Has "business ethics" become an oxymoron? You'd think so by watching and reading the news. Toyota's troubles mount daily. A local company that is supposed to help people get jobs is in trouble for throwing lavish staff meals. Numerous medical firms are cited for Medicare fraud.
Business ethics is about doing the right thing at the right time. Take Tylenol for instance. In 1982, the company pulled its products off the shelves after several people died because some capsules had been tampered with and laced with poison. Johnson and Johnson, which was later proved blameless, lost hundreds of millions of dollars, but its reputation soared and its actions still are touted as a public relations victory.
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No matter what type of business you're in, you have to answer to your customers, your employees and their families, your vendors or suppliers, your regulatory agencies, your community, and, if applicable, your board of directors and stockholders.
Research shows that the main reasons businesses are unethical are:
2. Cutting corners to outdo the competition.
4. Not paying attention.
Want to see how your company's doing? Take an ethics check with these questions.
• Has someone in your organization accepted an inappropriate gift or gratuity?
• Have you covered up a mistake or product error that has been detrimental to your customers?
• Have you knowingly sold poor-quality or defective goods or services for higher revenue?
• Have you reneged on a contract or business agreement without valid reason?
• Have you cheated a vendor or supplier so that you can add to your bottom line?
• Is your company in trouble with a regulatory agency because of intentional unethical or illegal practices?
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Job seekers should also be on the alert. Does the company you are considering share your view of business ethics?
According to a recent survey in financial magazine Barron's, the most respected U.S. companies are the most stable and profitable. They are also the most ethical.
Being ethical can improve your business' bottom line. Research shows that ethical companies enjoy lower insurance costs because they aren't fined as often. They are rated as better risks by lending agencies and are viewed as more stable and better places to work, so they generally enjoy a lower employee turnover rate.
Make your values part of all your company's plans. As Ben Cohen and Jerry Greenfield, founders of the ice cream company Ben and Jerry's, say, ". . . values must lead and be right up there in a company's mission statement, strategic and operational plan."
Here are ways to set an ethical tone in your business:
• Establish a list of company values and include them in your mission statement.
• Set up a framework of how your company will treat customers, employees, vendors, regulatory and supervisory agencies, and the community.
• Lead by example.
It all boils down to your reputation. Probably the best way you can judge how ethics affects your business is by customer loyalty. People like to feel good about the products and services they buy and the businesses that sell them. You'll be surprised how much customer loyalty you will generate when you publicize your company's ethical values.
Marie Stempinski is the founder and president of Strategic Communication in St. Petersburg. She specializes in marketing, public relations and business and career trends counseling. She also leads workshops. She can be reached at firstname.lastname@example.org.