Business ethics for profitability
JUST a generation ago a handshake was all the guarantee needed to feel secure that a business deal was rock solid, or a person's word was enough.
Being able to boast a good reputation is definitely a plus for a business because it adds the trust, and can protect a business's name.
Ethical conduct can positively govern business practices such as organisational behaviour and operation/production standards. Plus, trust helps build and sustain brand loyalty with the potential to create repeat business and referrals.
The online business world of today however, and the anonymity of corporations, makes unethical practices increasingly common.
A perfect example of this is VW's false clean diesel claim, which saw the company's excellent, decades-old reputation evaporate with a price tag in the millions, raising consumer doubt about what else the company has lied about.
The story of Apple and its consumer relationships is at the extreme end in the business ethics debate. The utility level of its products which serve consumers on an unprecedented personal level test the value of business ethics.
Apple is implicated and proven to have poor working conditions, a questionably high suicide rate in factory staff and is implicated by the UN in the illegal trade of raw materials from Africa.
Given the benefits of a good reputation, would Apple enjoy more loyalty with a cleaner slate?
As the majority of businesses in Australia are small to medium enterprises reliant on face-to-face relationships, good business ethics add enormous value and do influence consumer spending patterns.
For example, new clothing brands have emerged which promote the humanitarian work they do for their workers' living and conditions and cafes choose fair trade coffee beans, which can generate customer loyalty by addressing other needs customers have (e.g. to do good in the world).
Just as we interview prospective staff to screen them for experience and reputation, background checks on suppliers ensure they are not involved in corruption or humanitarian violations because by association their reputation can tarnish our own.
In 2012 Good Corporation held a business ethics debate and found: "An organisation that sets out to be values-driven and treat all stakeholders well, will keep hold of its staff, attract the best recruits, find itself recommended by clients and working with suppliers who strive hard to keep the organisation's business."
Feedback and suggestions to 6651 4101, info@coffs chamber.com.au or www.coffschamber.com.au.