With the recent revelations that the majority of Kiwis are inadvertently investing in tobacco and weapons manufacturing companies, it is worth thinking about ethics in your business.
In a small business where profit margins are often slim, it can be tempting to do whatever it takes to keep afloat. But where that conflicts with ethical considerations the results can be murky.
Business ethics are not black-and-white
Google’s unofficial motto gets to the heart of it “Don’t be evil”. But rarely does anyone go out of their way to be evil. Unethical behaviour usually comes about as a result of small compromises and little justifications.
Telling a white lie to a customer that the part they ordered hasn’t arrived yet, when really your team has been too busy to do the work, or the job got misplaced, seems pretty harmless. After all, the customer still gets the work done, and you keep your reputation intact. But a small lie paves the way for a big lie – how far are you willing to go to maintain your reputation?
It’s not always about legality
It’s not illegal for the finance companies managing KiwiSaver to invest in companies that make nuclear weapons. Similarly, there are plenty of ways to reduce the amount of tax you pay as a company, all of which are legal. And when money is tight it certainly seems less bad to short the taxman than your customers or suppliers. But is it ethical?
Unpaid internships are legal and can provide young people with valuable experience. But is it ethical to offer a potential job to five people to entice them to work for you for free, when you know you are only going to hire one of them?
See no evil?
You don’t have to actively do anything to create ethical challenges. It can be quite easy to foster a workplace environment which promotes unethical behaviour – for instance by excusing white lies, or by setting sales goals which can only be met by being unethical. Just because you don’t know it’s happening, doesn’t mean your business is working ethically.
It can be hard to figure out where to draw the line on your ethical responsibility. Are your suppliers your responsibility, or your clients? Is it better to just not investigate too hard in order to save costs or make money?
Asking yourself the hard questions
Operating an ethical small business often comes down to a willingness to ask hard questions and decide on the answers. Are you happy doing the minimum to avoid ethical dilemmas, or do you want to take positive steps to promote ethical behaviour in your business? What hills are you willing to die on – that is, what behaviour so violates your business ethics you’d rather go under than be involved in it? Or is the bottom line the ultimate arbiter?
Behaving unethically can damage your reputation, but occasionally, so can being ethical. Trying to figure out where your company sits on the question of business ethics is a difficult proposition. And often, small compromises chip away at your position in the course of doing business. But having strong ethical policies to do business by not only enhances your company culture, it also helps to make the world a better place.