In its simplest definition, ethics means the sense of right and wrong. Whatever is conscientiously right, is ethical; whatever is not, is unethical. But is that all? No! I would like to expand on this basic definition of ethics. According to me, ethics is the sense of right and wrong, coupled with a desire to do good in some measure for someone.
And that is the basic principle that needs to be followed when you are trying to practice business ethics and policies. A Buddhist religious principle says Bahujana Hitaya, Bahujana Sukhaya, which literally means 'Of the greatest good, of the greatest number'. That is what business ethics must actually be all about. While making great strides in improving the prosperity of the business, one of the most common endeavors of the business must be to see whether the business is really mattering to the common person in some significant manner or not.
Now here are my laws of business ethics that I feel any business must follow. These are not taken from any book or reference material; these are just some principles that I feel strongly about and implement in my own business. They are my own little brand of business ethics and values.
Productivity Is Much More Important Than Profitability
One of the primary business ethic I follow is that productivity is always more important than any kind of apparent profits that the business is projected to usher in. Let me explain what I want to actually say here. If I have two kinds of raw material I can use, one more expensive than the other, I will select the better one among them, regardless of the price. In most cases, the pricier one will also be the better one to use. What is the purpose of this? Well, I am making my production better. What about the products then? Aren't they decreasing?
Not actually! When I make a better production, I am also ensured of more sales. And that is the reason why my profitability will not always be affected, and even if it is affected, it won't be by a huge amount. And I am earning a very significant profit - that of the customer's trust, which is more important than anything money can buy for a business. We all know how credible businesses always have a very long innings to play in the market. That is what you get when you place productivity over profitability.
The Customer Is Not Sheep That Can Be Sheared
Most unethical businesses are unethical because they over-charge for their products, and thus fleece their customers pitifully. Such businesses may be able to make a quick buck at the outset due to advertising and hype, but once the novelty value of the business is done with, it will go down into the pits. What's a better point to note is that, companies that hike their prices obscenely at the outset cannot reduce them later. Even if they see that they are not getting the kinds of sales they had hoped for, they cannot downsize their prices without losing out on their credibility. Fair pricing is one of the most important of business ethics, and it must be implemented right from the outset.
The Buyer's Domain Is More Important Than The Middlemen's Domain
Okay, the middlemen are very important to the success of any business, and most businesses will go to any lengths to appease their distributors. After all, the distributors are the important people who buy the products from the manufacturers and then keep them in front of the consumers. In a highly competitive world, it is very important to catch the distributor's eye and hence most businesses make policies keeping the distributor in mind.
All this is fine as long as the consumer is kept at the center of the whole thing. The consumer is more important than the middlemen, and all businesses must realize the valuable business ethic of propitiating the consumer more than the distributor. If the consumer is not happy with the product, there will be no sales. And if there are no sales, there will be no distributors buying the products. The trick lies in making the consumer happy by giving them the exact kind of product they want - never mind the little higher manufacturing cost - and create the demand for the product that way. The distributors will automatically come craving for it.
Be Diplomatic With Your Competitors
It must be told, and emphasized, that business ethics always promote healthy competition in the market, and monopoly is actually ethically looked down upon. Your business will also have some rivals, and it is best for you to be diplomatic with them. Ethically, you must respect what your rivals do. If you feel tempted to start a cold war with them, just bear in mind that they are also in the same business as you are. So, definitely they must be good in some way, or they wouldn't tick at all. In fact, in the eyes of the consumers, you are sharing an invisible fraternity since you are providing similar products. It is quite ethical and profitable for you to follow this fraternal bond with your competitors. Even if you are trying to overthrow them, do that graciously and with improving your own business. Sabotaging your competitors' businesses in any way is sacrilege in the business ethics world.
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