Ethics in business – A call for systems change and frameworks for wicked problems

This past semester I was fortunate enough to have the opportunity to study ‘Ethical International Business Decisions’ a subject some may perceive as unconventional in the discipline of Commerce, however, a topic that is of increasing importance in a world faced with insurmountable challenges.

The subject facilitated my study of various ethical theories such as Consequentialism, Ethical Egoism, Virtue Ethics and Deontology and ultimately led me to the conclusion that many of the greatest moral challenges facing international business today are casualties of neoliberalism.

The Moral Challenges Facing International Business

Whilst free and competitive markets are essential to a healthy and fair economy, problems seem to arise when a sole focus on the bottom line and the metric of quarterly performance discourages the implementation of ethical frameworks and values, and encourages profit over all else.

To that end, it is my belief that some of the values neoliberalism proliferates are to blame for the moral challenges, be they prisoner’s dilemmas, moral dilemmas or wicked problems that our collective society faces.

Perhaps problems such as the climate crisis, the collapse of public education and health systems, rising inequality, financial crises and the surge of populism and extremism can be traced to the legacy of Friedman’s free-market doctrine (1970).

This economic theory has, in many ways validated corporate neglect of responsibility to those outside of the shareholder bubble, leading societal good and profit to be perceived in many cases as mutually exclusive by those in the ivory towers of business and politics.

The consequence of this is of course macro-scale market failures such as the climate crisis. Challenges of this calibre need to be addressed at a high level because none exist within a vacuum and all require systems thinking and systems change.

In analysing the fashion industry as a case study during the semester, it became clear that the implementation of ethical frameworks in business practice could be the key to tackling some of the wicked problems we face. The World Bank indicates fashion is responsible for 10% of global carbon emissions, clearly implicating the industry as a major contributor to climate change.

The industry embodies the theories of planned and perceived obsolescence, produces deplorable externalities and exploits millions of workers, largely female, in emerging economies of the Global South. Kering, an industry giant, was the first to introduce a unique Environmental Profit and Loss tool. It is essentially a metric for the implementation of stakeholder theory, and I believe it is one of the industry’s best weapons against climatic challenges.

The norm-making and norm-taking framework that De Los Reyes, Scholz & Smith (2017) introduced in their article on Creating Shared Value and presents an additional response to the prevention of unethical practices.

During my analysis of these frameworks it did strike me that whilst they provide a positive blueprint for preliminary responses to the fashion industry’s moral challenges, inevitable questions arise around “defining what exactly ‘good’ looks like”, as stated by Tyler Gillard, head of sector projects at the Organisation for Economic Cooperation and Development’s Centre for Responsible Business Conduct.

Many ethical challenges involve stakeholders belonging to different cultural groups, with differing cultural understandings and approaches. This can negatively impact upon our collective ability to agree on ethical frameworks or hypernorms situated within broad social contracts.

What Virtue Ethics Can Teach Us

Studying ethics in international business this semester left quite a significant mark on me, and whilst many of the theories introduced presented insightful musings on how individuals and societies can work to produce better outcomes, it was the study of something seemingly as simple as virtue ethics that had the greatest impact.

The forefathers of virtue ethics such as Aristotle, stated that being good or acting virtuously is in itself a reward, otherwise known as Eudaimonia.

I can’t seem to shake the idea that virtue ethics is needed now more than ever in leadership. Perhaps this notion of virtue made such an impact because I had recently read commentary from Barack Obama about the racial protests in the U.S.A.

He states “If we want our criminal justice system, and American society at large, to operate on a higher ethical code, then we have to model that code ourselves”. It struck me that there is a vacuum of meaningful leadership, of thoughtful leadership, of courageous leadership, of virtuous leadership, in some of the most powerful positions in our society.

The lesson of cultivating pure motives and intentions in decision-making could go a long way in teaching individuals across the board, especially those in positions of power in both the public and private sectors, how to respond in the face of crisis and uncertainty.