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in 2002 the US economy faced the Semin
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of the
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largest bankruptcies in in corporate
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history which led to the passing of
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sabes Oxley which was supposed to
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improve things but in 2007 and eight
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again they come to face the failure of
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some of the largest financial
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institutions which led to a recession
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many economists and experts in economy
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and political science basically
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including people like Alan Greenspan
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were shocked
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Alan Greenspan as he as you might know
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is a great supporter of deregulation of
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financial industry and was also the head
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of the Federal Reserve in 2006 at the
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level of greed and corruption exhibited
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by these financial institutions the
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result of these things that happen these
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de Beckles are chaos in our social
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economic and political lives now there
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can be many reasons for for these
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economic debacles but one important
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reason is the lack of ethical behavior
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on part of these businesses in makers
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they can be several reasons for this
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ethical anemia but however one important
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reason is that business education and
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business environment as such propagates
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a dangerous view that business exists in
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a realm separate from our social lives
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hence regular common sense morality and
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ethical 'ti does not apply to it now
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before we go into deeper into the topic
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under consideration I would like to go
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have a couple of slides on what terms
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and and and concepts are and how they
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related to the way we think Patricia
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Marin argues that that we all perceive
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frame and interact with the world
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through his conceptual schemes that are
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modified by mental models so words terms
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biases interpretations create and
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provide those mental models she
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discusses the case of Ford Pinto perhaps
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the most notorious case in the car
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manufacturing industry a defect in the
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tank fuel tank led to several deaths and
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for did it's infamous cost-benefit
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analysis they found out they estimated
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that if they would spend $11 on the
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update this would take care of the
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problem but if all 12.5 million cars are
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the cost would be 137 million dollars
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then on the other hand based on the
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estimates made by the NHTSA they
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estimated that this update would save
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hundred eighty lives and under 80
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serious serious injuries and that would
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lead to a benefit of saving of 49 point
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five million dollars how relieving a net
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loss of eighty seven point five million
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dollars now the question is why would
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they make this decision the fort
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management obviously not all of them
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were intrinsically evil people professor
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warren argues that they made these
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calculations because the decision to
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recall Ford Pinto or not was based on
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the employee for train perspective which
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precluded ethical considerations from
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decision-making processes and the gap
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was created between personal morality
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and business decision-making and the
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evidence in favor of recall was found
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inconclusive
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organization cultures that preclude
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ethicality from the business vocabulary
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remind me of Newspeak in the great novel
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1984 a totalitarian regime basically
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wanted to exclude certain words from the
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vocabulary so that might lead to some
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kind of thought crime that the logic
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really was that if we do not have a word
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for say free will or self-expression
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then in all probability we will not be
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able to discuss or relate to the concept
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of free will and self expression the
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profession of the perpetuation of
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phrases like business of businesses
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business of business ethics is an okapi
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is an oxymoron leads to the creation of
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economic Dogma which expects
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unquestioning adheres these statements
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as veritable truths and intractable
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facts if you look at the overall
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argument here which leads to the
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statement or provides the ideological
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underpinnings of the statement business
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ethics is an oxymoron you will see the
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statement is quite simplistic it's
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actually intuitive but it doesn't tell
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you the whole truth it basically if you
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look at the statement there are three
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main ideas that are being being
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expressed here number one is that
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self-interest is the sole
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season motive behind all business
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activities number two is the purpose of
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any business is just to make money for
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the shareholders and three is that
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business exists in a realm where normal
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common sense ethics does not apply now I
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argue that these dogmatic beliefs that
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have and will create more chaos in our
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economic lives are dangerous assertions
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and the need to be deconstructed and
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reassessed the idea of self-interest can
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be traced back in economic terms can be
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traced back to Adam Smith and his book
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The Wealth of Nations in 1776 now this
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book it is to this day is considered as
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the foundation work for modern economics
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many scholars and economists have
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interpreted Adam Smith's work as a peon
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to unabated pursuit of self-interest and
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that claim is supported by this
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statement which is perhaps the most
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quoted statement from that book as you
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can see the the butcher's the butcher
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and the brewer need our money we need
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their products the market facilitates
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the exchange
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hence other than self-interest no
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ethical considerations are in play
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however it must be argued that Adam
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Smith was mistakenly interpreted as an
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ideologue who's only contribution was
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the introduction and support of an
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ethics free view of economics dr.
