Morals Meet Profits
What happens when morals and profits meet? Since the birth of the “art of business” centuries ago, there has always been fraud, corruption, and moral compromise. However, it wasn’t until the dawn of the internet that companies’ misdoings became so public, paired with public pressure to correct any wrong doings. These types of occurrences are rarely forgotten… think Enron and the housing market crash for example.
The good news is many industries are now required to have more transparency with consumers, and there are even hotlines for employees to call for ethical concerns. It is finally “cool” and “hip” for companies to be involved in corporate good. Many young professionals even look for social good when they are vetting potential employers to work for. Although it seems like there are many factors in favor of a better tomorrow, there still may be concerns that arrive on a personal level when it comes to your conscious and company’s profits. How does one navigate through the morality path when a business’s sole purpose is often the bottom line? As globalization continues, it is more important than ever to have your finger on the pulse of this issue. I don’t have the answers to that question, but I’ve collected some research that can help give you clarity on your own journey.
“People sometimes forget that business ethics at its core is about excellence and high attainment rather than misdeeds and malfeasance. “ Lynn S. Paine
We will start our journey with an expert on the subject, Lynn Paine, author of Value Shift. She explains that ethics start with managers. Currently, many managers are only making ethics a priority in a preventative way to avoid legal and financial repercussions. Paine predicts that “in the future, I think more managers will recognize that risk management is only part of the story and that the benefits of positive values go well beyond problem avoidance (HBS).”
Is it even possible to put morals and ethics first and still meet or exceed the bottom line? Paine says yes. She explains that “better access to talent, enhanced employee commitment, better information sharing, greater creativity, enhanced reputation, and so on” can all add to the bottom line (HBS). With all of the variables, it appears as though this increased bottom line will most likely be gradual. There is no denying that when morals are compromised there can be a direct increase in profits. Paine studies perpetrators of moral misconduct and she found that across the board they all “justified their actions by reference to the anticipated financial gains (HBS).”
In opening up this topic for discussion, there seems to be more questions that arise than answers. For example, what about other countries where corruption is more common in business? That discussion is a whole other blog post on its own, but I will leave you with this last quote from Paine: “In every region I've studied, I've found business leaders who are trying to develop companies that meld high ethical standards with outstanding financial results (HBS).“
Profits and Balance
Dr. Jeffrey Spahn wrote A New Capitalist Manifesto? Imagining Business in the 21st Century in 2003. During his research, he found that half of corporate executives viewed the role of business as being solely the increase of profits for shareholders, and the other half viewed the purpose of business as contributing to the well-being of society. The good news is that today more and more leaders are seeing the correlation between profits and the well-being of society, rather than them being mutually exclusive. Leaders also “speak convincingly about the desire to build people at the same time they are also building products and profit. (HBR)”
Unpacking the Relationship between Profits and Altruism
At the end of the day, the subject of profits and business altruism is two-fold: the company level and the individual level. If the individual's morals are in line with the company’s morals, then this is the first step towards unification and progress. If an employee just can’t get on board with the company’s moral conduct, then it may be more productive for him or her to look for another fulfilling company. For example, if an individual is morally against working for a tobacco company, then there is no amount of internal training that can align the ethics of the employee and employer.
It’s vital for employees to speak out when they feel an ethical concern arising (on an individual or company level). This is a good opportunity for the company to get crucial feedback and provide further training (or correct the concern). Employees should also encourage their company to fulfill corporate social responsibilities. If the company is not in a place to do so, then the employee can organize initiatives with fellow employees to set the example for the company. This personal initiative speaks volumes on the commitment for social corporate good.
“The moral obligation of business is not separate from the profit-maximisation objective - they go hand in hand and, if harnessed, can produce powerful outcomes. The reward for those who get it right lies in the competitive advantage and enduring business value that is created. It is, primarily, a business proposition.” -Phil Preston
I challenge you to align ethics and profit . The world is inundated with the concept of profit > ethics; the business world needs more ethical thought leaders propelling societal good forward while still keeping business objectives in mind. The future will only determine this balance, and the future is ours to construct, morally and ethically.
“You must be the change you want to see in the world.” - Mahatma Gandhi