The uncertain future of an unethical company

Monday, 24 september 2018 | Redacción CEU

Despite the fact that society is less and less lenient, and requests and ever greater social commitment, ethics are yet to have an important role in many companies’ agenda. Most corporate decisions which are agreed upon on a daily basis within the framework of companies are solely related to strictly economic reasons. Growth remains the only variable when it comes to making decisions in the corporate world. What happens when companies take the ethical issue out of the equation? Is an unethical company a feasible organization? Can an enterprise grow if it ignores some solid values that go along with its management?

Will it boost both my workers’ performance and my profits?, an entrepreneur asks when faced with an explicit proposal for a greater commitment to ethics. There are no dumb questions, but wrong approaches. Ethics within companies should be an essential and unavoidable matter, rather than just a convenient alternative or an unimportant item on the agenda. In order to be viable, companies must adhere to a modicum of ethical principles, at least from a human and social perspective. However, this condition is rarely met.

What is the outcome when we come to a decision disregarding ethics?

Over the years, society has increasingly focused on ethical commitments and corporate responsibility. Some companies have reflected on it, and aware of their role as important agents of change they have started to implement policies on Corporate Social Responsibility. This change of approach is in part motivated by consumers’ growing demand for a greater ethical engagement on the part of companies. Naturally, conscious of how important an image of responsibility is for a business, investors and contributors have also played an active role. In spite of all this, ethics is still a pending issue for many brands.

On a daily basis, organizations make several decisions which can be guided by various reasons: they can be economic, pragmatic, personal, social, and so on. Even when both the principles and guidelines of a company are clear, some of these decisions may distance themselves from the corporate will, and ultimately, from the engagement companies have made with both their surroundings and their own organization. Nonetheless, companies are responsible for building an ethical framework. Only the company can boost, from within, a culture of values which is robust, and which can convey the importance of all the decisions made by its workers. To do so, leadership must lead by example. If managers neglect some specific principles, and they are not consistent with their behavior, their position will eventually run out of steam and it will not succeed in inspiring the rest of the team.

If a company disregards the impact its decisions have on the surroundings, it is reducing its chances of success, and undermining its ability to remain sustainable. Even if its viability is not damaged at the beginning – even succeeding in becoming a very profitable company eventually –, in the long run, the height of the cliff it is leaning out of will increase considerably. The fall may be fatal.

Answering the question posed by the unsuspecting entrepreneur at the beginning of this article, productivity and economic success are at risk when ethical issues are ignored or underestimated. Corruption, the lack of transparency and sensitivity towards the environment, and the absence of values are not harmless questions, they also take a toll. The future of an "unethical company" is much more changeable, unstable, and of course, uncertain.