Alamy. Payslip. Digital image. The Guardian. Guardian News and Media, 6 Nov. 2013. Web. 10 Sept. 2014. <http://static.guim.co.uk/sys-images/Work/IQ_vs_Income/General/2013/11/6/1383739798622/payslip-008.jpg>.

The Guardian recently posted an article regarding late payments and how “rotten corporate ethics can erode company culture from inside.” The article was very to-the-point in saying that “the ethical principle underlying any contract is trust.” Late payments, mainly between customers (businesses) and their suppliers, have for several years been a troubling and vital reason for the failure of many businesses. According to the article, “it is estimated that 4,000 businesses failed as a direct result of late payments” during the 2008 recession. As stated before, trust is key in any business environment between different stakeholders, a person or group with a certain interest in something. Thus, pushing for longer payments or changing the terms of a payment contract not only breaks the trust between companies, but essentially removes the competitive advantage the two firms had against their own competitors. Late payments not only effect upper management, but also the average employee as they may have to receive pay-cuts. Customers can also be effected by the possible shortage of supplies. My analysis of the article, with support from the “Stakeholder Theory” video, shows that late payments is a key ethical concern and may lead a business, particularly smaller ones, into decline if payments are continually ignored.

Sources:

Back, Philippa F. “Paying Late: An Ethical Business Issue.”Theguardian.com. Guardian News and Media, 06 Nov. 2013. Web. 10 Sept. 2014.

Fawcetts Chartered. “Late Payments ‘remain a Worry'” Fawcetts. Fawcetts Chartered, n.d. Web. 30 Sept. 2014. <http://www.fawcetts.co.uk/late-payments-remain-a-worry-1380/>.