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Wednesday, May 21, 2008

Ethics and marketing -- some thoughts

If you are looking for a clear and obvious answer to the ethical issues in our industry, I won't be able to provide them (I am not that brilliant!) This image from an academic paper suggests some of the variables here -- but if you read the whole thing, you'll see how downright complex your choices really are.

In the previous post, one of our readers describes how, to ensure a successful low bid a co-operating vendor and purchasing agent (and some friendly 'competitors'), arrange higher competing bids to ensure compliance with multiple bid requirements and still ensure a profitable job. Similarly, if you read my "Seven tips for construction marketing success" (by request on the blog sidebar) you can read about a general contractor who conspires with a local hospital to "come in low" all the time -- with the mutual understanding that the scope of work is deliberately left vague enough to allow for profitable change orders. Both practices, of course, are blatantly unfair to competing bidders and could well be in violation of the law, especially anti-combines (or in Canada, Competition Act) laws.

Last November, the late Sonny Lykos addressed these issues in a blog comment:

In my opinion, deceptive practices can never be justified any more than when an employee steals from his employer, justifying the act by telling himself that he deserved the raise he didn’t receive.

And that’s the problem with far too many people, their cavalier attitude of rationalizing unethical acts to get what they want. We know what the GC wanted, being awarded the project. We don't know what the hospital administrators wanted, and obviously got. Either way, the agreed upon tactic is tacky!

Of course, we don't live in a perfect world and ideals of fair business practice are challenged every day by the competing demands of expediency, personal relationships, and (on a more positive ethical note) job quality/satisfaction. We all know that the low bid is not always -- or even often, the best -- except in purely commodity transactions where quality standards can be highly specified. So, arrangements to get around the bidding rules sometimes serve a higher ethical purpose. (Should you take the low bid and get a crappy job that will cost more in the long run, or work with a trusted supplier who does things properly, without question, and will fix problems without complaint or manipulative change orders.) But we are playing with fire here and the ground rules are shaky, indeed.

I'm facing many of these contradictory ethical issues in my writing, for example, on the bid shopping/peddling issue. I cannot disclose the intellectual foundation of the story, for example, in part because it would divulge or interfere with sensitive and important business relationships. And I know that I cannot attribute or publicly identify in any way the many people who are contributing to its substance -- including the people who have graciously responded to my survey, and my own network of personal contacts who have shared insights that usually don't find their way into the media. (No one issues a press release saying they are about to bid shop or peddle, of course!)

Here, I cannot wave a magic wand and tell you what is right, and what you should do. But I am certain that successful marketing is very much intertwined with ethical and sometimes legal dilemmas. We should, I think, strive to build our marketing/branding advantage, but equally, strive to be fair in our practices. Done right, I suppose, this has advantages in business practice and sustainability. In the real world community -- not that of public relations experts and photo opportunities -- people get to know who is who, and what is what, and behave and respond accordingly. Your (real) reputation for integrity I think, with some common-sense shrewdness and talent, will ensure your business survival no matter the economic environment or ethical practices (or mispractices) of your competitors.

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