Business history clearly shows that adopting unethical means to run a business always leads to a reversal of fortunes.
--BY DR VIBHUTI JHA / SHARMILA SHARAN
The concept of business ethics may have different meanings for different people or management, but in general it refers to right or wrong actions in business practices. It balances the economic and social expectations and performances of the organisation. It refers to ethically correct responses from organisations to the mutual actions of individuals. Business ethics maintains moral values and ensures that the behaviour of employees and in turn, of the organisation gets aligned with these values. A business value is referred to as a set of beliefs pursued by any organisation. It plays a vital role in the growth and survival of strategies and tactics of any organisation helping to sustain the success. These values form the ethical guidelines for the organisation and also for the employees.
A new generation of businesses has become more “profit oriented”, and businesses worldwide are now suffering from “bad business practice syndrome”. On the one hand, organisations are trying to implement theories of value creation, customer relationship, societal marketing, and retention to work and better performance on the business front and at the same time, the ever increasing competition and new challenges are forcing businesses to adopt unethical practices too, under certain circumstances. Under the pressure of tag lines like “achieve the results by any means, at any cost”, the young generation entering the real world has started ignoring value systems in business.
The boom in information and connectivity in the current era has created tremendous opportunities in business but at the same time the threat of losing the basic values has also developed. Profitability is not bad but the values we lose in the process are going to be more costly in the coming days. Therefore, it has become our prime responsibility as citizens, as educationalists and as responsible professionals to make sure that businesses adopt and maintain ethical values in their work environment and that the young professionals coming out from institutions learn the art of integrating the skills, professional requisites and ethics in their professional working lives to create an environment of “good business practices” in a changing social, cultural and technological environment.
In this context, the concept of “Survival of the fittest” has became “survival of the smartest” where smart business is considered as the one “which gets the growth at any cost by any means.” Continuous growth in profit and business has become the prime objective of organizations while under immense competition. Organisations are trying to get more in less time and achieve an edge over competitors by any means. The boom in connectivity, communication, technology and information has opened the gate for organisations to act differently. Now the strategies are being changed in order to handle the business and customers.
The concept of business has gained new dimensions with the new generation of customers. In this scenario, when success starts proving to be too short lived, when customers start becoming more vulnerable, when alternatives are available, when satisfaction becomes obvious expectation, when bad practices are likely to overtake good practices and when profitability starts proving to be like an air bubble in the long run, businesses look for some solid base to support stability and sustainability. This has resulted in a search for a value based working system again to hold the customers, employees and company as well which are under immense pressure from growth, profitability, competition and social responsibilities. Organisations have now started feeling the need to redefine their core value system in the light of ethical considerations, making its relevance felt at every step.
In the changing scenario of dynamic competition, businesses require change in organisational synergies. The synergic affects of any organisation is a result of its resources and behaviour. These synergies are actually indicating the strength and weaknesses of any organisation. Organisational behaviour now needs to be enhanced to form a perfect synergy in professional practice through distinct ethical practice in individuals as well as at the organisational level. Concept of Synergy is based on the saying that “total is greater than the sum of individual.” When organisations combine their competencies with ethical values, it gives a tremendous boost to efficiency, effectiveness, belief and confidence as it provides a dynamic synergy to the whole system and helps in building new assets even in existing competencies.
Effective and appropriate usage of competencies can provide a new horizon to organisations in terms of a new work culture even with existing resources. Synergic effect of the latest information, competencies and an ethical working practice may give organisations an edge over others towards attaining and sustaining success in business. As the use and misuse of technology is seen as being together in this age of knowledge, it has become really challenging to create ethical synergy in businesses. Managing the appropriate integration of synergies requires a certain amount of ethical capability to keep the ill effects nullified and the good effects utilised in the best ways.
In managing a business, sometimes situations may force one to adopt certain undue measures or there may be situations in which a business may be tempted to make compromises, knowingly or unknowingly, in the areas of quality, services , employees or on value systems too, in order to fulfill the most important objective of today i.e. increasing profits. An immediate decision on some critical issue may lead to professionals making such compromises. But, that is not going to be expected and desired in the future, otherwise, we may not only observe the collapse of businesses but we may also lose the potential of our own youth, society and nation in a true sense.