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Marquez Sen who's an economist and and a
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Nobel laureate he adapts a Shakespearean
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efforts and thus while some people are
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born small some achieves smallest the
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unfortunate Adam Smith has had much
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smallest tests upon him if you really
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want to understand what Evan Smith
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really meant by self-interest we need to
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go beyond this one statement this is
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situated in a book that is 49 pages long
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we human need to go began beyond what
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they own wealth of nations and two other
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important works and one of them is the
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Theory of Moral Sentiments which
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preceded and also laid the moral
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foundation for wealth of nations the
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theory more Moral Sentiments begins with
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this step this statement in which you
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can clearly see that Adam Smith is
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saying
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that human beings have an innate desire
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to see others do well I can go on and
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give you several quotations and passages
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from the wealth of nations that are much
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less cited but there at the same time
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very important to understand what he
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meant by itself interest we don't have
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the time so the crux really is the Smith
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had cautioned against self-interest or
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limitless pursuit of self-interest he
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had noted that human beings have two
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motives to act self-interest and concern
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for others which he called sympathy and
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he believed that sympathy would restrict
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self-interest whenever it is at the
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added expense of other people or
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whenever fairness and justice required
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it in some Smith was an economist and a
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virtue ethicist who provided ethics a
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dominant place in the cap free
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free-market economy and he would have
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never agreed to the thesis that allows
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or justifies the pursuit of unfettered
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self-interest or personal gain under the
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guise of self-interest the second link
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in the chain is an argument that allows
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us to determine the difference between
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purpose and and and and motive of
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business now purpose as or Telos as the
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Greeks used to call it allows us to
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understand why certain institutions were
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created more than on the other hand is a
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mechanism it is based on on
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psychological needs and other needs that
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stimulates people to act both purpose
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and motive can actually be used to
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explain why certain things are done but
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they could very well be different from
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each other let's take the example of
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journalism journalists work for money
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because they want to pay their bills
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journalistic outlets also need to have
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access to funds so that they can keep on
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operating but journalism's purpose as
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determined by political science scholars
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is basically to act as the Fourth Estate
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and perform the function of a watchdog
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over government and other powerful
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interests in the state hence the
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original Telos of journalism actually is
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quite important for any healthy
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democratic society but if we argue that
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no business is
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these these journalistic outlets are
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just there to make money then
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essentially we are turning means into
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ends and by doing so we're debasing a
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very important social institution
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business is a social institution it was
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created by society so that the members
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of society can benefit by achieving all
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of these human needs including but not
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limited to profit no society creates an
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institution if it's not fulfilling the
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overall goal of the society if you go
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back in the history of corporations we
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will realize that corporations were
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given charters by state legislatures and
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federal attendant and and country legend
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asks us legislature based on separate
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votes and their economic activities were
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limited to certain areas that align with
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the overall purpose of the state hence
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the state or society is the bigger more
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important unit Adam Smith also
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acknowledged that an overall laudable
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goal of free-market economy is the
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improvement of the society and he
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believed that that that self-interest is
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the mechanism behind those business and
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market transactions furthermore he knew
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that unfettered pursuit of self-interest
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will damage social interest and he was
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in favor of establishing moral norms to
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restrict it today the economic Dogma
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puts a disproportionate emphasis on
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making profit as a sole purpose of
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corporations this might be true
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partially but think about this what if
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the business was created so that it can
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produce goods and services more
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effectively or efficiently what if the
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business were created because they can
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bring together skills and resources for
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different sources for the benefit of all
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participants the bar on this bottom line
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myopia needs to be avoided as when it
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gets unquestionably ingrained in our
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business practices it leads to the
