Most people when confronted with a title such as this would think of major companies bribing other companies or government officials in order to get large contracts. So at that point the average entrepreneur would see no relevance to themselves.
Certainly I have witnessed the larger corporate corruption where people pay bribes for the business and where they go through the motions of gaining the required number of tenders despite having already decided to give the contract to their friend.
But there is much more to corruption in business as a check on the definition of the word will show. Corruption is about low moral standards, it is about lack of integrity and it is about abuse of a person’s position for personal gain. Unfortunately, these are areas where the entrepreneur can be just as corrupt as the multi-national corporation.
Once morals and integrity are abandoned then lies become the norm and the desire for personal gain takes precedence over the need to provide good products and services to the client.
Of course, any entrepreneur that I talk to tells me that they always put the customer first. However, here are some examples of what entrepreneurs that I know have done whilst still maintaining that they are ethical and whilst decrying corruption in big business.
Firstly we have financial corruption. One of the big problems for new entrepreneurs is that of cash flow. Consequently they are obsessive about collecting any money that is owed to them. However, when it comes to paying their suppliers then the famous lies such as ‘the cheque is in the post’ immediately comes into play. Not only does this create a false picture of the company, it also means that morals and integrity are being sacrificed to cheat an honest supplier or suppliers.
The financial problems become worse where there is a requirement to take client’s funds and hold them for some form of future payment. One business that I knew used to carry out payroll services for clients and then invoice them for employee taxes that they would hold until the payments became due. However, in order to ease cash flow they spent that money on their business so that the funds were not available when required to pay the client bill.
The final and most serious financial corruption is the practice of trading insolvent. In other words, you continue to order raw materials and services whilst still taking work from clients knowing that you may well not be able to pay for what you have ordered nor will you be able to deliver for the client. This is a bit like playing the casino with both your suppliers and your customers.
Before moving on to marketing corruption, let us look at the issue of bribes. How many entrepreneurs will cut the price in order to persuade a client to take their product or service? In other words, how many of you can honestly say that you have not paid this type of bribe rather than selling your product or service on its merits and benefits?
Marketing brings its own form of corruption. Many will see marketing as a creative art that encourages over exaggeration and downright lies. Entrepreneurs are as guilty as large marketing companies of throwing their morals and integrity into the dustbin in order to win business. Entrepreneurs should first look at their brochures, advertisements and web-sites and ask themselves how much of what they have written would stand going through a lie detector.
I have known businesses that boldly state that although they are a new company they have years of experience in the industry. I once challenged a hair dressing salon on that point and was told that they had their hair cut regularly! On that basis I could class myself as a car mechanic!
Another favourite trick is to put references on to literature and websites. However, not all references are genuine and even if they come from genuine companies they often turn out to come from friends and relatives.
The concept of references can also be extended to allowing people to put comments on websites. However, I know of one company who immediately they get a bad comment invent a good one and put it on themselves!
A further favourite cheating practice is to put photographs on a website that imply an endorsement that does not exist. For example, there may be a photograph of someone famous that is in the public domain that can imply things about your product or service. Because of the size of the internet this may go undiscovered for some time.
I am sure that you can come up with many more of what we call in the UK ‘little white lies’! But once you start labelling this lack of morality and integrity in this way the road to corruption has begun. How big does a lie have to be before it is unacceptable! I would contend that no lies are acceptable if you want a good business. ‘People buy from people’ and people will only buy from liars and cheats once. Business is a process of mutual benefit between seller and purchaser and once you adopt practices that are for your benefit only then the business relationship is dead.
Finally, one very personal experience of how I almost fell victim to a corrupt business. I was approached on a business networking site from a man supposedly from Dubai. He appeared to be the head of a major company and he wanted consultancy on business incubators. After my initial response I was directed to his lawyer in the UK who asked for a proposal to build a business incubator and a costing. I immediately received approval for the outline proposal and finance was ‘approved’ despite my not submitting and costs. He also wanted my bank details! A quick check on the internet showed that he was someone who specialised in identity theft. I reported him to the UK police for them to take action.
So be careful not only about what you do but about what others may do to you. My experience has shown me that the one person easiest to lie to is a liar. Stay honest and stay in business.