04/ 20/ 2005
by Tamara E. Holmes
As a small-business owner, you will run into companies whose practices you respect and those companies whose practices you do not. But do their practices affect your company? If those practices are unethical, the answer may be yes.
Ethics refers to a system of principles that govern right or moral behavior. Since one's values determine what one considers to be right or moral behavior, you, as a business owner, have the responsibility of coming up with a code of ethics that reflects the values of your company.
So what happens when a company wants to do business with you and they don't have the same ethical standards? Unfortunately, if your company does engage in business practices with them and they are unethical, the public might perceive your company to be guilty by association.
For example, if a company has a reputation for treating customers unfairly and your company takes part in a campaign with them, you may be subject to their image. The public might assume that your company will treat customers unfairly too, whether that is an accurate perception or not.
Another thing you should consider is whether you might one day be on the receiving end of unethical treatment. Say you discover that a company you have a partnership with reneged on a commitment or contract with another small business. Upon first glance, you might think that this has nothing to do with you. However, if a business doesn't honor its word with one colleague, why would you believe that it wouldn't turn around and do that to you at a later time?
A small business' ethics reflect the character of the owner. By witnessing a breach in ethics, even if it does not directly involve you, you're getting a glimpse into that owner's character, which should influence whether you want to do business with that person in the first place.
Unethical businesses in your profession – even if they are competitors – may pose a threat to your industry as a whole.
If your field of business has a trade association, you might want to bring up ethics and suggest that the industry come up with a code of ethics since your individual business could suffer if your potential clients and customers view your industry unfavorably. By placing an emphasis on ethics with your peers and coming up with industry-wide standards, you also might discourage other business owners from engaging in unethical practices.
While it's never easy to deal with matters of ethics, it's probably most difficult to confront this issue when your business is the one that has been violated.
Clearly, you won't want to do business with that company again, but there may be more that you can do. Check with any trade associations for that industry to see if perhaps the company violated an industry code of ethics. If so, report the company to its trade association, particularly if that industry's members are given professional licenses to perform their duties. Another thing you might do is report the business to the Better Business Bureau. The BBB is not only designed to protect consumers, but it works to protect the business community as well.
If you were on the receiving end of unethical behavior, don’t hesitate to report it. Even if you never receive a cent of financial remuneration for the breach, you might stop another business from falling prey to the same practice.
