How to be Ethical in Business
Over the past decade, there has been great scandals or wrongdoings and corruption in South Africa and the world in general. We all remember the ENRON saga, and more recently and closer to home, the overnight scandal that was caused by Steinhoff. These types of wrongful behaviour have caused mistrust in the South African and world economy when it comes to big businesses.
The only reason the South African and the world population was exposed to these examples, is because these companies were in the public eye. There are also a lot of SME businesses and their owners who are up to no good and behave in the same manner, the problem is, we do not hear of the way they operate. The point is, these kinds of wrongdoings are surrounding us, whether in public and big corporations or, in our neighbourhood hairdresser.
Behaving ethically is the only way to conduct business.
What is ethical behaviour in the business?
Ethical behaviour is how an individual or business act in a consistent way to what society and individuals typically think are good values.
Ethical behaviour in business usually tends to be good for business and can gain the respect of your customer to create a relationship that will last a long time. In a recent study by Outbound Engine (https://www.outboundengine.com/blog/customer-retention-marketing-vs-customer-acquisition-marketing/) they found that acquiring a new customer can cost five times more than retaining an existing customer. They also found that retaining existing customers by 5% can increase profits from 25% – 95%. Current findings show that the success rate of selling to an existing customer is 60% – 70%, while the success rate of selling to a new customer is 5% – 20%. This shows strong evidence on the power and strength or retaining customers and one of the ways to retain customers is by ethically conducting business.
Here are some of the key principles to remain ethical in the business:
· Paying tax
· Paying creditors
· Paying salaries
If you stick to the above, you will be able to conduct business ethically and therefore lead to retention of customers which will, in turn, grow revenue and build a strong, long-lasting business.
There is a great quote by Oprah Winfrey which states: “Real integrity is doing the right thing, knowing that nobody’s going to know whether you did it or not.” Being ethical in your business is not about showing people that you are ethical, it is about running a business in an ethical way that will show everything is above board, your staff are happy, customers are happy and everything is run in a good and orderly fashion.