Virtuous Or Not

Today as at other times in the past we see the retention of goods or objects lost, fraud, unjust wages, price increases that take advantage of ignorance or hardship, price manipulation to gain an unjust advantage, corruption influencing decision making, poor workmanship, tax evasion, waste and criminal damage. These things occasionally lead to injury and sometimes death through accidents and famine. Corporate social responsibility theories suggest ways of prevention and reparation where business is at fault. Community involvement and social accounting are a couple of ways business can help communities with the impact of business practices. They are not the only way. There are two other systems of values and ethics that can also be analysed.

Business ethics and corporate governance are always coming in for blame. Rightly so in many cases. Critics of business ethics say they are a waste of time as there is already legislation in place, they are therefore a PR exercise bringing no behavioural changes. They also say behaviour and values come from early childhood and codes undermine their right to freedom of choice. Managers are often blamed but the ethics critics suggest that as it is the Board of Directors that is at the centre of the stakeholder model they are to blame. However, we have seen the Harvard Compact of 1990 which influenced the Cadbury Report on 'The Financial Aspects of Corporate Governance' of 1992 and the Greenbury Report and Hampel Committee of 1997 on director's remuneration. It was the King Report that set out guidelines for Codes of Ethics and Affirmative Action, employment policies and environmental issues. Recently the Higgs Report led to the creation of the Combined Code which is where we are at present. Several 'causes celebre' had led to the conclusion that something more had to be done. Unfortunately they have been largely unsuccessful.

In terms of management styles we can see the 'exploitative authoritative' of Likert's System 1 and 'the impoverished manager' of Blake and Mouton's Managerial Grid 1.1 which put both people and production in last place. The bureaucratic style and Theory X management have been called immature by Argyris as they make people dependent passive automatons. We can also see the contextual factors of Herzberg's theory lacking as the content is considered more important. The ethics should be analysed from different perspectives in terms of costs/benefits, respect for rights and distributive justice to get a better picture. There are reasons for these ethical problems. Personal gain, competitive pressures for profit, goals and values, cross-cultural contradictions are a few. Some of these traditions should be disavowed. The cause of many of these problems is that people do not listen. Listening is the most important part of the communication process. If people listened more they would have more to put into practice and set a better example.