ASSIGNMENT

ON
BUSINESS ETHICAL PRACTICES IN SERVICE
INDUSTRY

GROUP NAMES:
ABHISHEK SUMAN

OPERATIONS

2013001

AMEYA HANJANKAR

OPERATIONS

2013047

VIVEK MINER

OPERATIONS

2013212

DEVEN SAWANT

OPERATIONS

2013226

SHOEB SHAIKH
2013230

MARKETING

ARSHAN SHAIKH

OPERATIONS

2013231

MANISH SHARMA

OPERATIONS

2013232

BUSINESS ETHICS:
Business ethics (also corporate ethics) is a form of applied
ethics or professional ethics that examines ethical principles and
moral or ethical problems that arise in a business environment. It
applies to all aspects of business conduct and is relevant to the
conduct of individuals and entire organizations.
Business ethics has normative and descriptive dimensions. As a
corporate practice and a career specialization, the field is primarily
normative. Academics attempting to understand business behavior
employ descriptive methods. The range and quantity of business
ethical issues reflects the interaction of profit-maximizing behavior
with non-economic concerns. Interest in business ethics accelerated
dramatically during the 1980s and 1990s, both within major
corporations and within academia.
For example, most major corporations today promote their
commitment to non-economic values under headings such as ethics
codes and social responsibility charters.
Adam Smith said, "People of the same trade seldom meet together,
even for merriment and diversion, but the conversation ends in a
conspiracy against the public, or in some contrivance to raise prices."
Governments use laws and regulations to point business behavior in
what they perceive to be beneficial directions. Ethics implicitly
regulates areas and details of behavior that lie beyond governmental
control. The emergence of large corporations with limited

relationships and sensitivity to the communities in which they operate

accelerated the development of formal ethics regimes.

ETHICAL AND UNETHICAL BUSINESS PRACTICES

Business ethics is the most debated topic of our times. The difference
is between doing the right thing and the wrong thing. Business ethics
are the philosophical core of any business and their outcome is crucial
for economic development.
Peter Cooper the great American Investor says "I have always
recognized that the object of business is to make money in an
honorable manner. I have endeavored to remember that the object
of life is to do good."
Business ethics are more than moral values and principles that
determine our conduct in the business world. It refers to the
commercial activities, either with other business houses or with a
single customer. They can be applied to all aspects of business; from
generation of an idea to its sale. Business uses the society for its
resources and functioning, thereby obligating it to the welfare of the
society. While the objective of all business is to make profits, it
should contribute to the interest of the society by ensuring fair
practices. However, greed has led the present business scenario
towards
unethical
business
practices,

CODE OF ETHICS
Lot of organizations implement the code of ethics in their company
polices, which they implement during induction and regular training.
A Code of Ethics is generally a more blanket statement of values and
beliefs that defines the organization.
So what is it for?
Company's assets, funds and records
Conflict of interest
Management and employee practices
Information on competition

DEVELOPING A CODE OF ETHICS

Developing a code of ethics for your business helps build a
culture of ethical selling. Your code of ethics might simply be a
statement of principles defining the way you operate, make
decisions and treat your customers, suppliers and industry peers.
For example, your code of ethics might include statements such
as:
We recognize that what we do is more important than what we
say.
We give our customers and suppliers honest, accurate
information.

 We make sure our customers' purchasing decisions are based on

their preference, not our pressure.
We sell our customers products today that will encourage them
to return to us tomorrow.
We give our suppliers every opportunity to build long-term,
loyal relationships with our business.
We compete in our market by building our own reputation, not
by damaging the reputation of our competitors.
Developing a code of ethics will also help you create your own
code of conduct for selling.
Developing a code of conduct for selling
Many businesses develop codes of conduct for ethical selling
and train their sales staff to follow them closely. Codes of
conduct are designed to:
describe desirable and undesirable selling behaviors
promote high standards of practice
reduce the risk of fair trading breaches
Help staff make ethical decisions.
Write your code of conduct with your staff and customers in
mind, clearly setting out the purpose and structure of the
document:

