Ethics and Starting a Business With Friends

business_ethics_highlights_2The piece linked below is about the practicalities of starting a business with friends. But much of it ends up being about ethics. The strong bonds between friends, for instance, may end up making them more likely to permit themselves to do bad things. On the other hand, friends tend to trust each other, and trust is the foundation of a successful business.

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LINK: Everything You Need to Know Before Starting a Business with Friends (by Alex Norcia for Vice)

…Trust is a key to any successful business,” said Tae Wan Kim, an associate professor of Business Ethics at Carnegie Mellon’s Tepper School of Business. “Jewish merchants in New York’s Diamond District are a great example, as they don’t write a contract. The business is entirely based on trust and friendship. Contracts are an important business tool, but contracts are always incomplete. The void can be filled by trust, and friendship is a great fuel to engender trust. Family-owned small businesses are based, of course, on a similar concept.”

One major advantage might be that you’d have more of a reason to trust the people who you’re engaged in the enterprise with,” Berkey agreed, clarifying that this would only be the case if you—you know—trusted your friends….

What do you think?


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