Given the increasing prevalence of ethically oriented entrepreneurship in contemporary business and start-up environments, it’s worth pausing to consider the terms of that discussion. Basically, what does the term ‘ethics’ mean? How does the necessary social aspect of running a business complicate that? And, finally, if an ethical business model is possible, to whom is that business responsible?
Ethics is often mixed up with morality- although that need not be the case. In that sense, it deals with formulating, justifying and systematizing behavior according to a moral system and its values, such that one may behave ‘well’ or ‘poorly’.
But, by distancing ourselves from any single morality and focusing only on the nature of the ethical, we can simplify the question. Ethics explores the responsibility we have towards others. Its kernel is a single question- how must I act when I face another? So, we can understand that to do well, we must act so that we least restrict the other- that is, to allow them to act most fully. Acting ethically is allowing others to act- to be ethical, themselves.
The most basic level of ethical engagement is person-to-person. But business is oriented towards producing something, distributing it, and assuring its continued ability to do so. Businesses are always socially-minded, in the broadest sense. This complicates any ethical concerns- they become fractal-like. An infinite number of repeated engagements are knotted together when one brings ethics and business together- hence the expansive field of business ethics.
We must ask, then, before whom is the business responsible? This answer is, as I’ve implied, hugely complex. There’s nowhere near enough space to attempt a brief response. Instead, I’ll pose some questions that we can turn to in our considerations of best management practices.
First and foremost, businesses are a group of people. So, to assure that everyone can act most fully, we must ask- what form is best for organizing that group? How will income be distributed to assure equitable recognition of everyone’s contribution? Who has a hand in decision-making processes, and whose expertise and experience is allowed priority in specific decisions?
Businesses rely on resources and labor for production. Where are we getting them, and who is affected by that process? How can they be acquired without restricting the actions of those affected? Can a business call itself ethical if it harms others to create its product? How can we be sure, one way or another, that we do not harm others to further our own projects? And that we are not harming those that labor over our products, due to exploitative work conditions, contracting or wage practices?
Finally, what responsibility do businesses have to their customers? Is it ethical to use marketing to create or inflate an in-existent or minimal demand? Following that, is the durability of our product a concern, given detrimental effects on the consumer of planned obsolescence and shoddily made products endangering their users? How can pricing assure the continued operating of the business without bleeding our customer base dry?
These, and many others, are questions any business striving to be ethical must ask. Although, to briefly address a glaring omission, can there be a responsibility to shareholders/investors? To even begin to tackle that question, you first need to decide whether money can be a meaningful engagement with another or only its indefinite deferral. An issue that, regrettably, requires more space than I have here. Until next time!