When we talk about ethics violations, we immediately think of CEO or some kind of Wall Street scandal, rarely realizing that it happens more often in the bottom half of the workforce than in the glass tower. . Violations of ethics in inventory management are committed by:
1. Knowingly providing inaccurate information to customers or prospective customers about the price of storage space or other services, and the status of your inventory.
2. Favoring one vendor over another when purchasing goods or services because you have a friend who works for the preferred vendor or for potential financial gain.
3. Concealment of damaged products leaving a shipment.
4. Manipulate inventory numbers and levels when the customer questions your inventory levels or when management inquires about inventory status.
5. Reduced work to earn overtime.
6. Give preferential treatment to certain employees for possible future earnings and friendship.
These are just a few examples and I’m pretty sure if you look closely at your organization you can find many more. Why do these ethical violations occur? One reason is the lack of a code of ethics. The Code of Ethics is a specific set of professional behaviors and values that employees must know and respect, including confidentiality, accuracy, privacy and integrity. Large organizations have a code of ethics, but violations occur because the standards are not enforced or management feels the violation is not worth it.
Small and midsize organizations lack a code of ethics program because they don’t know how to develop one, it’s not important to them, or it’s too costly in terms of money and manpower.
Enron and Goldman Sachs are good examples of why it is important to have a code of business ethics. In the business world the bottom line is making money and there is nothing wrong with that but when it consumes your organization and you take the attitude of earning it at any cost then that is when the problem comes out and people will whatever. they can be ethical or unethical to make money.
A code of ethics will keep people within certain limits of what is acceptable in the organization in terms of behavior and business practices. The reality in the business world is that profits rule and as long as shareholders are happy, and there is full employment in companies, no one seems to care and ethics take a backseat to everything else.
With so much talk now about morality in business and the state of the world’s financial affairs, ethics is even more important today than ever before. Journalists are on the lookout for the next business scandal and will unearth every stone to expose one, after all, it sells news. Traveling and working in Asia, I have found that Asian culture is less sensitive to the actions of business, not that they don’t care, they just don’t consume their every waking moment and are not quick to judge like Western nations.
Operating with honest principles and ethics is no less profitable than operating unethically. LeClair, Ferrell, and Fraedrich, in their book Integrity Management (1998), describe five well-known successful companies that have invested organizational resources and are making a profit and operating ethically.
1. Hershey Foods
2. House deposit
3. Waste management
The old myth and saying “it’s not personal, it’s just business” is as hollow then as it is now. Business is personal, especially when you take the time to build a business relationship with vendors and customers to the point where they trust you, and acting in an unethical manner is sure to destroy their trust in your product or service and make it almost impossible rebirth.
