Recently we've been bombarded with announcements, appointments, conferences and newspaper articles on this topic which some consider to be a combination of two mutually exclusive terms, "Business" and "Ethics." What is all the fuss about? Why does it matter all that much?
Is it because of the frequency of corporate scandals? There certainly have been many such, highly publicised, in recent years - from pension-fund robbery to insider dealing to levels of top-pay Clearly it is in the interest of directors to do everything possible to reduce such risks.
Is it because managers are at best amoral and at worst immoral? This is an oft-stated "fact." The reality, of course, is that managers as a population are fairly well representative of the generality of society. They are neither less caring nor less honest on balance than others. It is not difficult, however, for many to adopt, consciously or unconsciously under the pressures of a fast-moving world, a set of business values which excludes many of the humane elements they would be horrified to leave out of their personal and family lives.
Is it because the business community has come to realise that there is more to economics than numbers? Maybe. The battle of economists like Nobel prize winner Herbert Simon to get recognition for the non-quantitative aspects of economic decision making may have been won in many areas of the academic world, but how many managers have well-understood processes for taking account of the qualitative and the subjective?
Is it because of the strong tendency in many businesses toward short-termism, which can lead to morally questionable decisions and practices? This is a common accusation, and not without some foundation. One has to recognise, however, that businesses are driven in this direction by many forces outside their control. Having said that, it is arguable that the long-term survival of even very large businesses will depend increasingly on the permission of society rather than on short-term financial statistics.
Is it because people in business tend not to notice the ethical dimensions within their decisions, and need to be "sensitised" to issues they've ignored in the past? Certainly there is considerable evidence that many managers simply do not recognise that the decisions they just made contained an ethical component which they ignored. Maybe this is why public outcry so often comes as a surprise to the people involved, who with total honesty can claim, "We were doing what we thought was best."
Is it because some people are still attempting to correct the "moral evils" of a now-victorious capitalism? It is, of course, clear that neither of the major competing economic paradigms of the 20th century have proved perfect in every respect - although it's also clear which has come out on top! And yes, there is work to do to ensure that the potential downside impacts of the free market are addressed, in the Western world, in the economies currently emerging from central control, and in the less developed areas of the globe.
Is it because the media distort the picture of business behaviour? Without doubt more space is given to things apparently going wrong than to the good news. Drama far more commonly depicts business people as being involved in criminality than being "on the side of the angels." And it is not difficult to condemn people for having made a choice which harmed certain individuals without giving adequate weight to the downsides of the alternatives. Most certainly the media need educating.
Is it because the influence of family and church in society have declined, and educators and business must now take the lead in moral education? This is a position being adopted by more people in recent years. The National Curriculum Council has recently been taking it seriously from the educational standpoint. Maybe it is not the responsibility of business to lead such social change, but it surely has a role to play in making clear to its younger people especially the values by which the organisation intends to live its life in the community.
Is it because there's a ethical upswing in society? One hears stories of of high-grade undergraduate students interrogating recruiters about the corporate reputations of their organisations. The right attitude to take to "Whistle-blowing" is an issue for many employees. Pressure group publications revealing the behaviour, or perceived behaviour, of companies are selling well in the bookshops. Ethical investment policies are very much on the agendas both of individuals and institutions.
Is it because the world is getting smaller, and organisations running faster? Yes, there certainly are new ethical issues arising from the increasingly transnational and cross-cultural scope of business.
Is it because customers are becoming more discerning as to whom they buy from, and may well turn away from suppliers they consider to be guilty of dubious practices? Once again guides to responsible business aimed at consumers are occupying prominent places on the bookstalls. The range of issues covered may not be what many managers would consider most relevant or important, but this movement cannot be ignored. It won't simply go away.
It may in part be all of these things, and many more. Whatever the combination of causes, however, it is now clear that this is far more than a passing fashion. Increasingly there is a recognition that areas of business policy about the treatment of employees, customers, shareholders and others, as well as corporate impact on the environment, are not such discrete and isolated issues as may have been thought. They are all based on and flow from generic values, which cannot be substituted by formal contract and legal process. The entire western commercial system is founded on honourable dealing and relationships of trust. As the Good Book says, "If the foundations be destroyed .... ."
© Copyright, David J Murray, 1993