When the going gets tough – like it is in the current business environment – merchants may be tempted to cut corners here and there. Those corners that they may try to cut could be ethical and moral corners. A word of advice: don’t even think about it.

 

In the short term, you might gain a little, but in the long term, you’ll lose everything: your business, your credibility, your self-esteem.

 

Guest Commentary: Business Ethics

Joe Scarlett, who was chairman of the board of Nashville TN-based farm and garden equipment retailer Tractor Supply Company, recently wrote an article titled “Lose Your Ethics, Lose Your Business” for his hometown newspaper, the Nashville City Paper. Currently, Joe Scarlett is founder of the Scarlett Leadership Institute at Belmont University in Nashville, Tennessee, and Chairman Emeritus of Tractor Supply Company. A lifelong retailer, he served in leadership roles at Tractor Supply Company until his retirement. During his years as CEO, the company’s revenues quadrupled and the price of its stock increased tenfold.

 

Here is his article on business ethics.

 

Lose Your Business, Lose Your Ethics

By Joe Scarlett

The recent tainted meat scandal in California further demonstrates why uncompromising ethics in business is the only path to long-term business success. In all, 143 million pounds of meat were recalled because of a lapse of ethics.

 

Who wins in this mess? Absolutely no one.

 

Was it avoidable? Certainly.

 

Since so many of the senior executives of Enron, WorldCom, Adelphia, Tyco, etc., were exposed and subsequently jailed, you would think that every business person in America would have learned the importance of maintaining a high level of integrity in business practices.

 

It is a real shame that some still have not seen the light and grasped the obvious.

  

High standards, honesty and ethical leadership all pay off in the long run and the opposite is simply a path to ultimate failure. Wake up, business leaders!

  

In February, Westland/Hallmark Meat of Chino California issued a recall for 143 million pounds of beef — six times larger than any previous recall. The company slaughtered cattle that could not walk and failed to notify an inspector, which is a clear violation.

  

Cattle that cannot walk have a higher risk of mad cow disease and bacterial contamination. What were they thinking?

  

Where was the leadership?

  

Federal inspectors did not identify the problem nor did the company report the problem from its own control processes.

  

A video provided by the Humane Society showed employees attempting to get sick cattle to stand up using forklifts, electric cattle prods and high pressure water hoses.

  

And now speculation suggests that the plant will close. Owners will lose their investment, executives will loose their salaries and perks and the workers will all be unemployed.

  

The only good news in the story, if there is any good news, is that there have been no reports of illness or meat contamination.

  

Employees clearly violated the rules, so you have to ask a few questions:

  

Were the rules posted, communicated and discussed? 
  

Was there a clear path to discuss and report dilemmas and violations?

  

Did the employees believe that the company strived to operate with a high degree of integrity in all aspects of its operations?

  

The obvious conclusion is that the answers to some or all of these questions is ‘no.’

  

The ethical and moral direction in any organization must be set by the CEO and the senior executive leadership.

  

When that direction is set according to high standards and then communicated effectively and repetitively, the organization invariably lives by those standards.

 

 We follow our leaders; when they set the right direction, we follow; when they set the wrong direction, or more commonly no direction, we wander into “no man’s land.”

  

Leadership in business is everything. We follow with pride and confidence when our leaders set a clear path that embraces high ethical standards.

 

Workers at every level deserve the right to work for leaders who demonstrate business and personal integrity.