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In this world of seemingly endless stories of poor customer service, employee thefts and scams such as Enron and WorldCom scandals, ethics in business is a hot topic. Over the next three articles we will take a closer look at this sensitive and important topic.
Many small business owners observe the blur of articles, news reports and water cooler chats about breaches in ethics from a distance, assuming they are too small for major explorations of their company’s ethics to make sense. Yet, any business should consider the impact of ethical behavior on their success and the benefits of having a code of ethics.
According to the National Federation of Independent Businesses (NFIB), the opportunity for unethical behavior is present at almost every level of a company. Examples include cutting corners on quality without informing customers, misleading customers about product features, deliberately underbidding then adding costs as the job proceeds, not following through with guarantees, and the list goes on.
Judith Kautz of smallbusinessnotes.com warns that, “Many ethical dilemmas faced on a daily basis in business are not clear cut. In fact, there may not even be a “right” or “wrong” answer to the dilemma, but how you deal with it will say much about you and your business. These decisions are often referred to as “gray” area.” On their ethics web site, the George S. May Co. provides a lengthy list of other opportunities for unethical behavior which includes, “little white lies,” jokes shared with others, the way co-workers are treated and talked about, things said to make a sale, e-mails written and forwarded to others, how customer complaints are handled, and what information is put on billing sheets, time sheets, and expense reports, among many others.
The NFIB tip sheet on ethics (http://www.nfib.com/object/1583926.html) reminds us that when customers are dissatisfied with a company’s service, they not only cease doing business with the company, but speak to others about their dissatisfaction. These people, in turn, also stop doing business with the company, and inevitably pass the word on to others. By the same token, customers who receive fair and ethical service go out of their way to do more business with the company and recommend the company to others. For this reason, integrity and honesty are important to the long-term growth of a business.
In the research study, “Does Business Ethics Pay?” by The Institute of Business Ethics (IBE), it was found that companies displaying a “clear commitment to ethical conduct” consistently outperform companies that do not display ethical conduct.
Well, now that I have your attention on this subject, in our next two articles we’ll take a closer look at the cost of poor ethics and how some local businesses are handling it. To prepare for the final article, we would like to share best practices in ethics used by small businesses in our own community. Please share your ethics codes, dilemmas and solutions with us for inclusion by emailing your thoughts to kbac@olympic.edu.
Clarification…
Last month we talked about various tax saving opportunities for business. For those who asked and those who are curious, we used the IRS website so are providing specific page links here for your reference:
As a reminder, we strongly encourage you to contact a qualified tax advisor to determine which deductions apply to your business, and how.
Also, we apologize for the math error in the Mileage section. If you travel 100 miles/month on business, by the end of the year your allowance is $534, not $445.
(Editor’s Note: Wendy Miles, Director of Customized Training and Military Education at Olympic College, oversees the operation of the Kitsap Business Assistance Center (KBAC). For partnership opportunities, contact her at 360-475-7786. For KBAC counseling services and workshops contact Rand Riedrich at 360-307-4220, rriedrich@oc.ctc.edu.). |
