Businesses, Ethics & Leaders

The "Sage" of Omaha, Warren Buffet once said, “I look for three things in hiring people. The first is personal integrity, the second is intelligence, and the third is a high energy level. But, if you don’t have the first, the other two will kill you”. And we have been witnessing the ‘killing effect’ of the absence of the first virtue i.e., ‘integrity’ from time to time from different segments of the society such as businesses/ corporates, public institutions, educational institutions, and administration thereof.

Let us, for the being, confining ourselves to the critical role of ethics in businesses, examine what ‘integrity’ means and how it is nurtured in the organizations. Simply put, ‘integrity’ means the “completeness and goodness” of a man. A man of integrity is understood as a “person of principle”, said Hank Paulson, former Chairman and CEO of Goldman Sachs and the 74th Secretory of the US Treasury.

In today’s world, many Pundits equate integrity with ethics. Ethics is primarily a communal and collective endeavour. As a communal exercise, ethics attempt to define our rights and obligations vis-à-vis others. Given the fact that society has others and we need these others for our survival and thriving, Rawls argues that ethics is elementally the pursuit of justice, fair play, and equity in our dealings with others. It thus means that ‘good behaviour’ intends no harm to others and respects the rights of others while ‘bad behaviour’ wilfully or negligently tramples over others’ rights and interests. In other words, ethics aims at protecting one person’s individual rights and needs against and alongside the rights and needs of others.

But the irony is: though we are by nature communal, and are in ned of others in the pursuit of our own goals, we, at the same time also being ego-centric and self-serving, tend to forget this simple rationality. As a result, disruptions creep in into our ethical behaviour. Such disruptions are frequently witnessed in businesses. Here, we must appreciate that work is, no doubt, a part of our life as much as ethics is. And work’s prime goal is earning a livelihood, right? Similarly, businesses are meant for making a living. Indeed, most ethicists argue that businesses have moral obligation to make a profit. It doesn’t however mean that businesses are only meant for producing a product and selling it for profit. For, businesses are also about people: people it works for and works with. In fact, businesses are interdependent and intertwined. Businesses need people and resources from the nature to produce goods and also need people to buy its end product. So, the bottom line of businesses being people, it cannot play its game of production by separate rules. Therefore, it has to necessarily question itself: “What ought to be done with regard to others?” Thus, ethics do matter for businesses as much as they matter in an individual’s life.

Incidentally, a survey carried out in sometime in the past revealed that 68% of those surveyed believed that the unethical behaviour of executives is the primary cause of the decline in business standards, productivity, and success. It had also pointed out that because of the perceived low ethical standards of the executives, workers too feel justified in responding like-wise: absenteeism, indifference to organizational needs and a generally poor performance in a given job have become a common feature in organizations. This creeping malady, coupled with the recent scandals in the business-world such as the Enrons, the worldcoms, and the betrayals that have ruined global economy in 2008 have all in a way incited a kind of renaissance of ethics. And, closer at home, we have been witnessing businesses repeatedly failing to honour their contractual obligations to their creditors, that too with all impunity. Mounting NPAs of the banking system is a pointer towards waning ethics in our institutions/businesses. Over it, the recent phenomenon of leaders fleeing from their responsibilities to safer havens is portraying a poor picture of our national character.

What all this growing menace tells us? It simply says that unless organizations constantly enforce standards of business ethics by modelling its leadership appropriately, nothing substantial can be accomplished. For, morality, as Aristotle suggested, cannot be learned simply by reading a treatise on virtue since it can only be awakened in an individual through the witness and conduct of a moral person. This “witnessing of another[‘s]” ethical behaviour believed to generate ethical behaviour down the line, for:

  • as communal creatures, we learn to conduct ourselves primarily through the actions of significant others such as our parents, teachers, leaders, etc.;
  • when the behaviour of others is repeated often enough and accepted by the peer-group as positive, we tend to emulate it; and
  • when these actions of us are reinforced by others, they would become our habits.

In fact, this process by itself is not sufficient to make one an ethical being. For, what is ultimately required is: a person should reflect, evaluate the so formed habit and finally must consciously chose to act ethically. Then only, it would become a permanent disposition. Simply put, ethical behaviour is “an inside-out proposition” involving free will, else it will always depend on the outside-enforcement.

And that is where the importance of leadership emerges in ensuring ethical behaviour in the organizations: that leaders have to set the tone, define the vision and shape the behaviour of all those in the organization by modelling themselves in the requisite ethical fashion. It is in order here to say that without the ‘witness’ of moral leadership, standards of ethics in businesses and organizations cannot be sustained. And, in the absence of such leaders in businesses/organizations, the nation — as the saying goes: Yathaa Raajaa thathaa prajaa — is destined to suffer from all kinds of woes repeatedly!


More by :  Gollamudi Radha Krishna Murty

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