Category: Business Ethics

By Posted on Posted in Business Ethics, Marketing Techniques and Philosophies Tagged with , , ,

OK, here comes a rant; I’m in an Andy Rooney mood, only more snarky. But it’s short. You’ve been warned.

Whose bright idea was this inane bit of “viral marketing?” I opened up one too many e-mails from Internet marketing gurus this week where the headline promises a gift, and the “gift” is a bleeping half-off offer.

Dude, if I have to pay for it, it isn’t a gift. It’s a sale. And if it’s a sale, don’t call it a gift–or you wont get the sale from me. Not only that, you’ve just drastically reduced the chances of my ever doing business with you again, because I value business honesty so much that I wrote an award-winning book about it.

Want to make money with a holiday gift offer? Don’t pull this crap. Instead, follow the model of Publicity Hound Joan Stewart. She compiles her annual “best of” e-book, filled with useful, actionable advice, loads every page with a good tip and a bounce-back order to a highly relevant product you can buy, and gives it away for free. And tells all her readers they can give it away, too. It’s the same formula that grew her free weekly newsletter into a six-figure business.

Okay, rant over. Putting on big smile to wish you a very happy holiday and an ethical, profitable 2009 🙂

And call a spade a spade, a ale a sale, and a gift a gift.

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By Posted on Posted in Business Ethics, Ethics in Government, People Helping People, Politics

Calling it the worst fraud in history (far worse than Enron), Democracy Now released the shocking news that the Securities and Exchange Commission (SEC) had known there were serious problems around Bernard Madoff for nine years!

Are you as sick and tired of this as I am? Enron fell apart in 2001. Michael Milken was indicted in 1989–that’s almost 20 years ago! And now we find out that Madoff, former head of NASDAQ, took the whole financial system for an astonishing $50 billion, suckering investors in with the promise of outrageously good yields and wiping out numerous good charities–the same week we find out Illinois Governor Rod Blagojevich actually had the chutzpah to try to sell Obama’s vacant Senate seat.

Have we learned NOTHING since the Milken days?

If you’re all riled up about business scandals, about banks and industrialists coming to Washington to coax billions of our tax dollars out of the government while doing nothing either to change the over-lavish lifestyles or to pump credit back into the system, if you think these companies should get a clue before they come looking for a handout and the government should get a clue before it hands out our money without any oversight, if you’re sick and tired of being sick and tired–there are a few things you can do. They’re easy, they take almost no time, and they could make a difference.

First, tell Obama’s transition team what you want to see the next administration accomplish. It’s the first time I can remember a newly elected president making a conscious and thorough effort to tap the wisdom of the general public.

Second, sign the Business Ethics Pledge and help create a climate where the Milkens, Madoffs, Kenneth Lays, and Blagojeviches of the future won’t find anyone to listen to their crooked Ponzi schemes and extortionate rackets.

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By Posted on Posted in Business Ethics, Ethics in Government

Four years after launching the Business Ethics Pledge campaign, and five years after publishing my book, Principled Profit: Marketing That Puts People First, that shows that ethical businesses can more easily succeed, the goal of making future Enron scandals unthinkable seems very distant this week. One dismal news story after another!

A little sampling of the depressing headlines:

Democratic Governor Rod R. Blagojevich of Illinois, arrested on corruption charges, manages to paint himself as more venal and small-minded, and more focused on personal gain, than even Richard Nixon. Read more »

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By Posted on Posted in Business Ethics, Energy & Sustainability, Ethics-International, Social and Economic Justice

The company that so many of us love to hate has started addressing some of the reasons why I won’t do business with them. This short article by Mallen Baker shows progress on both labor standards and energy. Reprinted in full with Mallen’s generous permission.

This is big news, as my understanding is a major part of why so much of the US economy picked up and moved to Asia is Wal-Mart’s constant demand that suppliers reduce the price 10% every year. About time it started adding some social responsibility to its demands.

Wal-Mart has told a meeting of its Chinese suppliers that social and environmental standards will need to be raised to help the company meet its goals and to move forward in the wake of the milk poisoning scandal that has left many Chinese children still in hospital.

The company’s requirements will aim to improve energy efficiency, with a 20 percent improvement in energy efficiency required of the top 200 suppliers, full disclosure of locations of factories including sub-contractors, and product improvements in terms of energy ratings.

Wal-Mart said that many of the measures would be good for suppliers, helping them to save money by reducing waste. But in any case, it made a direct link between the quality of products and whether or not a supplier cheated on overtime or used child labour, or dumped polluting waste.

