Are business ethics in decline? A recent Business Insider article suggests that is the case, at least in Australia.
32% of Australians thought tougher economic conditions and increased pressure to exceed the business bottom line tempt people to make unethical decisions. 27% of respondents said they think it’s common practice to gain contracts through bribery and 31% think Australian companies are embellishing their financial records for reporting purposes. Furthermore, “17% believe it is justified to deliberately misstate a company’s financial performance to meet financial targets.”
What do these numbers suggest? One in three Australian take a dim view of the ethical competence of people in business. My immediate reaction was to think this is overstated … surely we are not that cynical. However, the fact that almost one in five think it’s ok to fudge the figures seems to justify the cynicism.
This brings me to my question: Why be ethical? Do we truly know why it is worthwhile to act ethically in business? Does doing the right thing really matter?
Advocates of ethical conduct usually do so on the basis that acting ethically, in fact, leads to greater success. Take, for example, this article about “Why you should imbibe good business ethics in your organization.” The reasons given include: to attract more investments, to attract more customers, to attract and retain talent, to comply with regulations, and to protect reputation. These all make sense. If you do the right thing, good things follow.
However, the problem is that those are all purely utilitarian reasons — i.e. the argument for doing good is based on good outcomes. Two other questions matter: what about doing good because it is good, and secondly, what happens when acting ethically might actually have some negative consequences? The latter is one I find particularly interesting.
Can you remember those moments when doing the right thing — acting ethically — has cost you personally? Those times when you knew that speaking out, for example, would ostracise you and possibly risk your job? You have to make sacrifices to have the integrity to follow your conscience. If ethics wasn’t personally costly, it would not require moral effort and it would be the default behaviour, rather than a matter of fortitude, leadership, and moral courage.
The biggest challenge of prioritising ethics is that sometimes it is costly to us, personally and professionally, rather than always productive and beneficial. Being ethical only in the service of financial gain, reputation, etc. is not a firm foundation on which to build ethical conduct because those are utilitarian motives, not ethical ones.
Ethics concerns truth and integrity and virtue. What makes virtues virtues is that we pursue them for their own sake, not as instrumental to some gain. To put virtues in the service of wealth is a quintessential confusion of means and ends.
The truest and purest reason to be ethical is simply because it’s the right thing to do.
What are some of the ethical challenges you have faced … and how have you resolved them?