You work in the business world; you’ll probably have an important decision to make before you finish your first cup of coffee, but there’s one decision that should be a no-brainer: How important is it to be ethical? When you build an ethical business, you gain the respect of the public, avoid bad press, and establish goodwill with your customers. It’s beneficial for any business to treat people with respect, and isn’t that the definition of Ethics?
Tim Melville-Ross, President of the Institute of Business Ethics, raises an interesting point in his article about the ethical obligation of businesses. He says that “businesses can’t just say they’re ethical; they need to prove they have embedded ethical values.” He claims that if business isn’t conducted honestly, then “trust is eroded and businesses fail.” When he says that businesses fail, it’s hard to tell whether he’s saying that they simply end up closing their doors, or that they have failed to operate with a moral standard. Either way, failure to recognize the imperative of ethics has the potential to defeat a business. Concerned professionals like Tim believe that ethics are becoming more and more important, and consumers are increasingly aware of those businesses which engage in unethical practices.
Does Wells Fargo Need the Money that Bad?
In one outrageous case, Wells Fargo took advantage of their customers in a way that was so blatant, you can barely believe they actually tried it. One of the largest and most established banks in the nation instructed its agents to do “whatever it takes” to meet its newly mandated sales quotas. Bankers obeyed and began to open new accounts under customers’ names, without permission and completely unbeknownst to the customers.
They also charged them fees for these accounts. One customer, discovering new accounts in his name that he never opened, complained repeatedly and demanded that they remove the fees associated with the unsanctioned accounts. They promised to rectify the problem but continued to charge him for 10 bank accounts (he only opened 1)… for 2 years. This seems like an extreme example, but we hear stories about big business taking advantage of the little guy pretty often, don’t we? Companies like these make it easy for your business to stand out in a positive way by just conducting honest business.
What Your Customer Doesn’t Know—Does Hurt Them
A necessity for running an ethical business is to not be deceitful towards your customers. What happens when a company suddenly raises its prices on a certain product, claiming that the cost of manufacturing has gone up (when it didn’t), but the company just wanted to bring in some extra revenue, at the expense of its customers. That’s pretty shady, right? Running a business is tough, and as a business owner, you will find that sometimes you’re just not bringing in enough revenue to stay afloat. Resist the temptation to make your customers unduly pay for a deficit for which they are by no means responsible.
To Check Yourself, Ask Yourself the Following:
1. Would I buy what I’m selling?
You know how they say that you should never give someone a book that you’ve never read, or recommend anything you haven’t tried? Even if your business isn’t selling top-quality grade, you should still hold your product or service to a reasonable standard.
2. Is the cost reasonable? (whether your customers are paying it or not)
Just because your customers seem ok with your asking price doesn’t mean that it’s reasonable. You could argue that it’s “buyer beware,” and if they pay it, then that’s their own fault. The only question is whether or not you are comfortable with knowingly overcharging them.
3. How does my business contribute to the community?
Being ethical involves more than just being honest with your customers. Small businesses already fuel the economy, just by existing, but you can always be proactive and get involved with the betterment of your community, which is good for building professional and consumer relationships, anyway.
In the long run, you will thank yourself—and your customers will thank you—when you adhere to best practices and an ethical philosophy towards your business. You’ve already got a lot to manage when you’re running a business, especially in the economic climate today, but when you take the effort to make a stand to be a decent and principled business, your example fuels the movement toward a professional culture that is invested in doing truly good business.
Here’s some further reading about building trust with your customers, by running a transparent business:
Be Transparent and Build a Company People Can Trust
1. Tim Melville-Ross, “Ethical Business: Companies Need to Earn Our Trust,” The Guardian, https://www.theguardian.com/sustainable-business/ethical-business-trust-values
2. Susanna Kim, “Wells Fargo Bankers Accused of Fraudulent Behavior, Taking Advantage of Customers,” ABC News, https://abcnews.go.com/Business/wells-fargo-bankers-accused-fraudulent-behavior-meet-sales/story?id=30813962