Template for a sales code of conduct document

Your code of conduct can include the following information:
overview - outlining why you have created the document and
what it will do
statement of business values - including your code of ethics
ethical conduct sections
o soliciting customers - identifying appropriate steps
for finding and approaching customers
o communicating with customers - stating communication
principles that will guide your business's range of
interactions with customers and industry
o pricing - identifying ethical approaches to product pricing
o handling complaints and conflicts - listing the principles
that support your complaints handling policy and
principles for resolving conflicts
o lay-by agreements - stating terms for lay-by agreements
with customers
o selling methods - setting out appropriate selling steps and
methods
o bills and accounts - stating your commitment to providing
proof of transactions

o warranties, refunds and repairs - identifying product or

service guarantees you make to your customers
Procedures for identifying and responding to code of conduct
breaches
Additional information - listing contacts and sources for more
information.
Remember to use examples or scenarios in describing ethical
practices so that your staff understand clearly what you expect
of them.

ETHICAL BUSINESS PRACTICES

Here are a few ethical business practices that should be followed to
build a honest reputation and ensure smooth running of any
organization.
Investors: Ensuring safety of their money and timely payment
of interest.
Employees: Provision of fair opportunities in promotions and
training, good working environment and timely payment of
salaries.

 Customer: Complete information of the service and product

should be made available. Personal information of the customers
should not be used for personal gain.
Competition: Unscrupulous tactics, competitor bashing and
wrong methods should be avoided while handling competitors.
Government: Rules and regulations regarding taxes, duties,
restrictive and monopolistic trade practices and unlawful
activities like corruption and bribing should be adhered to.

Environment: Polluting industries should ensure compliance

with the government norms regarding air, water and noise
pollution.

UNETHICAL BUSINESS PRACTICES

You might find many companies who blatantly thrive on unethical

behavior and practices. A free environment is present or promoted
where acts of violation of norms to amass wealth in an unethical
manner is followed.
Following are some of the activities that come under the ambit of
unethical practice.

 Resorting to dishonesty, trickery or deception.

Distortion of facts to mislead or confuse.
Manipulating people
vulnerabilities.

emotionally

by

exploiting

their

Greed to amass excessive profit.

Creation of false documents to show increased profits.
Avoiding penalty or compensation for unlawful act.
Lack of transparency and resistance to investigation.
Harming the environment by exceeding the government
prescribed norms for pollution.
Invasion of privacy used as leverage, for obtaining personal or
professional gains.
Sexual discrimination
Business houses that comply with ethics to determine their conduct
are shrinking in number. The lack of business ethics in the market, is
the reason the world economy is presently in crisis. Organizations
now recognize the positive effects and outcomes of being ethical,
humane and considerate. They have a competitive edge in the market,
because of the honesty they show in their services. Their morally
upright reputation attracts better staff and helps in retention. Though
ethics are legally binding in most cases, self-monitoring, transparency
and accountability will go a long way in establishing trust of the

people. Besides this, it makes sense to change, before you are

penalized.
When would we as Indians observe ethical business practices in
totality? It is a big question but it has a straight simple answer. Each
one of us should be accountable and responsible to stop unethical
business practices.
We must create an environment which adheres to strictest
philosophies of clean, transparent, honest business.
Integrity is most wanted.

HOUSING DEVELOPMENT FINANCE

CORPORATION LIMITED

FAIR/ETHICAL PRACTICES CODE

Intent and Content

This Code has been formulated by Housing Development
Finance Corporation Limited (the Corporation) pursuant to the
Guidelines issued by the National Housing Bank on Fair
Practices Code for Housing Finance Companies vide its circular
bearing No. NHB(ND)/DRS/POL- No. 16/2006 dated
September 05, 2006. This Code has come into force from 19th
October, 2006 which has been modified pursuant to the
Guidelines issued by the National Housing Bank on Fair
Practices Code for Housing Finance Companies vide its circular
bearing No. NHB(ND)/DRS/POL- No. 34/2010-11 dated
October 11, 2010 and has been effective from December 23,
2010 . The said Guidelines has been further modified by the
National Housing Bank on Fair Practices Code for Housing
Finance Companies vide its circular bearing No.
NHB(ND)/DRS/POL- No. 38/2010-11 dated April 25, 2011.
This Code has come into force from May 10, 2011.

