Including Ethics in Strategic Planning

Promoting Ethical Behavior through the Planning Process

Building ethics into strategic planning is an important consideration for upper management when setting organizational processes and objectives.

Learning Objectives

Recognize and describe the process for building ethics into strategic planning processes

Key Takeaways

Key Points

  • Building consistent values and ethics into an organizational culture starts with effective strategic planning.
  • Stakeholder theory is a strong starting point for ethical considerations, as stakeholders such as customers, suppliers, governments, communities, and shareholders are all impacted by organizational processes.
  • A code of ethics and ethics officers are a great structural addition to strategic planning to ensure organizational alignment with values.
  • Providing all employees and managers with training, and a confidential system of ethical reporting, are key elements in building a strong ethical culture.

Key Terms

  • Code of Ethics: Guidelines adopted by organizations to assist members in understanding the difference between ‘right’ and ‘wrong’ and in applying that understanding to their decisions.

Strategy and Ethics

Setting an organizational strategy, vision, and set of values is the starting point of any new venture. Building in a strong sense of ethics, and an alignment with the well-being of all existing stakeholders (and society at large) is an integral aspect of the strategic planning process. The concept of aligning with the needs, ethics, and well-being of all stakeholders is referred to as Stakeholder Theory.

Stakeholder Theory

All organizations have a wide variety of stakeholders. Basically any group, individual, or organization impacted by operations is considered a stakeholder. This includes governmental bodies, customers, suppliers, employees, shareholders, financiers, communities, economies, and the general ecosystem. A board of directors is often elected to oversee the strategy to ensure alignment with values and ethics.

This chart underlines a few key stakeholder groups.

Stakeholders: This chart underlines a few key stakeholder groups.

Ethical Integration

Building ethical considerations into a business strategy via the planning process is an important element of ethics management. Strategy lays the foundation for how an organization carries out its operations. Building ethics into strategic planning is important to ensure that every facet of the organization is aligned with the ethos and values of the broader organization.

There are four elements strategic planners should develop when considering ethical alignment:

  1. Developing a Code of Ethics: This serves as a central point of reference for everyone in the organization. This code of ethics should take stakeholders concerns into consideration, and evolve organically over time as the organization grows.
  2. Ethical Training: Investing in training employees and managers in how integrate ethics into their process is a critical aspect of developing a strong ethical culture. Training equips employees and managers with the tools necessary to address ethically complex issues in the workplace.
  3. Situational Advice (Ethics Officers): Having ethics officers available for consultation is a great way to handle ethical issues as they arise internally. Employees and managers may encounter ethical dilemmas that the Code of Ethics and ethics training don’t address. In these situations, going to an ethics officer to determine best practices is a great strategic resource. The ethics officer can also use these situations to improve the organization’s ethical strategy.
  4. Confidential Reporting System: Not all ethical situations are easy to bring up in a professional setting. As a result, organizations should create an infrastructure for anonymous reporting to allow the organization to address problems as they arise without putting anyone on the spot.