We often hear phrases like "It's a dog eat dog world" and "Nice guys finish last." It would seem like it doesn't pay to be kind or ethical. If you want to make it in this world, you've got to drive a hard bargain and look out for number one.
Statistics show that this is not true, however. According to Corpedia, the creator of the Ethics Index, companies that are good corporate citizens, practice sustainability, and are able to attract and retain employees outperformed Standard and Poor's 500 companies by 370 per cent over the last five years.
This really does make sense.
While companies that cut corners, exploit employees and do not give long term customer support may be extremely profitable in the short term, they are not sustainable. Eventually customers will become frustrated by the lack of service, good employees will find better places to work and the company will face the risk of legal expenses defending their unethical practices.
Ethical companies understand the importance of a good public image, employee satisfaction and having repeat customers. Of course having professional expertise and a good product are important, but in a competitive market, if you want to stick around, it certainly pays to do the right thing.
The year 2008 saw the failure of a number of financial institutions in the United States. Certain companies, however, moved through the crisis with relative ease. They had avoided selling sub-prime mortgages on ethical grounds. They did not feel that they were in the best interest of their customers and they did not want to ask their employees to sell products that they did not believe in. Though short-term profitability was sacrificed, these companies won out in the long term and continue to be profitable today.
The same thing is true in retail business. Whether stores are locally owned or corporate giants, those that remain open are those which behave in an ethical manner and value both long-term employees and their customers.
While I am purposely avoiding naming names, if we ask ourselves where we like to shop and who we like to do business with, it will most likely be where we not only get a good product at a fair price, but also consistently good service.
Of course there are many businesses who are not good corporate citizens, and they seem to do very well. Their stockholders and top executives are reaping tremendous financial benefits. They seem to be getting away with exploiting their workers and the environment.
Government regulations, labour organizations and consumer advocacy groups are certainly necessary for keeping these companies in check and they are also part of the reason why unethical companies eventually fail.
In reality, corporate citizens are no different from individuals. It pays to do the right thing. When we are selfish, unkind and do not do our very best we may enjoy short-term benefits. If we seek long term success and happiness however, we know that we need to treat every other person as the sacred individuals that they are. The goodness that we share always comes back to us.
It really does pay to be kind and ethical.
