Business Ethics in the Post-Pandemic World: Why do they Matter?

Historically, the discussion on and around business ethics gained traction in different phases. The discussion became significant whenever there was war, political turmoil, economic crisis or a massive corporate scandal.

Philosophically, one could go back to Aristotle’s Nicomachean Ethics, written almost 2000 years ago[1]. He explained ethics as virtues required for a good living. Such virtues are not theoretical ideas for contemplation but practical, day-to-day habits. In India, Kautilya wrote the Arthashastra in the fourth century B.C.[2]?He talked about value-based leadership derived from the ideals of truthfulness, righteousness, gratefulness and reliability. There was also Karl Marx, who questioned capitalism. In his words, capitalism “sows the seeds of its own destruction”[3]?by delineating the masses and exploiting the working class. While such references have been critical to developing the present-day narrative on business ethics, the concept of teaching ethics in business schools is relatively new. It started in the 1970s in American business schools, where many business education ideas and practices originated and spread globally.

Renowned author, Peter Drucker, also known as the Father of Modern Management, wrote a paper in 1980 titled - “What is Business Ethics?”[4]?He referred to the rapid pace at which business ethics became an “in subject”, and business schools and universities introduced it as a standalone course. He strongly criticized business ethics as “no ethics at all” and considered the value no more than “society gossip.” So the criticism began when business schools introduced ethics courses and has remained to date. In between, when corporate scandals like Enron happened, those voicing for business ethics came to the forefront. A similar situation occurred during events like the financial crisis of 2008.

In 2022, in the post-pandemic world, the debate has heated up again. The question is – “Why do business ethics matter now?”

The pandemic was a shudder. Globally, people experienced grief and loss. Extremely high-speed economies, businesses and lifestyles came to a standstill. Differences between the haves and have-nots exacerbated, and the marginalized classes became more vulnerable. For businesses, it was a daunting challenge, more like a crisis. However, it also served as a litmus test of the endurance of companies. Almost all businesses, big or small, spend considerable time and effort in the planning department. But during the pandemic, while some organizations crumbled, shut operations or resorted to layoffs, others contributed to relief projects by producing sanitizers, masks and even ventilators, apart from going an extra mile to take care of employees and their families. The factors which distinguish the latter from the former could be strategic planning, the nature of business, or leadership. These factors are usually acknowledged, but one lesser-known potential factor is business ethics. The pandemic was when organizations had to choose between kindness and survival. Is there a path that balances both? Or in other words, do ethics make business sense?

Nobel Laureate economist Amartya Sen wrote a paper[5]?on this topic in 1993 and vividly described how denying business ethics is impractical. In his words, business ethics can be “crucially important in economic organizations.” Human beings are naturally ethical; biologists advocate this idea by discussing mirror neurons.[6]?So, if individuals or organizations are unethical, it is by conscious choice and not by default because otherwise, there will be chaos. Such a default option creates benefits including customer faith, market reputation, supplier support, and trust from stakeholders like the government, civil society and media. That’s why some organizations, despite the challenge of a pandemic, continue to be driven by kindness and business ethics. Ultimately, to them, all of this makes solid business sense. No matter the challenges, such organizations survive and thrive in the long run. Goodness eventually prevails!

[1]https://www.academia.edu/49862203/Aristotle_s_Nicomachean_Ethics_and_Protestantism

[2]?https://link.springer.com/article/10.1007/BF00380362

[3]?https://www.econlib.org/library/Enc1/Marxism.html

[4]https://edisciplinas.usp.br/pluginfile.php/4221491/mod_resource/content/0/What%20is%20business%20ethics%20-%20Peter%20Ducker.pdf

[5]?https://www.jstor.org/stable/3857381

[6]https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3898692/#:~:text=Mirror%20neurons%20are%20a%20class,act%20performed%20by%20another%20individual.