The Real Meaning of Business Ethics
Recent public opinion polls reveal that most American millennials today are anti-capitalism. Socialist Bernie Sanders certainly tapped into that opinion during the 2016 presidential primaries. Many millennials blame capitalism for a host of ills including generational poverty, environmental degradation and the hollowing out of the middle class.
This anti-capitalist opinion is a major and growing problem for American business leaders, large and small. It won’t be solved with more organic products in store aisles, greenwashing and corporate responsibility spin.
Millennials who are anti-capitalism have likely never experienced life in a communist, autocratic or truly poor country. They do not realize that western capitalism has produced more prosperity and more goods and services for more people than any other economic system in world history.
But capitalism and free markets devoid of ethics fails. Other systems like communism supersede it.
One problem is that the grossly unethical and often law-breaking companies and individuals dominate the news cycle – in recent months think Volkswagen, Takata, Equifax, The Weinstein Companies, Martin Shkreli and a long list of bad actors.
Public and private companies as well as individual entrepreneurs who are truly committed to ethical conduct don’t make the news nearly as often.
Legal compliance is the minimum standard for business. Ethical action is a much higher standard of conduct. It means basing business decisions on doing the right thing over what is merely profitable or expedient.
One problem is that determining the right thing to do is not always clear. For example, an action which makes a company more productive, like using robots and artificial intelligence in manufacturing operations, will lead to the loss of some jobs (but create others). The wind is a source of renewable energy, unlike carbon producing fossil fuels, but wind turbines kill massive numbers of birds.
In my view, the real meaning of business ethics is adopting a mindset which always includes an ethical analysis of the pending business decision on a personal and organizational level. Of course, the choices between robots and some workers or wind power and birds are difficult ones but an ethical actor takes them into his or her consideration at the outset. He or she does not blindly pursue a profit no matter the consequences.