The growing business handbook : inspiration and advice ... - Sparkler

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Ethics and the
growing company
7.4
As you grow, you are going to face a series of ethical dilemmas. Your company’s
survival ultimately depends on how you handle them, according to a report from
“
Victor Smart at CIMA:
Ethics are pivotal in determining the success or failure
of an organisation. They affect a company’s
reputation and help to define a business model that
will thrive often in adversity.
Chartered Institute of Management Accountants, Incorporating Ethics
into Strategy, 2010
Are ethics relevant to business growth?
In 1970, the economist Milton Friedman famously argued that in a free society,
‘there is one and only one social responsibility of business… to use its resources
and engage in activities designed to increase its profits so long as it stays within the
rules of the game, which is to say, engages in open and free competition without
deception or fraud.’
But many would now agree that even were this true then, things have changed.
Since these words were written, the ‘rules of the game’ in free societies have altered to
such an extent that, today, companies that do not embrace a much broader practice
of corporate ethics and social responsibility, through sustainable growth and
profitability, are unlikely to survive.
Why are ethics relevant?
So why should growing companies concern themselves with ethics, or corporate
social responsibility, as it has become more recently known? What’s in it for them?
This chapter will consider: