April 15, 2024


Finance Nonstop

Business and Ethics

As an entrepreneur, sometimes, you may be forced adopt austerity measures for managing the finances of the company or there may be so many allurements that you may be tempted to make compromises on the quality of the products you manufacture or to terminate the services of some of the existing employees so as to increase profits.

The situation may demand your immediate decision and the easy and simple way out may be to make such compromises. But if you are steadfast in observing ethics in your business, you may be equipped with the far-sightedness to foresee such eventualities and may have taken the appropriate steps that may free you from such tricky situations.

Some people may argue that business and ethics can not go together. This is not true. If you respect values in life, you will definitely understand that ethical business will definitely give you the leverage of peace of mind in doing your business. To understand the situations in the right perspective and consider ethical decisions for implementation, you may have to know the approaches that are available to you.

1. You take a stand that would be beneficial to all, keeping in mind your success in the business, your goals in the business, your responsibilities to your customers, your responsibilities to the society at large and also to your employees. This is otherwise called the Utilitarian approach.

2. You may opt to stick to ethics, come what may. You do not worry about the consequences of your decisions and you possess the courage of conviction and conventions to assert that ethical decisions are supreme in business. Even if it may entail closing down of your business, you stick to that stand. This approach may not appeal to all entrepreneurs and very rarely, we come across entrepreneurs of this kind.

3. The third approach is based on the golden rule. You clearly and unambiguously opt for decisions you know to be right. If you do not feel good taking a decision, then it is wrong. But, if you have a good feeling, then you believe it is the right decision.

4. In certain situations, you will be forced to weigh the cost of the decisions as against the benefits derived from them. If the consequences of the decisions are going to cost you more than the benefits that you may derive, then you may not opt for it and if the benefits outweigh the cost, you may go ahead with those decisions.

Experience shows that taking decisions based on ethics helps businesses in surviving many ups and downs. Business history clearly shows that adopting unethical means to run a business always leads to reversal of fortunes. Hence while taking decisions during such situations, the over-riding consideration should be “Commerce with ethics”, to quote Mahatma Gandhi’s words.