Objectives
Follow good, fair and transparent business practices by setting
reasonable standards;
Encourage market forces, through fair competition, to achieve
higher operating standards;

 Relate to the customer in such manner so as to promote a fair

and cordial relationship;
Set such standards and practices so as to foster confidence in the
housing finance system.
Application
To be applicable to all persons offering the Products and
Services of the Corporation as an employee or otherwise in any
manner and/or by any mode.
The Code is applicable under normal operating environment
except in the event of any force majeure.
The Code is based on ethical principles of integrity and
transparency and all actions and dealings shall follow the spirit
of the Code.
Commitment
The Corporation shall at all times do its best to act fairly,
reasonably and meet the standard practices prevalent in the
housing industry.
The Corporation shall abide by all the relevant laws, regulations
and meet with the ethical principles of integrity and
transparency during its interaction with customers.
While interacting with customers, the Corporation may take all
steps as may be required to provide clear information either in

English or Hindi or the appropriate local language regarding:

o its various products and services;
o the terms and conditions, the interest rates/service charges;
o benefits available to customers and the implications, if
any;
o contact persons for addressing the queries, if any;
The Corporation will provide a copy of this Code, at request, to
the customer. The Code will also be made available on its
Website and at every branch/ office.
The Corporation would not discriminate on grounds of sex,
caste and religion in the matter of lending. However this does
not preclude the Corporation from participating in credit-linked
schemes for the weaker sections of society and in respect of
schemes formulated by NHB/ other Government Agencies,
implemented through the Corporation.
The Corporation shall treat the information relating to customers
as strictly confidential and shall not share any information,
unless required under law or waived or permitted by the
customer.
The Corporation shall take necessary steps to inform its
customers of their right to information regarding their account
and the facilities available to them.
The Corporation shall be clear and not misleading in any of its

advertising and promotional materials.

The Corporation shall inform its customers of all financial
information such as rates of interest, charges, method of
calculation etc through brochures, posters or during the course
of meeting with the customers etc prior to entering into any
transaction.
The Corporation shall endeavor to keep its customers informed
of any change in interest rates / charges etc through letters or
any other form of general or public announcement or displays,
from time to time.
The Corporation shall disclose, by such mode and in such
manner as deemed fit, to ensure transparency, all information
affecting the interest of the borrower including but not limited to
:
o fees/charges payable for processing loan application;
o the amount of fee refundable, if any, if the loan amount is
not sanctioned;
o Prepayment options and charges, if any;
o Penalty for delayed payment, if any;
o Conversion charges (Switching loan from fixed to floating
rate or vice versa);
o Existence of interest re-set clause, if any.

 The disclosure shall be done so as to ensure that the borrower is

aware of all in cost parameters involved in processing and
sanctioning of loan. The Corporation shall not indulge in any act
which is discriminatory among equals.
The Corporation will review the compliance of this Code and a
consolidated report of such review may be submitted to the
Board.
Loans
The Corporation in the normal course of its business shall
endeavour at all times to guide its customers about the process and
procedure to be followed for availing a loan.
Each application shall be considered independently on merit, upon
scrutiny of all the information, documents required for verifying
the title of the property, identity of the person, entity and the
security to be offered, including guarantees.
The letter of guarantees to be executed by the guarantors would
cover their obligations, liabilities and circumstances in which they
can be called upon to pay the dues of the customer/borrower.
The Corporation shall communicate in writing to the customer
whose application has been reject Collection of Dues
The Corporation shall provide the customers with all the
information regarding their dues and provide reasonable time for
payment of the same.

 The Corporation shall while protecting its interest adopt

reasonable and lawful measures to recover its dues from
defaulting customers, including use of persuasive methods for
the purpose of collection of its dues.
Complaints and Grievances
The Corporation shall endeavour to address/respond to all
complaints and grievances within a reasonable time and keep
the customers informed about the status of their complaints.
The Corporation shall make available facilities at each of its
branches and offices for the customers to lodge and/or submit
their complaints or grievances, if any.
The Corporation will ensure that its grievance redressal
procedure is made available on its website.

ETHICAL PRACTICES BY HDFC BANK

HDFC only Indian bank in global list of ethical company

Mumbai, March 17: HDFC Bank, second largest private sector bank, is the
only Indian organization got listed in the world's most ethical companies'
list this year. As per the list prepared by the Ethisphere Institute, only one
Indian firm HDFC has made a place in the 110 world's most ethical
companies.
HDFC is one of the most trusted brands in the India and for a financial
services company it is quite noticeable that people should perceive that it as
ethical as well. Commenting on the attainment HDFC Vice-Chairman and
CEO Keki Mistry said: "It obviously feels nice to be one of the world's
most ethical company and the only one from India." The new achievement
of HDFC will help to inhance the brand equity of the company going
forward.

Among the list of companies online market portal eBay, Ford Motor
Company, banking giant Standard Chartered Bank, Accenture, Adobe
Systems, software giant Microsoft and food and beverage firm PepsiCo
found in top position.

RELIANCE UNETHICAL PRACTICES

Complaints India enables consumers and users of services and products to post
their common complaints and suggestions regarding airline, bank, business,
companies and Government and non-Government organizations in India and
abroad. Track your car complaints, mobile phone complaints, bank complaints,
credit card complaints etc at this website. It's a consumer forum, board or
bureau
for
consumers
to
redress
their
complaints.
Consumer Courts in India now gives the power to consumers to fight for their
consumer rights at district level consumer forums. However consumers can
proceed to confront companies and try to get quicker responses through the
website. For companies its important to quickly address consumer complaints to
protect their product or service brand image. Consumer-India web site has a
number of resources for your assistance. Separate new product complaint and
NRI complaint sections help in easier posting and tracking of complaints.
With online internet scams proliferating, its easy to get cheated by fraud

companies. Consumers need to protect themselves from online scams, email

scams.
Complaints can be posted on all products and services. You can post complaints
Mobile Services (Airtel, BSNL, Idea, Reliance, Docomo, Unior, Aircel etc),
Mobile Phones (Nokia, LG, Samsung, Sony Ericsson, Blackberry,
MicromaKarbonn etc), Home Appliances like TVs, Refrigerators, ACs, Cooking
Ovens etc.

UNETHICAL PRACTICES
INFOSYS
FRAUD

EMPLOYEE

TESTIFIES

ON

ALLEGED

VISA

By Megha Bahree and Miriam Jordan

An Infosys employee, who has alleged that Indian tech giant, Infosys
Technologies Ltd., engages in visa fraud, provided more details to a U.S.
Senate subcommittee this week.

Tony Avelar/Bloomberg News

In a testimony, an Infosys employee provided more details about alleged
visa fraud at Infosys.

