Blogs & Comment

Yes, there is such a thing as business ethics

The simple lessons our parents teach about personal integrity are useful, but insufficient.

(Photo: Dave Delay/Flickr RM)

Marketing guru Seth Godin posted a provocative blog entry called, “No such thing as business ethics“, in which he worries that the focus on “business ethics and corporate social responsibility” is distracting us from questions of personal responsibility:

It comes down to this: only people can have ethics. Ethics, as in, doing the right thing for the community even though it might not benefit you or your company financially.

Now I could quibble with Godin’s definition of ethics, which is actually a particular controversial view about what ethics requires, rather than a definition. But instead I’m going to take issue with Godin’s claim that all that matters in business is personal ethics, rather than organizational ethics. Godin writes:

I worry that we absolve ourselves of responsibility when we talk about business ethics and corporate social responsibility. Corporations are collections of people, and we ought to insist that those people (that would be us) do the right thing. Business is too powerful for us to leave our humanity at the door of the office. It’s not business, it’s personal.

Godin’s claim that “it’s not business, it’s personal” is problematic in two ways. First, it wrongly implies that business ethics somehow misses out on the whole personal integrity thing. That’s entirely false. Both the academic literature on business ethics and the “ethics and values” programs set up by individual companies put a lot of emphasis on individuals adopting the right values and making good decisions. Secondly, contrary to what Godin implies, individual ethics clearly is not enough. For one thing, people embedded in organizations have obligations that are role-specific. Just as lawyers and doctors have special duties that go along with their roles—they have to follow not just their own consciences, but also highly specific professional codes—so do people in the world of business. And for another thing, organizations can be set up badly such that all kinds of “good” individual decisions can still lead to problematic outcomes. The ethics of the organization, per se, matters a lot.

Interestingly, Godin tells us that he learned about all this from his dad. Unfortunately, while the homely lessons we learned at our parents’ knees tend to give us a good start in life, complex institutional settings tend to bring more complex duties, and hence require more complex principles.