effect on staff performance.
A happy worker is a creative worker, and inspiring management enables staff to enjoy their work.

Secondly, when employees see rationality and productiveness as high values in their lives, when they take pride in improving themselves and their work, when they think independently, and when they perform their work honestly, fairly, and with integrity, the resultant sense of self-esteem boosts productiveness and creativity.

This combination of principled management, and committed, creative staff, leads to constant innovation, and rising productivity throughout the enterprise.

 

Personal Creativity

Understanding and practising a rational code of ethics enable you to love your work. This is probably the most important determinant for high achievement at work. “I believe the real key to the wealth creator’s motivation is, surprisingly, love – not selfless love for others, but a profoundly personal, selfish love of the work, the product, the process of creation, growth, success, and the rewards earned through success.”[1]

Your ethics determine your self-evaluation. If you are constantly acting ethically, your opinion of yourself is high. You develop higher self-esteem and no longer experience guilt and self-doubt. This allows you to enjoy your work: the enjoyment of the technical side of the work is no longer diluted by concern that you should be doing something more ethical with your life. You feel fulfilled in your job, not only intellectually but also spiritually. Your work is accomplished with a feeling of clean satisfaction. You feel worthy of living, of achieving and of enjoying the financial rewards of your work. You no longer think “this work is good, but I should be doing something more worthwhile with my life.” This enhanced enjoyment of your work inspires you and enhances your creativity.

That enjoyment of work leads to innovation was clearly a belief of Soichiro Honda, founder of Honda Motor Co. He said “First each individual should work for himself – that’s important. People will not sacrifice themselves for the company. They come to work at the company to enjoy themselves. That feeling would lead to innovation.”[2]

Love of your work enables you to work hard. Dick Notebaert, CEO of Ameritech was asked how he managed to keep working so hard. He answered, “Because it’s fun… I don’t understand how people… can do something that’s not fun.”[3]

The emphasis on the virtue of independence also motivates you to conceive of better ways of doing your work, again enhancing innovation.

 

Commitment

When you see productiveness as one of the cardinal virtues, your priorities in life are re-aligned. You are able to commit yourself wholeheartedly not only to your career but also to each task in each day. Your sense of right and wrong is closely intertwined with working hard, with achieving goals and with producing results. Taking the easy way out is no longer acceptable to you, and this is made very clear to you from the feeling of self-reproach that accompanies any default on doing your best in your work.

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Inspiring Leadership

Because a rational code of ethics is completely integrated, there is no clash between opposing principles or values. And because building a great company is a noble endeavour, your leaders can embrace their work whole-heartedly without worrying that they are acting less than morally. Moral certainty is very enabling. By acting completely ethically, the company’s leaders will inspire the company workforce. By finding the strength to live what can be demanding principles, your leaders will display heroic and inspiring strength of character, and act as role models for their employees.

 

Honesty

When the importance of honesty is understood (and when management is ethical and fair), employees are less likely to fiddle expense sheets, or steal company property. They are also more likely to admit to mistakes rather than trying to cover them up; consequently others are less likely to be blamed for something they did not do.

The company’s reputation is enhanced, rather than being damaged by unethical behaviour (e.g. dishonest and deceptive conduct at sales presentations).

 

Justice/Fairness

When the principle of justice is not scrupulously observed by management, the effect on employees is very de-motivating, not only to the employee concerned, but to anyone perceiving it.
Conversely, where management is ethical, employees feel supported by management, and proud to be part of the organisation. Because management deals with them respectfully, and rewards good performance, they feel happier, and are therefore more likely to be creative.

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Communication

People who respect and trust each other are more likely to talk to each other. On the other hand, people tend to avoid people they consider to have acted immorally. Acting fairly and honestly builds trust and respect and improves the flow of vital information.

 

Reduced Stress

When people feel fulfilled, a major cause of stress is removed. Happiness drives out stress and makes it easier to tolerate it. This leads to lower absenteeism and staff turnover.

 

Summary

Adherence to a rational code of ethics leads to the following benefits:

  • Increased motivation and commitment
  • Enhanced job satisfaction
  • Increased creativity and innovation
  • Improved communication and teamwork
  • Greater trust throughout the corporation and between the corporation and its customers, suppliers, and shareholders
  • Greater efficiency
  • Reduced turnover
  • Reduced stress and sick leave
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Footnotes:

[1] Edwin Locke, The Prime Movers, Traits of the Great Wealth Creators (Amacom 2000) p. 108.
[2] R. L. Shook, Honda: An American Success Story (Prentice Hall, 1988) p.13, quoted in Edwin Locke, op. cit p. 111
[3] N. Tichy and E. Cohen, The Leadership Engine (HarperBusiness, 1997), p.131, quoted in Edwin Locke, op. cit p. 112


 
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