In a statement to the Senate Judiciary Subcommittee on Immigration, Refugees

and Border Security on Tuesday, Jay Palmer, the whistleblower at Infosys, said
the company intentionally violated our visa and tax laws for the purpose of
increasing revenues. Mr. Palmer accused Infosys of frequently violating U.S.
visa laws and of staffing multiple client projects with illegal employees,
including at Goldman Sachs, American Express, Wal-Mart and Johnson Control,
among others.
Mr. Palmer filed a lawsuit against the company in February in Circuit Court
in Alabama, alleging the company sought his help to circumvent U.S. law. The
lawsuit has led to a probe by U.S. authorities.
Infosys, which is cooperating with the inquiry, denied the allegations. Paul N.
Gottsegen, chief marketing officer for Infosys, said in a statement Wednesday
that Mr. Palmers remarks were full of inaccuracies, exaggerations and
falsehoods.
There is not, nor was there ever a strategy, scheme, or policy by the company
to use the B-1 visa program to circumvent the H-1B visa program, he said.
The company did not have a practice of sending unskilled employees to the
United States on B-1 visas to do the work expected of skilled individuals in the
U.S. on H-1B visas.
Mr. Palmer disagreed. This is how, he says, it was done.
During a March 2010 visit to Bangalore headquarters he says he heard several
conversations between Indian managers and U.S.-based managers where it was
made clear that Infosys was going to increase the use of the B1 visa program to
get around tough new restrictions the U. S. had placed on the H-1B program.
Infosys, he says, decided to flood the local Indian consulate with visa
applications in order to get as many approved as possible no matter the level of
an individuals skill. He says that in many cases the company sent relatively
inexperienced workers to the U.S. for projects.
He says Infosys sent employees on B1 visas to the U.S. for specific full-time
jobs at client sites but instead of paying them U.S. salaries, it would pay them

much lower Indian salaries, calling it a stipend. Infosys, however, charged its
clients U.S. rates for the employees, thus getting full reimbursement from their
American clients for Infosys labor costs. He also says Infosys paid no taxes on
payments to these workers.
According to Mr. Palmer, Infosys created an internal website of dos and
donts with tips including: Do not mention activities like implementation,
design & testing, consulting etc., which sound like work. Also do not use words
like, work, activity, etc., in the invitation letter. Please do not mention anything
about the contract rates as youre on a B-1 Visa.
He says that in order for this to work, the U.S. contracts had to be written as
Fixed Price contracts and not as Time and Material contracts. On a Fixed
Price contract a customer is charged a lump sum for labor, and the people doing
the work do not need to be identified to the client. But on a T&M contract, on
the other hand, the people doing the actual work had to be named along with
their hourly rate. In August 2010 Mr. Palmer says he received emails and
requests to rewrite T & M contracts to FP contracts.
Describing a specific instance, he says that in December 2010 an Infosys
employee showed him a spreadsheet with a list of B1 visa workers on a project
at Johnson Control, who should not have been doing such work. He said that
these workers were working full-time testing software code and writing scripts
but were paid their salaries by Infosys depositing money into the cash card
accounts without withholding any income tax.
Mr. Palmers testimony comes as the Indian IT industry finds itself facing more
scrutiny than ever. Outsourcing has always been a hot-button issue in the U.S.,
but with a stubbornly high unemployment rate in the U.S., the offshoring of
what are perceived to be American jobs has become an increasingly sensitive
political issue. Last year the U.S. passed legislation that raised fees for skilled
visas, particularly affecting Indian IT firms. IT firms based in India generate
60% of their revenue from the U.S.
On their part, Indian firms have seen the increased visa fees as well as delays in
getting approvals and much tougher interviews as part of a concerted campaign

