Arguments against business ethics

Arguments against business ethics

By Benito Teehankee

(Managing For Society column, The Manila Times, December 2, 2008)

Aside from handling courses in business ethics, I like speaking on the topic to various audiences. I’ve been invited to academic forums, Rotary Clubs, business conferences, student groups and even a doctors’ convention. I especially look forward to the questions of the audience because they give me a clue on the state of people’s thinking about ethics in the world of business.

While practically everyone in these audiences agree about the importance, even necessity, of doing the right things in business, there are concerns raised about promoting business ethics. Let me discuss three major arguments that have often cropped up.

The first argument is that people’s ethical values are set during childhood, in their families, and little can be done after that. My university has signed-up for the United Nation’s Principles for Responsible Management Education program. When an American friend based in New York found out, he joked: “Good luck teaching MBAs to have a conscience.” But the research evidence shows that adults are capable of value changes based on experience, reflection and continuing education. Companies who have done questionable practices for years have been known to reverse track upon reflection.

A Filipino pharmaceutical firm, upon the decision of top management, has stopped giving payoffs to government employees for any reason. Microsoft founder Bill Gates has argued for business to focus, not only on profits, but also on “improving lives for those who don’t fully benefit from market forces.” And this from a man whose concept of business previously was mainly about aggressive competition for market share and technology dominance. People, and therefore companies, can choose to change.

The second argument is that ethics has to start from the top. Depending on who is making the argument, they could mean that the CEO and his team must show ethics first for the rest of the company to do it. Some argue even further that the President of the country should show ethics first for businesses to do it. The role of leadership role modeling in promoting ethics is well-supported by research. The research also shows, however, that people are capable of ethical behavior even when their leaders are not. Many quietly do the right thing despite the bad behaviors of their leaders. In 2002, Land Bank cashier Acsa Ramirez objected to the improper handling of a check deposit ordered by her superior. Ramirez suffered from being wrongly accused for her efforts but was vindicated in the end. People can choose to be ethical even if their leaders do not.

The third argument is that the ethical company cannot be competitive and viable. Earnest businessmen have asked me how they can pay the right taxes and remain competitive if their competitors are under-declaring their incomes. Ester Punongbayan of accounting firm Punongbayan & Araullo informed me that they always advise clients to come clean with their taxes. I’ve talked to business owners who have mastered the tax laws and keep their books so clean that they can afford to look any tax assessor in the eye and still run viable businesses. Companies can choose to be ethical even if it is costly to do so.

Ethical behavior in business is a choice and, like many other business choices, it is not an easy or cheap choice to make. But now more than ever, businesses need to learn to make the right choices, not only for the sake of the country given its many challenges, but for the sake of future Filipinos who will benefit from a legacy of honorable behavior.

Dr. Benito L. Teehankee is the Sen. Benigno Aquino Jr. associate professor of business and governance at De La Salle University’s Ramon V. del Rosario Sr. graduate school of business. He may be emailed at teehankeeb@dlsu.edu.ph