in 2002 the US economy faced the Semin
of the
largest bankruptcies in in corporate
history which led to the passing of
sabes Oxley which was supposed to
improve things but in 2007 and eight
again they come to face the failure of
some of the largest financial
institutions which led to a recession
many economists and experts in economy
and political science basically
including people like Alan Greenspan
were shocked
Alan Greenspan as he as you might know
is a great supporter of deregulation of
financial industry and was also the head
of the Federal Reserve in 2006 at the
level of greed and corruption exhibited
by these financial institutions the
result of these things that happen these
de Beckles are chaos in our social
economic and political lives now there
can be many reasons for for these
economic debacles but one important
reason is the lack of ethical behavior
on part of these businesses in makers
they can be several reasons for this
ethical anemia but however one important
reason is that business education and
business environment as such propagates
a dangerous view that business exists in
a realm separate from our social lives
hence regular common sense morality and
ethical 'ti does not apply to it now
before we go into deeper into the topic
under consideration I would like to go
have a couple of slides on what terms
and and and concepts are and how they
related to the way we think Patricia
Marin argues that that we all perceive
frame and interact with the world
through his conceptual schemes that are
modified by mental models so words terms
biases interpretations create and
provide those mental models she
discusses the case of Ford Pinto perhaps
the most notorious case in the car
manufacturing industry a defect in the
tank fuel tank led to several deaths and
for did it's infamous cost-benefit
analysis they found out they estimated
that if they would spend $11 on the
update this would take care of the
problem but if all 12.5 million cars are
the cost would be 137 million dollars
then on the other hand based on the
estimates made by the NHTSA they
estimated that this update would save
hundred eighty lives and under 80
serious serious injuries and that would
lead to a benefit of saving of 49 point
five million dollars how relieving a net
loss of eighty seven point five million
dollars now the question is why would
they make this decision the fort
management obviously not all of them
were intrinsically evil people professor
warren argues that they made these
calculations because the decision to
recall Ford Pinto or not was based on
the employee for train perspective which
precluded ethical considerations from
decision-making processes and the gap
was created between personal morality
and business decision-making and the
evidence in favor of recall was found
inconclusive
organization cultures that preclude
ethicality from the business vocabulary
remind me of Newspeak in the great novel
1984 a totalitarian regime basically
wanted to exclude certain words from the
vocabulary so that might lead to some
kind of thought crime that the logic
really was that if we do not have a word
for say free will or self-expression
then in all probability we will not be
able to discuss or relate to the concept
of free will and self expression the
profession of the perpetuation of
phrases like business of businesses
business of business ethics is an okapi
is an oxymoron leads to the creation of
economic Dogma which expects
unquestioning adheres these statements
as veritable truths and intractable
facts if you look at the overall
argument here which leads to the
statement or provides the ideological
underpinnings of the statement business
ethics is an oxymoron you will see the
statement is quite simplistic it's
actually intuitive but it doesn't tell
you the whole truth it basically if you
look at the statement there are three
main ideas that are being being
expressed here number one is that
self-interest is the sole
season motive behind all business
activities number two is the purpose of
any business is just to make money for
the shareholders and three is that
business exists in a realm where normal
common sense ethics does not apply now I
argue that these dogmatic beliefs that
have and will create more chaos in our
economic lives are dangerous assertions
and the need to be deconstructed and
reassessed the idea of self-interest can
be traced back in economic terms can be
traced back to Adam Smith and his book
The Wealth of Nations in 1776 now this
book it is to this day is considered as
the foundation work for modern economics
many scholars and economists have
interpreted Adam Smith's work as a peon
to unabated pursuit of self-interest and
that claim is supported by this
statement which is perhaps the most
quoted statement from that book as you
can see the the butcher's the butcher
and the brewer need our money we need
their products the market facilitates
the exchange
hence other than self-interest no
ethical considerations are in play
however it must be argued that Adam
Smith was mistakenly interpreted as an
ideologue who's only contribution was
the introduction and support of an
ethics free view of economics dr.
