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December 15, 2017

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Business Ethics and Consumers

Academy of Management Editorial

There was a thoughtful editorial by Arthur Brief and Max Bazerman in the April 2003 Academy of Management Review. Their argument is that creating good products and services is an important part of ethical company behavior. Some companies routinely create good products that benefit customers whereas others create products that harm unacceptable numbers of people. Brief and Bazerman wonder why this is so.

While we occasionally mention customers as stakeholders, analysis rarely proceeds beyond that. Almost all of management literature treats customers as a resource to be exploited. Looking at management from the viewpoint of customers is a good research topic and a research topic that may do some good.

What It Means to HR

Business ethics are part of the human dimension of business, and naturally is of interest to HR. More specifically, ethics are part of the company brand and culture. Being ethical is one tool for attracting, retaining and motivating people. Furthermore, a company that behaves ethically towards consumers is less likely to have problems with unethical behavior internally. HR has a responsibility to play a role in promoting ethical behavior, it is part of the job.

One Other Lesson

One general lesson is that you get the most leverage by improving a core activity rather than doing something on the side. A company that does right by consumers will have a far bigger positive impact than a company that merely hands money to a charity once a year. A company that ensures day to day working conditions are pleasant will be better off than a company that tries to make up for poor working conditions by putting a pool table in the lounge.

Closing

Ethical behavior towards customers is, in part, an HR issue. It's a realm little explored by academia and too often ignored by business. Let's have the courage to ask, "Are our products good for our customers?"

-David Creelman
www.HR.com