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Is there such a thing as an honest business?

September 30, 2008

Getting a 3/4 mug of coffee when I paid for a mug, less than a scoop of ice cream when I ask for a scoop, charged a full minute by the phone company when I only spoke for 30 seconds. Getting shortchanged is a fact of life. My colleague complains about how some pubs take half a jug of beer, top it up with tap water and sell it for the price of a full jug. My Australian associate complains about getting ripped off by taxis. Me – I try not to sweat the small stuff unless its hundreds or thousands of dollars we’re talking about.

Consulting companies have their creative ways too. I’ve seen outrageous expense claims (called out-of-pocket expenses) charged to clients including a purchase of a bottle of whiskey disguised as a taxi claim. Consultants routinely claim phone calls, meals and taxi fares against project budgets. Some are reasonable. Some make you see stars.

Some consultants blame expense padding on the extra work caused by project scope deviations. Yes scopes can deviate but it could also point to a more deep seated problem. When a client engages you to build a house and halfway through starts asking you to build extra rooms and toilets, one has to ask – is it because they like changing their minds or because you never really understood what they wanted in the first place.

When consultants suffer from the ‘promise first think later’ disease, they can be forced into dishonesty to recoup losses. In the end they’re not much different from the pubs that sell diluted beer.

IMO when we are careless in doing business, honesty is often the first casualty. We then grow to become “shrewd” businessmen. I know its never easy when survival is at stake but it begs the question – if you owned a business, how far would you allow ethics to be sacrificed before it becomes unacceptable? Is it naive to run a business on honest principles and expect to stay afloat at a time when people would easily sell out their principles for money? Is there such a thing as a middle path?

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5 Comments leave one →
  1. September 30, 2008 9:45 am

    There are no middle path when it comes to dishonesty. Once a person begins to do so, it’s a slippery slope to disaster.

    E.g. How about adding some protein (Melamine) to milk to make it more rich? I am sure those people running their business are no fools. Yet, why did they such a thing?

    My own 2 cents is DON’T START! There’s a high premium for honesty, but you’ll need time to build such a reputation.

    I share your views. At times it feels like you’re the only one clothed when everyone else is running naked.

    The China melamine thing happened before. A year ago they did exactly the same thing to pet food and caused thousands of pets to die in the US. There was a global uproar, promises of action etc etc. Well, a year later it looks like neither the Chinese nor US government have learnt their lesson.

  2. September 30, 2008 9:55 am

    not easy to have an honest business nowadays esp when everyone around u is doing not so honest business. but you can just be like them….and be just ANOTHER dishonest businessman. so what is there to differentiate?

    MORE lies? MORE dishonesty? how long will that last? be assured tat once the customers found out, they will go away to other more honest (or new but dishonest) businesses.

    it’s how u can keep the customers happy which matters…. and not taking their happiness n trust away for short term gain.

    Hmm… sometimes I wonder, which one does a customer want more from you – honesty or the best deal? For example DVD pirates. Customers know those are stolen property but because they get a good deal, they close one eye. Or what if a supermarket mis-labels a product, putting $5 instead of $6. Would people really insist on paying the correct (higher) price? Like I said, what do you do when even customers are prepared to sell off their principles for money.

  3. LC Teh permalink
    September 30, 2008 11:00 am

    It would be a perfect world if everyone subscribes to the law of Karma. Some call it the Universal law of cause and effect.

    I discovered if I was dishonest with a little, I had to pay back 3-fold in penance elsewhere, somehow. Maybe it’s just my conscience tripping me up. But I’d rather sleep easy by paying up Paul without robbing Peter. Someday I still have to pay back Peter and/or go to jail for it.

    In business, certain actions can be ignored as in grey areas. But they do draw a fuzzy line somewhere. You cross that and the pit is bottomless. Once you establish a certain level of honesty, your associates (and rivals) know where you stand and they deal with you accordingly.

    And as they say, there’s even honor among thieves.

    An honest man attracts other honest people and also con-men, which happened to my dad many years ago. But being known as ruthlessly principled puts the con-artists on guard. The question is when the pockets are empty, how long will it be before survival instincts overwhelm principle.

    Talk about honor among thieves. I once had coffee with two con-artists (I wasn’t in the gang, hehe) and something happened between them. I’ll be blogging about that in a few days.

  4. October 1, 2008 1:35 pm

    for the dvd business. imagine if you tell them RM 5 is for CLEAR version but it ended up crap, cinema-like version with the heads moving around. do you think they wil go back there?
    if you tell them for RM 8, you can get a super CLEAR version with warranty……..i bet they will pay the extra RM 3 for the quality.
    The difference is not that big.

    But if RM 1 vs RM 8…then people might just take the risk to buy the RM 1…….the question would be whether they will return to the same seller again in the future.

    Yeah, these traders have to be honest to their buyers to ensure repeat business. But my point is – trading in stolen property is already a dishonest business to begin with. The customers too are willing to close one eye on the stolen goods for a cheaper price. So when you have a trader with dishonest principles trading honestly with a customer with dishonest principles, is it still an honest business?

  5. October 6, 2008 9:24 am

    it’s a dishonest business of coz. i think it’s more from the perspective of the customers and most of them would think of it as one-way. i don care u are doing honest business or not…and i don care if i am helping u to grow ur dishonest business. what i care is i get the good values which u promised me. if u failed to fulfill what you’ve promised me (honest or dishonest biz), then i will not come to you again.

    something like that. 😀 more like a trust than honest/dishonest.
    er…then a bit out of topic. haha

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