The Indo-German Chamber of Commerce (IGCC), in collaboration with the Friedrich-Ebert-Stiftung (FES) and XLRI-Xavier School of Management, conducted a discussion forum on ‘Practice of business ethics in business management in the 21st century’ in Mumbai on May 14.
The forum, titled ‘Business management in the 21st century: legal, ethical, moral, spiritual (LEMS) challenges’, was attended by representatives of industry and academia, who discussed the need for ethics in the workplace, and re-evaluated the moral justification for business decisions, actions and their consequences.
Corporate ethics
Fr. Oswald Mascarenhas, SJ, JRD Tata Chair Professor of Business Ethics at XLRI, delivered the keynote address, where he pointed out the nuanced differences between legality, ethicality, morality and spirituality (LEMS) and their connections to and implications in business operations.
He said in his address, “Being legal means acting according to the law, which is the basic minimum for business management. Doing the right thing is ethicality. Whereas, morality includes the right way of doing the right thing. Having the right reasons for acting moral, makes an action spiritual. Corporate ethics is a concrete, challenging way of life for corporate executives to think and act legally, ethically, morally and spiritually in today’s turbulent markets.”
“We need strong corporate ethics at all levels. We study corporate ethics and morals as dynamic systems of socially accepted, universal, principles, standards and rules that can spiritually empower our lives, our markets and our world,” Fr Mascarenhas said.
“Business ethics studies shared values in buyer-seller exchanges, corporate executive ethics centres on governance principles that power corporate decisions, strategies and implementation processes that have corporate-wide consequences, and often, industry-nation-wide ramifications. Accordingly, we explore and analyse corporate decisions, especially in the context of current turbulent markets ridden with uncertainty, chaos and ambiguity, which, when further infected by buyer-seller information asymmetries, can lead to corporate fraud, and corruption.”
Changes in modern-day business
A panel discussion was held on the driving forces of modern-day businesses and how changes impact their constituents. Among the panellists, Kelvin A. Sergeant, Sustainable Enterprise Development Specialist at the International Labour Organisation’s Decent Work Technical Support Team (ILO DWT) for South Asia spoke about the social responsibility and fundamental principles and rights at work necessary in labour as well as participation in general.
Shahana Mazumdar, Sustainability Manager at Indian Hotels Company, talked about the need for a political framework for responsible business conduct, the companies’ code of conduct and the benefits for society at large.
Anjali Bedekar, India Coordinator for the UNI Global Union, shared her concerns on increasing contractualisation and the basic minimum enforcement of labour laws.
Dr KR Shyam Sundar, Professor of HRM Area at XLRI, moderated the question and answer session where participants showed great interest in the topic and dwelt upon the role of workers’ organisations and corporate management in realising ethical approaches in business operations.
Better corporate governance
Prof Shyam Sundar said that Fr Mascarenhas’ legal, ethical, moral and spiritual theory of business ethics is important in this age of neoliberal globalisation, which has driven most firms to resort to low-labour-cost, high capital intensive products, and labour market strategies, especially when even the big firms consider mere law compliance as an act worthy of emulation.
This is so because in LEMS perspective law compliance is the basic expectation and a firm, in order to do the right thing, with the right intentions, has to elevate its business consciousness to travel beyond even ethical levels but peak at the spiritual level. While profit maximisation is not questioned, the distributive question and the ethical, moral and spiritual means of handling business issues, including the labour issues of modern corporates, still rely on 19th century business management principles.
Prof Mascarenhas’ emphasis on the dignity of labour and the need to create a just society resonates well with the decent work paradigm of the International Labour Organisation (ILO). Profit maximisation and cost minimisation business strategies then hurt the normative framework of business management. Pursuit of LEMS could, in fact, lead to better corporate governance and to a society’s social and economic progress.”