INTRODUCTION
Managing businesses in the 21st century has gone beyond mere profit maximisation. The need to be ethical in all business dealings as entrepreneurs can no longer be ignored. Entrepreneurs that ignore ethical considerations in business are doing so at their own peril. This article is all about exposing entrepreneurs to the basic things they are expected to know about ethics in business management.
MEANING OF ETHICS
Ethics is a field that studies human behaviour in relationship with others on the basis of wrongness or rightness of manifested behavior. Anything that is ethical is adjudged to be fair to all the parties involved. Entrepreneurs must always consider the level of transparency, the effect and how fair their actions are to those to be affected by such actions in all their business decisions before embarking upon such a decision. Transparency, effect and fairness are core issues for ethical consideration in business.
CONCERN FOR STAKEHOLDERS
Entrepreneurs and the organisations they represent are not out of this world. They relate with several individuals, organisations, interest groups and the state. All these groups have a stake in all businesses operating in their domain. Three questions that are of great concern to all entrepreneurs in relation to ethical business operations are?
a) Am I confidence to make my decisions known to people to be affected by them?
b) Have I considered the harmful effects of my decision and the way out?
c) Would my decisions be considered fair by everyone affected by it?
MAJOR STAKEHOLDERS
The following group being stakeholders in the business world must be considered by entrepreneurs in their day-to-day decision making.
a) Shareholders
b) Trustees
c) Guarantors
d) Investors
e) Partners
f) Approving bodies
g) Regulatory authorities
h) Advisors and consultants (yes, these people have something at stake too)
i) Employees - staff, managers, directors, non-executive directors
j) Customers
k) Suppliers
l) The local community
m) The general public
n) International communities
o) humankind
BENEFITS
Competitive advantage
Entrepreneurs that are adjudged fair to all concerns in their business dealings are always in the good book of the general public and therefore enjoy better patronage over their competitors.
Employer of choice
In this era of war of talents, employees are kin about working for any organisation with sound reputation. Sound ethical business practices add value to business organisations and also make it easier for them to attract and retain quality, competent and committed workers.
Attracting Investment
To attract investors and venture capitalists, an entrepreneur and his organisation must have reputation for fair and ethical business practices. This gives them a very solid reputation before investors and bankers.
Motivation and Morale boost
The integrity and reputation of the business is a source of morale booster to all the employees. They tend to feel happy working in an organisation that the society holds in high esteem.
Reputation
In this era when high and mighty businesses of yesterday are falling due to scandals. It takes ethical business operations to remain firm in a business environment saturated with high ranking firms. To maintain a good public image in your domain and globally, never trade your ethical business practices for anything else as an entrepreneur. It takes years to build a business; only a scandal is enough to destroy it.
Legal and regulatory Considerations
Businesses are being sanctioned now more than ever before for lack of accountability and transparency in their business dealings. The operating license of a business or an entrepreneur could be withdrawn for involvement in any unethical business practices.
Conclusion
The core of ethical business operation is to conduct your business as an entrepreneur in a manner that minimizes or avoid social conflicts. Negative business impacts on the society such as child labour, workers exploitation, social and environmental damage must be avoided.
REFERENCES:
Alan Chapman (2010). Ethical Decision Making and leadership. www.businessball.com
Fajana Sola (2002). Human Resource Management: An Introduction. Labofin and Company, Lagos.
About the author
Ajiboro Ayodeji is a Chartered HR Practitioner based in Lagos, Nigeria. Tel: 2348027807452. Email: hutrenconsulting@gmail.com.
©Hutren Consulting 2011
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© Hutren Consulting 2011
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