ethical thinking

Making Ethical Decisions in a Commercial World

“It is only when a company cares for its consumers as much as the consumers care for its products or services, can we create a healthy consumer culture – or else, corporate irresponsibility and consumer stupidity will only create a shallow, snobbish, insecure and ignoramus society.” ― Abhijit Naskar

It is a well-known fact the longevity of a business depends upon its relationship with its customers. A business must treat its small and big consumers with the same courtesy. Ensuring all of its customers receive fair treatment is a responsibility every business organization must take. Business ethics is a relatively new concept. It emerged in the 1960s due to the rise of a customer-based society. In this new society, people were concerned regarding the responsibility of corporate bodies, whether they were social or environmental. Over the years, the definition of corporate ethics has seen some change. From the simple consideration of whether to be right or wrong, it has evolved into maintaining a balance between legal constraints and competition with other businesses. A 2018 report said that unethical practices, observed by individuals came down to 47% from 51%.

What Business Ethics Means?

It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently. ― Warren Buffett

Business ethics is not only about morality. Practicing ethics in a commercial world and setting basic ethical guidelines for business can benefit your company in several ways. Ethics in the commercial world covers the following areas:

Fraud

It goes without saying that a company adhering to ethical standards does not practice bribery, tax avoidance, or fraud of any kind. Every business should set guidelines and take disciplinary actions against individuals violating these policies. Nissan, the automobile company witnessed a scandal when it’s then CEO, Carlos Ghosn, was arrested due to financial misconduct. The authorities found out that Ghosn has been underreporting his earnings by around 39.6 million Euros for five whole years. He also shifted his losses in personal investment to Nissan in the year 2008. He was eventually released on bail, but the fact remained that he had committed a terrible fraud. I personally feel a company should have a zero tolerance policy against such wrongdoings and immediately address these with a swift course of action that serves as an example.

Sustainability

A company must be sensitive about its effects on the environment. Renewable energy sources should be considered and natural resources should be consumed in a prudent manner. American oil and gas company ExxonMobil once sent a team of researchers to the Arctic to investigate global warming. They reported that global warming is a reality and that the company’s assets could suffer damage due to rising sea levels. ExxonMobil covered up this matter and instead invested millions of dollar for a campaign stating that climate change is a hoax. When this got out, it damaged the reputation of the company, which is in no way acceptable. Do you think ExxonMobil did the right thing? I think every company should be aware of its impact on the environment, since it is a global issue affecting all of us. Sometimes business leaders need to think from a non-business perspective. This is one such example.

Inclusion

 A company’s hiring policies must be based on inclusion and diversity. This means hiring people based on talent and competence, rather than race, sexuality, culture, etc. Furthermore, the staff should be sensitized about matters regarding inclusion, equal rights, and equally treating everyone irrespective of the above mentioned factors.

In 2018, two black men entered a Starbucks in Philadelphia, USA. They were waiting for a friend and had not bought anything. When one of them asked to use the bathroom, he was denied entry. They were asked to leave because they hadn’t bought anything, which they refused to do. The problem with this incident was that the manager had earlier tolerated other people sitting at Starbucks without buying anything. But in this case, she allegedly discriminated against these two individuals just because they were black.

She called the police and told them that the pair of black men were trespassing. They were arrested following this incident. What followed after that was a national uproar and a call to boycott Starbucks for being racist. The situation escalated to such a point that the CEO of Starbucks had to personally apologize to the two men. The manager on duty lost her job because of this. Such behavior should never be tolerated by the company. I feel that business leaders have a duty to pass down the ideas of inclusiveness and fair treatment to every level of organizational hierarchy. Only then can a fully inclusive work culture be established.

Exploitation

Exploiting poor and needy people may bring in profits, but can be disadvantageous in the long run. A report surfaced in 2016 that retail giants such as GAP and Walmart exploited their workers in Bangladesh and India. Complaints raised included not paying salaries, sexual harassment, and hostile work environments. The report further said that 24 Walmart factories across India did not follow labor rules. They followed unfair practices such as paying an employee less than what was promised, denying to pay them for overtime, and sometimes not paying them at all.

Some of the workers were made to work on Holidays in inhumane conditions involving no breaks or drinking water. Workers were also coerced into putting in more efforts and working long hours without overtime, under threat of losing their jobs. This kind of inhumane treatment of workers is unacceptable. A corporation should treat all its employees with the same fairness. It does not matter if the employee is a senior official or a janitor; every single one of them has their rights. And business leaders should ensure that all of our employees receive are same treatment.

Final Thoughts

“Those who climb the corporate ladder of lies and deception will sooner or later fall off the shaky steps.”
― Khang Kijarro Nguyen

Practicing ethics in a commercial world and setting basic ethical guidelines for business can benefit your company in several ways. Let us consider a company that sells frozen food. One such product supposedly contains lamb meat only. If traces of some other animal products are found in the product, it will instantly destroy the reputation of the company, since many people are sensitive about the food they eat. As a result, customers will lose their trust in the organization and chances are, they will never buy from them again. I am of the opinion that a certain degree of transparency should thus be maintained with the customer base. On the other hand, ethical commercial practices boost your reputation. Investors are more likely to be attracted to a company with a good reputation.

Apart from this, there are legal rules to consider. Corporate bodies that break the law can face penalties and fines. Furthermore, employees of the company develop this mindset that since their superiors are breaking the rules, they can do the same. This causes serious disruption in work and damages the work culture of the company.

Furthermore, in such an environment, employees feel like they can procrastinate and not put in much effort since the company is unethical anyway. I dream of a world were business leaders, while considering profit margins, also at the same time, contemplate the moral nature of their choices. Only then, can we build a better world.