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Ethical Issues in Small Business
There are many ethical issues that can arise in the course of operating a small business. A comprehensive understanding of the different types of ethical issues will help you to identify and handle these situations responsibly to maintain your core business values.
Many ethical issues arise as a result of human resource management. There are clear ethical issues in relation to the hiring, management and dismissal of the people who work in your business. An ethical approach to the recruitment process requires you to be upfront with the people applying for a position in your business. Job advertisements should clearly state the nature of the position and any questions regarding salary, job tasks, hours, timeframes and expectations should be answered as honestly and as thoroughly as possible. This protects both you and the applicant from having unrealistic expectations about the nature of the job.
The people who work in your business also have certain rights that are closely tied to ethics. Although occupational health and safety conditions are mandated by law in Australia, a business should also be bound by its ethical values to ensure that workers are provided with safe conditions in the workplace. Employees should also feel obligated to bring forward any potential health and safety risks that they notice to ensure the wellbeing of people working in the organisation.
When it comes to the difficult issue of employee dismissal, you need to be aware of some important ethical considerations. In Australia, employees should not be dismissed, unless a valid reason that is related to their employment can be provided. You also need to think about whether dismissing an employee is actually the best option in the circumstances or could you consider other options such as further training, job sharing or temporary leave.
Conflicts of interest can become a serious issue in businesses of all sizes. A conflict of interest arises when an individual or organisation is involved in multiple interests, where one could potentially corrupt the actions in regards to the other. For example, a manager interviewing job applicants would face a conflict of interest if a family member applied for the job. Their obligations towards helping out a relative could compromise their responsibility as a manager to hire the best candidate for the position. This type of situation is also known as an ethical dilemma, which is a complex situation where your moral or ethical obligations to different parties contradict each other, making it difficult to come to a resolution.
The appropriate use of business resources and facilities can also pose a number of ethical problems. Some businesses offer privileges to their employees or associates as a gesture of goodwill, however, people should avoid exploiting the generosity of the business by using them inappropriately or unfairly. Employees should also avoid using their business connections to gain an inappropriate personal advantage.
A business should adhere to a strict set of ethical standards, when accounting and providing reports to stakeholders. All information that is provided should be done so on the basis that it is accurate, timely and comprehensive. Providing false or misleading information is not only unfair and irresponsible, it is also against the law.
There are also a number of ethical issues that can be raised in regards to certain industries, the products they sell and the way they market their products. A couple of common examples are the tobacco industry, which sells products to consumers that are proven to be detrimental to their health, and companies that sell unhealthy food, which have been accused of marketing directly to children. Ethical dilemmas arise because the products they sell are in not illegal, yet the negative impacts on society are considered significant.
As a business owner, you need to make your own decisions in regards to the ethical standards and moral values that you maintain in your business. By following a carefully and thoroughly thought out set of business principles, you give yourself the best opportunity for achieving sustainable business success