Business students face some difficult challenges when learning to be ethical business leaders. Having knowledge of business operations is not sufficient to be leaders, not to mention being ethical business leaders.
The development of the values and skills to be principled or ethical business leaders requires recognition that business is an institution that has significant responsibility to improve social welfare with considerations of humanity, trust and fairness.
Related content: Here’s a way to help develop tomorrow’s leaders
To help young business students develop these values and skills, there are three things that can make a substantial impact on their progress.
1. Profits are not the purpose of business
One of the first things business students need to understand is that the purpose of business is not to make profits. In general, there is a naïve perspective about business as the way to make money or solely to provide economic benefits.
That is not true. The purpose of business is to enable the collaboration of individuals for a collective effort to provide goods or services that meet consumer’s needs and improve society. Profits are the result of a successful business, not the purpose.
Furthermore, the understanding that business is a human endeavor, not just an efficiency process is a key element to becoming a ethical business leaders. Appreciating this is one of the most important things students can learn to begin to think about business and its stakeholders as a cooperative institution that is crucial to the health of society.
2. Don’t rush to judgment/consider alternative perspectives
Ethical dilemmas are thorny problems that are not easily resolved. They also typically involve emotional or controversial issues. Human beings have a tendency to rush to judgment about such issues. Having a strong set of values and a good moral intuition is an excellent start, but it’s always better to stop for a moment and think through the situation and consider some reasons for making a certain choice. So, one of the first things that’s helpful to learn is to avoid a rush to making a moral judgment without some time to examine facts and possible outcomes of choices.
Missing the facts is a key problem with this process because our emotions, intuitions, and personal biases are more rapidly engaged with ethical issues than thoughtful consideration. Very simply, students need to be sure they have the facts correct before making a judgment, and then they also need to “slow their roll” to making a snap decision. Considering alternative perspectives can aid this process. Rather than just considering economic benefits or shareholder wealth alone, thinking about the potential harm, fairness, and responsibility toward others makes an ethical judgment much stronger than just focusing on one element of the issue. It focuses the decision on the human ramifications of what is being decided rather than “it’s just business.”
3. Have courage and build trust
One of the hardest things to do when facing ethical issues as a leader is to have courage to be able to stick to your decision and face the consequences. Particularly in business, economic consequences are often not positive when we make a moral or ethical decision about the welfare of other human beings. That means that there may be some business ramifications that result in negative economic outcomes for the short term. In addition, it’s hard for business students just starting in their careers to say “no” to practices they see as unethical, which may have negative personal consequences, if they speak up. It requires courage to say “no” or stand up for a decision that is unpopular or unusual in business because it’s wrong from a human/ethical standpoint.
Having the courage to make hard ethical decisions is an initial step on the path to building respect and trust with fellow members of the business community.
Building trust–not only with your employees, but also with your customers–for the long-term says an enormous amount about the character and capability an ethical or principled leader. This is not something that can be taught, but it can be modeled.
Students need to see and hear from ethical business leaders who are trusted and respected because they demonstrated the courage to make hard ethical choices and have lived better, fuller lives because of that.