February 21, 2024

Leading Business

Business in Evolution

Ethical Business Practices Attracting Multi-Generational Audiences

5 min read

Gen-Z continues to demonstrate a willingness and, for some, a prerequisite to include purpose and ethical practices inside the business world. Long are the days of Michael Douglas in the 1987 acclaimed film Wall Street whereby the rule of the day was that there were no rules. Today’s business professional is exiting higher education and proctoring professional paths steeped in purpose over profits.

The investment banking industry and higher education find themselves in respective purgatory, trying to attract top talent when that supposed talent has every opportunity of an open marketplace.

Higher Education Shifts

Higher education recognizes an impact in providing ethical modeling to business learning at various levels. Programs such as the McGowan Fellows Program, a prestigious scholarship established by the William G. McGowan Charitable Fund, introduce top MBA talent to ethical practices in business. “As they establish their careers, the Fellows are expected to make ethical leadership and a commitment to social betterment a key aspect of their organization’s ethos,” says Michael T. Nietzel in Forbes.

Accepted McGowan scholarship participants receive value-based leadership training, alumni coaching, and a social impact project as part of a year’s worth of tuition payment underwritten by the fellowship. “Fellows emerge with a new perspective on the responsibilities and potential of leadership, as well as a cohort of like-minded professionals and access to a welcoming alumni network of change-makers. They are prepared to advance business and society,” describes the McGowan Fellows Program.

Globally, operations such as the Journal of Ethics in Higher Education, published by the Globethics Foundation based in Geneva, Switzerland, open dialogue with the academic community. “The journal is aimed at academic experts in ethics and education, working at the forefront of ethical thinking in global and intercultural perspective, academic integrity, and the philosophy and practice of higher education,” as detailed by the Journal of Ethics in Higher Education.

On-the-Ground Ethics

Many of today’s startups often look to Venture Capital (VC) investment as a way to grow their businesses. On the positive end, it can provide the needed capital to bootstrap operations, increase advisement, and expand. However, a business that accepts VC support can sometimes lose creative control. Investors may also demand large equity shares or even seek a quick payoff promoting a sale.

In extreme cases, like Michael Douglas’s mythical character Gordon Gekko, some investors look to buy companies to sell off parts for quick profits. This practice is known as asset stripping, receiving increased questions surrounding ethics that have little regard for the hardships of workers affected. While asset stripping investment practices still exist, there is a growing sentiment among certain professionals to help startups with a more collaborative, business-first advisement in mind.

Leila Hormozi, co-owner of the investment firm Acquisition.com is a value-accelerated capital firm helping others scale their businesses. Hormozi developed knowledge in the trenches while expanding the company Gym Launch with her husband through a licensing model.

After establishing over 4,000 fitness centers, today, Hormozi and the members of Acquisition.com are looking to offer companies a collaborative method that leans into the ethical sentiment of investment.

“I don’t have a problem with external investment coming in to give a fledgling or struggling business what it needs to survive and scale. The problem is that some of these investors and venture capital firms can often be predatory and take too much off the top,” says Hormozi.

“They can make capital available under suffocating conditions, demanding a repayment structure that keeps them in the business for too long. Or they ask for an equity percentage that gives them controlling interest in the business without any return in value through robust consultation, expertise, assets, business network, etc. This tactic has killed many businesses. I wish to perform investment differently for low-mid market founder-led ventures that usually have it the worst when investment predators run through them.”

Company Culture Advisement

Hormozi and her firm concentrate on founder-led service businesses focusing on scaling or selling, depending on what the business owner wants. “Our strategy in these businesses is to build a solid company culture, onboard high-level talent, build robust but flexible infrastructures and management systems, and prioritize customer success. And this is something we’ve implemented even before Acquisition,” says Hormozi.

According to Dan Conner, general partner at Ascend Venture Capital, “Overcoming the ethical issues in venture capital is paramount for VC funds and the early-stage companies that benefit from them,” he says in Venture Capital Journal. Highlighting a turning point inside the sector, he adds, “More people must move beyond the typical VC investment strategy and adopt principled modes for ethical venture capital to work. Do nothing, and we risk social backlash and the devaluation of the venture capital market due to a lack of integrity.”

Ethics is at the forefront of not only VC investment but company conduct in the digital age. As a result, Wayne Elsey, founder and CEO of the Funds2Orgs Group, is looking for a shift in leadership perspective. “To navigate this new era, you want to take a leadership approach mindful of three fundamental principles: transparency, responsibility, and empathy,” he says.

For companies looking to attract younger talent, the question of ethics and global responsibility attached to business practices is becoming an integral aspect.

Albert Galarza, global vice president of human resources at TELUS International states, “As they [Gen-Z] continue to make up an increasing percentage of the workforce, employers must learn to incorporate Gen-Z preferences in order to effectively attract, engage and retain top talent within this generation.” Regardless of what sector is searching for talent, from investment firms to large and small business operations, ethical, responsible business practices are often a prerequisite that will attract both workers and customers.

As Gen-Z and the younger generations spill out into the business fields, more and more are grappling with balancing sustainability and global ethical practices in their career pursuits. Higher education plays a part in establishing the framework of ethical mindset development that inevitably carries over into career selection.

Whether starting a company or working in the financial sector, the younger generation is concerned with the ethical elements involved in their decision-making process. Entrepreneurs recognize that a collective effort is necessary, from advisement to investing and company culture building, all working in unison.

Responsible company growth is the name of the game for younger professionals, where transparency, empathy, and widespread ethical concerns are added to the mix of any career choice.

Interviews have been edited and condensed for clarity.


Leave a Reply

Your email address will not be published. Required fields are marked *

Copyright © All rights reserved. | Newsphere by AF themes.