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A look at the future of ethics in business
9 January 2009:
The motivation behind this question, of course, is the disenchantment we all recently have experienced as a result of the Wall Street financial scandals that have ravaged the U.S. and world economies.
Greed, fraud and questionable practices have played a significant role in our current recession.
Predicting business ethics is much like forecasting the economy. No one knows for sure what will happen or when. Probably the safest way to discuss the coming year or two is in terms of three possible scenarios - pessimistic, optimistic and most likely.
Pessimistic Scenario
The gloomy scenario is that business, as an institution, will not have learned its lesson. Executives will skirt responsibility and society will have a hard time holding decision makers accountable. Due to continuing global competition, slacking demand and the pressures of cost cutting, companies will be tempted to cut corners across the board. Corporate boards will not help much. Many of them have sold out to the CEO-driven system of governance.
Cutting corners with respect to stakeholders will adversely affect shareholders, employees, customers, the community and the environment. Shareholders will be hurt by the vagaries of the market. Employees will be laid off or have their hours cut back. Their job security constantly will be in question and they will pay more for their health insurance, if it is available. Their retirement funds will be in serious jeopardy. Other stakeholders will experience a similar downsizing in treatment.
Under harsh economic conditions, the possibility of questionable behavior on the part of managers and employees will remain high. Tight economic conditions also might trigger further unethical practices to keep companies afloat. The climate will be ripe for fraud. Corporate giving will decline and many nonprofit organizations and charities will suffer.
Optimistic Scenario
Under a positive scenario, many businesses that have contributed to questionable practices in the past, will repent, apologize and turn their organizational lives around. Business executives will be ethically "born again" and will return to the Judeo-Christian worldview of loving God and loving their neighbors as themselves. Love, in this context, will manifest itself as fairness, justice and caring. Caring for neighbors/ stakeholders will be expressed in improved practices and fairer treatment of all persons and groups.
A new commitment to ethical management will cause many leading executives to step forward and demonstrate ethical leadership and statesmanship, and the world will be encouraged by these new found expressions of integrity and transparency.
The public will be heartened and slowly, but surely, return some degree of trust to the business sector. Economic growth will return.
In this optimistic scenario, Congress and consumers finally will recognize they need to live within their means.
Most Likely Scenario
It is not likely that either of these extreme developments will occur. More than likely, we will be so preoccupied with the economy, the wars that never seem to end and social programs dwindling in solvency that we will not monitor corporate behavior as closely as we should.
Improved practices will be driven by some re-regulation, primarily in the financial services industry. This will improve conditions and just might have a trickle-upward effect on business ethics. Short of a major transformation in the world's business system toward long-term, ethical sustainability, things will go on as they have. In short, we might be waiting and watching for the next major scandal to hit the news, while hoping for some stabilization in the business environment.
In retrospect, ethical conditions did not advance demonstrably after the Enron scandal and there is little reason to suspect they will genuinely improve after the great Wall Street financial scandal cools down. Fortunately, the most likely scenario reflects a continuation of one of the paramount business systems in the world and in spite of all we have been through, life will go on. Unfortunately, it could be so much better. Fearfully, it could get worse.
By Archie Carroll
Source:Oonline Athens
