Business Ethics

business ethicsEthical challenges face businesses every day. How they navigate them says everything about their corporate or business culture. The Wall Street Journal had good piece last month regarding the ethical challenges facing entrepreneurs and the statistics were somewhat surprising. A full 35% of employees of small businesses had observed misconduct and 58% of that misconduct was by managers. This means a full 1/3 of small businesses are experiencing misconduct, and the number is likely higher because those are just the ones who reported it.

That’s not a good omen for small business. The article went on to talk about some of the reasons for this misconduct and most of it related to observations of lying to investors, to employees, and to competitors. Some was around anti-competitive practices and some was around abusive behavior, but the lion’s share was “lying.”

The problem with any of this behavior is that we all know that it’s never just one lie. People get into the most trouble when they try to cover up the lie, thus spawning more lies. And once you start down that slippery slope, it just all becomes much easier. Ever been around a practiced liar? Once they get going, you really want to believe them, even though you know what they are saying is not true!

Your Business Reputation

At the end of the day, unethical behavior of any sort is bad for business. Personally, we have our reputations to guard. They are uniquely ours, no one can take or give us anything to do with our own reputations. Businesses are the same. You have one “reputation” as a business and when unethical behavior, specifically lying to anyone, starts to happen, everyone knows. There are no good reasons to lie. Sometimes it’s okay not to say anything rather than lie, but lying never really works in the long run.

Businesses have a hard time living down a bad reputation. It is so hard to come back from that so why go there in the first place? Studies have also shown that customers and employees alike are more apt to be loyal when a problem is acknowledged and a remedy sought vs. trying to cover it up. Everyone makes mistakes, those who admit it show leadership.

At the end of the day, how do you want to be remembered? Think about the next time you have to make a tough decision and are close to that ethical line. Walk away, far away from it. Remember Enron? They didn’t start out to bilk investors and employees of every dollar they had, but they got greedy, cut corners and stepped over that ethical line so often it became their culture and eventually, it blew up. That is an extreme example, but if the percentage of unethical behavior happening in small business is as high as the article found, there could be more Enrons on a smaller scale. Don’t be that business.