Professor’s opinion: Applaud the ethics of companies, but don’t cheer too soon

Many studies show that society is sceptical about the ethics of businesses. Business ethics is seen as an oxymoron, a wolf in sheep’s clothing, a thin varnish. The period since the outbreak of the coronavirus shows, however, that business ethics does exist and is well and truly alive.

Many companies in the world now show their ethics by doing the right thing. Not because they are required to do so or because it is profitable, but because it is right in itself. Banks help disadvantaged clients by giving them extra credit and payment deferral. Supermarkets introduce ‘senior hours’: shopping time exclusively for senior citizens. Chemical firms produce free disinfectants. Pharmaceutical companies collaborate in the development of a coronavirus vaccine, and many companies have closed their offices and stores as a precaution.

We also see all kinds of local and individual manifestations of business ethics. Companies allow their employees to take care of their family members during working hours. Restaurants deliver free meals to people in need. A software company donated server capacity to a university for its corona project, employees of a tyre company donated part of their salary to efforts combatting the virus, and an airline donated facemasks and gloves to a healthcare institution. There are also companies that deliberately expose their employees to the risk of contamination because they provide vital services for customers. Think for example of repairers, supermarket workers, cleaners, and drivers.

 

Moral proximity

These examples of ethics are more than just about caring for the health of fellow human beings. They show that the first priority is giving to fellow human beings. It is people before profit. This is how companies show their humane side: by displaying human values, such as helping and protecting each other and trusting, believing, and investing in each other. Where social distancing is now the means to fight the virus, moral proximity is the medicine to combat the side effects of it.

Applause for companies then seems appropriate; applause as appreciation and encouragement. Not that there was no business ethics before, but in this crisis, it becomes more visible and noticeable.

However, we should not completely cheer. Unfortunately, there are companies that abuse the situation. American regulators have already cautioned seven companies for selling fraudulent anti-coronavirus products. What about companies that suddenly and unilaterally postpone their payment to their suppliers from 60 to 90 days? What do we think of high frequency traders who try to make as much money as possible in this crisis? And who has not recently received a phishing email that exploits their uncertainty?

 

Moral herd immunity

We should not cheer too soon. The longer the corona crisis lasts, the greater the pressure on our ethics. Under pressure, everything becomes fluid, including our values and standards. Will companies still be committed to their ethics if their finances are drained, customers stay away, competitors cheat, and regulators are occupied with other things? What then happens to employees if they alienate themselves from their work and become bored or panic-stricken?

Moral herd immunity is necessary if business ethics is to survive the corona crisis; immunity as resistance against threats to our ethics. This requires vigilance and courage – not of everyone individually, but of everyone together. Obviously, moral leadership is necessary from those in positions of responsibility, but this does not mean that others have to wait and see. This crisis calls for everyone to take responsibility at all levels within companies. Only when everyone takes their own responsibility can we be strong together and our business ethics be resilient. Hopefully, after the crisis there will be real applause for the ethics of companies.

Muel Kaptein is Professor in Business Ethics at Rotterdam School of Management, Erasmus University and a partner at KPMG. A Dutch version of this article was published in Het Financieele Dagblad on 24 March 2020.

 

Crisis-related Research Series

This article is part of our crisis-related research series: a growing collection of research-based thought pieces and opinions from RSM’s academics and researchers. Topics range from tips for battling loneliness to the ethical dilemmas faced by managers and leaders.

 

Rotterdam School of Management, Erasmus University (RSM) is one of Europe’s top-ranked business schools. RSM provides ground-breaking research and education furthering excellence in all aspects of management and is based in the international port city of Rotterdam – a vital nexus of business, logistics and trade. RSM’s primary focus is on developing business leaders with international careers who can become a force for positive change by carrying their innovative mindset into a sustainable future. Our first-class range of bachelor, master, MBA, PhD and executive programmes encourage them to become to become critical, creative, caring and collaborative thinkers and doers. Study information and activities for future students, executives and alumni are also organised from the RSM office in Chengdu, China. www.rsm.nl

For more information about RSM or this article, please contact Danielle Baan, Media Officer for RSM, via +31 10 408 2028 or baan@rsm.nl.

 

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