Are you practicing ethical business?

When entrepreneurs talk about “business ethics” it simply means: follow criminal, civil and corporate laws to avoid suits against the company; and avoid doing things that may put the company in bad publicity. Companies are especially conscious of these things as they may lead to loss of money and reputation.

More than two weeks ago, we took up corporate social responsibility which can be likened to "the heart of a company." Business ethics on the other hand can be likened to "the company's conscience." It ponders beyond obedience to laws that affect its existence but rather even questions these laws as to their fairness and function to uplifing the common good. Business ethics is foundational to corporate social responsibility since it operates on the principle of doing good business by doing what's good.

It is transformational to a company's goal to exist not only for itself but for others -- it begins to think that a business is not just a mere enterprise to meet its fiduciary interest but a social enterprise that plays a central role in the structure of society by initiating ways to improve the quality of life of people. Thus, one of the keys to achieving a successful yet meaningful corporate life, is not just merely meeting your company's obligations, but rather understanding the principle of operating from a spirit of selflessness as opposed to a spirit of profit...and to more profit. This means doing business with the intent of growing along with the growth of others through your actions.

A company can start being ethical by simply drafting its code of ethics. Code of ethics may cover your company’s moral principle, the way you conduct business towards dealing with customers. It can also cover your fair employment or non-discrimination policy on recruitment or your stand towards the environment and an ethical supply chain where you only accept suppliers that are ethical (e.g., those that do not use forced labor, or employ worker in “sweatshops” or use children for cheap labor.).

Other examples of ethical issues arising from internal and industry practices include: Treatment of customers where honoring the spirit as well as the letter of the law in respect to warranties and after sales service are observed. Equal opportunity in employment where positions are also spread to women or minority people; employment of disabled people.

In marketing, companies must be aware that pricing must be made clear and transparent to its consumers. Things to avoid cover dumping -- where selling at a loss to increase market share and destroy competition in order to subsequently raise prices; “bait and switch” selling - attracting customers and then subjecting them to high pressure selling techniques to switch to a more expensive alternative; pressure selling - especially in relation to groups such as the elderly; counterfeit goods and brand piracy publishing misleading market research and competitor intelligence.

Crucial to the company’s compliance to ethical standards is its position against bribery. Companies sometimes are forced to engage in bribery especially with a government agency in order to secure a contract. And the most common excuse is “if we don’t give them, others will.”

One of the strongest reasons why corruption stays in government is because companies abet the perpetuation of bad culture in government. Merit no longer applies in awarding contracts but by the highest bribe bid. And that’s the reason why we are seeing a lot mothballed projects, bad roads, poorly-maintained government hospitals for prices that are sometimes many times higher than their actual costs. Corruption corrodes government systems – rendering them inefficient to the needs of people that badly need them. Thus, companies that participate in bribery become not only as conspirators to the crime of corruption, but are in themselves become criminals when projects result into deaths or destruction. Companies must make a stand against corruption and should be willing to avoid such projects even if it means losing a huge profit.

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