Looking at the big picture is a good rule of thumb, but it’s particularly important these days for small-business owners.
Whenever I hear the phrase “business ethics,” the first thing I think of is when it goes bad, particularly for huge national companies such as the Enrons of the world. But Western Washington University dean Brian Burton has been getting the message out that small-business owners are faced with ethical decisions every day. Last week he spoke at a Northwest Business Club meeting about that topic and how all business decisions have a moral component.
Talking to Burton after his presentation, I was interested to hear about the experiences that led him to become dean and professor of the MBA program at the Department of Management. Before getting into academia, he owned and operated a small video-production company. He closed it after two years, after a major client filed for bankruptcy just before Burton submitted a big bill. Looking back, the decision to close was the right one, albeit a painful one, for him.
“For years afterward I couldn’t drive by the office after it had failed, it was that painful for me,” Burton said.
Operating the business did give him insight, however, about business ethics, something he now teaches at Western. While small-business and large-business owners make similar decisions every day, they face different potential hazards. A CEO of a large business may be tempted in a wide variety of ways to make an ethically bad decision, but a big company usually has procedures in place and most likely has someone watching them closely. A small business is someone’s passion, so they put in long, grueling hours. In that situation, it is easy to lose a sense of perspective.
“It can become hard to remember that there are worse things than losing a business, such as going to jail or losing friends and family from bad decisions,” Burton said. “Most small-business people realize that, but it can be forgotten if you are too wrapped up in the business and not looking at the bigger picture.”
The potential dilemmas can become frequent during an economic slowdown, especially when there are tough choices to make in the short-term.
“If you explain yourself to people and why you’ve made a decision, they may be disappointed or maybe not agree with you, but they will appreciate the fact you were honest with them,” Burton said.
Along with keeping the big picture in mind when making decisions, it’s also important to seek advice, Burton said.
“Find someone you can trust and don’t hesitate to ask questions,” said Burton.
The one debate many of his colleagues wrestle with is the idea of whether being ethical in business is profitable in the long run. Many examples show that doing the right thing improves the bottom line. Burton doesn’t think it’s possible to conclusively prove it to be the case, and doesn’t think it should.
“I think it would lessen the value of being a moral person. What’s more important is just doing the right thing.”