Unethical business practices can have an adverse impact on all businesses, regardless of size. On an organisational level this can include employees being encouraged to perform unethical or illegal acts or turning a blind eye to the misconduct of peers.
For a business, unethical business practices can result in a ruined reputation which can have a disastrous impact on their bottom line. On the other hand, businesses that are ethical and transparent stand to benefit in a number of ways as consumers look to support businesses aligned with their values.
Read the full article: Are you running an honest company?
The guide below outlines the most common unethical business practices in South Africa and ways to reduce ethical risk.
Business corruption is defined as “the abuse of entrusted power for private gain”, this can include a number of unethical business practices and illegal activities such as bribery, fraud and money laundering, among others.
Bribery involves “offering, giving, soliciting, or receiving of any item of value as a means of influencing the actions of an individual holding a public or legal duty.
Research by the Association of Chartered Certified Accountants (ACCA) found that bribery was flagged by many small business owners as a major business growth impediment in South Africa. The research found that SMEs are most likely to encounter bribery when dealing with public sector officials.
Read more: How to Avoid Getting Burned by Bad Clients
Small businesses should take the risk of fraud seriously. It usually involves using false information to scam an organisation. To avoid this happening to you, do not share business or personal information until you are sure about the legitimacy of the potential recipient. Other tips businesses owners can use include the following:
1. Update all changes to your business information
2. Report all suspicious incidents
3. Closely monitor your business bank accounts
4. Control access to your business accounts
Read the full article: What are you doing to protect your business against fraud?
It’s important for small businesses to vet and select ethical suppliers and business partners as bad players can have an impact on the business. Comprehensive background checks can help businesses avoid dishonest suppliers and provide invaluable insights, says Michelle Baron-Williamson, executive of Managed Integrity Evaluation (MIE), in the article ‘Supplier vetting on the rise in South Africa’. In fact, advance vetting services can highlight any conflict of interest between, or fraudulent activity relating to vendors and employees, identify tender collusion and irregularities.
Read the full article: Supplier vetting on the rise in South Africa
Need help finding the right strategic alliances, partners, collaborators, sub-contractors? Regine le Roux from Reputation Matters offers the following advice for small business owners.
- Stay true to your values and align with people that share and demonstrate the same values.
- Open and honest channels of communication are key.
- Respect and safeguard each other’s intellectual property.
- Have a process in place when selecting who you want to do business with and stick to it! As part of this process, check all the parties’ competencies. Conducting “values and ethics” due diligence is important.
- Have checks and balances in place throughout each project to ensure its on track and on par with your level of service.
- Have clear deliverables and milestones in place against a payment plan so that you don’t get to the end of a project and questions about invoicing and billing only raised then.