Is ethics important for success? If you look around you, do you think ethical companies are the most successful? Because, doing the right thing doesn’t automatically bring success. However, my argument would be to support the hypothesis that “compromising ethics almost always leads to failure.”
Here are examples to enable you to understand your stance on the subject and to see if my hypothesis can be supported;
1) Mr A needed to negotiate a distribution deal with a company that controlled market access to his products. The company’s CEO demanded that Mr A give his spouse stock in the firm in return for his support. Doing so could have led to millions in sales; if declined, Mr A would lose the business opportunity.
Would you treat this like a common business practice. Would you agree to the suggestion?
2) One of your directors Mr G was asking for sexual favors from vendors and potential recruits. Losing a person so critical to your operations would be a major setback and affect planned growth.
Would you tolerate a situation like this?
3) Mr B has a chance to make sky-high projections for growth, cover up some of the disclosures about losses and go along with unscrupulous investment bankers and their analysts for an IPO at a high price. The analysts and bankers were ready to hype the stocks and make them seem like good bets.
In such a situation, the losers are always the public. Would you support the IPO price and play along?
4) Mr M has noted financial reporting frauds during the audit. But the client promises to give more audits and other opportunities to Mr M, if he doesn’t highlight the fraud to the share holders.
What would you do if you were the auditor? Be ethical or business minded(Mr M’s definition of being business minded).
Many of these scenarios will not be one off but will repeat, until a significant issue surfaces. At such point it would result in a failure. Until such time, these people would look successful. You know what they say, “when **it hits the fan, it’s too late”.