In return, the company has said it will change the nature of its relationship with Asian suppliers, aiming to develop deeper long-term relationships to mutual benefit, rather than focusing simply on the price of each transaction.

Overall, I continue to be highly critical of Wal-Mart, but glad to see the company moving forward. I think this is only the third time I had anything good to say about Wal-Mart in this space. The first was after Katrina, when the company stepped in to do what the federal government should have done. And the second was almost two years ago, regarding one of the company’s other energy saving initiatives.

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By Posted on Posted in Business Ethics, Social and Economic Justice

Am I the only one outraged by this total misuse of taxpayer dollars? The companies that just got that $700 billion bailout are supposed to use this money to revitalize the stagnant loan market and kickstart the economy. Hello! This is OUR money you’re squandering!

  • Shareholders are lining up at the trough to capture dividends–and AIG doesn’t even know how it blew through its tax-funded payday. How can these companies take taxpayer money, claim it’s an emergency, and then pay dividends? Where is the shared risk?
  • CEOs and high executives at these companies are still expecting to take home mammoth compensation packages, after running their companies into the ground. Is it so unreasonable to expect these crooks to live on, say, three times the pay of a teacher, rather than 300 times?
  • Oh yes, and then there are the lavish parties and sales events that cost hundreds of thousands of dollars. Isn’t this a place to cut back when you have your hand in the public’s pocket?

    • And meanwhile, thousands of honest, hardworking people without financial savvy are losing their homes to foreclosure, often related to actions like balloon payments built into mortgages they didn’t comprehend, drawn up by these same companies. Can you say “taxpayer revolt”?

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    By Posted on Posted in Business Ethics, Frugality/Frugal Fun, Social and Economic Justice

    When I found out the other day that no sooner had insurance giant AIG accepted a huge bailout from the taxpayers–that’s us–that they had spent $400,000 on a posh weeklong retreat at the St. Regis Monarch Beach, a very expensive resort, including a $10,000 tab at the bar, and $24,400 on spa and salon services, I was too steamed to even blog about it. I knew that if I let my fingers loose on this one, I’d probably say something I’d regret. So I kept my mouth shut.

    Today, I found out that they’d planned to have a similar retreat a week later, at the Ritz-Carlton in Half Moon Bay, California, but this one they canceled–not because they’ve come to their senses, but because of the very understandable public backlash about the first retreat. Meanwhile, they’ve got their hand at the public trough, asking for another $37.8 billion. And they have the nerve to complain about cancellation fees!

    “We’ll certainly lose some money in cancellation fees, but it’s just beyond the point of trying to conduct these meetings given the uncertainty that’s taking place.”

    Yes, there are usually cancellation fees when you cancel a large event at the last minute. These things are booked months in advance and the hotels can’t resell all that space on that kind of timeframe. But still–you pay the fees, grit your teeth, and at least pretend that you care enough about the taxpayers who are bailing you out that you don’t go on expensive and totally unnecessary junkets. And you sure as anything don’t stick the public with your bills at the bars and spas; those should be borne by the individuals consuming the services.

    Rooms at these hotels range from $400 to $1200 per night. The government should demand repayment of every penny spent at the St. Regis on this pig-in-a-poke. Can you imagine what Limbaugh and the rest would say if they found a “welfare queen” enjoying this kind of high life at government expense? Well, when corporate executives are the ones getting welfare, the standards should be similar.

    You want to run up big bills to reward your high performers? Fine–but don’t ask us to pay for it.

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    By Posted on Posted in Abundance and Prosperity, Business Ethics, Ethics in Government

    Guest Blog By Lauren Bloom

    [Note from Shel: Yom Kippur, the Jewish holiday of atonement and forgiveness, starts tonight, and I’m pleased to post this timely commentary on the economy, forgiveness, and Yom Kippur from my new friend Lauren Bloom]

    This week marks the observance of Yom Kippur, or the “Day of Atonement,” the holiest day in the Jewish calendar. Yom Kippur offers practicing Jews the opportunity to request and receive forgiveness for their mistakes and broken promises throughout the year. It’s a lovely tradition, and one that recognizes a fundamental fact about each and every one of us: We all make mistakes and, when we do, we need to apologize for them.

    Just this week, we’ve seen what colossal damage corporate greed and dishonesty can do. As Shel Horowitz observed in this blog less than a month ago, the financial crisis gripping America could have been avoided if Lehman Brothers, Merrill Lynch and other investment banks had followed common sense ethical principles. But because they let avarice overcome their good sense, American taxpayers are out $700 billion that may never be recovered, thousands of people have lost their jobs, retirees have watched their pension assets dwindle, the credit markets have dried up, homeowners across the country are facing foreclosure, and there’s no end to the crisis in sight. Somebody – the greedy financiers who created this disaster, the regulators who let them get away with it, the corporate Boards who failed to ask tough questions -– owes the rest of us a huge apology.

