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I have seen successful businesses fail, have witnessed profitably running businesses suffer defeat and some seemingly effective corporate receive a great fall in their profits and popularity. One of the main reasons behind these surprising failures was the lack of business ethics. A true understanding of the right and the wrong and the ability to differentiate between them is ethics. Ethics is an important part of life and should be just as important in the approach taking when trying to run a successful business.
I believe strong ethical values are the core strength of any successful business; the attitude of a businessman creates the attitude for his/her company, which in turn sets the work culture of the business organization. For a business to thrive and maintain its wealth, it needs to be founded on certain ethical principles. A business that is based on ethics can run successfully for long years. Money makers who do not heed to ethical values can only earn a short-lived success. To last long in the market, business ethics is essential.
For a business to achieve lasting profits, customer relationships are paramount. The credibility of a business, its customer service, its customer care, its way of dealing with customers and its urge to retain existing customers, is a huge part of ethics in business.
Business ethics can leave a long-lasting mark on the customer and this is what ultimately makes up their minds for returning to that business and indeed recommending that business to contacts. If you build trust, not only will you retain customers but word of mouth will reach prospective clients. To gain a long-standing relationship with customers and achieve customer return for the business, the business needs to be based on ethics.
People who seek motivation behind being ethical should understand that they are ethical by definition. Ethics is an integral part of running a business and hence ethical values accompany business by default. Without following certain ideals in business, one cannot become successful. Success that is attained without a foundation of strong ethics is bound to be short-lived. A business cannot continue to prosper without an ethical base. A few successes can be coincidences or flukes but lasting success can only be a result of a strong foundation of ethics.
Most businesses are concerned about making money for the business and rightly so. However, some businesses make bad decisions and seldom bother to base the core of their business on ethics. This is a huge mistake and 9 times out of 10 end in the disaster. At times, ethical duties of businessmen and project managers should be more predominant than even the business laws. The successful business understands that ethics is more about earning long-lasting relationships. In a successful business ethical values should be placed way ahead of earning money.
The term 'business ethics' was introduced in the United States in the early 1970s. By the mid-1980s courses in business ethics started to reach students using some twenty textbooks and at least ten casebooks along supported by professional societies, centers and journals of business ethics. The Society for Business Ethics was started in 1980. European business schools adopted business ethics after 1987 commencing with the European Business Ethics Network (EBEN). In 1982 the first single-authored books in the field appeared.
The benefits given by the business organization should not be used in an unfair manner. The use of company resources for personal benefits and taking an undue advantage of business resources is completely unethical. A modest use of resources should be displayed by everyone from the top down. Using the wealth of the business for personal reasons is not ethical e.g. using company funds for personal reasons. The careful and thoughtful use of company resources is a part of business ethics.
Accepting bribes, pleasing the so-called 'important' clients, favouring a part of the customers while being unfair towards the others is against ethics in business. Even though the primary aim of any business is to maximize profits it must not do so by unethical practices. A business is there first and foremost to cater to the needs of society and work towards benefiting the masses.
Ethics remain an important component for any business and strong ethical values shall take the business a long way.
Experts in business management and researchers have recommended that businessmen and company professionals study ethics. They have stressed the importance of founding business on ethical values and following through with them. Management professionals are urged to stand by ethics and accept it as an important factor in the running of their business.
Not only do ethics apply to the overall moral views of a company they apply to all aspects of business conduct and the conduct of its employees.
Interest in business ethics accelerated dramatically during the 1980s and 1990s within major corporations. Due to the explosion of technology in the last quarter of the 20th Century the once controlled world market multiplied and new corporations where set up at an alarming rate.
This dramatic increase coupled with a changing society caused what was once accepted behavior to become objectionable. A good example of this is how companies once drafted advertisements for positions. As recent as 30 years ago a company could request that certain races or nationalities need not apply for positions. If this type of racial discrimination was displayed today there would uproar. It is common today for most major corporations to promote their commitment to non-economic values under headings such as ethics codes and social responsibility charters. Due to the change in society ethics came to the forefront of almost every business and corporation in the world. Firms started highlighting their ethical stature in the late 1980s and early 1990s, possibly trying to distance themselves from the business scandals of the day. Today, the ethics of a business can determine if a business will succeed or fail.
During the Celtic Tiger years in Ireland, ethics slowly but surely slipped further down the list of a business's priorities. Some already well established businesses jumped on the gravy train and sacrificed ethics for profit. The new dot.com businesses that emerged at the time almost had no business ethics. The Irish attitude of "put up and shut up" didn't help and these greedy "businesses" made millions off a distracted nation. Blind sighted by greed we accepted this new attitude and until recently put up with unethical business practices on a daily basis. Now in the midst of a recession only the ethical have survived.
Part 2: Take an example of a business model, where you feel the company, failed or excelled at dealing with ethical issues.
I have chosen Ryan air as an example of a company who in my opinion has drastically failed when dealing with ethical issues.
Ryanair is one of the most hated airlines in the world because of its business ethics. Their treatment of the customer leaves a lot to be desired and has brought bad press on the company time and time again. Whatever happened to the customer is always right? This company certainly doesn't abide by this common turn of phrase. They continue to exploit and annoy both customers and staff on a very regular basis, so why are they still in business?
Everyone is looking for a bargain and even more so in recent years. One could argue that the customer is well aware of the terms and conditions of Ryanair when they are booking the flights. They do after all advertise as a "no frills" airline. You are getting what you pay for. This is the most common response given by the company when confronted time and time again with angry customers.
So where do ethics come in? Are Ryanair ethically wrong in their treatment of customers? The customer has already booked with them knowing full well what service to expect. The answer is yes. Ryanair are unethical in their business practice regardless of how "truthful" they are at time of booking.
