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Moral Philosophy and Business

by Mike Parry

Whilst my student contemporaries were studying the works of Hobbes, Kant, Spinoza and Russell I was selling advertising space, motivating sales teams and latterly sitting on company boards. I have spent most of my working life in a world where an individual's worth is mainly assessed by the influence he or she can have on the growth and profit performance of an employer or client's company.

Some years ago I used to share regular lunches in and around Covent Garden and Soho with a great friend Paolo, who worked as an International Client Director in that modern version of the 'Tower of Babylon', an American advertising agency. Paolo, despite working at the dilettante end of international marketing, is a philosopher of long standing. During our lunches he constantly challenged my views on life and on my role and responsibilities in business. With his encouragement and mentoring I started reading about ethical and philosophical issues. My interest grew and I started to think more about what constituted a 'good' and harmonious relationship between all parties affected by the business world.

Until I met Paolo in my late 30's, I accepted without question that it was right to focus my energy and attention (at work anyway!) on delivering year on year growth and maximising profits for my employers. I recognised that my own success would follow from the results that I delivered. It was as simple as that and generally it still is. Neither I, nor any of my colleagues or superiors debated the ethical issues involved in schemes devised to take advantage of a competitor's weakness or extract more profit from our customer base. It was war out there. 'Do it unto him before he does it unto you.' Anyone raising ethical issues would have been marked down as a wimp.

Any business boss can make a strong case for the view that agonising over the impact of one's business decisions on the health of a competitor weakens your effectiveness. Similarly, dithering over whether you should provide goods or services at the cheapest price you can stand, rather than the highest price the market will tolerate, gets in the way of maximising profits (incidentally, any good marketer will tell you that obtaining the best combination of price per unit and volume sold, usually generates the biggest return!) That's the kind of calculation astute business people make all the time. Depending on which side of the fence you are sitting on it's either 'sophisticated marketing' or hard nosed exploitation of the customer.

So, as a 30-year business veteran, I understand the justifications for unsentimental decision making. There certainly is more virtue in a straightforward, profit-oriented approach than there is in a hand wringing, hypocritical 'this is hurting me more than it is hurting you' attitude, which often accompanies brutal decisions concerning staff or troubled suppliers.

Despite that, is there any room for, or interest in, greater consideration of how we treat colleagues, customers and suppliers in business? Is there real interest, within the senior ranks of business, in discussing personal ethical standards and the wider impact on individuals, society and the environment of the products we manufacture and the ways in which we market them? Superficially at least, the prognosis does not look good for any campaign aimed at introducing more training in, and discussion of, ethical and moral issues within companies.

Just take a look at these 'one liners' on business, taken from a public speakers self-help book. There's lots more where these came from.

"Never do business with friends or neighbours."

"Make friends of your clients but not clients of your friends."

"Trusting a lot has ruined a lot."

Then, read the business and finance pages of any national newspaper. Your jaundiced view will be further reinforced by stories of greedy directors of under-performing public companies awarding themselves million pound pay packets, misrepresenting their company performance, in order to enhance their own rewards, or presiding over corporations that exploit third world workers.

The net result of such behaviour is to engender cynicism in the honest souls within companies that have the misfortune to have such leaders inflicted upon them. Shareholders and potential shareholders, who could be valuable investors in new enterprises, are also not immune from the disillusionment that is likely to result from a regular reading the business pages of the national and international press.

On Friday March 7th 2003, the Daily Telegraph carried the results of a UK survey by YouGov into the perceived trustworthiness of the professions. On a net trust rating (calculated by subtracting the negative percentage score from the positive) ministers in government came out with a lamentable score of minus 49 per cent and directors who run large companies fared even worse, being right at the bottom with minus 56 per cent.

Not much fertile ground to be found there then, for the nurturing of ethical behaviour or for philosophical contemplation of what constitutes a 'good life'. More a message of 'greed is good' and a definition of 'a good life' being one spent accumulating the maximum amount of money one can, irrespective of the collateral damage.

