Business morality

In my last column, I discussed corporate social responsibility and ethical dilemmas in business.

The fact is that while social problems remain unsolved, society will blame business along with government. As the nature of social problems evolve, so too will the social responsibilities of business change.

Business decision makers and implementers must accept personal responsibility for the outcome of any actions undertaken by their corporation. Media owners must accept moral responsibility for the type of coverage of their media outlets. It cannot be justified by the need to be profitable, with the excuse that personal values and corporate needs are separate issues. Products that harm consumers and the environment are not the fault of any corporations but of the people who manage the company. Henry Sy was right when he and his family accepted responsibility for the type of movies being shown in the movie theaters they owned.

Finally, corporate owners and managers cannot expect corporate philanthropy to be the atonement for any harm their businesses have inflicted on society. This would be similar to buying indulgences, or believing that a person’s moral standards is based on the size of his donations to the Church or on a little time spent giving charity to poor people.

A person cannot separate personal values of what is right and wrong from the values he or she puts into practice at work. 

Business immorality

 There is a prevailing belief that business has simply no business attending to social goals, that this role is solely for government. Let each stick to its own sphere of responsibility. These views are promoted by many economists, including Milton Friedman, author of the book Capitalism and Freedom (1962).

However, this distinction does not exist in the real world. Henry Mintzberg, the management guru, has explained that in the real world of decision-making, the economic and the social all get tangled up.

Economists argue that social decisions have economic consequences. All social decisions eventually cost resources. Therefore, Mintzberg asks, “How can any economist argue for economic decisions that have no social consequences? They all impact socially.”

So businesspeople who take this separation seriously create havoc with the social consequences of their actions. They, i.e. businessmen, do as they wish for economic gain while conveniently slipping the social consequences of their actions off their ledgers, as what economists call “externalities,” meaning that the corporation creates the costs while society pays the bills.

In his book Managers and Not MBAs published in 2004, Mintzberg says that in recent years we have been experiencing a glorification of self-interest. According to him:

“Greed has been raised to some sort of high calling; corporations are urged to ignore broader social responsibilities in favor of narrow shareholder value; chief executives are regarded as if they alone create economic performance.

“A society devoid of selfishness may be difficult to imagine, but a society that glorifies selfishness can be imagined only as cynical and corrupt. In effect, our societies have been tilting increasingly out of balance in favor of markets at the expense of other social institutions. We need both but are finding ourselves increasingly dominated by one.”

The author adds that MBA education has played a significant role in developing this belief.

In the Philippines, businessmen are extremely fond of saying that the primary economic role of government is to ensure the profitability of business which in turn will encourage investments and which will then be the final solution to our economic and social problems.

The need for ethics and personal values among businessmen

The only way that the business sector as a whole can ever develop a sense of social responsibility would be to instill ethics and the proper personal values among managers. 

The meaning of personal values

 In its broadest sense, a personal value is an enduring belief that a specific mode of conduct or purpose of existence is preferable to an opposite mode of conduct or purpose of existence (Rokeach). For example, a person may believe that happiness cannot be attained without a certain degree of material possession. It is, therefore, impossible to be happy if a person is poor. This personal value will become a critical factor in determining the person’s choices and behavior.

Again, it is important to remember that values are such an intrinsic part of our lives and thought that we tend to take them for granted unless they are questioned or challenged.

 There are, therefore, a variety of values. The question is determining which are desirable and non-desirable values. This is not an easy task. The difficulty lies in the fact that it seems once a person has acquires a certain set of values, it becomes difficult to change them.

 However, the difference in opinions in major issues indicates the wide variety of values. For example, it is this variety that leads to opposing opinions on population control, capital punishment and homosexuality.

Summer creative writing classes and workshop for kids and teens

Young Writers’ Hangout on April 7, 14, 21 and 28, May 12, 19 and 26 (1:30 pm-3 pm; independent sessions); Wonder of Words Workshop on May 7, 9, 11, 14, 16 and 18 (1:30-3:30 pm for 8-12 years old/ 4-6 pm for 13-17 years old) at Fully Booked BGC.  For details and registration contact 0945-2273216 or [email protected].

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