Ethical Considerations for Small Business
Swift, Catherine, Canadian Speeches
In opinion surveys, small businesses are ranked by the public, customers, and employees as the most trusted and esteemed groups in Canadian society. The fastest growing sector of the economy, generating the most new jobs, small businesses are valued for their ethics, innovation, customer service, community involvement, and employee relations. But the of taxation and regulation, reflected in a growing underground economy, is seen as straining those ethical standards. Speech to Canadian Centre for Ethics and Corporate Policy, Toronto, December 2, 1999
With just a few days to go before we enter a new millennium, today I would like to provide a look into the future from the small business perspective, but at the same time touching on the past in order to show both the opportunities and risks which loom on our horizon. Just those two words, opportunity and risk, probably define the entrepreneur better than any others. They clearly depict the people who will be blazing new trails for others to follow and benefit from as we move forward as a nation into exciting but rapidly changing times in which not only the business community, but governments and every facet of our society is being challenged to become -- dare I say it? -- more entrepreneurial!
Growth in the small- and medium-sized business sector in Canada -- and for that matter many developed countries -- over the past couple of decades has been very significant. This segment of the business community now represents about 40% of GDP and accounts for more than half of total employment in the Canadian economy. As the overall role of small business expands, questions about what this expanding role means to greater Canadian society outside of the hard economic numbers also arise, and ethical issues are one such consideration. Having worked with and studied the values that drive the entrepreneurial culture throughout my career, I strongly believe the growing role of the small business community in Canada is good news for the expansion of more ethical business practices.
Research on entrepreneurs shows what is considered by some a surprising funding -- Canada is one of the most entrepreneurial countries in the world. A recent study of entrepreneurial attitudes in several developed countries found that Canadians were neck-and-neck with Americans as the most entrepreneurial of the group. Although it is impossible to fit entrepreneurs into any one category, research has consistently identified a number of common qualities displayed by entrepreneurs. The common elements include the desire to be one's own boss, independence, self-reliance, the desire to build something, and the need to make a contribution to society. There is also an anti-establishment element to the entrepreneurial mind set, accompanied by a fundamental scepticism of big bureaucracies such as those found in government and large corporations. Although money is certainly one motivating factor, it has never been found to be the leading incentive for entrepreneurs. And that is just as well, since many have experienced spectacular failure as well as fantastic success. In fact, surviving the former is often a prerequisite for achieving the latter.
One of the strengths of Canada's entrepreneurial culture is that we have permitted people to fail. To see what happens in societies that do not believe in letting businesses fail, we need only to look at the Asian financial meltdown of last year, where governments propped up inefficient and sometimes corrupt companies and financial institutions until the whole house of cards came crashing down. The way in which Japan and some other Asian countries conducted their affairs was anti-thetical to true entrepreneurship. Interestingly enough, after the financial crisis last year, these same countries are now looking to the entrepreneurial sector as the best means of reinvigorating their economies.
Negative motivations have also pushed people into entrepreneurship. …