The Ethical Business Guide: Ethical Decision Making During Difficult Times

BY JASON WOODFORD
AI DIGITAL

ETHICAL DECISION MAKING DURING DIFFICULT TIMES

Many corporate social responsibility (CSR) practitioners in business are engaged in navel gazingright now. With the current economic uncertainty investments in general, and CSR budgets in particular, are being scrutinised more deeply.

When times get tough CSR is an easy budget to cut. However, when this activity is broken down into an organisation’s responsibility towards its people, the planet and making a profit for its shareholders, it all makes more sense to real businesses.

Smart companies are taking the opportunity to streamline their business models so they can survive and hopefully thrive through a recession, and this inevitably involves making decisions about costs.

Ensuring that decision making is legal is a ‘given’ but whilst there is plenty of advice available regarding the legal compliance aspects of employment law and decision making (for example the excellent RBS Mentor service) there is a distinct lack of guidance on how to make ethical decisions in difficult times. How does a business explore all opportunities to avoid the potential for redundancy in order to genuinely come up with some options that could save jobs, yet still achieve the necessary cost reduction?

It is commonly accepted good advice in this situation to “cut hard, deep and early”. Despite this, it is very easy for the heart to be swayed by the emotional arguments for saving someone’s job, despite the head presenting a strong counter argument to make sacrifices so that the rest of the business can survive to invoice another day. And this is where a culture of openness and trust, often brought about through CSR, can help companies to make the right decisions in difficult times.

THERE IS A DISTINCT LACK OF GUIDANCE ON HOW TO MAKE ETHICAL DECISIONS IN DIFFICULT TIMES

In our case we had a series of team meetings where the financial forecasts were discussed and the requirement to reduce costs was quantified and explained, with the result that a combination of changes was implemented including:

  • A hiring freeze so no new recruits were employed
  • Some directors took a short term pay cut
  • Staff volunteered to work fewer days
  • Some suppliers reduced prices and eased terms
  • Staff re-trained to fulfil other new roles in client services and SEO production
  • Closer monitoring of overhead budgets and efficiencies

The net result of this has been a reduction in the number of redundancies required to achieve the cost savings, a stronger understanding of the business by all staff and a better shared sense of being part of a team that is pulling together to be successful.

Trust is critical; it takes a long time to develop and can be lost in a flash. I’ve spent several years building a culture of transparency and openness with staff, customers, partners, suppliers and more recently, with shareholders and I believe that we’ve benefitted from that past investment throughout this process. The goodwill and mutual respect between employees has crystallised in everyone, including those under threat of redundancy, pulling together to continue working, to resolve problems, to win new business and deliver their best for current customers in difficult circumstances.

You don’t have to be a hippy to make ethical business decisions!

THE GOODWILL AND MUTUAL RESPECT BETWEEN EMPLOYEES HAS CRYSTALLISED IN EVERYONE

Professor Khalid Aziz, Chairman of the renowned Aziz Corporation, recently said: “In having to deal with and communicate bad news, a downturn exposes leaders who are muddling through without a plan. In the absence of full information, markets will assume the worst.

Companies which refuse to come clean risk a steady and persistent drip of bad news. Businesses in difficulty should disclose their position early and in full. That way they can often allay the worst fears of the market, while demonstrating that they are on top of the problem and have a plan to deal with it.”

It is in fact possible to replace ‘markets’ in the quote with ‘employees’.

AI Digital is now stronger in terms of both people and profit performance and although we still have a long way to go, in terms of achieving our business ambitions, we have a much better chance of being around to do something about the planet.

AI Digital is an award winning, digital and search engine marketing agency incorporating www.academyinternet.com and www.sitevisibility.co.uk which helps brands and businesses acquire, retain and build repeat business using the digital marketing channel.

For more information visit www.ai-digital.com

© BLUE ROCKET AND THE GOOD FOLK 2009