    When a mistake is this enormous it can be tempting to say that an apology wouldn’t do any good, but nothing could be further from the truth. The bigger the mistake, the more an apology becomes a necessary first step toward healing. This week of Yom Kippur offers a wonderful opportunity for everyone who contributed to the financial crisis, regardless of their religious affiliation, to step forward and ask the American people for forgiveness.

    Thank you, Shel, for the opportunity to guest on The Good Business Blog.

    Lauren Bloom is an attorney who speaks and consults on business ethics and the author of The Art of the Apology – How to Apologize Effectively to Practically Anyone. Visit Lauren online at www.businessethicsspeaker.com and www.artoftheapology.com.

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    By Posted on Posted in Abundance and Prosperity, Business Ethics, Social and Economic Justice

    Yikes! Seven hundred billion of our tax dollars to bail out Wall Street–and that’s on top of what’s already been spent on Bear Stearns, Fannie Mae, Freddie Mac, and AIG.

    That’s $700,000,000,000. Now, I might support a bailout if we got our money’s worth out of it–but not this bailout–not only doesn’t it give us what we want, it includes one of the most dangerous and far-reaching clauses ever included in any legislation in this country:

    “Decisions by the Secretary [of the Treasury] pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”

    That’s worse than a mere blank check. It’s complete and total immunity from oversight.

    What on earth is the rush to pass such a bill? No one should have that kind of power.

    Then let’s look at the rest of the bill. As I understand it, it…

  • Passes bad debts and other liabilities to the taxpayers, but not good assets–or control
  • Sets no limits on CEO compensation, so the same people who wrecked the economy get to take home annual compensation packages in the tens of millions
  • Allows the government to subcontract out the management of these firms…probably to the same bunch of ethical midgets that broke them in the first place
  • Doesn’t do much to help homeowners facing (or already in) foreclosure

    In short, this is a free gift: break our economy and bring home a prize. Can you say, “corporate welfare”? And rather than paying for it out of general revenues, forcing those who never benefited to cough up the dough, let’s look at the bailout funding plan proposed by Senator Bernie Sanders, taking the revnue from a surtax on those who made their killing and now want to get off with no consequences–yeah, it was OUR economy that they killed.

    If it were up to me, I’d say the public should gain equity in the rescued companies, and any CEO compensation package should not exceed a percentage of the net profits to the company, and layoffs or bankruptcies mean automatic forfeiture of all bonuses. And salary, as opposed to bonuses, could be set at something realistic, say, $200,000-$500,000 (or as a reasonable multiple, say, 10-20x, of the lowest-paid full-time worker’s income). That’s still far more than most Americans have to live on. Bonuses beyond that should be based on performance: creating profitable companies, jobs, investments in renewable energy, etc. This system of rewarding the worst behavior and the worst performance is just plain crazy.

    I’ve already told my Congressional representatives. Have you?

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    By Posted on Posted in Abundance and Prosperity, Business Ethics

    I can’t help wondering–would Lehman Brothers, Merrill Lynch, and other fallen giants be in such trouble if they’d followed common-sense ethical principles?

    My award-winning sixth book, Principled Profit: Marketing That Puts People First, suggests a number of reasons to say no to a sale, focused on core ideas of honesty, integrity, and quality. In other words, successful businesses have standards both for how they behave and for whom they choose to do business with.

    So many of the loans coming apart in the subprime crisis didn’t meet the basic criteria of quality–there was no assurance that the borrowers had enough resources to pay back the loans.

    Yes, these loans provided a path to home ownership for many Americans who could not have otherwise afforded them–a worthy goal. But those ownerships turned out to be temporary, and those forced from their homes are now in worse shape. Perhaps if proper lending criteria had been applied, the market would have responded by lowering inflated home prices–and those who got burned would have had a safer and more secure path to real home ownership, and the financial titans wouldn’t be fighting for air.

    Oh, and one more question: Why was Bear Stearns considered worthy of a bailout (something I wasn’t at all sure was a good idea) but not these latest casualties?

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    By Posted on Posted in Business Ethics, Energy & Sustainability

    Here’s another entry in the Alice-In-Wonderland contradictions of our world: An auto-industry trade group, the Alliance of Automobile Manufacturers, launched a national campaign to cut fuel consumption and CO2 emissions, caled Eco-Driving.

    All well and good–except that this is the same group that bitterly resisted attempts to achieve a fleet average of 52 miles per gallon by 2030.

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