Logistics ethics: How do you set your limits?

Logistics ethics: How do you set your limits?

In the business world, ethics is a subject that involves several ambiguities but it is still an issue of the utmost importance. Ethics in the logistics world reflects a way of living in the professional field, and, of course, exposes a personal lifestyle. Remember that business is not done between machines: Businesses are made between human beings, and we take into account the actions and reputations of others to do business.

True ethics is not just a binary issue between honesty and dishonesty. Ethics in business, especially when you are dealing with logistics and supply chains, is the determining factor that leads a buyer to make a decision as to who their suppliers are, who their customers are, and what their prices are. Of course, ethics goes beyond that: It determines whether someone takes advantage of an unfavorable and undue situation regarding others (suppliers, distributors, authorities, or the customers themselves).

From a broader perspective, we could say that the most appropriate ethics to manage all logistical processes can be understood as a fair business. An investment. There are thousands of intangible factors that have to do with the success or failure of a buyer. One of them, for example, that has to do with the function of purchases and supplies, points out that the essential thing is to have an impeccable reputation. It is important to keep in mind that we are living times of hyperconnectivity. Any scandal explodes and becomes viral in a matter of seconds, destroying the good reputation that has been built for decades. A poor ethical decision may cost you a lot of money if a scandal occurs, and your competitors could easily take advantage of the situation.

Investing in good reputation is a business few are able to appreciate. One reason for this is because the fruits of investing ethically in a good reputation are collected after many years of work. Sometimes, although a company is not as competitive as others in its guild, it may be preferred by other companies to do business just because of good reputation. In many industries, such as the mining, pharmaceutical, or weaponry industry, ethical issues are sensitive: They don’t only mean economic losses, but fines, or even imprisonment.

Read also: Why Logistics are Essential to Business Strategy? by David Kiger

However, the need to have good logistics ethics is of special importance to buyers in any industry or profession. Especially when it comes to logistics operators with high economic capacity, the need for a solid ethic is much greater since a great power, as the superheroes say, involves a great responsibility, and this is because any wrongly-taken decision means a tremendous number of serious problems.

A purchasing and supply manager, for example, is in a critical position regarding his or her professional ethics since it is common in shopping to handle large sums of money and seek to save costs as much as possible. That is the breeding ground for corruption, and this is the main destructive factor of large organizations.

The Volkswagen case is an example of the devastating scope of unethical executive decisions. This company decided to alter a software of certain models of cars to get favorable results in the carbon dioxide level tests, and, in this way, to keep exporting vehicles to many countries. As in all traps, the house of cards ended up collapsing, and this became a famous fraud that has brought many businessmen to jail and has forced the company to pay billionaire fines to several importing states, which have very severe legislation in terms of environment. Everything points out to the fact that the reputational crisis that this multinational is going through will be remembered for many years. This, of course, means economic losses.

Image courtesy of Pixabay at Pexels.com

What should a logistic operator do to work on its ethics? The basic principle is to understand that acting with a professional morality is not enough but to understand that it is important to avoid anything that involves cheating (no matter what goals can be achieved through unnecessary shortcuts.) There are three basic pillars in logistics ethics. The first is loyalty to the organization and the laws that rule over the business to which the company belongs. The second is fair dealing with all the people with whom you do business (suppliers, distributors, customers, etc.) The third pillar is faith in your profession. If the latter does not exist, it is difficult to find a motivation to be ethical.

It is necessary to learn from the most experienced people, from those who have already gone through real problems. You need to listen to their advice and be guided by them. It is important to know the bad consequences of bad decisions, and understand that your company is not the exception: This can happen to you too.

So now you know. It is better to think ahead and do things right from the beginning. Even if you do not see it in a tangible way, good ethics is one of the requirements of business success. Seize it!

Recommended: Ethics in Procurement – Simple, but Not Always Easy

* Featured Image courtesy of David McEachan at Pexels.com

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