Marquez Sen who's an economist and and a
Nobel laureate he adapts a Shakespearean
efforts and thus while some people are
born small some achieves smallest the
unfortunate Adam Smith has had much
smallest tests upon him if you really
want to understand what Evan Smith
really meant by self-interest we need to
go beyond this one statement this is
situated in a book that is 49 pages long
we human need to go began beyond what
they own wealth of nations and two other
important works and one of them is the
Theory of Moral Sentiments which
preceded and also laid the moral
foundation for wealth of nations the
theory more Moral Sentiments begins with
this step this statement in which you
can clearly see that Adam Smith is
saying
that human beings have an innate desire
to see others do well I can go on and
give you several quotations and passages
from the wealth of nations that are much
less cited but there at the same time
very important to understand what he
meant by itself interest we don't have
the time so the crux really is the Smith
had cautioned against self-interest or
limitless pursuit of self-interest he
had noted that human beings have two
motives to act self-interest and concern
for others which he called sympathy and
he believed that sympathy would restrict
self-interest whenever it is at the
added expense of other people or
whenever fairness and justice required
it in some Smith was an economist and a
virtue ethicist who provided ethics a
dominant place in the cap free
free-market economy and he would have
never agreed to the thesis that allows
or justifies the pursuit of unfettered
self-interest or personal gain under the
guise of self-interest the second link
in the chain is an argument that allows
us to determine the difference between
purpose and and and and motive of
business now purpose as or Telos as the
Greeks used to call it allows us to
understand why certain institutions were
created more than on the other hand is a
mechanism it is based on on
psychological needs and other needs that
stimulates people to act both purpose
and motive can actually be used to
explain why certain things are done but
they could very well be different from
each other let's take the example of
journalism journalists work for money
because they want to pay their bills
journalistic outlets also need to have
access to funds so that they can keep on
operating but journalism's purpose as
determined by political science scholars
is basically to act as the Fourth Estate
and perform the function of a watchdog
over government and other powerful
interests in the state hence the
original Telos of journalism actually is
quite important for any healthy
democratic society but if we argue that
no business is
these these journalistic outlets are
just there to make money then
essentially we are turning means into
ends and by doing so we're debasing a
very important social institution
business is a social institution it was
created by society so that the members
of society can benefit by achieving all
of these human needs including but not
limited to profit no society creates an
institution if it's not fulfilling the
overall goal of the society if you go
back in the history of corporations we
will realize that corporations were
given charters by state legislatures and
federal attendant and and country legend
asks us legislature based on separate
votes and their economic activities were
limited to certain areas that align with
the overall purpose of the state hence
the state or society is the bigger more
important unit Adam Smith also
acknowledged that an overall laudable
goal of free-market economy is the
improvement of the society and he
believed that that that self-interest is
the mechanism behind those business and
market transactions furthermore he knew
that unfettered pursuit of self-interest
will damage social interest and he was
in favor of establishing moral norms to
restrict it today the economic Dogma
puts a disproportionate emphasis on
making profit as a sole purpose of
corporations this might be true
partially but think about this what if
the business was created so that it can
produce goods and services more
effectively or efficiently what if the
business were created because they can
bring together skills and resources for
different sources for the benefit of all
participants the bar on this bottom line
myopia needs to be avoided as when it
gets unquestionably ingrained in our
business practices it leads to the
development of a callous attitude in
business people in managers that justify
are socially damaging but at the same
time a singletrack pursuit of profit at
all costs
the last link in the chain it's a
descriptive argument it's basically say
as a business is a separate realm our
common sense morality does not apply to
it a great proponent of this idea is
Albert Carr Carr argues that business
executives in the pursuit of their
interest and interests of their
organizations are supposed to earn
expected to latch eat and love he
compares business with with the game of
poker and he says that a game of poker
in which distrust is the norm in which
kindness is a source of weakness in
which cunning is a source of strength
friendship is ignored and in fact it is
quite all right and acceptable to
deceive a friend for personal gain he
also instructs business people that if
you do lie cheat in your business
transactions don't feel bad about
yourself you're already doing all right
I love to watch gangster movies and one
very important thing in a very
interesting aspect of those movies that
I found is that how these gangsters are
able to bifurcate their personal life
with their social life I mean more in
most cases they're shown mafia movies
they're shown as as individuals who are
loving fathers loving parents good
neighbors helping people giving money to
charity going to church but at the same
time that extremely extremely ruthless
when it comes to their business
transactions I'm always reminded of this
really famous scene from perhaps the
greatest movie
against him who he ever made The
Godfather in which Michael Corleone he
finds out that one of his father's old
and trusted associates Tesio is setting
him up to be assassinated when Tesla is
being taken now by Michael's men to be
shot dead she looks back at Tom Hagen
was their lawyer and consigliere and
says well tell Michael I always liked
him it was business not personal the
question really is setting somebody up
to be assassinated how personal can you
get more I fail to understand that the
point really is that I always wonder how
did it achieve this this this
compartmentalization but then you read
car you realize maybe they're using the
similar
and they are saying and there is chewing
all blame all charges of anti-social
criminal behavior by believing that
their business is a game in which normal
common-sense morality does not apply but
does business really ask us to lie all
the time well if that was the case then
why would companies lose their goodwill
and why would they have impact negative
impact on their bottom lines when they
lied we have the examples of companies
like Volkswagen Toyota really good
companies but getting into trouble
because of lying and deceit
if lying was okay in business then the
idea or the value of the of promised
explicit and implicit would end in
business if the line line was okay in
business then the idea or value of of
good faith which is a presupposition of
all business transactions would be
abolished isn't in some industries even
giving in incomplete information
intolerable like the pharmaceutical
industry even advertising
notwithstanding the hyperbole involved
has to provide us with some credible
useful information to be effective if
advertising is all lying and we all know
it's lying then why it is effective and
finally if cars argument is actually
right then why would people want to be
managers because it almost seems that if
they want to be managers and do well in
the business they've had to sell their
soul so why would they do it the
business what the fact is said that
whatever we have they were seen in the
business world does not support these
assertions there is no universal code of
a morality that is followed and
subscribed by all business people
business is part of a society of our
society and many of the common-sense
ethical principles like truth-telling
trust building fulfilling promises
contractual obligations do apply to
business that apply to all other
institutions in our society the term
business ethics is an oxymoron leads to
a cynical d'Avignon zero-sum games
zero-sum game view in the
self-interest is a be-all and end-all of
all economic activity it justifies
egoism it states that people only and
always will act ended in the
self-interest it allows corporations to
develop a callous attitude that
justifies their most deplorable acts
behind behind exalted benefits of manner
of of of self-interest therefore the
need is to confront these ideas and
dogmas and reconstruct them a little bit
the issue is not that all businesses are
unethical the issue is that we need to
make ethical behavior the dominant norm
we can achieve this in fact by creating
ecosystems in businesses where business
executives can discuss business issues
in ethical terms without being denounced
as impractical or or too idealistic we
can achieve this by making ethics part
of common parlance so as to ensure that
our business decision-makers are able to
develop the ability to discern ethical
issues assess them and analyze them in
ethical terms and eventually develop an
overall appreciation of an often ethical
life thank you very much
[Applause]