Hi and سلام to All
To all Islamic readers, Happy Ramadan!
Thanks to all who have asked me to post other subjects and have enjoyed the posts?
I have a question for the people out there; what is the difference between and Ethics and Morals? Look further down for the answer.
This subject is something close to my heart as I have two different opinions on the subject.
If you look at the economic climate today and the amount of people who have been retrenched you could say that there is not. Why do I say this? Easy, it was caused by the hunt for more money and higher profits which would result in more money in the person’s pockets. So, the rich got richer, the poor become poorer and the middle income lost a lot.
On the other hand, if you look at companies that have a social responsibility programme, such as Vodafone which made the decision not to install cellular masts in certain areas and is in the process of making a decision on whether it will remove all mats from major motorways to prevent people from talking and driving at the same time. Or the case of BHP Billiton who chose to close a very profitable mine as there was a chance of loss of life.
When I talk to people about ethics, I have always told them that in my opinion. When you live at home, you get and learn your ethics and morals from your parents, when you reach your teens; you get it from your friends and from your parents. However, when you leave home and you go to work, this changes. You, if you choose to, now get your business ethics from your management. Why? To further your career.
Taking all of this into account and from experience, the ethics of the business is determined by the appetite for risk that management have. If management is willing to discuss and act on the requirement for Risk Management and Corporate Governance, you will find that the company has a high level of ethics However; if management is not bothered you will find that the company has low or no ethics. You can also see it in the way that the company deals with its staff, do they treat them well or are they just paid slaves? Does the company put social responsibilities before profits or put profits before anything else?
This brings the question of how do you improve profits? Many financial people will give you a formula on what it is and how it is made but most seem to miss out on the ‘Human‘ factor. To increase profits, you must lower your costs or improve the efficiency of your work force. One way of lowering your costs is to automate the processes or to simply retrench some employees and get the remaining staff to work harder. This is what I call the cost of service, service in this instant could be a physical object, a call centre or customer support. When a company starts losing profits what is their first reaction? Yes you have it! Retrench, Retrench, Retrench. Look at what the major banks have done, they caused the current financial problem and their first action was to retrench. They do NOT retrench management; they did retrench the normal employee. On the other hand, some companies have, when faced with a loss of profits have chosen to keep the staff and cuts the salary and perks of management as management should have seen it coming over the horizon.
The European Union and especially the French have started to look at limiting the salary and perks of senior management. Why? They identified the fact that a company loses its ethics when management have the opportunity to increase their salary and perks. I hear the UK is about to do the same. Will it work? I believe so! Do you?
In summary I believe that there is ethics in business but that it is shown in few companies as the majority of companies are after the profits and the ability of management to improve their salary and perks. The companies that want profits but are will to limit their expectation based on their social responsibilities prove that there is ethics but unfortunately, these are few and far between.
Will governments be able to regulate and enforce social responsibility in companies? Only time will tell. I will not hold my breath and neither should you.
An ethical person is like a married man who knows he should not cheat on his wife. A moral man will not. I got it from NCIS which is a great show. Do you agree with the statement?
Cheers and We Aleichem As-Salam until next time,
Enjoy the rest of the week and may you and yours travel safely.
1. The primary function of a supplier,
2. The primary function of a consultant,
3. The differences between client and supplier,
4. The differences between supplier and consultant,
5. The differences between client and consultant,
6. Ethics as a consultant,
7. Ethics as an employee and
8. Is there ethics in business.