Fitting business conduct

Resellers have long bemoaned the lack of ethical business conduct in the regional channel. Tamer Ismail, CEO, BDL Group, shares insight on the significance of upholding fitting business behaviour.

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Fitting business conduct Tamer Ismail is the chief executive officer at BDL Group, a Dubai-headquartered IT broadline distributor. The views expressed in this article are Ismail’s own opinions and not necessarily those of Channel Middle East magazine.
By  Tamer Ismail Published  July 22, 2014

Software piracy, grey marketing, price wars and counterfeit IT goods have been thorny vices that have plagued the regional channel for some time now. This, coupled with declining margins on hardware and tightened credit terms, has added further pressure to resellers operating in the authorised channels. While others have managed to weather the storm despite the challenges, some have had to engage in misconduct and unethical business behaviour in order to survive.

A business, whether in the IT industry or any other sector in Middle East or anywhere in the world, that exemplifies integrity in its products, services and actions holds itself up to the highest ethical standards at all levels.

For Middle East businesses, the importance of promoting good business manner cannot be understated given that the business profile from a compliance, ethical conduct and legality are crucial elements that an emerging market region like this one needs.

I believe that ethical standards in business are a key factor in how that business is defined, and for IT distributors, their business reputation impacts on partners, employees and potential for growth.

One of the crucial elements that can help organisations to consistently build a culture of principled business demeanour is by developing an open two-way communication channel with the primary target customers and being transparent with the whole ecosystem on issues that could influence and impact their business.

It’s crucial that every firm should promote a positive and productive environment to its staff because it’s the people that shape the culture of any organisation.

For example, a distributor needs to understand the way its resellers work and should make the extra effort to play a key role in providing extensive market reach and coverage in helping them to grow. The value of this role grows exponentially in fragmented markets and the distributor should clearly define the responsibilities of the partner.

Ethics is a crucial part of the channel ecosystem because of the impact any misconduct tends to have on the whole supply chain. If a distributor or reseller is engaged in unethical business conduct, not only is the individual reseller or distribution company affected, but the brands they represent are equally compromised.

I don’t believe it is hard for the IT distribution sector to conduct business ethically. However, ethical business behaviour on its own cannot be sustained unless a code of conduct is outlined  and agreed upon by all involved in the IT supply chain. This will in turn, help to manage expectations and foster mutually beneficial alliances. If all stakeholders involved in the  channel adhere to a strict code of conduct, the many challenges that seem insurmountable would easily be overcome if there is collective accountability.

From an industry view, if the channel wants to attract new IT vendors to the Middle East, the compliance profile of the whole IT sector end-to-end, and ethical component is a significant part of whether the region can draw new investments to build on existing ones.

Corporate governance has become a major factor which affects the success of emerging markets businesses, but there is no lack of corporate governance policy framework here in the UAE. I think it’s there, but we need to improve and get other countries in the region to embrace it. We have seen in the past several years corporate governance centres and institutes of directors being established in the UAE, which means that the benefits of good corporate regulation are increasing and getting recognised.

Ultimately, this will lead to more mature businesses flourishing as there is no one-size-fits-all approach here. The best companies are often those that know they still need to learn and improve. Building resilience is necessary to ensure a company’s long-term survival. Having a good team that is efficient is one sure way of building your company’s profile to have a mature business ethos. This is what every channel business should strive for.

Tamer Ismail is the chief executive officer at BDL Group, a Dubai-headquartered IT broadline distributor. The views expressed in this article are Ismail’s own opinions and not necessarily those of Channel Middle East magazine.

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