I received information about a study that reminded me once again that business ethics is messy.
We would like to think that being ethical is a simple process of deciding right from wrong. Although sometimes it is, more often it seems to take us into a murky gray of ambiguity and seemingly irresolvable dilemmas.
The study was conducted by Experian, a global information services company. The study examines the payment behavior of the small-business owner in relation to the current mortgage crisis. The study found that business owners with a severe mortgage delinquency were more likely to pay their business obligations instead of their mortgage. It seems that because of deteriorating equity, high mortgage payments and limited refinancing options, business owners chose to ensure the business’ survival, preserving their source of income at the risk of losing their home. For the report, Experian compiled a sample of 2.7 million business owners and analyzed the payment behavior of those owners with a mortgage over the course of one year.
New entrepreneurs often struggle with the need to put their house at risk to help start a new venture. This study suggests that once the business is operating they will tend choose their business over their home.
What an agonizing choice this must be for most of these business owners.
Keep your business afloat, but lose your home. Keep your home, but risk losing your business. Ethical choices are not always as clear cut as we would like.