By Bakhtawar Khalid
In the light of recent hoarding and price manipulation scandals, the business industry has developed a reputation for its lack of ethics. In an industry where getting ahead and making money appears to take precedence over ethical decision-making, it can be difficult to understand the importance of ethical behavior in business.
Lack of business ethics and commitment to compliance leads to a wealth of problems for a business; for instance, they can face:
- Fines and long-drawn legal battles;
- Criminal charges against those involved;
- Negative effects on employee motivation may create an air of distrust among employees and tension created from such an environment hinders collaborative work. Unethical practices incentivize employees to skip protocols resulting in increased paperwork and sometimes repeated efforts;
- Unethical practices promoted by company leaders result in a loss of respect from employees. If publicly disclosed, this leads to a loss of credibility and customer confidence;
- It might result in business disruption – any business activities that may be affected by compliance violation consequences or legal holds;
- Productivity losses – business productivity is generally impacted when compliance violations are levied against a business;
- Revenue losses – revenue can certainly be impacted by regulatory violations and the consequent fines and damage to the market repute and credibility;
Although creating an ethical culture is important for sustainable business growth, creating a level playing field in the business environment requires constant interactive dialogue and advocacy by the business community with government officials. Transparency International’s 2019 Corruption Perceptions Index (which ranks 180 countries and territories by their perceived levels of public sector corruption) showed that more than two-thirds of the countries scored below 50 on a scale of 0 (highly corrupt) to 100 (very clean).
What is trust and how does it relate to business?
Trust is defined as “our willingness to be vulnerable to the actions of others because we believe they have good intentions and will behave well toward us.” Trust is given when an individual or an organization exhibits evidence to safeguard your interests through repeated action. For businesses, trust refers to organizational policies and operations that deliver on their brand promise.
Businesses build trust among customers when they repeatedly deliver what they say they do, whether it be high quality, great service, or the most unique or most affordable product. Trust is lost when businesses fail to deliver on their promise and when they exhibit interests that are markedly different to the communities they are operating in.
During the corona-virus lockdown, we saw many businesses dedicating their corporate social responsibility budgets towards impacted citizens, service delivery riders involved in ration distribution and restaurants making lunch packs for frontline professionals. However, we also witnessed the flipside of businesses using this emergency as an opportunity to hoard and manipulate the prices of wheat, sugar, petroleum, and even life-saving drugs. In this difficult socio-economic situation, it is a real challenge for businesses to survive but being empathetic towards their customers goes a long way in building customer loyalty.
How can businesses be empathetic towards customers and display integrity in their operations?
Developing products, services and organizational policies while keeping the human experience at the center is a great way to show that your organization cares. We are seeing more Pakistani companies developing this human-centric approach in their communication and public messaging during the COVID-19 pandemic.
For example, Ufone’s campaign during COVID-19 “Humein hai App ka Khayal” stood out. In these difficult times, Ufone is now giving its customers free calls to medical centers, emergency services and help-lines. Establishing a code of conduct and ethics policy helps to maintain an ethical culture within the organization.
While upholding internal standards of integrity, the business community of Pakistan should also focus on rebuilding the trust with the government and customers by adopting transparency in their practices. There are a few good examples of this in Pakistan. Amidst this outbreak of unethical practices witnessed by wheat and pharmaceutical sectors in Pakistan, there are still industry giants working with the government and private sector to help their communities come out in this crisis. Their efforts help build their credibility and should encourage small and medium enterprises to emulate their behavior. Allied Bank contributed Rs. 60 million to PM’s Corona Relief Fund and in support of NGOs and hospitals across the country.
It also provided direct financial assistance to the country’s leading hospitals: Shaukat Khanum, Dow University, Indus Hospital and the Institute of Public Health, Punjab. The Atlas Group committed Rs one billion per month to pay all employees irrespective of lockdown. It will also ensure that its 200 vendors and 2,000 dealers do the same. Cyber net enhanced the bandwidth to allow people working from home to connect. Additionally, Engro Foundation, the social investment arm of Engro Corp signed a collaboration agreement with the Bill and Melinda Gates Foundation to address poverty alleviation, health, and nutrition.
Another approach often adopted is to collaborate with community influencers of concerned communities. Certain institutions have a strong influence over the relationship between business, government, and consumers. In Pakistan, these intermediary institutions are civil society watchdogs, business intelligentsia, and well-known business education institutions. These comparatively new stakeholders have expertise and knowledge about business dynamics and generally use media to wield influence. These institutions profoundly impact not only the peoples’ trust and reputation of the business but also the government’s business policy.
A great way of rebuilding the trustworthiness of businesses is by contributing to society. This will help communities identify you as community partners. For example, often we witness big brands sponsoring community parks, university gyms and playgrounds communicating that they are invested in the growth of this community and like to support their interests.
The business community of Pakistan has had a very confrontational relationship with the authorities. There is a need to shift this relationship to an interactive and proactive one. We need to recognize the benefits of reconciliation and a positive approach towards business regulations and develop close coordination with the regulatory bodies. A close interaction will help both the partners understand each other’s positions and achieve the intended results of the dialogue.
Building trust is all about taking decisive action to not only safeguard your own interests but also safeguard the interests of the communities we are working in. Building stronger oversight and advocacy organizations – including the business community – offers a good start.
Article originally published by the Sustainable Development Policy Institute