Business >

Are business ethics or profits more important?

This Debate has 18 articles on the Ethics side and 7 articles on the Profits side. Click here to see all the articles rated and ranked by Helium members.

Ethics

Profits

11 of 18

Ethics

You can look at the ethical considerations of a business in a macro sense and the benefits are immediately obvious. Bluntly speaking, clients like to feel good about their purchases ergo if you can help to make them feel better about buying from you and - by trading in an ethical manner say - then they are going to come back for more. It's a fundamental branding concept and just good common sense. And taking on green initiatives, charitable work, doing things that let your customers know there are some decent human beings sitting behind the corporate website is not only beneficial to their conscience and your bottom line - they greatly improve the quality of your sleep as a manager or business owner too.
But what about the micro effects of ethical trading, the little things that the client often doesn't see? How you develop your staff for instance and the internal culture that you generate. The effects of an unethical work culture don't just directly affect your business, (although they very much do), they radiate out amongst the workforce and echo into the world beyond like a bad case of head lice. Most full time staff spend at least a third of their lives in the workplace, and long-term they are bound to be affected by its internal ethos; their behaviours and life strategies are going to shift and morph towards the qualities of that culture through simple osmosis. When these inherited traits are exacerbated by a strong corporate culture where common beliefs and practices are held up like golden chalices, the result can be positively demonic, and horribly destructive where there are a shortage of fundamental human values being taught.

As a director of one of my former companies where there was a strong ingrained culture of creativity and personal achievement, I was dismayed and disheartened time and time again at bringing young talent into the firm - always bright, smiling, enthusiastic and willing to learn - only to see them turn over the course of a year or so into arrogant, self centred popularity seekers who would, for the most part, sell their best friends if only to get a leg up or some personal credit from the managing director. In one case a member of staff was ostracized and subsequently driven out of the company only because he lacked the natural talent of a few colleagues and his personal ethics dictated a reluctance to work for a particular client - a big tobacco company. His impeccable work rate, great personal skills and willingness to develop his own abilities were completely overlooked and eventually and somewhat sadly he left under pressure. Was I angry about this? You bet. But there was never a better education in the golden value of training good internal and professional ethics.
Whether he was right or wrong about his reluctance to work for the client is moot, the point is that the employee was shouted down merely for raising the question of what was morally acceptable in the business. This unfortunate incident happened for one reason - the ethical vision and values dictated by the company weren't tempered with humility, acceptance and empathy. Okay, I admit this sounds all very noble and rather liberal - if the company is making profit then so what, right? Wrong. The wider implications of this kind of culture to a business can be extremely detrimental to the balance sheet, and woe-be-tide the manager who doesn't take heed.
A poorly managed culture embracing a reluctance to accept and teach the significance of sound ethics in too many cases results in a profound 'me first' society, where diversity from the clique and any opposition to the company ethos becomes not only frowned upon, but is utterly stamped out. Of course this can be a good thing where there is a truly destructive bad apple hiding out amongst the staff, but generally speaking what you end up with is a stagnant and inflexible environment where its people are afraid to stand up and stand out by being different, or suggesting alternatives to the current reality. People lose the perspective to see the universe (and crucially the business) without themselves at the centre of it; the virus-like 'How Does This Directly Benefit Me' syndrome replaces more productive and mutually gratifying paradigm of 'How Can We Make This Better'. In a corporate world where creativity and flexibility are vital elixirs of profit across all domains from sales to delivery, who can afford to have an employee base stifled by a lack of humanity and the fear of its repercussions?
This is particularly true of businesses who demand a strong internal culture in especially competitive marketplaces, it's a magnifying glass to personal values - good or bad. In my own case, a company which preached creativity, passion and drive with an almost Biblical vehemence, but which held up the complementary principles of humility, wisdom and learning as nice but unnecessary, what emerged perversely was a markedly increased turnover of staff, a granite-like reluctance to innovate and, ultimately, increasingly sluggish growth. That's just the immediate and visible damage lack of ethical vision can cause. The longer term effects of an ethically unprincipled and unguided culture are an inherent lack of trust, the loss of good employees, degeneration of reputation through poor word of mouth publicity (if an employee will so willingly sell his or her grandmother, do you really think they're going to be loyal to you?) and most worryingly a fear of speaking out against unethical practices in the business, from bullying to theft. Indeed a report by the Business Ethics Centre recently stated amongst its findings that, 'Ethical culture is the single biggest factor determining the amount of misconduct in your organization'. Basically, in an ethically barren environment people tend to keep their eyes averted and not get involved. Previously unacceptable behaviour becomes accepted by proxy and erosion of values escalates in a vicious cycle.
All of this along with a generally flat and unhappy atmosphere in which you really don't want to spend the minimum eight hour day let alone working until the wee hours on a tight deadline.
Is that the kind of business you want to work in? Ethics are easy and profitable, they're not an either/or management decision - one leads naturally from the other and they cost nothing. Teach your employees the value of empathy and they won't just learn to walk a mile in their colleagues' shoes, they'll learn to try on the boots of your best clients and produce work which better meets their needs.
Teach them humility along with confidence and they'll discover that sometimes another idea is a better one, or that collaboration is the way forward, and that there's always something new to learn. As was once Penned by a famous William, 'Sense shines with a double luster when it is set in humility. An able and yet humble man is a jewel worth a kingdom.' I couldn't have said it better.
Mostly teach the people in your organization how to be decent human beings in the face of the often magnificent pressures of business, and to deport themselves with rock-solid ethics and values of trust, leadership, wisdom and integrity. Then model your company vision around those values and lead from the front with that vision held up high and your business will benefit immeasurably from a happy, skilled and loyal workforce which will reflect ultimately in the bottom line.
Ethics in the workforce of a successful and future thinking business should be sought out as a quality as valuable as any MBA or all of the talent in the world.