Monday, 9 January 2017

REVISITING THE TERM ETHICS IN A BUSINESS SENSE

REVISITING THE TERM ETHICS IN A BUSINESS SENSE
This is the second and concluding part of the article on Ethics


ETHICS – A SITUATIONAL ASPECT
Ethics in a business atmosphere is extremely hard to understand, and is in reality highly situational – which is part of the reason why people refuse to be drawn into open conversation and comments even in personal one-on-one communications and discussions. One part of ethics is actually quite simple – cheating, fraud and other such actions that are either illegal, or wrong  - or indeed both. Bumping up TA Bills, collusion with the partners and vendors, and many other minor transgressions are also part of this. Frankly, these are minor irritants to companies, though they can grow in scale in times of stress.


MINOR TRANSGRESSIONS
These don’t impact business performance, inasmuch as they don’t have any connection with strategic or major tactical strategies, neither do they interfere with organizational goals. However, for some reason these are not discussed openly within companies. That is an entirely different matter, so let us leave it at that; we are on a hunt to determine the foundations, and such tangential aspects need not concern us regardless of the scope they are prevalent on. That said, these minor transgressions can get out of hand; and ensuring compliance is and should be a matter of company policy with zero tolerance.


Similar is the case with Gender related issues in some aspects; the gender mix in any company, for example, is not a matter of ethics. This is related to gender equality in a society, and is largely independent of ethical considerations. Reactions and response to such sociological factors depends on the prevalent societal modes and public direction, as well as the concept of right or wrong. Thus, while deliberately not hiring ladies {for example} may be an ethical issue, but again, this is something that is tangential to us, as in most cases it does not impact the bottomline and topline.


THE CORE ETHICAL CONSIDERATIONS
What are the aspects that are truly unethical? These are such practices that have a direct, provable causative link with business performance; aspects that need the focused attention of responsible managers. These habits can break markets, impact profitability, destroy brand reputation, destroy internal structures, and are born out of the managerial style, laxity in control structures, unhealthy unchecked business practices, and at times even a Performance Management System that is out of tune with the on-ground business scenario. There may also be other aspects; that will require deep study in the institutions and management colleges of India. Question is, are we doing that research?


This can take the shape of a powerful senior manager promoting, supporting and listening to favourites to the detriment of the organization. Now take a minute here; not all cases of the seniors supporting juniors are matters of ethics – these matters are, as I pointed out above, highly circumstantial. But if someone is aiding the rise of a manager who is operating on business practices that are not the core operational strategy adopted, then you have a major issue. This is not understood as a matter of ethics – but if your words are saying one strategy to one set of employees, and communication of a different,at times opposite, strategy to a select few- this is a lack of transparency, and maybe unethical. As I said, these matters are extremely hard to judge.


Another example is of a business negotiation; you ought to have complete transparency in operation and discussion. That, however, does not mean that you share everything; that would be stupid. The point is to share everything that is ideally or optimally required  for the other party to make a proper decision. In some cases, this does not happen – which is why quite often the relationship breaks down very fast. Given that incomplete disclosure has happened, this was a foregone conclusion, almost. And in 100% such cases, it represents a business risk that needs to be controlled.


CONCLUSION
These are just two examples I have taken to drive home my point; the focus of ethics in our Media, Organisations and Academia has always been the big-ticket issues that can drive companies asunder. These sporadic occurrences, though clearly unethical in nature, are just one aspect of the coin. The side of the coin we need to focus on is the other one – the daily operational aspect, the ones that are concerned with Human Nature, Business Processes, Core HR Functions… these  can destroy operational effectiveness, erode productivity and lead to a quantifiable business loss. These represent the foundation inasmuch as they are linked to core organisational processes that drive the daily operations, Balance Sheet and the Profit and Loss Account… 

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