ethical and legal aspects

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The Ethical and legal aspects of Business Communication

We all know the need for good words and nice gestures in

communicating with people in business and dealing with customers.

These are, no doubt, essential. They are indeed a pre-requisite for

ensuring effective communication and meaningful and enduring

customer relationships. Yet, in todays context, businesses have

to do much more than the good word and nice phrases bit.

There is an imperative need to go beyond the words, and look at the

spirit in which communication is effected and customer relations are

sustained. This relates to the ethical dimension or the values

concerning communication and customer relations that every business

should consciously build up and nurture.The market place can be described as a battle ground and

marketing as a civilized form of warfare in which most battles

are won with words, ideas and disciplined thinking, In

beating competition, businesses often do not have much choice

but to use flashy words and hard-hitting ideas to penetrate

markets and win over and retain customers. In as much as

bottom lines are crucial for sustaining market share, the profit

motive governs the rules the businesses follow in pursuingcommunication and customer relations. Business decisions are

taken more by applying the head than the heart. It is to be well

understood that businesses that really endure are those that show

commitment to values, businesses where the ethical dimension co-

exists with the primary objectives.

The spirit behind the words counts for a lot. Progressive

Business organizations make it a point to articulate values and

lay emphasis on the ethical aspects of business in general which is apre-requisite for ensuring effective communication and meaningful

and enduring customer relationships.

Business Organizations are Perpetual Entities

The ethical dimension of busi-ness assumes significance when

we realize that business organisations, particularly in the

corporate world are seen as perpetual entities. They exist to

fulfill a specific need of people in the community. They will

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continue to thrive and survive as long as they strive to meet that

specific need or a set, of needs in a manner that is acceptable to

the customers or service seekers. For this, they must earn and

sustain customers trust and confidence on an on-going basis.

Commitment to Core Business Principles

In order to earn and retain custom-ers trust and confidence,

progressive organizations are value-driven and they affirm their

commitment to core business principles. In their communication

and customer relations they are governed by such principles

to which they are committed. When it comes to advertisement

or the vision document or the mission statement, words anddeeds clearly reflect the value system which operates in that

business organization. This set of core principles may take

many forms, for example:

An Organization may decide not to advertise in any

politically affiliated newspaper or journal.

An organization may decide not to make any adverse

comments, implicitly about its competitors and their

products. An organization may decide not to pass on to the customer

any loss arising out of mistakes committed by their

employees.

Such principles can be many and varied .

Beyond Caveat Emptor

Value driven business organizations transcend the CaveatEmptor or the buyer beware attitude. The attempt is not to

outwit the customer and make a fast buck. The attitude is not

one of carrying to any customer inimical information in fine

print at some corner hoping that it would miss his attention.

Enlightened business managers do realize that you missed the

fine print, so you suffer days are over. Good customers are

hard to come by and should be given fair treatment. The sense

of fair play, it is realized, is an important value that should

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permeate communication and customer relations.

Business Legal Compliance

Businesses have learnt hard way that their relationship with the

customer extends beyond the legal aspect. Legal requirements

have to be met, particularly when they are favoring the customer.

Taking recourse to legal remedies and carrying on

running legal battles against the customers is far from desirable,

even when the legal grounds favor the business. A business can

win the court case but lose the customer, and even the goodwill

of a section of existing and potential customers.

Customers are Not Adversaries

All these arguments bring out the message that customers are

not to be treated as adversaries. They are partners without

whose sup-port no business can hope to survive. Among

partners there cannot be a win-lose relationship. It has to be a

win-win relationship. Beyond legal compliance, beyond the

jargon, there should be a sincere effort to make the relationshipmutually beneficial.

