The Wall Street gurus who had trumpeted deregulation were now seen demanding a bail-out from the federal government. For business enterprises to thrive today demands an astute understanding of philosophy and ethics, which is why professors are weaving Rousseau and systems theory into enterprise courses.
To understand the nature of business ethics, it is also critical to understand systems thinking. A business does not operate in isolation from the environment in which it operates. The University of Denver publication "The Essence of Enterprise" points out that "Every system has a purpose within a larger system." The business is therefore a system within a larger community. Ethics begins with an awareness of how businesses impact more than just their shareholders. Businesses impact the environment, the social and political climate, and the economic stability of whole regions.
The managing of risk is a constant ethical dilemma in business. How much risk is acceptable to make a profit? Since many business decisions are made through proxy on behalf of employees, shareholders, or lenders, the decision maker's fate alone is rarely at stake. The gap between the decision maker and the decision's consequences enables poor ethical choices. As the financial crisis has taught, poor ethical choices are bad for business.
Weighing the investment of various stakeholders in the decision is also essential. Often the stakeholders are not solely confined to members of the enterprise. It is here that reflecting upon the ideas of Jean Jacques Rousseau is so useful: a businessperson must not lose his or her sense of the 'human' obligation he or she has to greater society, and the impact his or her decisions may have upon others. Rousseau stated that some personal liberties must be sacrificed for the individual to live in harmony with the rest of the world.
Although social sacrifice might be thought to be the antithesis of good business practices, businesses today ignore social obligations at their peril. A company that pollutes the environment or exploits its workers will invariably draw negative publicity and cause profit loss, such as...
Hence, a company must have an ethical profile -- and have the emotional intelligence to understand consumer's emotional needs and wants.
Social ethics can also be important marketing tools. The websites of almost every major corporation, from Google to Microsoft, boasts of how the organization engages in charitable service to the community and treats its workers well. As Louis Brandeis said: "The recognized professions, however, definitely reject the size of the financial return as the measure of success. They select as their test, excellence of performance in the broadest sense -- and include, among other things, advance in the particular occupation and service to the community." The pleasures of excellence in service to the community rather than the pursuit of profits alone should guide the professions of law, medicine, and also business.
Medicine and law both have national organizations (in the form of the AMA and ABA) that define ethics for its members. A doctor or a lawyer who behaves unethically can lose his or her license. However, business does not have an official screening test, organization, or regulatory agency defining community and professional standards. Instead, businesspeople have the obligation of policing themselves, as well as the worry of falling afoul of the law. An institutional ethical police like the AMA would ultimately benefit business. However, such an institution does not yet exist. For this reason it is essential that businesspeople study ethical leadership and emotional intelligence. Businesspeople must build their communications skills so they are able to internalize a sense of personal morality that can be reflected on their followers and colleagues. Only with an ethical stance can enterprises ensure that they will be able to retain the public trust, live according to existing laws and regulations, and enjoy profitability as well.
Works Cited
Brandeis, Louis. "Business: A profession." Brown Commencement Address. 1912.
"The Essence of Enterprise." University of Denver: Daniels College.
Rousseau, Jean Jacques. "The Social Contract." 1762.
