Ethics, Business and Justice

Like life, business also involves dilemmas and conflicts. The line dividing between good and bad and right and wrong often becomes hazy.  Consider the following:

  • An advertisement showed a biker jumping the traffic signal and being chased by the policeman for the violation only to find that biker was in rush to help a patient.
  • Many glossy advertisements of investment products over emphasize benefits but rush through ‘conditions apply’ so fast that nothing can be made of them.
  • Many pharmaceutical firms conduct human trials of their drugs on people in poor countries.
  • Doctors in hospitals recommend patients to undergo unneeded tests in the name of diagnosis.
  • During the time of scarcity businessmen hoard and fleece customer by overcharging.
  • Gurus and ‘Babas’ exploit the vulnerable and naïve people by recommending magic remedies.
  • Many countries dump their products in order to save livelihood of its citizens but jeopardizing the welfare of the other.

Business happens at the point of intersection when two or more people meet. This simple exchange needs governance mechanism.  In the absence of such a mechanism the fairness of the distributive outcome cannot be achieved.  Fairness in the distribution of outcomes is essential to justice. Ambiguity is a fertile ground for debates.  Establishing the rightness of an action demands justification and it is here various approaches of justice came to play a role. Harvard professor Sandel identified three approaches: welfare, freedom and virtue.

The utilitarian school aims to maximize welfare and seeks greatest happiness for the greatest number.  The costs and benefits of an action become the guiding principle of morality.  The correctness or right of an action is a matter of calculation. So a drug trial on a small number is right if a large number of people could be saved.  

The idea of freedom is linked to justice in libertarian conception. The focus here is on individual rights such a freedom of speech or religious faith. However the others rights to do the same should be respective.  Business in this conception should be left free and liberated from any regulations.  Milton Friedman considers many of the sate activities to be illegitimate infringements on freedom.  There is nothing wrong if a ‘baba’ or guru doles out magic remedies.

The third set of theories view justice linked up with virtue and the good life. Justice is about cultivation of virtue and common good. Justice should promote virtue.  Immanuel Kant proposes that a deed be done because it is the right thing to do irrespective of its consequences. So if an advertiser does not mislead because people will discover misrepresentation, he has done the right thing for wrong reason. This lacks moral worth. Moral worth of an action consists in intention not consequence.  

The rightness of a thing is often subjectively perceived. And this individualized perception can lead to unfair decisions. The ‘way things are done’ may have strong historical justification but may be on weak footing on morality front.  Therefore it is essential that top management creates a culture where that rightness of business decisions is not solely governed by the considerations of top line and bottom line. Utility is not a correct perspective to judge moral worth of things.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s