Business Ethics

Business Ethics

By Michael Davids

An Oxymoron…Or Are there Ethical and Profitable Ways to Conduct Commerce?

A liberal arts education at Holy Cross College that leads to a business concentration requires students to take courses in literature, history, religion, and philosophy. Are classes like these really necessary for conducting business? Business people, owners, executives, and employees are expected to be scrupulously honest and ethical in all their professional and personal dealings. They should never take action that has even the appearance of being inappropriate.

But who writes the rules?

The very first day a student graduates into the business world, his or her abilities to make ethical choices will be tested. Here are some of the types of questions students may face:

If you sell copy machines to a large corporation at slightly over cost because they buy in volume, but then you sell the same machine to a school for orphans at full price (or approximately 50% more) because the school’s purchasing agent doesn’t have the wherewithal (or leverage) to negotiate a better price, is that fair? Unethical? Or, good business?

If you are a doctor and you charge an insurance company full price, but charge a poor uninsured family half price, is that fair? Unethical? Or, good business?

If you manage a drug company that has discovered an extremely rare new compound that cures all kinds of cancer, do you sell your limited supply to the highest bidder, or to the most needy? How will you recover your research and manufacturing costs and still make a good profit?

If you can manufacture a running shoe in the US for $1, in Canada for $.90, in Mexico for $.50, in Nicaragua for $.25, or in Haiti for $.15, where do you build your plant? And, at what point, if any, have you crossed a moral divide? What is a living wage? Is a minimum wage job in the US that doesn’t provide enough money for food and shelter superior to what would be considered a living wage in Haiti?

Is it wrong to pay a worker less than their work is worth? Is it equally wrong to accept more from your employer than your work is worth?

Is a fixed price more ethical than a variable price? What is a fair price? What is a fair wage?

At what point does a business decision become a moral choice?

There is a big difference between what is legal and what is scrupulously ethical. How are the inexperienced supposed to know the difference?

Business authors such as Stephen Covey write about using a moral compass, an effective symbol for how decisions are made because its needle can spin through all directions. As a captain guides a ship, he or she cannot always maintain a perfect heading. Wind batters the boat, waves push it. The goal of any navigator is to know what direction to head and hope that the port and starboard corrections eventually even out.

Some people believe that “fair business practices” are anything the market will allow. Others believe there should be international standards to follow. Governmental commissions have been convened to determine such things, and their findings create outrage on both sides of the argument between corporate standards of conduct and human rights.

According to Holy Cross College Business Professor Tom Burzycki, “In a world of business, whether it is a not-for-profit or a profit seeking enterprise, ‘Saints’ from Holy Cross College understand that their purpose is more than just winning at any price or changing rules to fit a situation. They will consider that their actions, and those of their business, go beyond being legal. In order to resolve problems, the solution has to be fair to all concerned. It should result in a good feeling about making that specific decision and a belief that it will work in the real world. Ethical dealing is the only basis that facilitates an increase in open cooperation for future work.”

When we talk about ethics, we are forced beyond the rule of law into the fuzzy world of feelings, fairness, and assumptions. In the liberal arts curriculum, students study stories, histories, philosophies, and parables that can help them understand concepts that even the most logically written rules and laws cannot define.

By showing the personality of Jesus Christ in the Gospels, for example, the New Testament takes one beyond the hard and fast rules of the 10 Commandments. Read Christ’s parables and one can understand more about how to behave than one could find in a book of laws. Readers can get to know His personality and make assumptions that help steer their lives.

Although assumptions fall into the great gray divide between the black and white of hard fast rules, it is impossible to make decisions without them. For example, one can wonder, “In this situation, what would Jesus do?” And a study of literature, history, and philosophy can improve this decision-making process even further: “Am I being noble, or a noble fool like Don Quixote?” “Am I weighing my options, or paralyzed by them like Hamlet?” “Am I doing something positive in the world, or just pushing a rock like Sisyphus?”

By studying the lives of historical characters, fictional characters, and Biblical personages, students can develop their moral compass and navigate the ethical dilemmas that arise between market forces and human needs, between fair profit and greed, and between logic and faith.

And when a mistake is made in one direction, the steering wheel can be turned to correct one’s course and keep the ship pointed toward the greater good (whatever that may be).