If businesses are steadfast in practicing ethics at work, they definitely will be better equipped with far-sightedness to foresee such eventualities and might take the appropriate steps that may protect them from such undesired situations. Business history clearly shows that adopting unethical means to run a business always leads to a reversal of fortunes. In spite of the rate race, a healthy approach in business will always provide the opportunity for sustainable success through the synergy of knowledge, technology, competency and ethical values in business. In this era of global business, the issue of maintaining ethics in business has intensified the need for a value based ethical working system in all business activities for sustainable success.
Businesses can often attain short-term gains through unethical ways; but such practices will un-stabilise the business over a period of time. In today’s high paced business world, where all the information related to the business is available not only to the competitors but also to the customers, the threat of losing ethical values has become more prominent under competitive pressure. Hence, while taking decisions during such situations, the over-riding consideration should be "Commerce with ethics", to quote Mahatma Gandhi.
In the increasingly conscience-focused market places, the demand for more ethical business processes and actions, better known as ethicism, is increasing. Considering such ever changing scenarios of business, this ethicism or ethical value system can play a vital role in maintaining and sustaining businesses in the long run. If one respects values in life, one will definitely understand that ethical business will give peace of mind while doing business. Peace of mind in this jet aged business era, has become the challenge for businesses and is the basis for ethical synergy in organisations.
The foundation for ethical behaviour goes well beyond corporate culture and policies of any company, as it depends greatly upon an individual's early moral teachings at home, related educational institutions imparting professional requisites, the competitive business environment the company is in and society providing directions to an individual. The challenge of creating ethical synergy within an organisation is almost as hard as standing in a stormy wind. A strong ethical base system in the organisation needs to be strengthened and synergised otherwise the whole exercise will prove to be futile as the desired sustainable results will never be achieved as profit margins drive businesses in any case.
The challenge of developing a synergy of ethical values in business incorporates building a better business, adopting better systems, following better practices, caring for social responsibilities, developing the leaders capable of facing, handling and maintaining systems in crucial pressure situations and not the least making the best use of the latest information and technologies. It can be done through a leadership that is capable of handling it. This “capable leadership” can be shaped through a value based developmental system which starts from professional institutions and continues as professionals in industrial organisations.
The role of professional educational institutions bears greater responsibility as knowledge and skills are valuable but not easily "ownable" as objects. Imparting the value system and rooting the ethical base in budding professionals is the responsibility of such professional educational institutions. The core requisites of a professional include elements like knowledge to perform responsibilities, attitude to excel in performing responsibilities, personality to deliver the results in performing tasks as leader and team member and behaviour to be a good professional and a responsible citizen . Here, the behavioural element includes the value based ethical aspects of one’s professional behaviour.
In general when we talk about this professional behaviour, a very rude kind of picture comes to our minds but actually it is incorrect. Professionals should be balanced, mature, ethical and correct in behaviour even under the greatest of market pressures to write sustainable success stories which should be acceptable, reliable, accountable and respectable in competitive performance and society as well.
Educational institutions are expected to impart all these requisites before placing the professional in the real world, in order to make them industry ready. It is established now that the absence of these ethical practices can damage institutions in the long run. Budding professionals must be taught the importance of value based ethical practices to overcome the bad practice syndrome; that business ethics is at the core of good business worldwide. This can come only from a value based system approach rooted deep in the minds of budding professionals during their transformation process. Good ethics should be a part of every business and also it must be up to the public too to make sure that a company adheres to correct business ethics.
The budding professional must be made to realise that ethics is like the soul of any organisation as it helps the organisation to win customers, create employee loyalty and handle competitors in better ways. The loss of ethics may mean the loss of loyalty and integrity. Those who lose ethical values and become soulless under market pressures, lose their growth pathway. This soullessness may finally cause permanent damage to an organisation.
In this era the customer has become the centre of every business activity and when the customer becomes the centre of attraction, all human aspects come into play. In addition to the latest management techniques based on information and knowledge available world-wide, a set of personal values and commitments are needed to make all employees and their organisations utilise knowledge, skill, culture and rationality under an ethical system of working. There is a direct correlation between behaving ethically and creating long-term customer value.
A balanced synergy of knowledge, skills, and value based behaviour is needed to be instilled in budding managers to shape the future of our businesses for the next bottom line which is “good ethics is good business”. This will transform our businesses from bad practice to good businesses. This change is a must for our nation and society.
The authors can be reached at firstname.lastname@example.org and email@example.com at Kathmandu College of Management.