against them. Some Indian officials have even labeled the U.S. moves unfair
trade practices.
In his testimony Mr. Palmer, says he and his attorney have received over 40
communications from individuals at other Indian companies stating that the
same type of H-1B and B1 visa fraud is being committed there as well.
Infosys said it would not rebut Mr. Palmers remarks point-by-point at this time
because of its ongoing litigation with him.
We take very seriously our obligations under the law and specifically our
responsibilities to comply with the immigration laws and visa requirements in
all jurisdictions where we have clients, said Infosyss Mr. Gottsegen. Mr.
Palmer is obviously intent on spreading his falsehoods about Infosys and our
business practices as broadly as possible in order to advance his objective of
getting as big of a payout as he can from the Company.
In his testimony, Mr. Palmer also lobbied for more restrictions on work visas to
foreign companies.
My real life experiences have educated me to the point that if Congress decides
that an increase of Green Cards or legal work visas in the U.S. is a must, then
there should be limitations or ratios, he said. For example, for every H-1B
visa issued to foreign national company they should have to hire an American
worker.
He also said Indian companies were benefiting at the expense of the American
economy, a charge the Indian IT industry disagrees with. Indian software and
services industry body NASSCOM has said in the past that the cost savings they
provide help make U.S. firms more competitive.
I have read statements from NASSCOM stating that not increasing Green Card
numbers and with the current visa restrictions, the Indian economy would
suffer, said Mr. Palmer. Let me ask the committee, what about our economy?
What about the years and years of ignoring the laws. These companies
maliciously do not hire Americans and look at ways to circumvent policy and

law instead of working with it. Look at the stock and growth of these large
foreign companies in a down environment they are not suffering.

ndian financial industry has always been successfully able to trace every
prospect offered by the India's fiscal policy both in terms of alteration and
expansion. In spite of all the endeavors implemented to develop the financial
market, it still remains fatally faulted due to lack of three major key elements
namely inadequate management, stringent accountability, and proper
punishment.

As a result, the capital market of India has remained one-dimensional and has
staggered from one investment scandal to another. A straightforward listing of
the top 10 investment scams narrates the account of why Indian investors were
left annoyed by the scamsters.

UNETHICAL PRACTICES
A brief about Top 10 Investment Scams in India

1. THE SECURITIES SCAM

The capital market witnessed its foremost investment scandal in the form of
securities scandal in the year 1992. It revealed the utter anarchy and lack of
administration in the prevailing fiscal market. The money market at that time
permitted funds to be relocated with impunity from financial institution and
corporates into equity and consequently witnessed crores of bank's capital to
transfer into brokers' account. This illegal market practice was later asserted
as
"legal
and
acknowledged".
In an attempt to punish the tricksters, a special court was initiated and
scrutinized around 70 cases registered by CBI. Surprisingly, not even a
single trickster was found guilty by the dreadfully sluggish judicial system.
As a matter of fact, the scamsters made frequent attempts to re-enter the
market with same set of traps and resulted in losses to investors.

2. THE IPO SCAM

Soon after the entry of international organizational investors, the Control

over Capital Issues was banned as the market saw heavy bull trend resulting
in the revitalization of the secondary market from the previous scandals. The
ban of Control over Capital Issues unlocked the prospects of massive scandal
in Initial Public Offerings (IPO). The scam was executed in two parts; the
first part was carried out by the firms that increased their market costs to
incur profits in order to sponsor lucrative projects. The second part saw the
unison of small time merchants, CAs, investment bankers and traders to
hoist
new
firms
and
heave
public
capitals.
The IPO scam prevailed for three long years from 1993-1996 and finally saw
its downfall when the costs of the registered firm started deteriorating.

3. FAVORED SHARE SCAM

The scandal was an outcome of the extensive cost fixing on the derivative
market. Besides increasing fresh capital, advocates of Indian firms promptly
coordinated general body authorizations to transfer shares to themselves on a
privileged basis and at a considerable reduction to the market, thinking that
the share prices would never see the ground. Conglomerates started this
trend and accrued profits of nearly 55o crores until Securities and Exchange
Board of India (SEBI) formulated strict guidelines to abandon the market
practice.

4. CRB'S CARDBOARD SCAM

The ` 1000 crore finacial multinational named as Chain Roop Bhansali

(CRB) was the only biggest firm and most impudent of all to benefit and
disappear in the loosened market ambiance of mid-1990s. The services
offered by his firm entailed FC collection, mutual fund, banking, etc. The
clearances obtained by the firm for the trading of these services required
sufficient inspection by SEBI and the RBI and the fact that they managed to
qualify shows the supervisory weariness of the regulators. Facilitated by the
clearances and profitable credit ranking, CRB accrued greater profits based
on high value financing. The CRB collapse not only affected the investors
but also the other finance firms.

