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Friday, December 11, 2015

Why Supporting Ethics is Good for Business

All business is based in social interactions. Social expectations constitute the core of transactions that occur between people. These same transactions also constitute expectations between business. It makes no difference if we are discussing trade and barter between two people or millions of dollars moving through institutions. When ethics are not supported and reinforced through other institutions the fundamentals of economic activity can be damaged.

Few would want to work with another person who is known to cheat, steal, lie and act in an unethical manner. Because money is a socially constructed term of value based upon an amount of effort being cheated out of money by another is a grave violation of social norms and the fundamentals of economic life. Lawsuits, retaliation, lost business and other actions occur when unethical activity takes place.

The problem is that today's society is extremely complex and law and rules can be easily circumvented by people who have more knowledge on these affairs. There are entire industries that help companies get around what is ethical and not ethical making the trust factors of society relatively low. Just look at the polls that show trust between each other, business, and government is declining.

It doesn't have to be. To build strong ethics means that companies should reward employees who act ethically, fire employees who don't, and encourage greater levels of accountability. The Justice System should protect the innocent and ensure violators are held responsible for their behavior. Complexity doesn't need to mean that people do what they want, when they want, without any accountability.

When people have this trust economic activity increases. People believe that if they put effort forward they will get rewarded. They are deterred from acting unethically because they will be punished through poor reputation, lost jobs, lost business, or even legal problems. The long-term end game should never look good for those who do not act ethically yet society doesn't always work that way.

Unfortunately, there are many people in society that have forgotten the value of ethics and think that all things come down to how much they can put in their pockets. Such people sell out their own values as well as the values of society. Still....they often walk unpunished. They have attorneys, right and wrong is lost in legal manipulation, people stay silent, and general confusion of values abounds.

Supporting business means supporting the fundamentals of business that relate to how we value and treat each other. It isn't some wishful thinking...it simply is a fact that people who trust each other are willing to trust working with each other. Trust is built on mutual reciprocity and social expectation that the two people will seek a win win situation. When this doesn't happen we all lose because the precedence set is that ethics is a commodity to be bought and sold depending on its value. 

 


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