VOLUME 26 NUMBER 10 1994

Looking Forward to the Past of Business Ethics

Norman Jackson and Pippa Carter
By the end of the twentieth century it was already recognized by many that management is a highfashion industry. New ideas, interests, approaches burst on the scene, each one offering the ultimate user satisfaction, and are adopted feverishly by academics and practitioners alike. For a while they are all the rage but then, inevitably, they go the way of all fashions: something brighter and shinier appears, promising even more ultimate satisfaction, and relegates the previous object of desire to the storeroom of old interests. Certainly, the old interest may, in time, reappear, dusted off and with a new coat of paint, but the cycle simply repeats itself. Such has been the situation with business ethics. For example, the expression of concern about businessmen targeting schoolchildren with undesirable products probably sounds like a contemporary problem but, in this case, comes from a book on business ethics published in 1937[1]. The same book also notes that business ethics was, even in the 1930s, a recycled concern: it had previously been in vogue as early as 1916, but interest had subsequently waned. Thus we can see that the fin de sicle interest in business ethics, which derived from the late 1970s and early 1980s, was at least its third outing that century. Unless something had dramatically changed in the appreciation of the imperatives of business ethics, there was no obvious reason why this outing too should not share the same fate as previous ones and there was no compelling evidence that such a change had occurred to sustain it. One could argue that management theories exhibit something akin to a product life cycle. A new idea is developed and goes through a relatively slow period of proselytization and acceptance. Should it catch the popular imagination, there is accelerating growth in its adoption and it becomes widely recognized as the
Industrial and Commercial Training, Vol. 26 No. 10, 1994, pp. 23-25 MCB University Press, 0019-7858.

new orthodoxy as it reaches its mature phase and enters a plateau where its veracity is largely unchallenged. Gradually, weaknesses are perceived in its formulation and/or application, it loses its appeal as the universal panacea and interest starts to decline as people transfer their affections to other ideas. The length of the plateau phase varies, but ten years or so seems to be the average sort of figure for management knowledge. In the case of business ethics, and given that any serious attention to it would meet with fanatical opposition from those gifted enough to see that the moral of morals (the metamorality) is the duty to sustain/increase profits, it can be suggested that business ethics in the 1990s was in the mature phase of its product life cycle: the mention of it on management courses was de rigueur, books about it appeared with increasing frequency, it had its journals, its conferences, its groupies, etc. Even though there was potentially much more to be said, and therefore much room for development, business ethics had by then been recognized as presenting a challenge to profit, and so had reached the limits of its tolerance. The prospects for further development were bleak. With this scenario in mind, it has been intriguing to review the fate of business ethics in the preceding decade from the situation of the year 2004.

The Year 2004

Interestingly, business ethics came of age in a period when the conduct of business was increasingly coming under scrutiny, possibly one effect of a series of revelations of corporate malpractice in various spheres. There was an increasing awareness of, and disapprobation of, normal business practice. But it was also the period of the predominance of the hyper-real[2,3]. This was an auspicious conjunction of events, as the gap between the real and the symbolic became a happy irrelevance. For those for whom time has blurred memory, let us elaborate. Much was made

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in the early 1980s of the responsibility of businesses to create wealth which would then trickle down to all, to create jobs, to protect the environment, to prioritize the customer, to sponsor the arts, etc. There was an increased blurring of the distinction between government and business, as business more and more assumed the responsibilities which had once been the prerogative of government, and good government became more and more defined in terms of the principles and practices of business (leading not surprisingly to the emergent concept of corporate governance). As business acquired this major role in the well-being of society it became appropriate to address to it questions of social morality. However, it is one thing to recognize the ethical responsibilities of business, but quite another to define this in real terms. What did it mean? If giving workers a living wage, protecting the environment, not exploiting the Third World and so on, meant cutting profit, was this being ethical? Or was it more ethical to maintain shareholder wealth? Certainly, the Christian ethic, which had been popularly taken to guide social morality, seemed increasingly strained by contemporary business practice. The tension was, however, eased by the realization that ethics did not necessarily always mean our ethics, but could include their ethics. In the early 1990s a number of commercial transactions for example, the bribery of local officials to secure contracts gained much publicity because of their perceived potentially scandalous nature. But they never achieved the status of true scandals. Although such practices were prima facie unethical, when reconceptualized in terms of conformance to local practice they were accepted as ethical; they were only unethical by our standards, not by theirs. This sort of thing has been a problem for transnational organizations for a long time. Thus, in the fourth century AD, the young St Augustine, working abroad, found that the local customs were different from those he was used to at head office. On consulting back to The Director for Overseas Cultural Relations, St Ambrose, he was given the now famous advice, when in Rome do as the Romans do. Here we have the formal sanctioning of action which recognizes that what we may normally regard as ethically wrong may be regarded as ethically correct under other circumstances. For this sanction to emanate from such a high moral authority as the Catholic Church has been very useful over the centuries in justifying ethical relativism as itself virtuous. In the language of the 1990s, what might once have been seen as dubious political expedience was re-

