Businesses are not real: They are conceptual, abstractions. The big change that moved us towards the huge multinational businesses we see today was the legal decision to allow businesses to be treated as their own entities and we should honour that separation.
The same is true of government when people talk about government morality.
The sole purpose of any business is to make money.
The sole purpose of a government is to retain stability, order and retain power.
Ethics are personal. This is not to say they aren’t important, they are. They should be venerated to the degree that wealth and youth are in western society, even if they aren’t.
Businesses and democratic governments are abstractions we created to fulfil human needs and desires. We want to have lots of money and not have a dangerous, chaotic environment.
Politics and business leverage evolution. We have created artificial environments with artificial rewards. Organisms that can’t get enough food, keep themselves safe and attract a mate die. This works remarkably well and has for a very very long time. It is the only successful way to create an efficient economy that can improve quality of life, alternatives like communism fail in the large scale because they can’t provide this evolutionary simulation.
Business has a clear metric – money. If you make a profit you survive, if you don’t you ‘die’ (bankruptcy). Businesses can breed (merge), they can grow. A characteristic of any living organism has to be passed on through breeding but business ideas that work spread regardless. Think agile programming, or the idea of specialisation at work even at a more basic level. Businesses that implemented them had a greater chance of success, more of them survived. Now most surviving businesses implement them.
So where does ethics come in? Two places. Businesses should be ethical if it makes them money. There are defined markets for ethical goods. People are attracted by fair trade labels, they will (sometimes) pay more to know the workers who made their clothes live acceptable lives.
The second is people in the business. They have the responsibility to ethical because they are people, real people, not abstract concepts.
Which has two implications:
- People should not be overly celebrated for being rich. This is not a virtue.
- People should be celebrated for their ethics.
The reverse obviously being true for companies.
The problem is a western culture that overvalues entrepreneurs, apologies entrepreneurs. There are many dangerous side effects of this.
When evaluating the success of a company you might say how wonderful apple is for example. They hit the $1 trillion valuation today. You remark about how great their profit margins are. How wonderful they are at marketing their products. How good they are at turning relatively cheap hardware into a product that feels and seems to react in a premium way. How good they are at trapping people in their ecosystem.
But there is no point judging apple by its ethics because it isn’t designed to be ethical.
But this DOESN’T transfer to the person in charge, or the people in charge. It is strange. Why judge those peoples success on their ability to generate wealth, which is their profession and not judge an engineer by his ability to write code or build bridges? It doesn’t make any sense. Someone making lots of money is neither good nor bad. Whether they make that responsibly is entirely different.
People whinge all the time about businesses not being ethical, when it isn’t their purpose to be ethical. It is, purely, people shirking their responsibility to exercise ethics. You can’t defer the problem by blaming these other entities. That leads to the weak thinking that there is no point trying to be ethical because these huge entities are evil and have all the power.
The key for people is to remember you have no control businesses or anyone else, all you can do is attempt to exercise self control and act ethically, as well as encourage everyone else to do the same. This applies at work and at home
The key for business ethics is for the workers to exercise ethics and to remember that the business is the abstract concept, made of people making decisions. It is NOT the case that you are just ‘a cog of the system’ and thus your role is purely profit driven, because it isn’t the case.
Whether or not the company is considered “ethical” with the positive connotation we normally give this word is another matter that involves judgments based on morality. Such a label is subjective, but the business community, as a whole, looks at key factors to decide whether or not a business is practicing good business ethics:
- Business structuring
- Moral decision making
- Ethical business principles
One of the foundations of business ethics is the theory of utilitarianism. Utilitarianism states that, when weighing all options, the option that produces the greatest net benefits for the least net cost, is the most ethical option. Which factors are considered in this cost/benefit analysis, however, could greatly skew the results one direction or another. Successful companies recognize the need for fair and responsible ethical behavior, not just from a moral standpoint, but from a business standpoint, as well.