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development of a callous attitude in
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business people in managers that justify
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are socially damaging but at the same
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time a singletrack pursuit of profit at
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all costs
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the last link in the chain it's a
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descriptive argument it's basically say
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as a business is a separate realm our
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common sense morality does not apply to
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it a great proponent of this idea is
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Albert Carr Carr argues that business
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executives in the pursuit of their
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interest and interests of their
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organizations are supposed to earn
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expected to latch eat and love he
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compares business with with the game of
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poker and he says that a game of poker
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in which distrust is the norm in which
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kindness is a source of weakness in
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which cunning is a source of strength
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friendship is ignored and in fact it is
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quite all right and acceptable to
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deceive a friend for personal gain he
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also instructs business people that if
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you do lie cheat in your business
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transactions don't feel bad about
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yourself you're already doing all right
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I love to watch gangster movies and one
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very important thing in a very
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interesting aspect of those movies that
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I found is that how these gangsters are
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able to bifurcate their personal life
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with their social life I mean more in
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most cases they're shown mafia movies
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they're shown as as individuals who are
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loving fathers loving parents good
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neighbors helping people giving money to
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charity going to church but at the same
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time that extremely extremely ruthless
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when it comes to their business
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transactions I'm always reminded of this
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really famous scene from perhaps the
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greatest movie
00:12:45
against him who he ever made The
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Godfather in which Michael Corleone he
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finds out that one of his father's old
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and trusted associates Tesio is setting
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him up to be assassinated when Tesla is
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being taken now by Michael's men to be
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shot dead she looks back at Tom Hagen
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was their lawyer and consigliere and
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says well tell Michael I always liked
00:13:07
him it was business not personal the
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question really is setting somebody up
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to be assassinated how personal can you
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get more I fail to understand that the
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point really is that I always wonder how
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did it achieve this this this
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compartmentalization but then you read
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car you realize maybe they're using the
00:13:29
similar
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and they are saying and there is chewing
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all blame all charges of anti-social
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criminal behavior by believing that
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their business is a game in which normal
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common-sense morality does not apply but
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does business really ask us to lie all
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the time well if that was the case then
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why would companies lose their goodwill
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and why would they have impact negative
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impact on their bottom lines when they
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lied we have the examples of companies
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like Volkswagen Toyota really good
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companies but getting into trouble
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because of lying and deceit
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if lying was okay in business then the
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idea or the value of the of promised
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explicit and implicit would end in
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business if the line line was okay in
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business then the idea or value of of
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good faith which is a presupposition of
00:14:21
all business transactions would be
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abolished isn't in some industries even
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giving in incomplete information
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intolerable like the pharmaceutical
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industry even advertising
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notwithstanding the hyperbole involved
00:14:38
has to provide us with some credible
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useful information to be effective if
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advertising is all lying and we all know
00:14:46
it's lying then why it is effective and
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finally if cars argument is actually
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right then why would people want to be
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managers because it almost seems that if
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they want to be managers and do well in
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the business they've had to sell their
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soul so why would they do it the
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business what the fact is said that
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whatever we have they were seen in the
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business world does not support these
00:15:09
assertions there is no universal code of
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a morality that is followed and
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subscribed by all business people
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business is part of a society of our
00:15:20
society and many of the common-sense
00:15:23
ethical principles like truth-telling
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trust building fulfilling promises
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contractual obligations do apply to
00:15:30
business that apply to all other
00:15:32
institutions in our society the term
00:15:36
business ethics is an oxymoron leads to
00:15:38
a cynical d'Avignon zero-sum games
00:15:41
zero-sum game view in the
00:15:43
self-interest is a be-all and end-all of
00:15:45
all economic activity it justifies
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egoism it states that people only and
00:15:51
always will act ended in the
00:15:52
self-interest it allows corporations to
00:15:55
develop a callous attitude that
00:15:59
justifies their most deplorable acts
00:16:01
behind behind exalted benefits of manner
00:16:05
of of of self-interest therefore the
00:16:09
need is to confront these ideas and
00:16:11
dogmas and reconstruct them a little bit
00:16:15
the issue is not that all businesses are
00:16:17
unethical the issue is that we need to
00:16:21
make ethical behavior the dominant norm
00:16:23
we can achieve this in fact by creating
00:16:27
ecosystems in businesses where business
00:16:29
executives can discuss business issues
00:16:32
in ethical terms without being denounced
00:16:35
as impractical or or too idealistic we
00:16:39
can achieve this by making ethics part
00:16:41
of common parlance so as to ensure that
00:16:44
our business decision-makers are able to
00:16:47
develop the ability to discern ethical
00:16:50
issues assess them and analyze them in
00:16:53
ethical terms and eventually develop an
00:16:56
overall appreciation of an often ethical
00:16:59
life thank you very much
00:17:01
[Applause]
