Perspectives on Business Ethics at the 2015 MBA Symposium
On September 15th, Glion Institute of Higher Education hosted its 5th annual symposium as part of its MBA Key Concept Series on the Bulle campus. This year’s event showcased “Perspectives on Business Ethics” with a panel of industry experts who are thought-leaders in the domain of ethical behavior and governance for finance, education, fundraising, and innovation and sustainability.
The day’s key speakers included:
- Paul Dembinski, Observatoire de la Finance, an independent, non-political organization that examines ﬁnancial techniques and their impacts on society
- Wes Wierda, Partner at Hobéon, a Dutch strategic consultancy company with a focus on higher education
- Carmen Romero, Chief Innovation Officer at Causedirect, a Swiss-based non-profit organization that helps charities meet fundraising goals
- Fabrice Leclerc, Entrepreneur and Consultant, on innovation and sustainability for notable organizations such as the UN, Nestlé, EPFL, and L’Oreal.
Dr. Paul Dembinski from the Observatoire de la Finance in Geneva began the day’s discussion with his “Financial Perspective on Business Ethics”. It seems that nowadays homo economicus has taken over by justifying any instrumentalization of economics and finance in the global economy that will drive results and profit. The real economy seems to have detached itself from our sphere of values. Still, as humans, we cannot escape the notion of ethics in all of the decisions we make. More than just addressing “ethical issues” at the corporate level, we must concern ourselves with ethics embossed in every day life and culture, as it is a heuristic process to involve ethics in decisions.
As current and future employees, we must empower ourselves to use our ethical judgment and sense of responsibility in order to truly make sense of our decisions in business. Ethics requires thinking before action, in order to drive right and just outcomes.
Dr. Dembinski quoted French philosopher Paul Ricoeur to remind us that ethics must be considered at the individual, group, and framework level. Citing the different opinions on the current refugee crisis in Europe, he noted we must ask ourselves whom it is we consider as aggressors in this situation and whom we do not. He also spoke of “Adam’s Fallacy” (in reference to the economist Adam Smith).
By Smith’s definition, the economic sphere of life has been granted an amoral status as compared to the private sphere of life.
In the former, the full pursuit of self-interest is paramount, while in the latter this pursuit falls into the weighing of means to decision outcomes from a moral perspective. There is a distinction between “Ethics in Business”, which implies that ethics is external to business, and “Business Ethics”, which acknowledges the pre-eminence of ethics, of which business is a part.
Ethics in finance is a key issue as we seek to put the world economy back in order after the 2008 financial crisis. The 2008 crisis was used here as an analogy to illustrate cause and blame in ethics and business. Who or what was really at fault? Finance professionals? Shareholder appetite? Economic and finance theories? Insufficient internal and external controls? Whatever the answer may be, it boils down to the confusion of means and ends in business practices, which we must all recognize and work to rectify.
Dr. Martin Senior, Online MBA Program Leader and Lecturer at Glion, brought up the link between ethics and human behavior. There seems to be quite a big gap between all of the thinking on the topic of ethics versus actual ethical action.
Dr. Dembinski noted that as management learns to think better when making decisions within business constraints, ethical action will take place. We must start by thinking about situations that pose dilemmas in order to get out of them.
Following this, Wes Wierda, partner at Hobéon and professor at Glion and LRG, discussed ethical dilemmas in the music industry”, which he described as a “winner take all” market. Record labels have a tendency to sign any artist they believe will bring in profit, which is a dangerous practice in terms of ethics. These gatekeepers are also in power positions to call all of the shots for whoever is trying to break into the industry.
The music industry is an example of a sector where although laws are imposed and followed, this does not mean that practices are ethical. Companies will still try to avoid punishment by circumventing laws meant to be applied uniformly to everyone.
After lunch, attendees were invited to participate in an activity to discuss making business decisions “in the shoes of an ethical entrepreneur”. The questions were provided by Andrea Paltzer, Founder of The Earth Education Project (EEP), a small NGO seeking to break the cycle of poverty by empowering women with education and job training in Central America. She asked:
1) When does a growing ethical brand become just another company? Student groups responded that this happens when it loses the vision of its original mission, focuses too much or solely on profit, and/or falls prey to the interest of economic and political groups. It was stressed that ethical companies must always have and support a cause, no matter what.
2) Would a franchise system work for an ethical company or should a company with such aims by definition stay small? In the case of EEP, students believed franchising could be positive as it would increase the company’s message, but also dangerous because it could also dilute it.
3) How do you grow an ethical brand and keep your ethics intact, whilst maintaining your social impact? Groups responded that ethical conduct should always be a primary goal, and not a tool used to increase a company’s financial health. It is possible to generate financial results and remain ethical within a company, and there does not always have to be a choice between the two. The key is for management to make decisions that will reap the maximum amount of benefit while inflicting the minimal amount of harm. Some examples of ethical corporations that are both successful and good for people and the planet are: Sevenly, Terracycle, Warby Parker, TOMS, Mad Cap Coffee.
For the second half of the day, Ms. Carmen Romero, Chief Innovation Officer of CauseDirect, addressed the concept of ethical crowdfunding. On websites such as Kickstarter, Pebbletime and Coolest Cool, crowdfunding has immerged as a hot trend over the past few years. It’s a method of collecting funds from large numbers of people, usually in the online environment, and in 2014, backers pledged more than half a billion dollars to projects on Kickstarter alone. In this fast growing and unregulated environment, how can ethical companies raise money from a large number of people to fund their activities? It begins with having more than just profit in mind. Companies need vision, passion, and creativity for their cause. Good governance and best practice are also necessary in this space to prevent the funding of the wrong causes.
The Panel Discussion at the end of the day, which also included the participation of entrepreneur and consultant Fabrice Leclerc, brought up some important points:
We need to remind ourselves that business is not life. Our value is not determined by our job title or our salary. It is defined by who we are. We are all unique, valuable and individual and we must not lose sight of this during our job search. Each one of us has value to add to a company, and we should not settle for the first offer that comes our way.
Profit and good deeds are not mutually exclusive, as shown by the aforementioned businesses that value life and value being part of something bigger. At Glion, students are not thinking enough about creating ethical businesses. Maybe this is because the concept of ethics is not discussed enough. Entrepreneurs should focus more attention on advertising and promoting their ethical – and profitable – activities in order to draw awareness to the business of doing good.