I recently conducted the latest in a series of interviews with successful Welsh entrepreneurs to try and discover what makes them, and their businesses, tick.
Thirty detailed interviews have been carried out to date (some are on video here), and the information gathered will, undoubtedly, lead to the production of some key academic papers in the field.
One of the key questions we ask during face to face conversations with the entrepreneurs is whether the values of the business reflect their own personal values. The aim of this is to probe the extent to which business ethics play a key role in the strategic development of the business.
The responses to date have been encouraging, despite the fact that many may think that ‘business ethics’ is an oxymoron, particularly in more entrepreneurial ventures. This variance to the accepted norm in our research findings reflects the high ethical values espoused by many growing firms in Wales.
Business schools have as much to learn from the personal behaviour of many Welsh entrepreneurs as they do from large conglomerates.
During the interviews, the term ‘honesty’ was used more than any other, along with the expressed belief that having an open style of management with employees, customers and suppliers could only be of benefit to the business.
For example, one business owner emphasised the importance of his relationship with his subcontractors where a policy of paying on time meant that, when one-off pieces of work needed to be done, the suppliers were more than happy to go the extra mile to help.
Another stated that, when attacked by their largest competitor, the approach undertaken by the business had shown the bigger company to be engaged in ‘corporate bullying’ and customers had moved across to the smaller firm because of their disdain for such practices.
It is therefore heartening that they are not only distinguishing between what is morally right and wrong in business practice but are actually setting standards which every organisation in Wales should follow.
Perhaps the difference with small firms is that the entrepreneur can set the moral direction for a company that all of its employees and stakeholders must acknowledge, if not follow. In many larger organisations, individuals in senior positions can often get away with ethical behaviour that benefit them personally but does little for the business in which they work.
I recently had personal experience of a situation where a 'respected' senior manager had consistently ignored standards of ethical behaviour in such a way that would have shocked many colleagues.
Yet this individual’s employer, a large organisation normally of the highest ethical standards, had done little to condemn this behaviour, even after discovering what had gone wrong.
Perhaps the argument for ignoring such a drop in ethical standards is that drawing a line under such behaviour will not raise any further embarrassment. However, it may then be accepted as the norm by other employees.
As a leading psychologist told me recently, ‘broken window’ syndrome, where one person gets away with such actions with no consequence to this behaviour leads to others within the organisation believing that they can also ‘get away with murder’.
Indeed, it is surprising how many senior managers and entrepreneurs forget that it can take years for an organisation to build a reputation although, through the actions of one or two of its employees, it will take only moments to lose it.
Whilst some, in an era of increased spin and deceit, may cynically frown on the development of moral codes of behaviour in business, our research shows that many of the growth businesses are succeeding not only because of the innovation or creativity of the founders, but as a result of the trust they have built up with stakeholders through their firm’s ethical behaviour.
Milton Friedman once said that the one and only social responsibility of business was to maximise profits for its shareholders. It is not often that I disagree with the great man but in this case I believe that the private sector can set standards which the public sector and even, or especially, politicians should follow.
Small firms in Wales are showing that things can be done differently and that profit can go hand in hand with honest ethical behaviour which takes into account the needs of all stakeholders in the business.
Thirty detailed interviews have been carried out to date (some are on video here), and the information gathered will, undoubtedly, lead to the production of some key academic papers in the field.
One of the key questions we ask during face to face conversations with the entrepreneurs is whether the values of the business reflect their own personal values. The aim of this is to probe the extent to which business ethics play a key role in the strategic development of the business.
The responses to date have been encouraging, despite the fact that many may think that ‘business ethics’ is an oxymoron, particularly in more entrepreneurial ventures. This variance to the accepted norm in our research findings reflects the high ethical values espoused by many growing firms in Wales.
Business schools have as much to learn from the personal behaviour of many Welsh entrepreneurs as they do from large conglomerates.
During the interviews, the term ‘honesty’ was used more than any other, along with the expressed belief that having an open style of management with employees, customers and suppliers could only be of benefit to the business.
For example, one business owner emphasised the importance of his relationship with his subcontractors where a policy of paying on time meant that, when one-off pieces of work needed to be done, the suppliers were more than happy to go the extra mile to help.
Another stated that, when attacked by their largest competitor, the approach undertaken by the business had shown the bigger company to be engaged in ‘corporate bullying’ and customers had moved across to the smaller firm because of their disdain for such practices.
It is therefore heartening that they are not only distinguishing between what is morally right and wrong in business practice but are actually setting standards which every organisation in Wales should follow.
Perhaps the difference with small firms is that the entrepreneur can set the moral direction for a company that all of its employees and stakeholders must acknowledge, if not follow. In many larger organisations, individuals in senior positions can often get away with ethical behaviour that benefit them personally but does little for the business in which they work.
I recently had personal experience of a situation where a 'respected' senior manager had consistently ignored standards of ethical behaviour in such a way that would have shocked many colleagues.
Yet this individual’s employer, a large organisation normally of the highest ethical standards, had done little to condemn this behaviour, even after discovering what had gone wrong.
Perhaps the argument for ignoring such a drop in ethical standards is that drawing a line under such behaviour will not raise any further embarrassment. However, it may then be accepted as the norm by other employees.
As a leading psychologist told me recently, ‘broken window’ syndrome, where one person gets away with such actions with no consequence to this behaviour leads to others within the organisation believing that they can also ‘get away with murder’.
Indeed, it is surprising how many senior managers and entrepreneurs forget that it can take years for an organisation to build a reputation although, through the actions of one or two of its employees, it will take only moments to lose it.
Whilst some, in an era of increased spin and deceit, may cynically frown on the development of moral codes of behaviour in business, our research shows that many of the growth businesses are succeeding not only because of the innovation or creativity of the founders, but as a result of the trust they have built up with stakeholders through their firm’s ethical behaviour.
Milton Friedman once said that the one and only social responsibility of business was to maximise profits for its shareholders. It is not often that I disagree with the great man but in this case I believe that the private sector can set standards which the public sector and even, or especially, politicians should follow.
Small firms in Wales are showing that things can be done differently and that profit can go hand in hand with honest ethical behaviour which takes into account the needs of all stakeholders in the business.
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