Recently, with the expansion of globalization, we saw a surge in the need for business to openly affirm being ethically compliant… That’s great, but what does it mean – seriously?
Here are some major questions any business should ask itself, no matter what they produce…Why do we need to state that we are ethical businesses? Has the business world gotten so greedy that we now need to state when we are using proper practises?
What is ethical here may not be ethical elsewhere. Plus, society is constantly evolving therefore what is now regarded as ethical may not be ethical tomorrow, so is it worth it to be ethical? In the recent economy, it makes perfect economical sense.
To be ethical, a business has to respect some, dare I say it, principles that can, apparently, mean a deviation from generating more cash employing any possible shortcut. No one is to blame for shortcuts. They are a temptation. It has been so forever in business, and even more so since the Industrial Revolution.
But really, if you shortcut too much, in the wrong way or in the wrong places, you end up paying a higher price on the long run. Your business quality, your brand reputation will suffer and, ultimately, you will pay the price for it.
Let’s say that you can traditionally produce a widget for 100; Now if you mass-produce that widget, it will only cost you 10. Great? Seems so, but let’s look at the details.
Well, to mass-produce you may have also to take some small shortcuts; and if you standardize the widget re-using molds already produced and available you could even get the cost down to 5. Even better.
So when is it that it becomes un-ethical? Maybe when we try to un-naturally push the way the widget is produced to secure a cost of 1?
Maybe we lose quality in the way it is produced. Maybe we employ improper practices to get that widget made.
The truth is: I don’t know. No one does. And that’s where the problem is. What is ethical here and today may not be ethical tomorrow or elsewhere, remember?
What I do know, though, is that to make your money back when you mass-produce, you also have to mass sell. You have to corner a market place where millions will want to buy your widget, and those millions will want it so bad that they will not care if the quality lacks so the cost can be low. You also produce a widget for a specific market, therefore you better be aligned with what is ethical for that specific market.
In turn, producing ethically may ultimately mean that it costs a bit more to you. You may be tempted to ask yourself if the market is ready to pay more for it. To your customer, producing ethically means a product made by someone who cares, someone that really believes in what is produced. This is associated to a guarantee of commitment and of quality that will generate customer’s loyalty. Customer’s loyalty generate recurring sales and reinforce brand and reputation. All this, on the short and long term, adds up. Maybe even more than by simply selling a non-ethically produced widget for one dollar.
I know that to work, businesses have to be driven by profit and passion. And if you are a business decision maker you have to live with every decision you take; more importantly, with its consequences. It needs to matter to you. Today’s business ethical charts are a bit like a list of evolving great principles – common sense to some, novelty to others - subject to each individual’s understanding.
Can one go through life, and business, without being polite and ethical? Indeed one could; will it impact one’s reputation, image and rapport on the long run? Indeed!
Don’t be falsely trapped in the choice of being profitable or ethical. Instead focus on being profitable and ethical.
-Simon Vumbaca
For more information on Simon and his business expertise please log on to www.simonvumbaca.com
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