We do not only want to grow and develop; but to grow and develop in the right way which is the sustainable way. Sustainable development is centered not on science, not on technology but on man. Human beings (employees, customers, suppliers, the members of the community where the business is located) need to live healthy, dignified and productive lives in harmony with nature.
Thus an entrepreneur must run his business taking into account his responsibilities not only towards himself but also towards others and towards the gifts of nature he often utilizes for his business.
In other words, he must run his business based on high ethical standards.
The advantages of ethical behavior in business are cited by Brian Hill writing for the Chron website (http://smallbusiness.chron.com) and adapted here:
- Build consumer loyalty – Consumers are getting increasingly educated and aware of their rights. They may let a company take advantage of them once, but will not tolerate being treated shoddily and unfairly again. They would write letters, e-mail, make phone calls, complain to the DTI (Department of Trade and Industry), post their bad experience on Facebook and other social media. Conversely, a good experience with a business can easily spread by word of mouth and online. Remember that companies need a broad base of loyal customers, repeat customers attracted to the business because they have been served efficiently and given a good deal for what they pay. A reputation for doing ethical business will help build this large and loyal customer base.
- Keep good employees – Employees, the efficient and talented ones, will stay long with a company only if they believe in it, are proud of it, and are happy in it. They would want to be compensated fairly for the work and commitment they put in. They would want their managers to be transparent and truthful about what is going on in the business that would affect them. They would want to stick with a company with a prestigious name. Businessmen who observe good ethical practices have a better chance of retaining the most talented and hardworking people.
- Improve productivity in the workplace –When employees are well-compensated and happy and proud to belong to a company, morale in the workplace rises. People are motivated to do their best and to cooperate willingly in all the company’s productivity programs. Only happy employees can make customers happy – an application of the principle “You cannot give what you do not have.”
- Avoid legal problems – In its eagerness to make profit, a business may ignore worker safety, underpay their employees or refuse to give them legally-mandated benefits. Or it may violate environmental regulations such as having a proper waste disposal system. Or possibly ignore proper labeling and packaging laws. Or install “jumpers” to reduce their utility costs. The penalty for these violations may be severe, including fees, fines and sanctions and even imprisonment, not to mention a severely-blemished reputation that would be very hard to erase from the public’s mind.
Entrepreneurs, especially new ones, will be faced with a dilemma whether to go for quick and short-term gains or long-term sustainability that can only be built slowly and patiently. An ethical business builds in the long run a stable environment that minimizes unexpected problems and maximizes harmony, prosperity and productivity.
Henry Ford is quoted to have said: “A business that makes nothing but money is a poor kind of business.”
So, it makes good business sense to be good, or as Anita Roddick (of Body Shop fame) asserts, “Being good is good business.”
Photo: from static.guim.co.uk