SMU Launches ‘Ethics and Your Business’

Is there really a right way and a wrong way to do business? Business ethics involve the legality and morality of company practices and behaviors. In most cases, it’s pretty clear. It’s obviously wrong to cheat or steal from employees or customers. Calling an honest competitor a crook just to win a sale may not violate any law, but it’s a clear violation of what’s right. What about poaching that competitor’s best salesperson? Many would say that’s fair game. Ethics is situational and it requires a strong moral compass.

As part of their internal culture, many leading companies emphasize Corporate Social Responsibility, looking beyond the benefits to the enterprise toward the welfare of the community at large. Steel mills tout their energy efficiency and cuts to harmful air emissions, for example. Service centers and manufacturers set goals for hiring female executives, minorities, veterans and the disabled.

There is a cost associated with corporate responsibility, with reducing waste or donating to a local charity. When business is good, it’s relatively easy to be responsible. When times are tough, the temptation to bend morality in search of a competitive advantage can become overwhelming. In our capitalistic system, the prime directive of every business is to hold the interests of its shareholders above all else. Thus, corporate responsibility poses an inherent conflict, especially for smaller firms with fewer resources.

But a reputation for ethical behavior and social responsibility can cast a favorable light on the company and contribute to the bottom line. Supporting shareholders and society are not mutually exclusive.

Steel Market Update believes the longer-term view of responsible and ethical actions will ultimately win if recognized and supported by the industry. Unethical behavior will eventually ruin reputations and a company’s ability to exist. There is an example of the galvanized service center that had a reputation for misrepresenting the steel it sold into the marketplace. Over time, the service center went out of business (and for some reason had no buyers). Was the company ethically bankrupt and is that what caused its demise?

Steel Market Update wants to do all it can to promote and support ethical business practices and social responsibility in the steel industry. For that reason, we are launching a new segment in our newsletter and on our website. Periodically, we will provide commentary and interviews with industry thought-leaders on the subject of ethics from various points of view–corporate, educational, governmental and others. We welcome your comments, as well; just send an email to Tim@SteelMarketUpdate.com. We hope you find it interesting and inspiring.

Remember, the true message of Wall Street, the film, is that greed is not good. Gordon Gekko was no hero and he ended up in jail.