The major corporate climate debate of the moment is whether business should be solely answerable to stockholders or whether much broader stakeholder responsibilities must be brought into play. In this article I discuss “Business Ethics” and how old-fashioned views of stockholders alone are broadening out into a wider conception of value creation.

I have avoided Twitter for some time. My reluctance stemmed from the fear of another social networking site tearing chunks of time out of my day. However, I’ve surrendered, and despite my first inclination to only follow the likes of Stephen Fry and other celebs I’ve actually found it rather thought provoking. Of course, there are many mundane tweets which don’t put a spark in my day (such as trips to the dentists or school runs) – but there are others which have made me stop and think about some of the bigger business questions of our day.

After registering for the event at the front door, I then was given a tour of the facility with the emphasis on the people within each office and their accomplishments. My ethic’s detector antennae(EAD) began to tingle. Then I was introduced to a variety of associates who began asking me personal questions. Now my EAD is in full vibration. From a sales process, these individuals had not established any relationship, but presumed that my relationship with the person who invited me immediately extended to them. There really wasn’t any opportunity to meet any potential ideal prospects because each guest was being held in conversation by anywhere from one to three associates nor was there any time to meet with the individual who invited me because he was circling the room meeting all the other guests. Now the words, multi-level marketing and cult began circling in my head.

Given that my time is quite valuable, I asked one of the associates as tactfully as possible if this was informational or a recruitment meeting. Again, I was told it was informational, absolutely not a recruitment meeting and to please keep an open mind because everything would be shortly explained.

Guests were then directed to a small room with stacking chairs (minimum padding) and spent the next almost 2 hours listening to their successful marketing director all the reasons to buy into this multi-level marketing business. Since I was in the back of the room and was not raised to be a rude individual, I stayed. However, I was not a happy camper because I was definitely lied to by the person who invited me because 2 of the 3 points on the last Power Point slide specifically involved recruitment.

What really bothered me was that the majority of people (mostly young people under the age of 30) in the room were actively listening to this sales pitch which was identified numerous times by the marketing director as not a sales pitch. After all, if you joined them part time you could make over $20,000 annually by just working with 4 families in a month. Of course, the marketing director did not say that you need 4 new families each month to sustain that income. As the old adage goes If it sounds too good to be true, it probably is.

So what does this have to do with ethical values in business? Absolutely everything! Ethics first and foremost are about being honest. When I asked the associates what they did, the only response was We help people. Any further questions were slickly evaded by having a new associate enter the conversation.

Second ethics is a referral mechanism or criteria. Since I network a lot, I also believe in referrals. Ethics is about knowing individuals and what type of values that guide them. Since I was intentionally mislead, I can no longer refer this individual or his organization and when asked will honestly share my perception that this is not a reputable firm no matter what some nationally known business guru said.

As in this case, not only was I mislead by the individual who issued the invitation, but the associates I met at the firm as well as the marketing director. Isn’t it funny that a firm can’t even be honest and call their marketing director a sales director? I guess by calling them a sales director would be too honest or ethical and might scare people. NOTE: Upon returning home, I did a Google search of this organization and discovered yes they were a multi-level marketing firm. Yes, I should have done this before accepting the invitation, but I believed that the person was forthcoming in directly answering my 2 questions.

This much broader view of responsibilities – Stakeholder Theory – has been around for quite some time and owes much to the work of R. Edward Freeman. In his words, “For any business to be successful it has to create value for customers, suppliers, employees, communities and financiers (shareholders, banks, the people with the money).”

The interests of all the stakeholders must be considered and best integrated in a broad-fronted quest for value creation. In finding the common ground of these stakeholders – rather than seeking only to mitigate against conflict and searching for trade-offs – businesses are better able to create value for all.

Small business owners have limited time and need to leverage every moment to build their business. Networking is one such activity. Yet, when other small business owners take advantage of their colleagues through the demonstration of unethical business core values, then everyone loses.

I am sure that this national firm will continue to grow because many individuals want that magic pill for success. However, I believe that by being a lot more ethical, this firm and some of the other similar firms could grow with greater speed and not earn the negative unethical reputation as a cult based multi-level marketing firm

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