Ethical Issues MSPs Face

Managed service providers, like other companies, frequently face issues that involve tough decision-making. While maximizing profit is the (or at least a) goal for all businesses that are in business to make money, there are times when the course of action that’s the most financially lucrative isn’t necessarily the right one. The inability to discern between right and wrong (or worse, the conscious disregard for the difference) has led many businesses of all sizes into moral failure – which frequently ultimately also leads to financial failure as well. The Enron fiasco is perhaps the most famous case in point.

Ethical lapses often involve legal consequences; failing to conduct business in an ethical manner can result in actions that are criminal offenses, or that result in civil liability (or both). But perhaps one of the biggest misperceptions is that “unethical” and “illegal” are always synonymous. An act can be legal and still be a breach of ethical. And there may even be some cases where the ethically right thing to do can be illegal.

Consistency in ethical application

Integrity in business relates in large part to how you deal with other people (and companies). That includes (but is not limited to):

  • Ethical considerations when dealing with your employees
  • Ethical considerations when dealing with your partners
  • Ethical considerations when dealing with your competitors
  • Ethical considerations when dealing with your customers
  • Ethical considerations when dealing with your vendors
  • Ethical considerations when dealing with the government
  • Ethical considerations when dealing with the press/media

Ethical people – and businesses – are consistent in adhering to the principles they believe in. You can’t call yourself ethical because you treat your employees great, if you try to cheat your vendors. Likewise, you don’t get ethics points for always going above and beyond for your customers, if you mistreat the “little people” who work for you.

Ethical silos

Ethical principles can be divided into several different categories. Some of these include:

  • Truthfulness: telling the truth, even when it might cost you something. That means you don’t lie to your employees (for instance, saying you can’t give raises because there’s no money, when you’re making record profits). It means you don’t lie to your partners (for instance, hiding some of your sales to which the partner contractually has the right to a percentage). It means you don’t lie to your competitors (for instance, deliberately “leaking” false information about your upcoming product/services line to throw them off). It means you don’t lie to your customers (for instance, selling them a high cost product that you know you’re planning to discontinue and stop supporting a few weeks from now). It means you don’t lie to your vendors (for instance, telling them that you’ve found a better deal elsewhere to get them to drop their prices, when you haven’t). It means you don’t lie to the government (for instance, cheating on your taxes). It means you don’t lie to the press or media (for instance, claiming studies show your service or product is the highest performing when those studies are bogus).
  • Accountability: This often goes hand-in-hand with truthfulness, as it requires telling the truth about mistakes you may have made, rather than blaming poor quarterly results or other negative news on someone or something else. Accountability requires that you take responsibility for your company’s actions.
  • Followthrough: Being honest and accepting responsibility isn’t enough. Ethical best practices also requires that you follow through with swift and strong action. If someone in the company mistreats a customer, the response should be two-fold: the person(s) responsible should be disciplined or even terminated if appropriate, and the company should make it right for the wronged customer, whether that means a refund, prompt correction of the problem, or even the offer of a period of free service or “extras” at no charge.

Note that it can be easy to misinterpret these tenets. Being truthful doesn’t mean you always disclose everything to everybody. Accountability doesn’t mean designating a scapegoat to take the fall for mistakes or actions that were based on common company practice/philosophy. Follow-through doesn’t mean no second chances when honest mistakes are made.

The ethical waters in the business world have gotten murky, with merging cultures and differing values and changing mores that make it difficult to know what’s acceptable and what’s not in a given time, place and situation. It’s up to you, as the leader of your organization, to establish guidelines regarding what constitutes moral/ethical practices within the law, societal expectations and your own conscious. Ethical considerations should start with your hiring practices, and ethics questions should be part of the interview and selection process. It’s also up to you to provide education and training to those who work for you; you cannot just assume that everyone is on the same page when it comes to ethics.

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