Discuss the below:
Do you think it is possible for corporations to operate in an ethical way?
Fairness in Business:
Does it matter, and what does it mean.
Joel D. Rubin
Fairness is a value that is taught and reinforced typically from childhood. Its association is universally positive. However in real business world where profit and higher profit is the measure of success does it have any bearing? The article delves deeper into the issue.
Imagine a natural calamity like tornado occurred in which some parts residential area is damaged. As demand for accommodation outstrips availability, in that condition market rent goes higher. But as per fairness value in such condition demand for higher rent is perceived as unethical. Though it will give higher return in short term, in longer term it will bring bad reputation. Similarly in case of short supply of goods if the price is jacked up by company then it will be perceived as unethical company and looses its fairness value and in the longer run people lose faith, there by the company will stand to lose more.
Having said that the fairness should be part of decision making in business, the article characterizes fairness as -
1. Impartiality: As per dictionary means free from self interest, prejudice or favoritisms, conforming to established rules.
2. Consistency with community's perceived expectation of fairness: The understanding of this is more complex as it does not follow any definite set of rules.
Out of the above two, a business house should be very careful in dealing with the second point.
Example is given of Nike, where it lost plenty of business as well as reputation for it's controversial practice of lesser pay to Asian work force compared to others. Though, as per place of production pay was similar or higher compared to others in the same area. Similarly in another situation, like excess ticket held by a club for football match perceived to be high in demand, the tickets should be disposed through first come first serve basis which will perceived as fair for the case. So in conclusion it may be said that Fairness in business matters much for stable and growing business. It adds intangible value to the business, satisfaction to employees and customers.
Article Digest Prepared by:
Sudhansu Mohan Das
Dy. General Manager (CO & CC), ISP, Burnpur
Source:
Business Horizon-2012; 55 No.1