Of ethics and small business/
@InquirerBiz
In their early startup stage, some small companies may try to cut ethical corners by ignoring established rules of conduct, thinking these could be handled later when their business shall have grown bigger and stabilized.
The premise here is that complying with a high standard of business ethics is expensive, wasteful, or even unnecessary.
Ethics is not a “sometime” thing, but rather an “all the time” imperative, according to George May International.
Transparency
Honesty, transparency and fairness apply to all stages and aspects of the business.
Paterno Viloria, president of the Small Enterprises Research and Development Foundation (Serdef) says: “‘Being good’ is good for business. It is well worth the extra time, effort and expenditures involved, if any. It makes good business sense, financially speaking, over the long term, because customers, suppliers, dealers and other associates would prefer to relate with companies known for ethical products/services and business practices. They are also more attractive to joint-venture partnerships and strategic business alliances.”
Serdef also reminds entrepreneurs that their business is a reflection of themselves: their character and integrity.
An ethical business is always founded on an ethical leader- ship.
Employees—the managers all the way down to the rank and file—take their cue from the man or woman on top.
This is how the ethical cul- ture permeates the entire organization.
Bending rules
This will in turn influence how the company deals with customers, suppliers and other stakeholders.
This is easier said than done, of course, especially if the entrepreneur is operating in an environment where bending rules is the norm and business practices are less than transparent.
Doing business with government, for example, is known to be fraught with corruption, where every step has to be “lubricated” in bribes.
Meanwhile, competitors may seem to uphold the “all is fair in love and business” mantra and stop at nothing—good or foul—just to dominate the market.
Employees lack motivation to do their best, content to perform only at the level that will ensure they keep their jobs.
Expectations on conduct are best written down and made available to all employees in the form of a company manual. Otherwise, these should be communicated as clearly as possible in other ways such as during meetings.
Policies must be enforced indiscriminately. Ethical breaches must be noted and pe- nalized, regardless who commits them.
An engineer-contractor from San Juan City, who requested not to be named, reveals there are business aspects he can and those he cannot compromise on.
He had learned to observe so-called “standard operating procedures” to cut down on red tape in transactions.
At the same time, he asserts he has never and will never relax on the quality of his work. “We never underspecify in order to enlarge profit. We strictly adhere to the agreed-upon materials and processes. We stand by the durability and integrity of our buildings,” he says.
This is very important, he says, especially in a disasterprone place like the Philippines.
Mark Lester Valle, coowner of Habi Collective, a photography and video production outfit, says the company does not make smallness or newness an excuse for flouting rules.
“We pay the right amount of taxes even if we suspect the money may just end up enriching private pockets.”
The company also gives employees, whom he refers to as “teammates” their full due. “Carla (my partner) and I adjust our lifestyle so that we can set up an equitable payment scheme for our team mates,” he says.
In fact, the partners pay senior members of their team the same compensation they pay themselves as owner-managers.
Tomas Ranada, who manages Uptrend Trading, which imports nutritional supplements from the United States and sells these locally, think that because there are so many of them, small businesses are in effect “exempt” from many government regulations because these are simply difficult to enforce.
Nonnegotiables
“Of course, there are basic, nonnegotiable rules, such as: Businesses should not provide blatantly dangerous products and services, nor cheat customers. In terms of business registration rules, exemptions might be street vendors and small, home-based buy-and-sell businesses. Home-processed food production may require monitoring by barangay officials,” Ranada adds.
A principal code faithfully observed by everyone at Uptrend is: “Give customers their money’s worth; if possible, more than what competitors are giving.”
Ranada concludes: “If being ethical means doing the right thing, it is hard to see why it should be bad for business in the long run.”