Ethics and the SME

Here’s a very nice short article on business ethics, with a particular focus on SMEs (small and medium enterprises).

By Hendri Pelser, writing for Times Live (South Africa), Play fair and you will win:

With the effects of the global credit crunch still with us, it is pertinent to consider business ethics – the lack thereof helped create the recession.

But how does one approach business ethics? In the academic world, it is a philosophical discipline. For companies, it’s often a large volume of rules and regulations.

In the arena of small and medium enterprises, however, it simply comes down to the way you and your business behave – and decision makers face a myriad ethical challenges every day. These range from the way the tea lady is treated to the non-payment of suppliers or even bribes and kickbacks….

This piece is nice in a number of ways. Too little has been written, generally, about ethical challenges faced by SMEs, and this article says a lot of smart things about that. But the article really is a good brief primer on business ethics, and an interesting read throughout.

My one quibble is with the title of the article, which is misleading (but which probably wasn’t chosen by Pelser, so it’s not his fault). Nothing in the article actually implies that if you play fair, you’ll win. Certainly there’s a suggestion that good ethics leads to a good reputation, which in turn can help a business achieve success. But the relationship between ethics and business success is clearly complicated. In some cases, success is what gives a business a bit of leeway to engage in the kind of overt ethical behaviour that will build its reputation. In such cases, the truth is closer to “win, and you can afford to play fair.” Also, it just cannot be denied that in at least some cases, you’ll play fair and lose. Or, more generally, there are situations in which you’ll lose no matter how you play — perhaps because other companies have better products, better staff, better marketing, economies of scale, whatever. That complexity, of course, is precisely what makes ethics in business a challenge. If acting ethically were a straightforward recipe for business success (and if it were uncontroversial just what counted as acting ethically), we’d see a lot less unethical stuff going on in the world of commerce.

12 comments so far

  1. southwerk on

    I went and read the article but I didn’t see a trackback or pingback in his comments. Did you sent him one? Maybe because it’s a newspaper, it just gets absorbed in the larger business. jp

  2. […] Here's a very nice short article on business ethics, with a particular focus on SMEs (small and medium enterprises). By Hendri Pelser, writing for Times Live (South Africa), Play fair and you will win: With the effects of the global credit crunch still with us, it is pertinent to consider business ethics – the lack thereof helped create the recession. But how does one approach business ethics? In the academic world, it is a philosophical discipli … Read More […]

  3. […] Chris MacDonald praises a web site from South Africa and its discussion of ethic from a risk management standpoint. I have a reblog of that up on my site. […]

  4. Chris MacDonald on

    JP, are you asking if I posted a comment on the article? No, I didn’t.
    Chris

  5. southwerk on

    When you cite someone’s blog or newspaper article, you can go down under where you enter your writing on wordpress and there is a section called “Send Trackback.” Enter their URL and they automatically get a notice and a brief excerpt that you cited them. I like to do that. I think it makes people feel good. jp

  6. davidcoethica on

    Smaller businesses often deal with similar levels of complexity to those in the largest corporations, they just react far more instinctively rather than attempt to follow precise codes of conduct or formally defined procedures.

    I also agree wholeheartedly about an ethical business is no guarantee of commercial success. Unethical businesses can be as successful or fail as badly as ethical companies. Ethics is but one part of a bigger recipe that includes, knowledge, luck and tenacity that defines how well a business will be, especially at the smaller end of the scale.

    In fact many ethical businesses fail because they stubbornly believe themselves deserving of financial success merely because they are attempting to be morally upstanding. It’s about understanding the game and finding balance, like everything else in life.

  7. DarryleHuffman on

    One must remember that small companies tend to be aethetical out of survival.

    • Chris MacDonald on

      Darryl:

      Is there any evidence that that’s true? Are small companies really more ethical?

      Chris.

  8. Hendri Pelser on

    Hi there.
    Thank you for your comments.

    My original headline read: The good, the bad and the ugly – Ethics in business.

    The idea behind the article was to give business owners something to think about. Corruption and kick-backs can be common-place in the SME space. If you don’t play the game, you often don’t get the business.

    I did not want to focus on the academic or big-business approach because SMEs operate on a different level where decisions are usually made on the spur of the moment.
    Rather, I wanted to give my readers something to think about.

    Reputation seemed the right approach. Also, I approach the SME sector as a community of like minded people. People want to deal with people they like. Reputations create perceptions. Unethical behaviour will ultimately ruin yours…

  9. […] small and ridiculous. I’ve written about the collapse of major financial institutions, and ethical issues for small business, and monkeys working as waiters and the ethics of soccer balls. I’ve written about the auto […]

  10. […] Ethics and the SME (via The Business Ethics Blog) // Chris MacDonald has discovered a great South African column talking about business issues. I went and looked at several entries. If you want to look at business in a totally different regulatory, historical and cultural mind set, this is where to go. Professor MacDonald cites the latest article about ethics. It’s discusses the ethical implications of risk management. Here’s a very nice short article on business ethics, with a particular focus on SMEs (small and medium enterprises). By Hendri Pelser, writing for Times Live (South Africa), Play fair and you will win: With the effects of the global credit crunch still with us, it is pertinent to consider business ethics – the lack thereof helped create the recession. But how does one approach business ethics? In the academic world, it is a philosophical discipli … Read More […]

  11. […] Chris MacDonald praises a web site from South Africa and its discussion of ethic from a risk management standpoint. I have a reblog of that up on my site. […]


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