Business Ethics - The Value Of Ethical Behaviour

business ethics - does it pay

Business ethics is simply about acting ethically in business.

Business ethics is about doing business in a manner that is morally right, fair, and just. Every profession has its set of ethics or principles guiding the conduct of business in that profession. Acting in a manner contrary to the laid down ethics attracts penalty from the governing body or council of the professional body concerned.

In simple terms . . . ethics is about what is right or wrong. In relation to business, ethics is about what is acceptable business practice and what is not.

Why worry about ethics?

Well, the world of business is focusing more on ethical behaviour. That is why subjects such as ethical sourcing is beginning to take centre stage.

Therefore, to do business in the long-term, you should begin to take a closer look at how you do business, how you treat your workers, what you pay your workers, and how safe your work environment really is. All of the above falls under ethical sourcing.

Ethical sourcing is about buying from suppliers who do business ethically . . . suppliers who value their people and their environment enough to commit resources to sustainable development.

If you ask me . . . business ethics is common sense. It's about doing what is right now and always. It is about been fair.

One of the first things that come to mind when we discuss ethics is . . . honesty.

Ethics requires that business people be open and straightforward when dealing with suppliers, employees, and other stakeholders of the business. Honesty should not just be the best policy, it should be the only policy your business operates.

This includes . . .

  • paying employees what they deserve to earn
  • paying suppliers on time and all the time as agreed
  • keeping straight accounting records - don't keep two sets of books; one for tax authorities and another for management
  • administering fair pricing for your products . . . don't 'roast' your customers with criminal margins

    On the part of employees, DO NOT steal from your employer. It is against good business practice. It is wrong. It will cost you your job.

    Let's take an example of how unethical behaviour can cost you your job and your reputation.

    One company had a large fleet of vehicles insured with a particular insurance company. In addition to the company owned vehicles, all employees had at least one car insured with the same insurance firm. The company paid a percentage of the insurance premium for staff, so staff had to stay with the insurance firm.

    Unknown to the company, the head of team of the insurance department, Ferdinand Maverick*, was collecting a percentage of the premium from the insurance company as commission for retaining the services of the insurance company as opposed to changing insurance providers. And for over a decade he collected and enjoyed this money without scruples.

    Things took a turn when his contact person in the insurance company left the business and a lady took over managing the account. The new person, Mrs Bola Wiegand, in the insurance company was unwilling to pay Maverick the commission he was use to collecting from the previous contact person.

    Maverick got annoyed and threatened to withdraw the deal from the insurance firm for another firm. This was a big account and it was disastrous to lose it.

    Consequently, Mrs Wiegand wrote a petition to the client company explaining the situation. A panel was set up by the client company to investigate the allegation. Maverick claimed it was his right to collect the brokerage commission.

    The company didn't think it was ethical to do so. Therefore, he got summary dismissal.

    What do you think? What does business ethics dictate in a situation like this? If you were in Maverick's shoes, what would you have done?

    Make no mistake about it.

    It is wrong, it is unethical, to accept favours . . . financial or otherwise . . . to do your job - the job you are already being paid to do by your company. Accepting those favours in the name of it being a gift doesn't make it right either.

    Be ethically sound. Make business ethics your watch word. Manage conflict of interest situations with soundness of mind. It will save you a lot of embarrassment and a lot of troubles.

    P.S: *The names used are fictitious.

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