A FORTNIGHT ago, we looked at the ethical dilemma facing some corporate businesses.
Later on, in the previous week’s edition, we looked at how the accountancy profession is poised to handle such dilemmas.
From the onset,  it is important that we bear in mind that ethical behaviour encompasses a broader range of aspects rather than just an individual’s or corporate judgements on whether a conduct would be considered right or wrong.
Ethical principles affect how companies and their respective employees behave, the choices they make and how these companies compete, the quality of products and services that they produce and offer.
Decisions taken within the company may be made by individuals or groups, but whoever makes them will be influenced by both the national and the corporate culture of the company.
In the United States for example, the public expects a product to be absolutely safe in normal use as is reflected in the strict liability theory.
In the European Union, the public expects every product to meet standard specifications. However, this expectation varies across national cultures within the region.
For example; Volvo creates and builds motor vehicles based on the Scandinavian culture which emphasises protective and systemic safety, as reflected in their elaborate national social welfare systems.
Additionally, Ferraris build motor vehicle architecture based on manoeuverability because Italian culture essentially emphasizes safety by taking individual action.
The above examples entail that corporate businesses operating in each and every given national territory are expected to conform to the ethical expectations enshrined in the given cultures.
A knowledgeable buyer would for example prefer a Volvo over another motor vehicle brand due to the ethical attribute in safety in its design.
Companies with strong ethics programmes have found that these efforts can decrease vulnerability to potential costly fines, improve reputation, and provide increased access to additional capital.
This too, inevitably and positively affects employees’ commitment to work and inevitably fosters customer loyalty.
International businesses increasingly face the risk of failure to comply with international laws and regulations, product and quality Standards.
Any default in terms of the inability to comply with these onerous requirements can be costly in terms of brand reputation customer loyalty and consequently loss of business.
Additionally, the development of a strong corporate ethical position can greatly reduce the incidence of fines resulting from inability to comply with laws and regulations, fraudulent and other unlawful conduct.
For global businesses with operations abroad and overseas, it is imperative that such undertakings develop ethical practices that enable the necessary skills to provide reasonable assurance that their employees can make ethical decisions regardless of where they are placed.
This therefore decreases a company’s vulnerability to unethical conduct and the potential impairment it can cause to profitability, brand image and the overall business well-being.
We should also note that even in Zambia, there are established links between certain Chief Executive Officer’s (CEO’s) and corporate reputation.
When certain CEO’s are at the helm of some companies, their ethical reputation enhances a company’s ability to attract investment capital and recruit top talent.
Companies addressing ethical, social, and environmental responsibilities have growing access to capital that has not otherwise been available.
A combination of a strong corporate culture and ethics are a vital strategic key to survival and profitability in a highly competitive era.
Inevitably, enduring corporate attitudes, sound values, and practices are the basis for long-term achievement.
More recently, business research has shown a positive correlation between the existence of corporate ethic programmes and financial performance.
Corporate businesses with a consistent commitment to ethical principles perform better financially than those that do not.
On the other hand, Companies with adverse publicity about unethical corporate behaviour lowers stock exchange performance on their investments.
Business research further reveals that a company’s ethical integrity directly influences prospective employees decision to work at the company.
No one would ever take pride to work with a company that has a poor ethical stance and image.
Additionally, employee surveys indicate that ethics is one of the most important factors for employees in deciding where to work.
In some cases this even precedes quality, service, or price.
A survey conducted by Bozell Worldwide, and the Wall Street Journal International edition revealed that business ethics matter to consumers.
Another study also revealed that when compared with other significantly important general corporate citizenship categories or activities, ethics and values  ranked highest in the United States and Europe and third highest in Japan.
As we have already alluded to, ethics inevitably are a critical aspect of every corporate business.
Global business trends are increasingly emphasising the growing importance of ethics, social and corporate responsibility as well as environmental considerations when doing business.
There are enormous benefits for corporate businesses to pursue ethical considerations in their dealings as well as in the design and creation of their products and services.
For comments e-mail: ntumbograndy@yahoo.com Mobile +260977403113 +260955403113
The author is the Managing Consultant at GN Grant Business Consultant, a fellow of the Association of Chartered Certified Accountants (ACCA), a Master of Business Administration (MBA) holder and a candidate for the Herriot Watt University (Scotland) Doctor of Business Administration (DBA)