Saturday, April 23, 2011

Anticipate Ethics Slippage

In my opinion, retailers have an ethical obligation to help improve their local communities. But whether or not you agree, I believe you support the requirement that retailers not cheat their customers.
     Business researchers at Harvard University and University of Notre Dame analyzed instances in which retail businesses did cheat customers. The researchers concluded that in many cases, the owners/operators did not intend to do wrong. The slippage was unintentional, at least at the start.
     One example the researchers give is from the auto repair shops at Sears, Roebuck and Co. With the objective of increasing employee productivity and, some say, wanting to serve customers more promptly, management set a goal for the automotive mechanics: Each was to do at least $147 of billable work per hour.
     The result was not faster work, however. Rather, the mechanics looked for items to repair that weren’t really broken. They also jacked up charges for legitimate repairs.
     The Harvard/Notre Dame researcher classified the ethical lapses. Here is my version, along with suggestions for anticipating ethics slippage in order to head it off:
  • Ill-conceived goals. The Sears auto repair episode is an example. Before setting standards, encourage comments from those responsible for the implementation. Ask them to say how they might meet the standards. Also ask them if they see better ways to set standards that would achieve the retail business objectives.
  • Motivated blindness. A retailer might grant special favors to suppliers who provide the best of the production output, but the retailer doesn’t realize that this can lead to the supplier expecting special favors even if later giving inferior merchandise or services. One remedy is to honestly assess any conflicts of interest in what you do.
  • Indirect blindness. While charging the same prices to customers, a retailer might outsource tasks and fail to monitor the quality and ethicality of the work. The retailer’s objective is increase or maintain profitability when the retailer’s time is tight. But accountability legitimately remains with the retailer even when work is outsourced.
  • Slippery slope. In many cases, a minor transgression is okay, but do check back to ensure the minor transgression doesn’t become a revised base for what is acceptable. Shortchanging the customer by half an ounce at the fish market might be within the range of ethical acceptability. However, monitor whether that becomes two ounces because the salesperson isn’t careful enough.
For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more:
Monitor Your Community Involvement Payoffs
Disclose Product Cautions

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