I WROTE THIS STORY FOR SAM’S CLUB “SOURCE” MAGAZINE
— which unfortunately is no longer published:
What makes your company unique? Is it an original product or service? Painstaking attention to detail? The utmost in customer service? Or is it, like one entrepreneur I spoke with recently, her ethics?
Not exactly the answer one might expect from business people today, but certainly, in light of the well-publicized big company scandals these days, an answer that we need to be hearing from more and more professional people.
Ethics: what is the right thing to do? We are discussing behavior here — talking a good game and playing a questionable one is not the right thing to do. Most people agree that, in business, the ethical code for an organization comes from the top. Owners and top managers make decisions that affect, and are visible to, those within a firm as well as the outside world. The challenge is to take responsible actions based on integrity, i.e., the steadfast adherence to a strict moral or ethical code (according to the American Heritage Dictionary).
The study of ethics is extremely complex. Philosophers discuss “normative” ethics — prescriptive theory that tells us how things ought to be (e.g., people ought to be honest). Meanwhile, social scientists examine “comparative” ethics, which describes how different cultures observe ethical standards. Some believe in “absolute” values: actions are either good or bad. Other people consider ethics in a “situational context” wherein every act is evaluated in light of particular circumstances.
People need to think more carefully about what moral values should be basic, according to Sissela Bok, a Distinguished Fellow at the Harvard center for Population and Development Studies and a member of the advisory council for the Institute for Global Ethics. She points to commonly accepted values like sharing; caring for the sick, the young, and the elderly; and avoiding violence, breaking promises and lying.
“One word spoken rather than another, a document back-dated, a few figures altered on a balance sheet, [. . . ] a clever smear disseminated about an adversary, a glowing letter of recommendation for an employee one has just dismissed — what could seem easier? Or more painless, at least in the short run? In sales as in the promotion of products, executives who see their companies threatened by competitors often find the lines hard to draw — the more so if they weigh what they take to be their minor departures from the truth against all that they stand to gain in the short run.”
This quote appeared in an article called “Hidden Costs of Lying” that Sissela wrote for a publication called WorldLink [vol 4, Nov-Dec 1991].
Business leaders are faced with difficult moral decisions every day; they are inescapable. SAM’S CLUB asked some of its small business owner members to discuss ethics, business, and how those hard choices are made.
Jim Johnson, owner of the Johnson Sprinkler Company in Tulsa, OK, and a SAM’S CLUB member since 1984, sees ethical behavior as the honest way a businessperson relates to his or her customers.
“It’s how a person should always be above board. I like to give my customers exactly what I tell them . . . and possibly a little more at no extra cost,” says Jim who does no advertising and bases is business entirely on word of mouth. “I’m not the low bidder on jobs, but I work hard to keep the kind of reputation that assures my customers they will be well taken care of.”
Jim is a subcontractor who, himself, will not work for some general contractors and individuals whose practices create stressful workplaces. He avoids doing business with people who are prejudiced, power hungry, and demeaning.
“Whenever I am considering what action to take in any given situation, I listen to my feelings. If I get a bad feeling, I won’t do it. We all know right from wrong; whether we take the right action or not is up to us,” he suggests.
Without trust there are no ethics, says Bryan Hawkins, owner of Hawkeye Industries, which makes technical parts for equipment manufacturers. Trust is the backbone of the positive relationships that are critical to business success:
Where people trust one another; that’s what builds and maintains behavior,” says Bryan who started buying from SAM’S CLUB the day he opened his business in 1995.
Bryan explains that in all his dealings, both with customers and employees, he wants to be considered fair. “When the people you work with know that you are dealing with them in a way that does not take advantage of them, when you are known for your fairness, then that is hard for any competition to beat,” he says. Bryan suggests that determining what is fair and what is the right thing to do is a spiritual question: not necessarily a religion, but certainly based on Biblical values.
Daniel Kreikemeier agrees that trustworthiness and honesty are key traits in an ethical business person:
“The way you conduct your company, treating your employees as more than just numbers is important,” says Daniel, who has more than 60 employees in three companies that distribute fire equipment to cities in Nebraska. He’s been a business member of SAM’S CLUB since 1993. “Most people know right from wrong if they were brought up correctly. Wrong injures people. Right does not,” he says.
A former president of FAMA (Fire Apparatus Manufacturers Association), Daniel has been involved in working with the national association to make certain that members’ actions are legal and above board. “It gets difficult sometimes, but if you say you are going to do something, then you have to do it,” says Daniel, who admits that today’s business environment differs from the past. “It used to be that when I bid a fire truck, an oral commitment meant something. No longer. The good ole’ boy trust isn’t there anymore. Today too many people say one thing, but if something better comes along, they change, and they don’t even think they’ve done anything wrong.”
Brent Miller, a dentist in Cleveland, Ohio, and SAM’S CLUB member for twenty years, has a positive view on business today because he believes the public expects ethical behavior.
“There are so many good companies out there that the bad ones don’t succeed,” he says. “With the economy the way it is, people are careful where they shop and what they spend. They are not easily fooled. They will not put up with businesses that try to take advantage of them.”
Brent says that high standards are the hallmark of ethics, a positive way of doing business. He points to his own personal dealings with SAM’S CLUB as a prime example of the way businesses should be run. Whenever he thinks of SAM’S CLUB, he remembers a time long ago during an especially devastating winter storm when the store kept its doors open past closing so he could get there to purchase a power generator. “They helped when they didn’t have to, and to me this is a very high degree of ethics,” he says.
The political philosopher of the late 15th and early 16th century Niccolo Machiavelli told political rulers that they should be deceitful, but not to appear so. He also said, “there is such a gap between how one lives and how one ought to live that anyone who abandons what is done for what ought to be done learns his ruin rather than his preservation.”
At the beginnings of a free market society in the 17th century, philosopher Thomas Hobbes asked if it was possible to have ethical rules in a society where people are primarily self-interested. In 1968, Albert Carr wrote a controversial article for the Harvard Business Review called “Is Business Bluffing Ethical?” in which he suggested that business is a game where certain strategies – as long as they are not proscribed by law — are acceptable. Playwright George Bernard Shaw is quoted as having said:
We must make the world honest before we can honestly say to our children that honesty is the best policy.
Where does the incentive to be ethical come from? Therapist and religious historian wrote in his 1994 book Care of the Soul : A Guide for Cultivating Depth and Sacredness in Everyday Life: “The motivation for living an ethical life is not just intellectual or someone frightening you. It can be based emotionally on your sense of compassion and empathy. That’s where soul and spirit come together.”
In her book Lying: Moral Choices in Public and Private Life, Sissela Bok offers six reasons why people should avoid lying:
1) Dishonesty leads to lack of trust and cynicism
2) Lying is coercive; it forces people to act differently from how they might have acted in light of the truth.
3) Lying is resented by those who are deceived.
4) Dishonesty is likely to be discovered.
5) Liars often do not calculate either alternatives or consequences.
6) One lie usually requires more lies.