A few months ago, German automaker Volkswagen was rocked by an emissions scandal that is still affecting business today.
The scandal, which can only be described as a complete disregard of ethics, has seen sales in different markets plunge.
Josiah Charles Stamp, a British economist, once said: “It is easy to dodge our responsibilities, but we cannot dodge the consequences of dodging our responsibilities.”
Ethics departments
In light of this, does it make sense for companies to have ethics departments in their structure?”
In general, most companies measure the success of their businesses by profit margins and revenues. Many such enterprises have not integrated the principle of business ethics as a measure of success.
Yet, companies that have ethical offices have continuously witnessed growth of their businesses as they have changed their focus from money to people.
L’Oréal, for instance, is committed to building high ethical standards and a genuine engagements with its customers.
“A company with strong values is a company you can trust, and trust is the biggest asset a company can have,” said Emmanuel Lulin (pictured), the cosmetics’ firm senior vice president and chief ethics officer.
He added that L’Oréal emphasises four core values: respect, integrity, courage and transparency, which it insists on in all the countries it operates in. It has integrated an ethics office in Inter-Consumer Products (Nice and Lovely, a recent acquisition in Nairobi’s Industrial Area.
“Our ethics officer doubles as the operations manager. He has ethical documents in his office, some of which he gives to employees, others he puts in strategic places.”
Mr Lulin said the company has set aside a day to discuss issues of ethics. For its efforts, L’Oréal’s has been nominated six times by the World’s Most Ethical Company gong by the Ethisphere Institute, a leading business ethics think tank.
“Our ethics programme is a values-driven programme as opposed to a programme driven by law. We believe an ethics programme based on compliance only is a failure of the mind. It should be driven by compliance and by values,’’ said Lulin.
“To lie is not a good investment at all. Respecting the law starts by paying the taxes required, even if it may lead to a slightly higher prices.”
Sustainable business
Double standards also have short-term benefits, yet risk hurting everyone in the value chain, which Lulin said caused the Volkswagen scandal.
“We decided that having ethical behaviour is the best way of doing business. It is a sign of maturity and will give a business a healthy long life, and therefore, sustainability.’’
A lack of ethics, he said, has seen many global companies shut down due to huge losses that result from unethical decisions.
“Companies should not just be concerned about selling huge, but also selling better, as this will lead to sustained sales. It is not just about striking a better deal at first sight, but also a second deal.
“You may have huge sales once, but not sustainably because clients may discover you quoted an exorbitant price, or it was not value for their money, or the products were not safe,’’ said Lulin.