Writing recently in the Sunday Times, a senior staffer in a high profile eco-charity said he was saddened by the lack of attention paid to ethical studies in the content of an MBA course that he had recently undertaken. He took the course primarily to get the measure of the type of executive that he would encounter in forthcoming campaigns and money raising initiatives. He considered that his fellow students left the course no more inclined to think about what constituted a 'good life' than when they joined the course a year earlier.

A quick scan through the indexes of more than 50 business skills books that inhabit the shelves of my office bookcase unearthed only one containing references to 'ethics or ethical behaviour', even though several of these books teach leadership and motivational skills.

A notable exception is a new book by David J Cooper (Associate Dean for Enterprise in the Faculty of Business and Informatics at Salford University), entitled Leadership for Follower Commitment. David's excellent book contains no less than four references to ethics.

I quote pages 32/33:

"What would develop follower commitment (to a leader) is an understanding that one's own needs are an integral component of the organisation's Value system. Such consideration introduces ethical dimensions of 'Rights' and 'Universalism' (Weiss, 1966)."

Cooper goes on to remind us that Weiss, when referring to Universalism, stated that: "Moral authority is based on the extent to which the intention of an act treats all persons as ends (not means) in themselves and with respect." Weiss also stated that: "Managers who overlook the rights of even one individual or group may jeopardise the implementation of a decision, policy or procedure." Weiss recognised that ethical behaviour has positive connotations in terms of business performance. In David Cooper's book ethical behaviour is also endorsed as a key to unlock enthusiasm and enterprise in staff.

David Cooper also makes reference to John Adair's book, The Action Centred Leader (1973). Adair suggested that aspiring leaders must look after the key interlocking aspects: task needs, group needs and individual needs. He suggests that people will follow more enthusiastically if they feel that their needs are integral to the organisation's value system. Thus an ethical dimension is introduced.

Adair, in another great little book Effective Leadership (1983) quotes the Headmaster of Eton College; "if you trust the boys they will let you down — but if you don't trust them they will do you down." A half-hearted, rather cynical support for the value of trust in a relationship, but support non-the less.

Much as it may be a worthy cause, as these authors argue, it may nevertheless seem that anyone hoping to promote the value of fostering ethical standards and a more philosophical approach to business decision making faces an impossible task, particularly if the targeted companies are being asked to pay for this service.

Despite this generally negative picture of the value that is placed on moral and ethical debate, in the business decision-making process, I believe that such issues are rising to the surface. The first hand evidence I have, drawn from the commercial training courses that I run and business contacts I deal with (admittedly a relatively small sample) suggest to me that once you open people's minds, (particularly young people) to moral and ethical issues, just as Paolo did for me over 20 years ago, they are excited by the ideas and want to hear more. Their minds take flight, they realise what they have been missing and are changed forever, if only in a small but positive way.

It should not really be a surprise that this reaction is so common. Younger executives are feeling the remorseless pressure to deliver at all costs much earlier in their business life than was the case in previous generations. They are also more concerned about work-life balance that my generation was. I work with a number of late 20's and early 30 year olds who are already looking for a way out, at a stage when they would have been hungry and full of ambition, 20 years ago.

They are now also exposed to much more evidence of the negative consequences of the actions of political despots and greedy international companies. Even if they had never given it much thought before, they can quickly grasp the potential impact on their lives and the lives their young children will lead in the future.

Ironically, virtually every commercial sales training course, stresses the importance of trust in the establishment of fruitful, long lasting relationships with customers. How do we cement relationships with our clients and prevent them from being stolen away from us? We are reminded of it (perhaps more necessary now in the face of falling attendance at Sunday Schools) because demonstrating one's honesty and decency to clients and potential clients, through actions, pays commercial dividends. It is a shame that we do not generally extend the 'relationships' lesson further and encourage debate on moral/ ethical issues in more company training suites.

