How Can You Solve an Ethical Challenge in Your Small Business?

Small Business

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Imagine that you’re Robert. You run a hardware store employing four staff who have all been loyal and committed over a period ranging from 2-5 years service.

But business is down and you have to retrench one of the team. How do you decide which one should go?

You believe in being fair and prize yourself on being a decent boss. You could choose the one most recently employed, but he is your best staff member. You could choose the least effective staff member, but she is four months pregnant and really needs the money. Another has become close friends with your wife through their gym membership and you worry about your wife’s reaction if you choose her.

What do you do in this situation? Who do you look to for help when you’re the only one who can make this decision?

Every small business owner knows the isolation and loneliness that can come with running your own business and this is exacerbated when there are tricky ethical dilemmas to solve. You can’t turn to staff because they are looking to you for leadership.

You can speak to friends and family but that can result in feeling overwhelmed with different, often competing advice, or if they have a stake in the outcome, biased advice. Sometimes you need complete confidentiality to work the issue through.

Robert had no idea where to start but he had heard of Ethi-call, a free, national service for people experiencing an ethical dilemma or issue, so he booked online for a one-hour call.

According to Elisabeth Shaw, Senior Consultant at the Ethics Centre, people ring Ethi-call when they feel caught in a bind between competing elements. Perhaps there seem to be two “right” answers or equally “wrong” options. Perhaps no one around them thinks there is a problem, but the caller has a deep sense that something is not sitting comfortably.

“This service is the only one of its kind in Australia, and it offers something quite different to other phone lines such as LifeLine, who in fact refer these sorts of calls to us,” said Elisabeth.  She noted that callers tend to judge the fact that their issue is not a mental health, psychological or personal counselling matter, but a matter of ethics.

The top 3 ethical issues facing small businesses:

  1. Doing what is right and surviving in business

There can be questions about doing what is “right” in balance with a need to survive.  Family businesses can add a layer of complexity, where allegiances, loyalties, and legacies can come into play.

  1. Behaving in an ethical and legal way

There can be questions for bookkeepers in relation to the legitimacy of claims and being directed in ways they are uncomfortable with or believe may not be compliant. There can be difficulties with directions from management, worries about compromises being made, and the risk of being a whistleblower when one’s own job and family circumstances might be on the line.

  1. Making tough decisions when you have a small tight knit team

Managers might be facing decisions about redundancies and wonder about what principles to use in making hard decisions, especially when the employees have been part of a tight knit team. Many really want to do what is right, yet what is “right” may seem unclear. This is where there is a greater need for a fresh or “outside” perspective.

In Robert’s case, he explored his dilemma from a number of angles. While he knew that the “last on first off” solution might be easiest and cause less conflict, when he looked at his duties to his employees, the individual relationships he had with each one, and his own sense of natural justice, he couldn’t take that option.

He wanted to make a decision that was procedurally fair, but also was respectful and attended to his own goal to be a good, caring employer.

After discussing this issue with a trained professional adept at asking questions from a practical, philosophical perspective, he decided to seek advice from the relevant union and also talk to his small business friends to open himself up to different options. He decided to share his business problem with his staff and offer voluntary redundancy in the first instance. While he knew he might lose his best employee that way, he still felt it was the right approach. If that didn’t work, he would have to come up with another plan.

What can you do if you have an ethical dilemma?

  1. Ask a trusted source outside the situation

This could be a mentor or colleague or family friend, someone whose guidance and feedback you value and respect. It could be booking a session with Ethi-call.

  1. Slow down and reflect

On a personal level, it is good to slow down, not rush to make a decision, to think and reflect first. Try to analyse what seems to be wrong and distill it into key questions. Perhaps some of the aspects are legal issues, or industry issues and other advice can be sought too.

  1. Trust your intuition that something is not quite right

After thinking about it, you might realise that your initial reaction wasn’t warranted after all. However, we’ve all heard people say and may have even said it ourselves, “if only I listened to myself. I knew something wasn’t right”.

Ethical challenges can be overwhelming when you feel stuck and don’t have a way to work through them. If you can’t resolve it yourself then it’s worth considering a free resource, such as Ethi-call. Talking through the issue with a trained professional can help you to see the best solution to a complex dilemma and help you have peace of mind about your final decision.