presented as the height of good ethics: it was only right and proper for companies to adopt local practices as evidence of their true sensitivity to cultural difference. In other words, virtually any practice could be justified in ethical terms in so far as it was bound to conform to ethical practice in some culture or other in theory at least. Thus, by the mid-1990s, the currency and utility of business ethics was assured because the concept had become effectively detached from any substantive content. In previous periods this lack of substance might have been regarded as fatal to a concept, but in the 1990s it was the epitome of the emergent Zeitgeist, which finally managed to achieve the hallucinogenic world of hyper-reality. You may remember that this period saw the maturity of a world characterized by the separation of the image from substance, where the image came to be seen as more real than that which it represented. The clearest manifestations of this were to be found in areas such as advertising and politics. In the former, products, be they motor cars, mortgages or toilet rolls, offered unalloyed and never-ending joy, increased sex appeal, health, wealth, liberty and happiness. In the latter an even more extreme case no matter what disasters befell, they could be, and were, always portrayed as intentional, progressive and beneficial. As regards business ethics, the mid-1990s saw considerable enthusiasm among companies for advertising their ethical approach to business. Notable examples include the eulogizing of employees as the most important resource against a background of falling wages and reduced job security; and, by 1996, virtually every corporate organization was able to claim that both their products and their processes were totally environmentally friendly, even though all scientific measures of pollution showed a continuing increase. Government policy in this period was to complete the deregulation of business and to encourage self-regulation. Various award schemes were instigated, culminating in 1997 with the institution of the Ethical Company of the Year Award. The chief executive of the first winning corporation was, shortly after the award, appointed to head a new quango for the promotion of business ethics. A year later a commission of enquiry found this company knowingly responsible for ethical malpractice but, despite howls of protest from the opposition, it was not seen as a matter for either dismissal or resignation. The appointment of a Minister for Business Ethics after the 1999 election seemed to re-state an official commitment to the significance

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VOLUME 26 NUMBER 10 1994

of business ethics, but was somewhat tarnished by the imprisonment of the first minister for serious financial irregularities in his private business dealings. In some ways, business ethics never recovered from this. The traditional sources of moral authority had declined in favour of business, which now became the repository of moral leadership. In effect, business itself defined what was ethical business practice. Over the last couple of years new thinking on business ethics often referred to as new ethics has reinforced the view that business ethics is the same as business practice and thus its existence as a separate concept is redundant. This appears to be confirmed by a recent government proposal in response to pressure from the business community, to drop business ethics from the new revised National Curriculum for university business schools.

Back to the Here and Now

In 1994 it might have been thought that the scenario of the then future of business ethics described above was merely an exercise in cynicism. However, apart from the specific storyline, what has been described reflected events which had already occurred by then, in some form or other, and so even then should have been seen as rooted in the real rather than the fantastic. It seems to us that the prospects for Business ethics were inevitably bleak, extrapolating from its then present state. business ethics, simplistically, can be seen as concerned with right and wrong business practice, but there neither was, nor is, universal acceptance of what might be right or wrong, and it did not appear to be part of the project of business ethics as a discipline to address this problem. Indeed, there is still an unresolved issue about who should be responsible for establishing such principles[4]. As a result, it is not unfair to say that such codes of business ethics which existed tended, as now, to be a product of the business community itself which clearly, and unsurprisingly, acts in its own interest. But this is a bit like letting the criminal community establish the precepts for the Penal Code. If there were to be a transcendent, universally accepted code of ethics, this would, by definition, require profits to be foregone where they were in conflict with the requirement to do right. This is

at odds with the raison dtre of capitalist organizations, which is to create shareholder wealth. It is often overlooked that capitalism is simply a system of allowing money to create more money, and in this sense is intrinsically amoral. Thus business ethics has seemed to be faced with a dilemma: either it could choose to address the conflict of interest between ethical practice and profit, or it could accept the existing framework of business practice and attempt to rationalize ethical practice and profit. Generally, business ethics chose the latter course, which, given the amorality of capitalism, left it trying to resolve the unresolvable, to square the circle. Nonetheless, in 1994 (and even in 2004?) to declare business ethics redundant would be to say the unsayable. It is for this reason that effort at the corporate level has been channelled into the symbolic, cosmetic aspects of business ethics while sustaining the distinction between those and the real. As long as this distinction is allowed to be sustained business ethics will increasingly belong to the realm of hyper-reality.

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References
1. Sharp, F.C. and Fox, P .G., Business Ethics, D. Appleton-Century, New York, NY, 1937. 2. Baudrillard, J., Selected Writings, Stanford University Press, Palo Alto, CA, 1988. 3. Eco, U., Travels in Hyper-Reality, Picador, London, 1987. 4. Carter, P . and Jackson, N., Management, Myth and Metatheory, International Studies of Management and Organization, Vol. XVII No. 3, 1987, pp. 64-89.

Norman Jackson is Lecturer in Organization Theory in the Management Division at the University of Newcastle upon Tyne, UK. Pippa Carter is Lecturer in Organization Theory in the Department of Management Systems and Science, University of Hull, UK.

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