What Is Integrity? 7 Reasons Why Its So Important in Business

If you want to understand the meaning of integrity in business, consider the following scenario.

Just before a major product launch, your head of IT tells you there’s been a minor breach of systems containing customer data. Publicising the incident will ruin your launch and scare off your customers and investors. Besides, you’re pretty sure that no sensitive data actually got into the hackers’ hands. So wouldn’t it be OK just to keep quiet about it, at least for now?

As tempting as it would be to put a lid on the bad news, acting with integrity means being honest about what happened and dealing with the fallout. People trusted you with their personal data, after all, so you've got a responsibility to tell them if there’s even a small chance that it was compromised.

In this example, the right thing to do is quite clear-cut, but that’s not always the case. Whether you run a business or work for someone else, you’ll often run into situations in which it’s very difficult to act with integrity or you’re not even sure what the right course is.

So, in this tutorial we’ll try to bring some clarity to the subject by examining the meaning of integrity in detail with examples of integrity (and lack of integrity) in action. You’ll also learn seven reasons why integrity is important in business, and you’ll get some tips on how to act with integrity in difficult business situations.

What Is Integrity in Business?

Let’s start with a definition of integrity, especially as applied to the business world.

Oxford Dictionaries defines integrity as:

“The quality of being honest and having strong moral principles.”

It’s important to note that these moral principles are undefined and vary from person to person. As we saw in our article on ethical leadership, people can have different value systems and beliefs. 

The key to acting with integrity is to understand what your personal values are and then to be true to those values. It comes down to honesty, which is why the right course of action in the earlier example was to tell the truth about the data breach rather than trying to cover it up.

In that example, acting without integrity would probably have led to a better short-term outcome but created problems further down the road. That trade-off is a common theme of integrity in business, and we’ll come back to it later in this tutorial.

Keep in mind, also, that the dictionary’s second meaning for “integrity” is “the state of being whole and undivided,” as in “territorial integrity.” That concept of wholeness, from the Latin root of “integer” that also gives us words like “integrate” and “entirety,” is important. 

When you act with integrity, you’re the same person in all scenarios, whether you’re talking to the boss or the janitor. You don’t present different faces or tell different stories to different people. You're whole.

Although acting with integrity is sometimes difficult and can lead to short-term fallout, it's got some important benefits, which we’ll look at next.

7 Reasons Why Integrity Is Important in Business

According to motivational speaker and author Brian Tracy:

"Whenever I hold a strategic planning session, the first value that all the executives agree on is integrity. Leaders know that honesty and integrity are the foundations of leadership. Leaders stand up for what they believe in.”

This is backed up by research from Robert Half Management Resources, which found that both workers and CFOs (Chief Financial Officers) named integrity as the most important attribute in a corporate leader (it was cited by 75% of workers and 46% of CFOs).

But why exactly is integrity so important in business? Here are seven reasons.

1. A Stronger Reputation

In the business world, reputation is everything. Suppliers need to trust you to pay them for the goods they deliver. Investors need to trust you to put their money to good use and deliver a profitable, sustainable business. For employees, customers, business partners and everyone else you have contact with, trust is essential.

If you act with integrity, people will trust you, and word will spread faster than any advertising campaign you could ever come up with. Similarly, a lack of integrity will scupper your reputation.

So acting with integrity will allow you to reap the benefits from better relationships with the people you deal with.

2. Employee Satisfaction

Most people want to do a good job, and they'll be happier working for someone with integrity than for someone who asks them to compromise their own principles.

Research by David J. Prottas at Adelphi University found that employees’ perceptions of their manager’s behavioural integrity were “positively related to job satisfaction, job engagement, health, and life satisfaction.”

So if you want happier, healthier, more engaged employees, acting with integrity is an undervalued but powerful way to achieve that.

3. Quality

Acting with integrity often means producing a better product or service for the customer. For example, let’s say that tests reveal a serious weakness in your flagship product, just when it’s selling like hot cakes. You might be tempted to keep on selling it anyway, but that would mean short-changing your customers by providing an inferior product.

A leader with integrity would explain the situation, fix the problem, and ship the product only when it’s of acceptable quality. This is just one example, but in general, acting with integrity is likely to lead to better quality products and services because you’re acting in accordance with your values and principles, and few people really believe in putting out shoddy work.

4. Long-Term Outlook

As we’ve seen, there’s a theme developing in which there’s often a trade-off between short-term wins and long-term success, and behaving with integrity is usually aligned with the long-term outlook.

Whatever business you’re in, you’re often presented with the chance to cut corners and/or avoid problems by behaving dishonestly. Doing the right thing, on the other hand, can lead to more problems initially, but it usually pays off in the end. We’ve seen a few examples of that already.

Business is a long-term endeavour, and successful companies are usually those with a strong long-term outlook and vision. So acting with integrity can help you to focus on getting the best results five years from now instead of five minutes from now.

5. Clearer Focus

As Sir Walter Scott wrote back in 1808:

“Oh, what a tangled web we weave When first we practise to deceive!”

Lying and cheating can take up a lot of energy and time. You’re presenting different faces to different people, and you've got to keep track of which story you’ve told and how to keep it all consistent, and then you've got to tell more lies and manufacture more evidence to back up your original lie, and so on. 

