Page 174 - Introduction to Business

148 PART 1 The Nature of Contemporary Business

handling customer orders than more experienced employees. It is imperative that
new employees receive assistance from the other employees, as well as continued
training, to become effective workers. Some existing employees may receive added
compensation for training duties to motivate and reward them for excellent work.

Ethics in Entrepreneurship
Business ethics comprise moral values, standards of behavior, cultural norms, social
customs, and legal systems. A small business manager needs to understand the laws
that affect the firm’s activities and communicate them to the employees. Laws per-
taining to discrimination, personal abuse, and human rights are especially relevant
to ethical issues. People have rights as citizens that businesses must respect.
Organizational policies and procedures regarding interactions among workers,
customers, and other individuals and businesses are on another level of ethical
standards. Each business should create a written document that clearly states the
entrepreneur’s guidelines for ethical business practices. Can employees use equip-
ment, such as phones and computers, for their personal needs? Which personal or
family emergencies can be excused to allow employees to temporarily leave work?
What are the privacy rights of employees in their use of e-mail messages and other
forms of communication? Employees should receive a copy of the document and
be advised that violation of policies and procedures with respect to ethical conduct
can result in dismissal.
Another application of ethics in business is an entrepreneur’s personal philos-
ophy about how people should be treated. It is difficult for laws as well as firm poli-
cies and procedures to cover all dimensions of such a complex concept as ethics.
company credo A business philosophy Sometimes a company credo or code is developed to highlight an ethical philoso-
that provides an ethical standard for a phy. What is the difference between right and wrong? What standard should be
firm, as well as its managers and
applied to ethical problems that inevitably arise in human interactions in a
employees
business firm? To which values should employees adhere in their work duties? A
business philosophy can give guidance to people within the firm about how to
deal with ethical challenges. One way to operationalize a business philosophy is to
set out a list of principles that are consistent with the philosophy. Each principle
of conduct should give a concrete example of how employees can apply the firm’s
philosophy to their work. For example, a common business assumption is that
customers are critical to the firm’s future success. As such, the principle that the
“customer is king” implies that even if a customer seems unreasonable, she or he
will be treated with all due respect and every effort will be made to satisfy the cus-
tomer’s demands. When an employee is not sure how to handle an ethical prob-
lem, the entrepreneur and employee should discuss the best course of action
under the circumstances.
It is conceivable that a decent person will engage in an unethical act. The
stresses of everyday life as well as competitive pressures facing the firm can cause
employees to suffer lapses in ethical behavior. Also, sometimes people make mis-
takes because they do not foresee an ethical dilemma until it happens. These ethi-
cal blunders are bound to occur. Entrepreneurs need to be flexible and implement
policies that accommodate ways of overcoming ethical mishaps. Naturally, an
employee who repeatedly makes ethical mistakes should be counseled and may
have to be released if counseling fails to correct lapses. When hiring employees, it is
essential to discuss ethical business practices in the interview process so that they
know what is expected by the entrepreneur.
Finally, ethics in business encompasses social and environmental responsibil-
ity. Today, many educated customers want to buy products and services from firms

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