The amount of extra charges they have is way higher than any other company offering a similar service. British Airways have a fantastic "Value Calculator" that clearly shows the false economy that is flying with Ryanair. Check it out at: http://www.britishairways.com/travel/value-calculator/public/en_gb
Ryanair's administration expense must be one of the most expensive charges they have. Below are some of the "extras" the customer is charged:
Forgetting a boarding card or just not having the facility to print one off before you arrive at the airport will cost you â‚¬40.00.
Not having the facility of a home computer or internet service (which most elderly customers wouldn't have) will set the customer back £1.00per minute to talk to a customer service representative and book over the phone.
Waiting to put in a complaint over the phone will cost the customer 5p per minute.
Their extra charge apparently goes towards their costs that are not met during the winter months when aircrafts are grounded in certain countries.
A fantastic example of how unethical their business practices are displayed in the following extracts from newspapers over the years.
Ryanair charges for boarding passes ruled illegal by Spanish court
Saturday, January 15th, 2011
Ryanair, the World's most hated airline, have been told by a Spanish court that their rip-off fees for failing to produce a printed off boarding pass are infect illegal.
The pathetic excuse for an airline charge a whopping £40 if you turn up for your flight having forgotten to print off a boarding pass but Judge Barbara Maria Cordoba Ardao, sitting at Commercial Court Number One in Barcelona, ruled that Ryanair was breaking international law by imposing the levy.
What a bunch of filthy thieving bastards!
She added that responsibility for printing the boarding pass had always rested with the airline.
A spokesman for the Civil Aviation Authority said that the Spanish ruling would have to be upheld in the European courts before it could be enforced at British airports. Fingers crossed that this happens soon and that Ryanair are forced to drop this shady practice. Furthermore, Ryanair should then be forced to refund all the charges already made.
A spokesperson for Ryanair said "Over 99.9% of Ryanair's passengers used our web check in facility last year".
So that means that almost 750,000 passengers did not use it. This equates to over £29m in illegal fees. Pay up Ryanair!
Ryanair delay causes hospitalisation of children due to dehydration
Friday, December 31st, 2010
Ryanair, the World's most hated airline, are being blamed for the hospitalisation of a nine month old baby and it's three year old sibling earlier this week after they, along with the other passengers, were forced to endure a five hour delay on a plane stuck on the ground.
The children ended up being rushed to Temple Street Children's Hospital suffering from dehydration after they were finally allowed to leave the aircraft.
Their ordeal began after a Christmas flight from Dublin to Eindhoven in Holland was cancelled because of heavy snow, but passengers were kept waiting onboard. After three hours their father asked if he could buy a sandwich for his three-year-old, who was "shaking from hunger". However, he was informed it is "not company policy to sell food while the plan was grounded".
The children were so tired, hungry and dehydrated following the mammoth delay that they had to be taken by ambulance from Dublin Airport.
Their father, who does not want to be identified, said blizzards hit the airport as the plane was due to take off on the afternoon of December 23. The disgruntled passenger insisted "people were treated less than human beings" during their lengthy ordeal.
All they had to eat during the five-hour delay was a doughnut given to them by another passenger who dug it out of their luggage. A young woman who was also on the plane collapsed and had to be taken off the jet, according to the man from Palmerstown in Dublin.
When the family and the other passengers were eventually allowed to disembark at about 8.30pm, most of them had to stay at the airport as there was no transport. The family was still in the departure lounge at 2am when the man's children began running temperatures. An ambulance was called and the whole family was taken to Temple Street where the children were treated.
"They (the paramedics) were brilliant. They got us into the ambulance, brought us to hospital and stayed with us. They said it was their 40th call to Dublin Airport," the man said. He and his partner finally made it home with their children at about 4.30am.
Ryanair demonstration on how to publicly humiliate passengers
Friday, November 12th, 2010
Ryanair, the World's most hated airline, are well known for their draconian behaviour when it comes to carry-on luggage restrictions.
However, this often results in creative ideas by passenger's intent on getting round any extra charges.
A group of young ladies were recently filmed as they were forced to unpack as much of their luggage as possible, putting on many layers of clothing just so that their bags fit in the carry-on luggage "sizing" contraption.
Whilst the video is hilarious, it does also highlight just how ridiculous Ryanair's rules are. The same total weight is still boarding the aircraft proving that this is simply a way of generating extra revenue based on the fact that many passengers will simply cough up the cash to avoid the humiliation.
Ryanair accused of providing 'slave contracts' for Norwegian cabin crew
Tuesday, October 19th, 2010
Ryanair, the World's most hated airline, have featured heavily in the Norwegian press over the last few days regarding employee conditions that one anonymous cabin crew member refers to as "slave contracts".
Moss-Avis, a Norwegian news website, spoke with the unnamed Ryanair employee this week about the issues that staff face. He said that if Ryanair found out who he was that he would be fired.
The problems he highlighted include low wages of about 1300 Euros per month. This is so low that the Norwegian immigration authorities did not believe it was possible for someone to live on such a meagre amount.
It has also been reported that cabin crew at Ryanair will be paid only for the hours they are in the air. Any delay or cancellation results in no pay. And then, once you're in the air, the pressure is reportedly very high for the crew to sell as much as they can with some staff on commissions.
I tend to steer well clear of Ryanair and suggest you do too. Why not try a proper airline that will actually fly you to the place you think you are flying to, won't charge you rip-off fees for baggage, using a debit card to pay and checking-in and, furthermore, will treat you with a little respect, something that the stories above demonstrate Ryanair find difficult to do.