26 May, 2010

CSR and the amorality assumption

Business is generally not thought as a very moral field. The business of business is business, not ethics. The recent (or perhaps even ongoing) crisis hasn’t actually raised the image of business as a morally sound way of acting. Rather people associate business with concepts such as self-interest, survival of the fittest, “kill or be killed”, fraud, bribery and other dirty tricks. According to a survey made a couple of years ago, only 9 % of Germans trust business leaders. (Jörges, 2008) I wonder what the percentage is nowadays, as the survey was before the financial crisis.

Even though the public largely may regard business people, or at least some of those, to be immoral that may not be the actual case. Business people themselves often think of business as mainly amoral. Amoral means that business is indifferent to moral issues. It means that companies do not have to take ethical issues into account per se, it is not up to them. This statement is usually followed by the explanation that it is the government’s business to define a law system that supports ethical ways of doing business and the companies are responsible for staying within these guidelines. In corporate social responsibility (CSR) this is usually labeled as the laizzes-faire model of CSR. Traditionally CSR models also define other possible models of behavior. The relation to ethics varies from the amorality of the laissez-faire model all the way to the social shaper model in which stakeholders and ethical issues, instead of sales and profits, are the primary concern of an organization. Most non-profit organizations fall into the social shaper category. (Johnson, Scholes, Whittington, 2008)

From a philosophical perspective, however, CSR has its flaws. It still assumes that there is an inherent trade-off between profit-making and ethical behavior. With the exception of the social shaper, most CSR models justify ethical behavior with added value and hence increased profits. In other words, most companies behave ethically not because it is right, but because they earn money. Recalling Kant’s categorical imperative it doesn’t qualify as ethical behavior, because ethical behavior is there an instrumental value.

If the end result is ethical behavior anyway, why care about the principles behind that? I find the answer quite obvious: for safety’s sake. Firstly, if our systems for valuing ethical behavior (such as preserving the environment) fail, companies would start to behave unethically again. Secondly, it is very hard to try to put a price tag on everything. The public image of a company would crumble instantly if knowledge of major unethical behavior would spread. Such knowledge is, however, not very easy to obtain and spread to consumers. There are just too many companies out there, we can’t (or at least I can’t) memorize every fact I’ve read about their labor usage, materials or environmental controls. And that’s where ethics comes into play. When the time of choice between good and bad behavior arises, an ethical person (or company) chooses the right thing whereas the CSR driven one, aware of the information asymmetries chooses the wrong one. And that’s bad for us all.

Johnson, G. et al. (2008) Exploring Corporate Strategy. Prentice Hall/Financial Times.
Jörges, H.-U. (2008). Die Knute der Rendite. Stern 36, 56.

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