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- 1. 2 Small Business Ethics: A Key to Long-Term Success McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
Editor's Notes
- It is important for students to understand the what is ‘legal and what is ‘ethical’ are not necessarily the same thing. Pose some ethical questions for them to consider as they go through the chapter Would you cheat on an exam? Would you lie about being sick to skip work? Would you put extra miles or meals on your expense account?
- Example Ethics: It Isn’t Just the Big Guys When Enron imploded, the subsequent wave of corporate scandals confirmed the cynical suspicion of unethical behavior Small Businesses, often overlooked, are not angels Simple theft, one or two bad managers, hiring unqualified relatives can all lead to disaster Suggestions for a code of ethics: Review outfit’s ethics Craft a code of conduct Train your people Solicit feedback Talk about ethics and network with ethical people
- Culture in a small business is many times set by the owner and grows stronger as the business matures. Thus, it is very important early on to set the right tone.
- The four elements are each discussed on a further slide.
- The old saying is “Do as I say- not as I do” This does not work when running a small business. Employees will follow the examples set by the owner whether it is coming back late from lunch, taking personal calls, playing computer games during working hours, or other potentially harmful behaviors. It is important to set clear guidelines by your actions. It is also important to follow those guidelines daily so that they are considered the ‘norm’ by the employees.
- Oftentimes our actions go unnoticed by others. When promoting a strong ethical culture you cannot afford your attitude and values to go unnoticed. Some ways of making sure your attitudes and values are visible are: Successories posters (values, teamwork, etc.) Sign stating “Customer is always right” Donating to a certain cause, and informing employees about it Publicly thanking employees for ethical actions Your personal values will show through to your employees. Don’t be afraid to display your beliefs in your office, or other appropriate places in the company. Examples Picture of you with family Sponsoring a team for a cancer walk Allowing employees time off for their children’s school events
- Small businesses have the ability to be very flexible. As a new company you will face many situations for the first time. It is an opportunity to decide how to deal with each new situation. Not all things can be planned for and it is your responsibility to handle unique situations (employee theft)on an individual basis and possibly make a policy for a situation which may arise again (funeral leave).
- As small companies become successful, large companies take note. If they feel it is a profit worth having, they will engage in competition. Small businesses have the ability to respond quickly due to fewer levels of bureaucracy. Due to fewer resources people in small business are accustomed to finding alternatives and tend to be more creative and innovative out of necessity.
- First principles : basic ideas about what constitutes right behavior In questionable situations it may be necessary to formally consider the situation and options available. The format for doing this is presented in the next several slides.
- These four questions are design to start you thinking about your obligations and who is obligated to you. You and your company do not operate in a vacuum. Consider Employees Customers Suppliers The community in which you operate Organizations you support
- The distributive view is a short term view. It considers a situation as a pie split among people. The more I eat, the less there is for you This is not the best way to run a company if you want to be in business in the long term.
- The Integrative view involves thinking long term. It has been shown to be a more profitable and positive approach. Steps are outlined on the next slide.
- Utilitarianism : an ethical model that supports seeking the greatest good for the greatest number of people Universalism : an ethical model that suggests that there is a code of right and wrong that everyone can see and follow Golden Rule : an ethical rule which suggests you treat others in the manner you wish to be treated Billboard principle : an ethical model that asks whether someone would be comfortable having his or her decision and name advertised on a billboard for the public to see
- While business organizations are the natural place to go for advice, there are many people available at your local college, your church, on your softball team, at your gym, or any other place you spend time, which have valuable information and experience.