Should business survival trump ethics?
This is a copy of an email I sent to the author of a book on business ethics. What are your thoughts?
You wrote that: “Sustainability is important! An organization that goes bust can’t do much good for anyone”
Ah! Thanks for clarifying. You’ve put your finger on the intriguing point: Should an organization that destroys long-term societal value have a fundamental right to exist (even if it’s profitable)? An organization that goes bust can’t do much good, true. But that doesn’t mean that a company that survives will do enough good to justify its survival.
If a company fails to produce societal value–even if it’s making money–I’m not sure society is served by having that same collection of people continuing to produce the same products in the same ways in the same legal structure. They’ve shown that they simply can’t do a legal, ethical job. Yet because they’re profitable (as would be an assassination service, or a deceptive lending company), we simply grant them the right to exist.
There’s a position that some organizations deserve to fail (not be acquired… not reorganize… but fail, altogether). Those resources can then be much more usefully deployed in forming a different organization doing something of greater societal value.
If a person destroys someone else’s property, harasses them, or kills them, we lock that person up and remove their ability to function in society. When deceptive practices by energy companies (thinking back to California a couple of years ago) manipulate energy prices to severe societal detriment, or when tobacco companies knowingly market to people who can’t make an informed decision [teens] to get them hooked on a powerful, deadly narcotic, or when fast food companies spend hundreds of millions influencing the entire society to eat food that is known to cause heart disease, adult onset of diabetes, and obesity, we say, “Well, it’s good for business, and let the buyer beware.”
There is plenty of evidence saying the buyer can’t beware for psychological or structural reasons. Advertising works, even for informed consumers. Locking up all the roadside real estate for your restaurant works, even for people with dietary concerns.
Harvard Business School’s mission is: We aspire to develop outstanding business leaders who contribute to the well-being of society. It’s a mission I’ve adopted as my own. If we take that as the goal of all of us in the leadership fields, it seems that we have to be asking these questions. If we don’t, who will?
That is what I’d love to see you address. To address ethics in business starting from the premise that businesses should be sustained as the #1 consideration, in my mind, really short-circuits the discussion before it even begins. It essentially says, “let’s talk about specific ethical situations in a context where, at the end of the day, survival of the company trumps all else.” There’s a whole class of really interesting cases are precisely the ones where company survival and societal survival clash and there is no way to have both.