The 24 words that define ethical business activities

The landscapes of today's business and political arenas are littered with casualties cased by the failure of a company or an individual to live up to any sense of the term "business ethics." While many companies have soared, they later crashed down to earth because they refused to follow the rules of ethical business behavior. Enron is one example that epitomizes this error. Politicians who are unable to "walk their talk" are legion. Many of these people have aspired to run for the highest offices in the land, but could not live up to the ideals they purport to represent. I won't even dare to cross over into the realm of religious leaders thrown from grace because of a multitude of misdeeds.

Just how important and relevant is the topic of "business ethics"? I recently did a Google search of the term and received 73,100,100 results, ranging in definitions and scope. The extensive interest in this concept merits further investigation.

Let's start with a basic definition. Wikipedia defines business ethics as "a form of the art of applied ethics; that examines ethical rules and principles within a commercial context, the various moral or ethical problems that can arise in a business setting, and any special duties or obligations that apply to persons who are engaged in commerce." This definition does little to clarify the concept of business ethics. On the contrary, it muddles the practical implementation of business ethics on the day-to-day battlefield.

So, what should we do? Many companies write manuals outlining everything important to the person, or people, writing the manual (or for the legal staff that approves them), but is that enough? How many people know what is in their company's manual? I would wager, not many.

In 1932, Herbert J. Taylor was hired to lead Club Aluminum Company of Chicago, a company that was facing bankruptcy. After much effort Taylor created a simple set of values that everyone in the company could rely on anytime questions arose about how to proceed with a difficult decision. The original document contained only 100 words and Taylor realized that, to make it effective, he must simplify his thoughts. Taylor arrived at the following 24-word test of the things people think, say or do: 1. Is it the truth? 2. Is it fair to all concerned?

3. Will it build goodwill and better friendships? 4. Will it be beneficial to all concerned?

After much deliberation, Club Aluminum Company of Chicago adopted "The Four Way Test" as a guide to use whenever a complicated decision needed to be made. By 1937, the company had paid off its debts and eventually began paying dividends to the company stockholders.

But the story does not end there. In 1943, Rotary International adopted "The Four Way Test" as a part of its Vocational Service program. The test has been translated into more than 100 languages over the last 70 years and is used in all of the avenues of service provided throughout the Rotary organization. This is a pretty impressive accomplishment for 24 simple words.

I am proud to say that I have been a Rotarian for almost 20 years, and I constantly use "The Four Way Test." Living out the principles of that test has been anything but simple. On an almost daily basis, it seems that decisions, which meet some of the criteria, but not all, must be made. I have often watched people and companies take a direction that contradicted those simple 24 words. When given a second chance, those choices and decisions had to be re-thought and re-examined. The thinking that led to those choices being adopted had to be changed so the end results would pass those four simple questions. Often, however, the opportunity for a second chance never came and the business opportunity would go somewhere else. When this happens too often, companies may be forced out of business.

I am an eternal optimist. I await the day when the term "business ethics" simply means, "this is the way business must be done." Business people will understand the concept and agree to be ethical. Businesses will thrive and our business life will be simple and honest. Until that time arrives, I know that every decision I make must pass the test. Now you also have the tools contained in 24 simple words. These words contain the essence of good "business ethics." Will you choose to use them to make sound business decisions that will stand the test of time?

Gary MacDonald works wth First American Title in Reno.