It is in society's interests that people of influence in companies; young people who will shape the future policy of their companies, should think more about and stimulate debate about ethical questions, vis a vis their company policies. I am not suggesting that they will find pat answers, but just being involved in the debate, particularly if it is chaired by a wise and inspiring councillor, will raise their awareness of the bigger picture. The next time they are creating an aggressive marketing campaign, the objective of which is to prey on some human frailty or suck money out of the pockets of people who can ill afford it, it may just make them stop and think.

The choice of subjects for these debates is endless. It could start with subjects such as these:

"Is it right to continue manufacturing and promoting sales of cigarettes when recent estimates suggest cigarettes kill 5 million worldwide every year?"

"Where are the limits, if any, to personal freedom. If we want to make an environmentally damaging product and customers are clamouring to buy it, what right does anyone, or any group have to try and stop us?"

"Is it right for companies to increase and then prey upon the insecurities of western women, to promote the sale of intimate deodorisers?"

"Should rich and powerful western pharmaceutical companies sell lifesaving drugs to poor African countries. Should they surrender patent protection to allow the production of affordable products for these markets? If they do what impact will this have on future investment in new (better) products? Does the fact that these poor countries are run by corrupt rulers absolve us from any responsibility to help?"

It should include issues closer to home concerning relationships between staff, such as "Where should your ultimate loyalty lie?" or "Where does clever marketing end and exploitation begin?"

There is almost no limit to the interesting issues that have relevance to the business world and which are being acted out every day.

We know that there are no pat answers to these and a host of similar questions. That makes the debate more exciting and challenging. The uncertainty, the lack of a definitive answer is itself an important part of why commercial companies should encourage debate of such issues. Apart from resolving the specific issues under discussion, participation in the debate results in better, more rounded people. People who will question complacency and bring more knowledge and a more open mind to bear on the next difficult problem that they (and the company) have to face.

One of the biggest challenges in any 'advanced' materialistic, western society is persuading people to change the way in which they measure 'a good life'. We cannot possibly sustain our present rate of consumption and despoliation, let alone see it duplicated across the currently less materially advanced parts of the world.

In the real world we have to recognise that senior business managers are still tasked with making a business case for all the money that they invest in training or any other activity. They are not going to lay out good money for some 'hippy dippy' training that will land them with more troublesome, less compliant workers, who question the companies motives at every twist and turn.

We have to appeal to their self-interest and convince company decision makers that they will enjoy measurable net benefits by embracing a more adventurous attitude towards how they develop the skills of their staff. If they encourage a creative debate about the 'rightness' or the decency of their actions, and act positively on reasonable proposals for change, the end result will be more effective worker. A worker who is happier, more productive, and better able to establish and sustain fruitful relationships with colleagues and customers. A worker who has exciting new ideas to contribute, rather than waiting to follow the company's lead.

Furthermore, in an age of fierce competition and over supply in most markets, the quality of ones staff is a highly effective differentiator from one's competitors. A company chairman may be committed (by previous levels of investment) to producing a 'me too' car for the next 3 years. He is not committed in the same way to duplicating the present performance levels of his staff over the next 3 years. People are highly adaptable and flexible. An imaginative training programme and change of culture can quickly transform them, galvanise them into action and set them apart from and above their competitors.

Therefore we can with some credibility claim that:

  1. A high standard of ethical behaviour will help cement relationships with staff and customers.

  2. Encouraging bright staff to introduce relevant philosophical questions into discussions of future strategy could unlock groundbreaking ideas.

  3. In a world full of competitors, companies that foster and value the creation of new ideas attract the kind of people that really make a difference, people who give an organisation an edge over the pack.

  4. Word gets around. Clients don't live in isolation. They talk to potential clients. Then, new business flows, as if by magic.

Training that can deliver such benefits makes hard business sense and if embraced by enough businesses could make a significant contribution to changing the business world for the better.

So, there is potential for business training in matters philosophical and moral. Let us hope that we can convince more business leaders of its potential value. It would be great fun delivering it! I hope that some Pathways readers will respond to my article and help me to make a contribution to this process.

© Mike Parry 2003