Global Interconnect, Inc. is a leading medical device and high-end industrial/commercial manufacturer for the world’s largest OEMs, where customized solutions become critical connections. GII’s Director of Global Procurement, Troy Mauk, had a feature article published in American Purchasing Society’s January/February newsletter (Volume 45 Report Number 1/2) “Professional Purchasing” titled “Business Ethics’ Vital Importance to Corporate Brand”. Below is the contents of the article. To learn more about The American Purchasing Society click here.
“The ethics of business is the ethics of responsibility. The business man must promise that he will not harm knowingly.” Raymond C. Baumhart, author of An Honest Profit: What Businessmen Say About Ethics in Business (1968).
The American Purchasing Society’s Code of Ethics includes the following primary pillars, in my estimation:
- Buy without personal prejudice from suppliers who offer the optimum value when all factors are considered;
- Be honest and insist on honesty from others. Denounce all forms of unscrupulous business practices;
- Avoid all conflicts of interest which would jeopardize impartiality in your business transactions;
- Be truthful with your suppliers, potential suppliers, and all others with whom you do business; and
- Maintain high standards of personal conduct.
By implementing and remaining mindful of these pillars, professional Purchasing personnel can be guided through fair and acceptable business practices without exception.
DEFINING BUSINESS ETHICS
Business ethics are of paramount importance. One expects ethical behavior in dealing with every person in the organization from senior management to rank and file.
Business ethics draw clear distinctions between right and wrong; fair and unfair; proper and improper negotiations; business practices and relationships between companies. In summary, business ethics comprise a code of ethics, and a code of conduct outlining employees’ mode of behavior by which a business will act to promote honest representation of the organization.
SOURCES OF ETHICAL VALUES
People learn ethics from many sources, including religion, philosophy, parental teachings, instinctive sense of fair play learned from teachers, clergy and those one respects, from intuition, and through learning about the rule of law. Being legal does not necessarily equate to being ethical. Such thinking is inappropriate in that legal and ethical are defined by different parameters.
Laws are imposed within societies to define acceptable behaviors to minimize criminal activity. Yet ethical violations, while legal, have the power to compromise a company’s branding. In recent years, corporations, municipalities, governments and religious organizations have all been involved in scandals due to behavior perceived as unethical. In several cases, corporate collapses resulted from these behaviors.
HOW ETHICS AFFECT BRANDING
In standard branding models, branding value is defined and measured by economic performance. Legality and ethics form the foundation of brand equity. Branding has profound impacts on society and not just a company’s customers. An ethical brand enhances the firm’s reputation; this reputation reinforces the brand in turn. Unethical behaviors will significantly destroy or extinguish the brand of an organization, as evidenced by the recent high profile corporate scandals.
The conduct of a company over a long term – its trustworthiness, reputation, dependability, sense of CSR (Corporate Social Responsibility) and the manner in which is treats its staff, are all components of a good branding.
Here are a few quotes that I found that represent the importance of good business ethics:
- “You’re never wrong to do the right thing.” Mark Twain
- “Doing the right thing doesn’t automatically bring success. But compromising ethics almost always leads to failure.” Vivek Wadhwa; Wall Street Journal
- “Ethics is knowing the difference between what you have the right to do and what is right to do.” Potter Stewart
- “What is right is not always popular and what is popular is not always right.” Albert Einstein
- “We do not act rightly because we have virtue or excellence, but we rather have those because we have acted rightly.” Aristotle
- “It is not hard to make decisions when you know what your values are.” Roy E. Disney
- “Relativity applies to physics, not ethics.” Albert Einstein
The entire staff has a responsibility for the organization’s branding through ethics. Traits which promote ethical behavior include: honesty, integrity, responsibility, trust, respect, teamwork and leadership. An organization with good ethical behavior can bring increased benefits to a company such as attracting new customers, attracting new employees, and employee retention. These all contribute to increased sales and profitability.