5. PLANTATION FIRMS' SCAM

Since few firms in mid-90s were subject to no guidelines, the plantation

companies during that time also got away with profit protrusions. The plantation

firms projected themselves as a part of IPO and assured massive returns. The
investors were lured and the companies accrued profits from fake campaigns of
around ` 8000 crores plus.

6. MUTUAL FUNDS SCAM

After several mutual fund scams, the UTI bailout reflected the lack of proper
guidelines in the Indian capital market. Since UTI was initiated under its
own regulations, it was the tax payers who suffered the loss of ` 4800 crore
in the process. After three years, the company was back purchasing Ketan
Parekh's controlled scrips and incurring massive losses in the process. The
evidence of the private mutual funds performance has also been inconsistent
after hitting the downfall in 1999 and 2000. It took a considerable amount of
time for capital market to win back the trust of mutual fund investors.

7. THE 1998 SCAM

The scamster of 1992 scam, Harshad Mehta came back with a bag of tricks
again in 1998. This time he lured investors through a website by trading
stock tips. His unremitting manipulation of several shares resulted in the
much expected collapse of Bombay Stock Exchange.

8. HOME TRADE SCAM

Initiated in 2000, Home trade invested rs 24 crore in promotional campaigns
to attract investors. The scam affected 8 co-operative banks that lost ` 82
Crore in EPF scheme. The Chief Executive of Hometrade, Mr. Sanjay
Aggarwal was convicted by Nagpur Police later.

9. DSQ SOFTWARE SCAM

In the year 2000 and 2001, the Managing Director of DSQ Software, Mr.
Dinesh Dalmia, was held responsible for ambiguous mergers and prejudiced
allocation of the amount of upto ` 595 Crores. He was later convicted in the
year 2006.

10.SATYAM SCAM

After manipulating the firm's documents for several financial years, the
former Chairman and Chief Executive of Satyam Computers, Mr.Ramalinga
Raju, was arrested for committing scam, following unethical practice and
forgery. He showed greater profits and committed fraud of ` 700 crores.

THE VALUE OF STRONG ETHICAL BUSINESS

PRACTICES AND SOCIAL RESPONSIBILITY

Strong ethical business practices are a hallmark of a good company

that you want to build and maintain in your small business. You

cannot just develop them overnight. Build sound business practices

by setting an ethical example and creating policies and procedures
that govern the activities of your employees.
VALUE
The value of strong ethical business practices can be found in your business
reputation and company brand. You are a seller of goods or a provider of
services. Customers must believe in your brand to make repeated purchases.
That's because they can usually buy a similar product or service from a
competitor. Your business ethics help you stay ahead of competitors with
lesser business practices.

THE RISK OF DAMAGES

You do have to worry that actions by employees can damage your business
reputation. For example, a sales person might make an unethical transaction
with a customer, and then the customer spreads information about that
transaction around the market, hurting your business reputation. When you
build ethics into performance expectations for employees, you
have more protection against this scenario, but you can never fully control
the risk to your business reputation.

TRANSPARENCY
Business ethics help you increase the loyalty of customers, which leads to
their repeat business and referrals of others to your company, over time.
Increase customer trust through transparency, such as by publishing ethical
guidelines on your website and requiring ethical training yearly from staff. You
also need checkpoints. For example, you might use a mystery shopper service to

sample what kinds of business tactics your sellers are using with your
customers. You might also reward employees for reporting unethical behaviors
of other workers.

SOCIAL RESPONSIBILITY
Operating a business according to ethical standards requires ongoing
commitment. Show how you're committed to society through social
responsibility initiatives, further building your company's reputation. For
example, use your website or newsletter to describe the charities and volunteer
programs that your employees participate in; don't forget to share how your
company makes green decisions such as recycling to benefit the environment.
You want ethics to be integrated into all business activities.