Acting with integrity, on the other hand, frees up all that energy and lets you focus on what's important instead of spending time covering your tracks.

6. Better Company Culture

If you lead by example and act with integrity, that'll spread throughout the company. We already saw that integrity is good for employee satisfaction, but think about your employees’ performance too. 

If you've got a culture of integrity in your company, your employees will make better decisions, with the long-term interests of your customers and the company in mind. They'll be able to trust each other, which will have huge benefits for collaboration and teamwork and will minimise costly disputes.

How do you create such a culture? We’ll look at that in the final section, and you can also check this tutorial:

• 
  Management
  
  
  What Is Ethical Leadership? How to Be a More Ethical Leader
  
  
  Andrew Blackman

7. Stronger Sales

Ethical considerations are important for many customers these days. In the UK, the Ethical Purchases market was valued at £98 billion in 2019, more than double the size of the market in 2010.

Many companies have tried to tap into this market with glossy advertising and self-serving “greenwash”. A more effective way is to embed ethical behaviour in your company, truly acting with integrity and spreading that culture throughout your business. Do that, and you'll attract new customers who will in turn spread the word to like-minded people.

How to Act With Integrity in Business

Now that we've seen why integrity is important, let's look at how to put it into practice on a personal level, in your team, and across your whole company. Here are six techniques you can use to make sure you're a person of integrity:

1. Define Your Moral Principles

As we saw at the beginning, integrity is about being true to your moral principles. But many of us don’t think about those principles very often or define them very clearly. So the first step is to do that. What’s important to you? What principles do you want to live by? What does integrity mean to you?

For more help on this, see the following posts:

• 
  Values
  
  
  What Are Your Personal Values? How to Define & Live by Them
  
  
  Andrew Blackman


• 
  Branding
  
  
  How to Define Your Core Brand Values (And Why You Should)
  
  
  Julia Melymbrose

2. Look Back With Honesty

OK, so how are you doing? Are you living up to those principles? 

If not, don’t beat yourself up. Instead, try to identify patterns. Do you tend to be influenced by stronger personalities? Tempted by easy money? Pressured by your boss? Make a non-judgmental inventory of your own integrity or lack of integrity in business. Consider asking colleagues if you need an objective viewpoint.

We’re looking at some general strategies for behaving with integrity here, but this self-inventory may help you to come up with a personal action plan based on specific situations in which you know you can do better.

3. Treat Everyone the Same

In business, too many people treat others as instruments for their own gain. They give big customers the red-carpet treatment while scorning those with smaller wallets. They curry favour with the boss while shunning the intern.

But remember that integrity is about wholeness, honesty, and being the same person in all situations. If someone works in your company, they make an important contribution and are worthy of respect, regardless of their pay grade. A customer deserves good treatment, even if they can’t afford the big-ticket items right now.

People remember how you treat them, and they notice how you treat others. 

4. Reward Honesty 

Behaving with integrity means not just being honest yourself, but also encouraging others to be honest with you. That way, a culture of integrity can spread throughout the organisation, with the benefits we just discussed.

But, if you’re a manager, you need to remember that you've got huge power over the people in your organisation—the power to enhance or damage their careers and livelihoods. That power may well inhibit people from being honest with you. On top of that, some managers inadvertently discourage honesty. They can be so focused on making the team look good that they intimidate or discourage those who've got bad news to bring.

So if you want people to be honest and behave with integrity, you need to reward that behaviour publicly and repeatedly, until the message sinks in with your employees that it’s safe to be honest with you.

5. Hold Your Hands Up

In business, results are important, and people and companies are often judged by what they deliver. There can be huge pressure to cover up or minimise mistakes and to make the results look better than they are.

But if you want to behave with integrity, you’ll need to resist that pressure. Don’t be afraid to admit to mistakes or missed targets. Explain them clearly and honestly, and for the most part people won't judge you as harshly as you think—in fact, they’ll probably think more of you.

6. Find the Right Balance

Do you remember the movie Liar, Liar? Jim Carrey’s character, a habitual liar, suddenly finds himself forced to tell the truth in every situation. He blurts out painful and embarrassing truths that insult and anger those around him.

Although it’s just a Hollywood comedy, there’s an important business lesson there. Behaving with integrity requires you to be honest, but it doesn’t require you to unleash every private thought and opinion, especially when doing so would hurt other people. 

How you deliver the truth is also important. When giving difficult feedback to an employee, be sensitive to how that person will receive it, and try to balance criticism with acknowledgement of the person’s achievements. For more on this, see the following tutorial:

• 
  Management
  
  
  Feedback for Managers: Tips on How to Give it, How to Get It
  
  
  Lisa Jo Rudy

Conclusion

In this tutorial, you’ve learnt about the meaning of integrity and why it’s important. You’ve seen some examples of integrity and lack of integrity in business decision-making, and you’ve learnt how to act with moral integrity in your own business life, while encouraging it in your employees and colleagues.

What’s next? Why not take one of the suggestions in the last section, and put it into practice today?

Editorial Note: This content was originally published in 2018. We're sharing it again because our editors have determined that this information is still accurate and relevant.