Blogs & Comment

A definition of 'business' and why it matters

How can we talk about business ethics, if we don't know what business is?

There has been constant discussion about whether President Obama is “pro-business” or “anti-business.” What commentators generally mean by that is whether Obama is sufficiently sympathetic to the needs of the business “community,” or rather excessively sympathetic to the wants of Big Business. A lot turns here on what we mean by business. Confusion about that muddles discussion of business ethics, too.

Confusion about business ethics abound. Some people, for instance, think business ethics is about the pursuit of sainthood in commercial domains, a definition which makes the field an eminently unpromising endeavour. Others mistakenly associate the term “ethics” with a narrow range of limits on personal behaviour, such as on accepting bribes. Still others seem to think the word only applies to big corporations. All of that is incorrect, and starts discussions of business ethics off on the wrong foot.

If you want to understand the scope of business ethics, it helps to begin by looking at what business itself is. Here’s my informal, non-textbooky definition of “business”:

Business is the activity of making stuff or doing stuff for other people, in return for money (or in exchange for other stuff). (You can check out my more formal definition of business ethics here.)

That’s it. That’s all business is, fundamentally. What motivates those involved is another question. So is how they behave. Which brings us to ethics.

Business ethics is about what you can and cannot do in the process of doing business. What kinds of behaviours are good or bad, right or wrong, virtuous or vicious, in a context in which we are all trying to make a living?

I think this way of explaining business ethics is useful for a many reasons, but mostly because it’s non-confrontational. It ought to reassure—and hence draw into the discussion—the business community. As a business ethicist, I’m not poking my nose into the world of commerce to tell people there that they have to stop pursuing profits. Far from it. Profits are great—go for it! I’m just here to talk about what reasonable limits there might be on profit-seeking activity.

It also reminds those who are critical of “business” that what they are actually critical of is certain business practices, certain ways of doing business. “Business” isn’t synonymous with “Wall Street.” The idea of being “anti business” verges on incoherence, given this understanding of what business is.

Of course, the right understanding of business is only a start. But it’s an awfully good start.