Why being ethical pays
IT’S NOT ABOUT BEING A NICE GUY It means having integrity, objectivity, competency and skilfulness.
The past few decades have seen a boom in business to heights not seen before. Corporations and entrepreneurs have thrived under international markets and have seen record profits, greater wealth creation and growing economies.
But in the midst of all the success, business has also witnessed an unprecedented number of corporate debacles.
Phrases such as corporate greed, corporate scandal and accounting fraud have become synonymous with business to the point where society has asked whether or not ethical practices exist in corporations.
Nonetheless, are we correct in assuming that such debacles transpire only at corporate level? Most certainly not. In fact, there are more dubious practices at small- and medium-sized enterprise (SME) level than there are at corporate level.
The only difference is that corporate scandals are well documented and publicised, while small business scandals rarely, if ever, get a second ear.
That however does not mean entrepreneurs should conduct themselves unethically.
The issue lies in the misunderstood concept of ethical conduct. Some mistakenly assume that ethics relate to a soft approach of doing business; a gentle, unprovoking, easily-coerced attitude in an attempt to get along with everyone.
That could not be any further from the truth. Ethical business conduct suggests four critical components:
Integrity: a sense of honesty, truthfulness, reliability and uprightness.
Objectivity: an ability to constructively challenge from a solution’s perspective.
Competency: an ability to get things done.
Skilfulness: Prudent and proficient in one’s chosen field, with continual training to stay abreast of current professional practices.
Therefore ethical business conduct is not only about doing the morally right thing; it includes an entrepreneur’s holistic approach to professional conduct.
Doing the morally right thing is important, but making the right decision doesn’t necessarily have to come from a place of morality. It can originate from one’s skill and understanding of your business and industry. For example, a competent individual understands that reporting more revenue than was earned can only have a future negative impact on the business. That decision doesn’t necessarily require an honest individual but a competent level-headed individual with a business mind.
Ethical business practices are also about making decisions while being mindful of all stakeholders. Additionally, business ethics is about sustainability.
Business leaders are faced with a myriad of tough decisions on a daily basis and a general rule of thumb to ethical decision-making is to determine how a particular decision will impact stakeholders and, more importantly, the future of the business.
Ethical conduct is not about being a nice guy but it’s a tool for building cordial relations with all stakeholders and subsequently a sustainable profitable business.
Munya Duvera is CEO at Duvera Elgroup