"There is no way to succeed in business without the highest ethical standards" – Jordan Belfort
We understand ethics as what is right or wrong, whereas the law is about what is lawful and what is unlawful, as decided by the state's courts. Ethics is not only about the values people hold and act upon, but also about examining and analysing several principled beliefs and customs that set the underpinning for judging specific norms or behaviours.
It is a daunting task to build an ethical organisational culture, even in the most stable of operating environments. In a recent research paper, 80 percent of the respondents highlighted the importance of ethics and compliance in how organisations responded to the pandemic.
In the e-commerce industry, business ethics guides and influences how the company serves its customers and treats its employees while being governed by the personal ethics of the entrepreneur, which consequently, affects its organisational procedures, systems and outcomes.
"There is no such thing as business ethics, there is just ethics. And ethics makes no concessions for the real or imagines necessities of making a profit" – Micahel Josephson
A few of the interesting things COVID-19 has done is it has surfaced many inequalities already present in our online business ecosystem. The ethical challenges faced by our e-commerce industry have taken on new meanings and priorities in recent times.
In the e-commerce industry, there are a few globally recognised factors that ultimately determine whether e-commerce companies are implementing ethical business practices or not. Some of those factors are in the following:
Transparency: The practice of representing facts, pertaining to what the company does, truthfully and with clear communication. E-commerce entrepreneurs have to believe that a strong relationship with their customers will have a stronger impact on the success and stability of the company. The more candid the e-commerce company becomes, the more the public is likely to trust its service, product or mission. When there is a business issue that demands clarification, (and takes place within or outside the company), it becomes imperative for the company to offer full disclosure.
Integrity: The practice of upholding ethical values by e-commerce businesses, in effect, encouraging employees to apply ethical standards daily. For online businesses, integrity is structured within the domains of clear policies, guidelines, and related learning materials, as well as robust procedures and controls to help the company prevent, detect and respond to any inappropriate behaviour.
Integrity guides the e-commerce business to stick to its original decision, especially when pressured to do otherwise. The consumers can see a strong reflection of honour and courage in the actions of the e-commerce company that believes in morality based on equality and fairness demonstrating strength and commendable organisational character.
Trustworthiness: The act of fulfilling commitments and promises to their customers. This is crucial as consumers typically like to continue buying from those companies which they believe are dependable and principled.
Loyalty: It encompasses all relationships e-commerce businesses nurture and maintain. The partners in these relationships may include their staff, investors and consumers. In the long run, loyalty is translated to business profits valuing the advancement of the company and employees.
Fairness: The act of driving business operations fairly and committing to exercising their legitimate power to serve their customers justly. E-commerce companies should only use transparent and honourable methods to gain competitive advantages over their existing business competitors. Fairness and equality should be reflected in a company's hiring practices, marketing initiatives, business partnerships, and competition within the e-business industry as a whole.
Compassion: In online business having compassion resides in accomplishing business goals to serve the maximum number of customers while causing the least amount of damage to the consumers and the planet while maintaining a profit.
Respect: It is one of the cornerstones of any business foundation. Showing respect for the rights, privacy and dignity of its consumers is an important ethical standard for the e-commerce businesses of any country. Respect also talks about protecting customer privacy since e-commerce companies are expected to be held to the ethical standard of keeping information such as bank account details, health background or social identity numbers confidential.
Lawfulness: In business ethics, it includes abiding by legal regulations and obligations. This may include areas like taxes, worker safety, and employment and labour laws. E-commerce companies working within the boundaries of the legal system get more credibility and honour from the community as well as its customers.
Responsibilities: The e-commerce companies that have higher ethical standards recognise their responsibilities to their employees and customers. On this note, we would like to add that the boundaries of those responsibilities are marked with the values and mission of the organisation to make logical decisions that benefit everyone.
"Never deceive others, in business or in life. In 1995, I was deceived by four companies – four companies that are now closed. A company can not go far by deceit" – Jack Ma
In the long run, following ethical codes in business offers benefits for both the e-commerce companies as well as the greater industry.
E-commerce companies need to be vigilant in making sure that by demonstrating ethical behaviour consistently, consumers can feel more comfortable so that the e-commerce company can attain a very strong sustainable competitive advantage over others.
Professor Mohammed Tareque Aziz, PhD is an academic and a Service Quality Management (SQM) consultant.