Move Towards Corporate Governance

Values relating to communication and customer relations are

also to be seen in the larger context of business organizations

moving towards corporate governance. The term corporate

governance has a wide connotation. It supports a business ethicthat shuns short cuts and unethical practices. It brings out the

accountability of management to shareholders. In its broader

sense, corporate governance is said to encompass the entire

range of formal and informal interactions of the corporate

sector with the society at large. Corporate governance strives to

ensure fairness, honesty and transparency of a business

organization in relation to its dealings with various stakeholders

viz., shareholders, creditors, the state and employees. The

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widely referred prescriptions of the Cadbury Code in the United

Kingdom deal with the role and responsibilities of the Board

of Directors and its sub-committees. Among others, the code

lays down that the Board report should contain a coherent

narrative, supported by the figures of the companys performance

and prospects and that the Board has an obligation to

present a balanced and understandable assessment of the

companys position. These aspects of corporate governance are

particularly relevant in the context of ensuring good and proper

communication and customer relations.

Cardinal Principles of Communication

The three cardinal principles of communication for any, good

business organization are:

a. Adequacy

b. Transparency

c. Consistency.

Adequacy implies that all relevant information is made available

by the business and its management to its employees, customers,

investors or shareholders as the case may be to facilitate afair assessment of the state of affairs.

Transparency relates to the degree of openness in the sense that

no attempt is made to cover up or hoodwink the shareholders.

Consistency in a sense reflects the core principles, statements

and performance-related claims, which the company stands by

over a period of time. It means that there is no attempt to

contradict the, statements and claims made by senior management

functionaries and that they speak on the same wavelength.

The Rights of Customers

In the context of ensuring effective communication and

meaningful customer relations, business organizations will have

to take cognizance of customer expectations and their rights as

they perceive them. Essentially, these relate to the right of

information, the right of choice and the right of accountability.

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Right of information This right concerns the customers need

to have all relevant information on the product and the

company before he is in a position to decide on the transaction

or relationship. The prices and rates, the terms and conditions,

the incentives and discounts, the warranties and after-sales

arrangements should all be made available. In the services

sector, the right of information is gaining acceptance not only in

the financial services and public utilities, but also in medical and

such other professional services. The right of information in

different areas would mean the fol-lowing:

A doctor giving his patient details about his ailment, the type

of medication and treatment he proposes to follow and may

even involve encouraging the patient to seek a secondopinion, if need be

For Airlines services it means giving reasons for the delay in

the flight depar-ture, the probable time of departure and the

efforts being made to cut down the delay and not leaving the

passengers in the dark

For a bank or a financial institution it means giving to the

borrower the full picture of the rates and charges involved,

and not keeping him or her in the dark about any hiddencosts

For a mutual fund agent or salesman it means keeping the

prospective investor duly informed about the implications

of investing in mutual funds-that the returns may vary and

even the principal amount may get eroded depend-ing upon

market related factors

The right of information would also cover the availability of

and easy access to product and company literature.

Right of Choice

The second important expectation from the customer would

relate-to the right of choice. Customers generally expect to have

adequate choice of identical or more or less similar products or

services. In fact the trend in market today is to offer abundant

choice and even tailor-made products or services rather than a

one-size-fits--all kind of approach.

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To cite examples, for an airline passenger the right of choice

would involve different menus to choose from and for a

mutual fund investor, it may involve the facility of shifting

from one scheme to the other without much of a load factor.

Right of Accountability

Todays businesses have to be far more accountable to their

customers than the businesses in the past. Through transparency,

the customers and others get to know what is happening

in the company and when things do not happen as they should

be happening customers often make their voices heard. They

resent if the costs of any inefficiency within the company arepassed on to them. They expect the employees to turn out a

days fair work and resent gossiping or idling. Similarly, customers

expect the business managements to penalize their

em-ployees for any mistakes they may commit, which result in

losses, and not pass them on to the customers.

To conclude it can be said that business organizations are laying

particular emphasis on the ethcal part of business too. Even as theycommit themselves to the core business principles, they also

articulate the values, which govern their actions. People forming

part of the business should make conscious efforts to reflect

such concerns through communication and customer relations,

so that enduring and endearing relation-ships are built up and

sustained across all sections.

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ethical and legal aspects

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