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What is Ethical Business?

Posted On - 07/08/2014 11:52:22

Ethical business is about doing In the last blog, we introduced ethical business. Remember our definition: ethical business is doing "the right thing". It's based on moral decisions. Crucially in our definition, it's doing the right things because it's good for your business.

In this series we'll explore how you can apply it in different areas of your business, but needless to say, we can't cover everything. So if you want to be an ethical business – and I suspect you do, who doesn't want to feel good about what they do and be successful – then you'll have to make your own decisions about what is and isn't "the right thing". We need to establish a set of ‘rules' so you can judge for yourself whether something is ethical.

You may be your business, but your business isn't you

Your business is a living entity in its own rightFirst, we need to establish a basic fact. It may seem obvious, but it is fundamental and underpins your approach to business. It is this; your business is a living entity in its own right. It has its own identity, character, and personality distinct from yours. Of course, it will be heavily influenced by yours, but (legal definitions and liability aside if you're a sole trader) it isn't you.

And here's the key bit; the business comes first. If you're in business, then everything you do should be for the long term benefit of the business. Your own ambitions, personal and financial, are entirely dependent on – and a consequence of – the success of your business. Even the things that matter to you – the service you provide, your expertise, customer care, reputation, impact on jobs or the local community, being your own boss, or simply tinkering with technology – are dependent on your business thriving. If the business fails, you can't do any of those things and you won't achieve your ambitions, personal or financial.

Remember this throughout – your number one priority should be the long-term success of your business.

Given that your business is based around building a good reputation and developing a happy, loyal, long-term customer base, if something is good for the long-term success of the business, it is likely to be ethical. This gives us our first test; is it good for the long-term success of the business?

Conflicting interests

Ethical business doesn't fundamentally conflict with deeply held personal principlesBut what if that's not enough. If you were offered a contract to build land-mines – don't worry, you won't be – it may well be beneficial to the business, but is it "the right thing"? Does it conflict with your personal beliefs? This gives us our second test; does it fundamentally conflict with deeply held personal principles?

Now we have two tests, but is that enough? Can we really say something is ethical simply because it is good for the long term success of the business and doesn't clash with your conscience? We can confidently say it isn't unethical, and that's good enough reason to do it (remember, we've already established it's good for the long term success of the business).

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