Managing People
- aaruniabhishek
- Jun 7, 2023
- 5 min read
Updated: Jun 8, 2023
The matter with Business Ethics.
Managing People; NEO Ethics.
What is the matter with business ethics?
And, more noteworthy, what can be done to make it right?
To understand the gap between business ethics and the concerns of most managers, it pays to recall how managers and management academics thought about business ethics before it evolved into a formal discipline.
Indeed, much of the research and writing in contemporary business ethics can be understood as a disgruntled reaction to how ethical issues were usually addressed at business schools—particularly to the traditional answers to the fundamental question: Why should managers be honest?
Ethical management aims to catch any new spirit and embody it in voluntary standards without waiting for legal compulsion.
Most managers could quickly assimilate this response to "Why be ethical?" under enlightened self-interest. Indeed, by now, the declarations of corporate social responsibility have become conventional wisdom in executive circles.
In business ethics, the One idea was to bring experts in moral philosophy into business schools.
Training in moral philosophy would give business ethicists the analytical frameworks and conceptual tools necessary for fine-grained ethical distinctions and discerning the appropriate course.
NEO philosophers can apply their sophisticated frameworks to leaders' ethical dilemmas.
NEO philosophy tends to value altruism, the idea that an individual should do well because it is right or will benefit others, not because the individual will benefit from it.
An ethical business must be honest because it wants to be virtuous. In other words, business ethics means acting within the industry for nonbusiness reasons.
Ethics and interests can conflict. Take the example of racial segregation in the last century. Remaining racially segregated was ethically wrong.
Nevertheless, active desegregation would have flown in the face of then-prevailing public norms and most likely would have been penalized severely by market forces.
When ethics and interest do not conflict, business ethicists have a point too. Indeed, there is ethical value in doing the right thing because it is right, not just because it serves one's interest.
Furthermore, altruism is one of the many motivations shaping NEO leaders' behavior in the real world.
In the case of the potential conflict between ethics and interests, the fundamental issue for a leader is not whether such conflicts sometimes (or even frequently) occur but whether the leadership acts on them when they occur.
If, in some instances, it turns out that what is ethical leads to a company's demise, then so be it.
To be ethical, companies must ensure that employees' work tasks are compatible with their personal "projects," thus making external motivation irrelevant.
Such views may resonate with some moral philosophers but are of little help to managers.
Like it or not, corporations do exist, and most leaders work in them.
Any business ethics worthy of the name should be an ethics of practice.
However, business ethicists must get their hands dirty and seriously consider the costs of "doing the right thing."
Simply put, ethics must hurt.
To grasp how strained such a position can become, consider the argument that the organization adopting compliance training is acting ethically only if other companies do not do the same thing.
When only one company pours resources into training, it likely will not recoup its investment. Indeed, it is other companies that almost certainly will benefit by hiring better-trained graduates.
The fact that "some firms will ride free" on the expenditures of the sponsoring company guarantees that those "firms who < DO > invest money to solve social problems are altruistic.
If, of course, enough companies were to start sponsoring training, it would be possible for them all to recoup their investment by hiring from a much more extensive pool of better graduates.
Business, like government, is not just a profession. It is also a system in which everyone must live, managers and nonmanagers alike.
Rather than focusing on professional norms and behavioral modes, thinkers have advanced systemic critiques that often question the very premises of the system.
Such thinkers accepted and worked within their professions' basic premises and norms. Moreover, that context has allowed them and others to develop ethical precepts of values.
Although leadership has increasingly come to be viewed as a profession in this century, a heritage of systemic moral criticism allures business ethicists to be grand philosophers.
The leaders see corporations…as places where we can be entirely emotional human beings; offers liberation.
Leaders, by contrast, have attempted to gain credibility within their professional area primarily by girding their work with abstract moral theory.
Many mainstream management scholars see ethics as "subjective," "soft," and "normative," while regarding their fields—finance, and marketing, say—as "objective," "hard," and "scientific."
Neo leaders possess the "complex body of knowledge" that defines a "true discipline."
Furthermore, by offering evidence, business ethics has "at least two significant theories, utilitarianism and stoicism, as well as academic publications.
Ethical theory can help illuminate the moral problems managers face. However, no other field of professional ethics needs to couch its analyses on philosophy.
Business ethics is not merely a subject of study but a way of life.
The critics' discontent signals the beginning of what might be a more productive direction. Think of it as NEO - business ethics.
While differing in their specific approaches, advocates of the new business ethics can be identified by their acceptance.
The creative part of NEO ethics is discovering ways to do what is morally right and socially responsible.
This unique integration is NEO ethics.
The NEW business ethics accepts the messy world of mixed motives and moral conflicts.
Within this broad area of the agreement, practitioners of the new business ethics pursue practical approaches.
Aristotle's conception of "virtue" to devise an ethics of practical value to managers. Being virtuous does not "involve radical demands on our behavior."
Indeed, such demands are "completely foreign to Aristotle's insistence on 'moderation.'" According to Aristotle used the word "moral" simply to mean "practical."
On the contrary, NEO leadership conceives a practical approach of "mutual trust."
In NEO ethics, one can establish a set of workable virtues for NEO Leaders. NEO leadership involves a willingness to do what [is] necessary and an insistence on doing it as humanely as possible.
One can argue that the most necessary work in business ethics is the creation of actionable strategies.
Social contracts are the implicit moral agreements that, having evolved, govern actual business practice.
This emphasis on social context finds an intriguing echo in the ethical telescope.
Suppose managers and stockholders have a duty to customers, suppliers, employees, and the local community. In that case, one can argue that these social actors also have responsibilities to leaders and stockholders.
In other words, business ethics is not a concern for leaders alone. But it is everyone's responsibility.
Considering that NEO leaders already have noble intentions, the task of NEO business ethics is to go beyond.
NEO Business ethics should concern itself with designing and developing organizations for leaders who, like all human beings, display the normal range of ethical virtues [and] want to see that these virtues are not compromised.
The acute dilemma is:
— ignorance, where one does not know what the right or wrong thing is to do
— and foolishness — situations where one knows what is right but fails to do it.
Having robust business ethics results in a socially responsible, more profitable organization.
The four virtues of NEO Ethics are wisdom, justice, courage, and moderation.
In each of these new approaches, what is essential is not so much the practical analyses offered but the commitment to converse with people in a language relevant to their reality.
That is the NEO virtues.
Conclusion: The market rewards ethical organizations.
The question that arises is: Who is the free rider?
Comments