By: Aarti Maharaj
Often, new business challenges emerge when companies start taking advantage of growth opportunities in different markets. Whether it’s uncovering a new breed of corruption or third party oversight, companies are continuously faced with a myriad of risks. In countries such as Brazil, India, and Russia, for example, workplace integrity remains at an all-time low and employees are feeling pressured to compromise ethical standards at the cost of business, says a new report by the the Ethics & Compliance Initiative (ECI).
The Global Business Ethics Survey, the first of its kind, points out that a median of one in three workers (33 percent) in the 13 countries polled said they had observed misconduct in their workplace in the previous year. Meanwhile, employees in Brazil and India joined Russian workers with 40 percent or more observing misconduct. In the United States, 30 percent of workers have witnessed rules violations at work.
“Ensuring business integrity wherever we are located in the world requires understanding of global workplace ethics issues,” said Ellen Martin, The Boeing Company’s Vice-President for Ethics and Business Conduct.
Organizational culture remains an important part of the mix. The report reveals that 36 percent of employees in multinationals observed misconduct—an increase when compared to workers in businesses that operate domestically. The pressure to compromise standards also exists in these global businesses. About 25 percent of employees at multinationals experience the need to engage in unethical activity while at local companies only 18 percent may erode ethical conduct. In essence, the advantages of a strong ethical culture are manifold. Companies with stronger cultures tend to have employees who are more engaged and committed. Turnover tends to be lower and productivity higher.
On the other side of the spectrum, it seems that third parties are at the root of the problem. According to the study, these suppliers are more likely to feel the pressure, observe misconduct and experience retaliation than those within “non-supplier” companies. When it comes to third parties, identifying the weakest link remains a critical part of a company’s ethics and compliance program. The data, however, shows that the relationship between a company and its suppliers could present significant risks.