If it’s legal, it’s right. That’s what many say when asked about some sort of business practices. And yet, recent history shows us the importance of ethics while pursuing business objectives.
Regulation will always be behind business
This era of digitalization, the use of artificial intelligence and data processing tools, along with changes in people’s perceptions and expectations is opening the door for many new business models.
In the US, they’ve popularized the term gig economy to refer to a labor market that relies on temporary and part-time positions filled by independent contractors and freelancers. Its aim is providing more efficient and cheaper customer services using technology as the main driver. On the other side, gig workers trade off flexibility and independence for job security.
Generally, regulation goes behind business. This means that, especially when a new business model comes out, there’s a gray zone around legality. These non-regulated practices, good for the business, are not usually considering the consequences on the rest of the system.
Good business makes good ethics?
What happens when managers actually consider business over people to make their decisions?
At this time, every business is a data business. The amount of information a company collects about customers is huge. They collect, measure, integrate, and evaluate data to turn it into actionable information which can be considered into the day-to-day operations. This is done for workers too to enhance their engagement, improve their motivation and reduce talent loss.
For many companies, it’s temping using workers’ information to pursue business results at all costs, deteriorating employees’ conditions just because there’s a more convenient regulation somewhere else, or no regulation at all. Offshoring of factories to countries with a soft labor regulation, or transportation business with a freelance workforce using tricks to keep drivers on the road, can be good examples of this.
None of these practices were illegal when companies did it. And yet, should we consider the ethical side of the problem?
Should any company pursue business results without considering the impact around?
Back in 2008, we suffered the worst financial crisis of the last decades. There was an implosion of the financial market, and yet none of those activities were illegal. They just were unethical, and produced great harm.
After episodes like that is that we can see the importance of ethics and why this should not be only something written in a business report to comply with the law. An ethical company culture is needed to provide a basic framework, and businesses must be conducted within these limits.
Otherwise, we’ll grow businesses highly profitable in the short term but not sustainable in time.