It will not be unfair to describe the current time as period of protest. People seem to be coming alive to practices and policies that governments and business adopted but failed to deliver. Many countries are reeling under vociferous often violent protests against people in power for their governance deficit. Failure at different levels has led people to protest against governments in different countries including Romania, Turkey, Egypt, India, Argentina and Libya. The scenario is not very different in business sphere. Various corporate scandals have rocked share markets and shaken the faith of investors including Enron, Worldcom, Lehman, Freddie Mac and Satyam. In the social arena the things are no different. Things that upset include abuses of the rights of marginalized, women and child.
One of the major criticisms against business has been their failure see effects of their actions beyond immediate profits. Consequently, the sustainability and social ills have come to haunt consciousness and conscience of managers. The humanity has witnessed unabated plunder of resources risking the planet earth. The economics of consumption is putting the health and happiness of people in jeopardy. The People pay for their consumerist instincts cultivated by marketers by way of lifestyle diseases like obesity, stroke and hypertension. Overall, there seems to be something amiss.
A business or government is a collection of people and their consciousness. Each and every decision that theses bodies take does pass through their reason and rationality. So a government is run by its constitution and a business is run by its own mission. But the pervasive protests against both governments and business are symptomatic of some malaise that these systems suffer from. Legality often overrides morality. Consider the following situations: should a burger be laced with ingredients that affect long term health of children; should insurance hide information in order to sell a policy; should a drug company sell a medicine below cost to patients; should marketing create perception of inadequacy to sell their products; should a company hire children to minimize cost; should government pass women reservation bill?
All decisions and hence questions are pass through tests of adequacy. Often internal adequacy is considered supreme. View all the above decisions from the prescriptions made by Milton Friedman who ties the corporate rationality to the statement that there is only one responsibility of business ‘to increase its profits’ and stay within the ‘rules of game’ (legality). Ted Levitt’s prescription is that the purpose of business is to ‘get and keep a customer’. These prescriptions have an effect of throwing the issues of conscience and morality outside the scope of tests of adequacy that businesses often apply. Max Weber questioned: has money making truly become path to heavenly salvation in The Protestant Ethic.
The culture of ethical violations which has come to characterize our business and polity requires serious course correction in the way adequacies are defined. The shift to legality based governance is natural to nation state. The normative principles which people often acquired from social and religious socialization has become weak or taken a superficial form. Therefore often religiosity (accent on rituals) is not accompanied by spirituality (transcendence). Whenever a scandal is unearthed, the most common utterances by political and business people are: ‘let the law take its own course’. ‘We have done nothing as per law’. The ‘letter’ of law has become more important than ‘spirit’ of law.
The ethical issues embedded in decisions must be resolved by ethical reasoning. Morality or ethics is much more than legality. Immanuel Kant proposed that actions should be judged on the basis of their intrinsic goodness or badness/ right or wrong, not their consequences. Consequences do not determine right or wrong. The perception that legal is right is entirely misplaced and is at the root of many evils that our society suffers from. Legal may be immoral, therefore the actions must be judged from an extended framework of adequacy. The protests on the streets of the cities are manifestations of aimed to establish supremacy of morality over legality.