Magazine article European Business Forum

Aside from Human Rights, Each Issue Is Specific and Should Be Treated on Its Merits. Talking to Stakeholders Is Critical

Magazine article European Business Forum

Aside from Human Rights, Each Issue Is Specific and Should Be Treated on Its Merits. Talking to Stakeholders Is Critical

Article excerpt

In today's globalised world, companies face many moral conflicts. Take Google and Yahoo! Both have been widely criticised for co-operating with the Chinese government in censoring search results and handing over information about dissidents. However, as the companies argue, if they didn't, they wouldn't be allowed to do business in China.

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From an ethical perspective, it is certainly not sufficient to insist on legal arguments or empirical facts. Since Google's well-known motto is "Don't be evil", it must acknowledge that simple legal arguments are insufficient. The motto is clearly a moral one. Following the saying, "When in Rome, do as the Romans do" opens the gates to opportunism. But does that mean there is only one ethically correct way to behave in the globalised world?

The answer is yes and no. Yes, for there is a single moral principle all business has to follow. No, because moral principle leaves room for a diversity of norms. We might rework the saying thus: "When in Rome, do as good corporate citizens do".

So, what exactly is the moral principle? In modern ethics, all human beings have the ability to recognise each other as members of a community in which everyone has the same basic rights and responsibilities. An action or claim can be considered morally right, then, if everyone within the moral community agrees to it. Rationality or "reasons" ("Vernunft") must be decisive, not power. This is the core meaning of the "categorical imperative" established by the philosopher Immanuel Kant.

Businesses that want to be regarded as good corporate citizens have to honour this, no matter where they operate. They have to recognise the legitimate claims of all their stakeholders, respecting their dignity and moral rights as free and equal citizens.

But what are stakeholders' legitimate claims? That's less clear - though business needs to be willing to clarify the claims of everyone involved, seriously and unprejudiced. It also needs to define its own claims.

From this principle it follows that maximising profit cannot be the overarching principle of corporate conduct. Like any other goal or interest, the pursuit of profit must be made dependent on legitimacy. This is the meaning of integrity. Profit is a legitimate goat; maximising profit is not. If it does that, it simply ignores the legitimate claims of all those who do not possess the power to affect its profitability. This would be a breach of the moral principle.

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Now, does this mean that even business operating in any culture or country has to follow precisely the same norms? That sounds rather implausible. While the moral principle is a formal concept, valid beyond specific cultures, norms are usually situational. They can only be justified as legitimate in the light of, and in accordance to, the moral principle. In Islamic banking, say, there is a norm not to lend money at interest. A bank that charges interest violates this norm - but does this also conflict with the moral principle? …

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