Ethics -- now there is a complicated topic. First, there is the quandary faced by boards of directors and CEOs of companies who have an ethical obligation to their shareholders to create sustainable profitability. But the best way to be profitable might be to do things that hurt people. Example: what if the company is a major employer in a small community where the cost of doing business is too high. Should the company move its production to a lower cost location, with the consequence of devastation to the people who have committed themselves to working for that company? Is the ethical obligation to shareholders stronger than the ethical obligation to loyal employees.

Then what about the ethical quandaries created by the fact that individual interests may well stand in conflict with corporate interests. Perhaps the failure of another department in the company means that I get more power, authority and higher salary. Do I take actions using my position to work under the radar and undermine the efforts of someone else. Manager A wins at the cost of Department B?

And on a third level there is the difficulty that what is ethical in one culture may be unethical in another. An example of that is the fact that some cultures rely on giving valuable gifts as a normal part of establishing a relationship, for example between a sales person and a purchasing officer. Whereby in other cultures, gifts of any value (for example, more than US$25) would be seen as a bribe and an attempt to inappropriately influence the outcome of a negotiation.

These are not just theoretical issues. There is the well-publicized case of Siemens offering bribes to get a large piece of business in a developing country. View story here. The winners would be shareholders and an increased workforce at Siemens. And more recently there has been the Volkswagen scnadal about auto emmissions monitoring.

Bribery of government officials in emerging nations by companies from developed nations is so common that the Organisation for Economic Co-operation and Development (OECD) wrote a booklet on it. Click here.

How should we feel then when the American CIA admits that for decades they have been dropping off bags of cash to Afghan’s leader for his personal benefit in order to buy his allegiance? Read story here. When do the ends justify the means?

Today many people are trying to sell ethics as good business by making the point that consumers want to purchase from companies with a conscience. The airline that I fly promotes ways to remove my green gas footprint. The Body Shop chain of personal care products made its reputation on refusing to sell any product that was tested on animals. Here is another example from Cadbury Schweppes. Read case study here.

If you want to do some reading about ethics, you might find that the topic has been under discussion for a while. So turn off your illegally downloaded music and check these out.

The first book is by Aristotle! Click here.
Then we move forward to Nietzsche. Click here.
Then Kant gets into it. (You have to give it to those philosophers.). Click here.
We can’t leave Machiavelli out of this list: Click here.
And for something more contemporary, click here.

For these book references I have linked you to goodreads.com, a web site I find very useful. Just search for “ethics” or “business ethics” on their site and your choices will be voluminous.

But I must admit that the premise of the last book I listed sounds pretty good to me: Author John C. Maxwell says that whether in business or private life, apply the Golden Rule as a litmus test for ethics. Think about all the people who are affected by the action you are about to take. Put yourself in their shoes and ask if it seem fair and the best solution for everyone. Think about short and long-term consequences.

Your thoughts are always welcome.

- Herb