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Fine Tuning Business Ethics

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A popular concept in science fiction is to consider a parallel universe where cultural norms are reversed. There are an infinite number of possible situations that would make travel to one of these dimensions enlightening or humorous… or both. Daily life in our universe is never seen to be out of the ordinary because we follow those who have determined exactly what ordinary should be. What if they are wrong? I doubt that there were fewer vices to tempt virtuous people in Socrates’ day, but he didn’t have the technology at his disposal to dispense disarray faster and further. It is easy for today’s philosophers, religious leaders, and personal coaches to urge people to “be worthy of commendation of all good people” but even the definition of “worthy” and “good” can’t be examined too hard or it gets cloudy.

Banding groups of these people seeking virtue into a company can result in the organization being commended or criticized depending on the ethical norms of the people impacted. What is missing is a common definition on which to base these viewpoints. In 2008, Remi Trudel and June Cotte published a paper quoted in the Wall Street Journal based on their research on perceptions of ethics and its value. “Does Being Ethical Pay?” had to begin with three major assumptions in order for their experiment to work. First, a company needed to have a progressive commitment to diversity in hiring and consumer safety. Second, it needed to have progressive environmental technology practices. The last assumption was that it must have a commitment to human rights, such as avoiding poor working conditions in foreign factories. There is little wonder in the fact that the Bangladesh factory collapse a few months ago was seen as the result of an unethical business practice. The findings in this novel experiment was that consumers are willing to reward a company for perceived ethical products and punish those that are seen to be producing unethically.  

Segmenting the target audience can help to alter the message based on perceived ethical norms. Organic foods appeal to one market segment, but splashing the word “organic” without some point of reference can be misleading. Is it unethical to use that term if it does not meet the strict California standards for something to be called organic? It is also true that standards are still evolving with no natural rhythm to control excesses. The evils of institutional slavery progressed to its abolition, then to race relations management to heal the divide, then on to promotion of diversity as an ethical best choice. A pendulum that swings too far will normalize itself by swinging back until society as a whole accepts the new norm. Sometimes the normalizing factors will be at the extreme ends of the ethical spectrum, but it is rare for the exception to become the norm for very long without undue political pressure to force the issue.

A search for some kind of ethical absolutism can creep into the group thinking and start a bandwagon of “not exactly wrong” but “not quite right” reactions. For example, pharmaceutical companies spend billions of dollars on research into compounds that never make it to market. When a successful product has to be priced at a point to maximize overall good, is it wrong when some people find out that they can’t afford vital medicines? The general consensus is that this is wrong. Is it wrong for such a company to seek profits to grow the business and expand the product line for the general good? Most would agree that the pipeline of new medicines would dwindle down to a trickle if companies were punished for being profitable. Finding that line of demarcation between right and wrong… ethical or unethical… is a fluid boundary that can fluctuate according to current circumstances.

It will always be difficult to set expectations on the deliverables of a company unless there is good intelligence on the wants and needs of the general public. Leaders who keep an ear to the ethical chatter of their environment will be able to find the right mix for the time and be successful.

Image credit: alexh / 123RF Stock Photo



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