On the importance of understanding ethics in the global marketplace

Citation

Lee, T. (2008), "On the importance of understanding ethics in the global marketplace", Management Decision, Vol. 46 No. 8. https://doi.org/10.1108/md.2008.00146haa.002

On the importance of understanding ethics in the global marketplace

Article Type: Preface From: Management Decision, Volume 46, Issue 8

I am quite pleased to have been asked for some thoughts on this special issue. The task allows me to think about topics and questions that are not “front and center” (or immediate) to my own academic research. Specifically, I’m a self described management scholar who is educated in organizational behavior (OB) and who has spent the last 25-plus years primarily thinking about and studying voluntary employee turnover and retention. Like most management and OB scholars, of course, I know that managerial ethics, business ethics, corporate social responsibility, sustainability and such are wonderful sounding words. One the one hand, it seems perfectly obvious to virtually everyone that – at least at some abstract level – ethics (and associated terms) are necessary for individuals, firms and nations to co-exist peacefully and prosper. On the other hand, virtually everyone might also agree that “the rub is in the details”. In particular, thinking about this special issue allows me to focus on, “What do we do we know about managerial ethics in a global economy?” As academics, we often hear that, “It’s healthy to pause and occasionally take stock on how we’re doing?” (In several of my own review articles, for instance, I’ve used this or a similar phrase.) In this preface, I therefore take such stock.

Several years ago, I had the distinct honor of editing one of our major academic journals in management. That experience provided a broad and expansive view of our research on many topics. When I ponder about the stock of the academic scholarship on business ethics, I am led to believe that we do not have a “dominant paradigm”, a small set of competing conceptual frameworks, nor a body of coherent empirical findings. Given the generally accepted importance for understanding business ethics, one might reasonably ask, “Why we don’t know more?” After all, academics have theorized about and empirically studied ethical issues in management for several decades. Because I have the freedom to speculate, I would like to submit my own explanation. Until relatively recently, the academic study of business ethics was simply not “at the right place and at the right time”.

Like most non-experts of business ethics (which clearly includes me), the term immediately leads me to remember ENRON, Arthur Andersen, WorldCom or Tyco. Needless to say, these examples are quite powerful reminders of what can happen when individuals and companies forget to “do the right thing”. Nevertheless, our collective memories can be short. We often find our attention re-directed to the next major global issue, such as national elections, regional war or the effects of carbon on our environment, or to the more immediate and personal issues, such as promotion, tenure and annual performance evaluations. The net effect of these kinds of diverting influences may be that we quickly forget these dramatic examples of mis-conduct. In a similar fashion, the focused academic study of business ethics becomes a bit harder because scholarly attention is so often diverted to different issues. In other words, the greater academy focuses on other questions.

In 2008, however, I sense that something is different. We recently recognized from Thomas Friedman in his best selling book of a few years ago, The Earth is Flat, that people, firms and nations are now amazingly interconnected. What happens in China, India or Ireland, for example, affects people in Seattle, Washington (where I live and work). What’s different today is that this interconnectedness across the globe renders the effects of business ethics to be critical for everyone now more than ever. Thus, I further submit that the academic study of business ethics may be at the right place and at the right time because the world is so highly interconnected. The effects of an ENRON, Arthur Andersen, WorldCom or Tyco affect so many more people because of this interconnectedness. Following the traditions of normal science, I also believe that it is increasingly important for scholars in business ethics to reach agreement on potential dominant paradigms and/or a modest subset of competing conceptual frameworks that, in turn, direct and enrich our empirical efforts.

I like to think that this special issue is one more (healthy) sign that the academic study of business ethics is indeed at the right place at the right time. In this issue, for example, we learn about that the effect of corporate social responsibility in Spanish firms is positively correlated to sales growth. From a case study, we learn that global ethics must be more than sets of rules or the blind adherence to rules. At the level of nations, we also learn that corporate social responsibility is positively correlated with competitiveness. Based on conceptual grounds, we are prompted to think about the nature of the sustainability. Is it a scientific construct, social movement or passing fad? We are also prompted to ponder on the meaning of justice in a global market place; from the authors’ conceptual arguments, multiple meanings and nuances for justice can be inferred. Applying logic from long ago, do we learn about ethical business practices when applying a Kantian lens? In my judgment, the scope and depth of this intellectual activity signal to me that the academy is more active and engaged in understanding business ethics in the global marketplace than ever before.

Although this special issue is a wonderful start, where might we go from here? I believe that what we do best as scholars is the deliberative reflection on managerial issues and problems. In other words, we create ideas. Equally important, we must eventually subject our ideas to empirical testing (which may be, in the language of our colleagues from economics and business strategy, the source of our competitive advantage as academics). To do so, we should first begin with a broad acceptance of multiple traditions in scholarly theory and methods. Perhaps most important, we should move toward defining our terms. What do we mean and what do we not mean when we use words like managerial ethics, business ethics, corporate social responsibility and sustainability? Recognizing that defining these terms may be akin to hitting a moving target (because they will almost certainly change over time), we must agree – even if only in general terms – what we mean to study. By not doing so, we run the high risk of talking passed one another. By doing so, we can more readily determine who is advantaged and who is disadvantaged by our theory and empirical work. Do our theories and research, for instance, create wealth and opportunities for everyone, or do they enable only a smaller corporate elite? I believe that these kinds of issues become answerable when we agree upon what we mean and do not mean.

Presuming some agreement on our words and potential effects on particular constituencies, I believe that we must next recognize the legitimacy of multiple research traditions, methods and tools. It is less useful to debate, for example, the value of quantitative versus qualitative methods and far more useful if we recognize when to use each kind of method. Both have their valued places in our scholarship.

In closing, I would like to congratulate the authors of the articles in this special issue, and the editors as well. I see a job well done. I also envision a longer journey that likely encompasses many more key insights and valuable discoveries and that spans many careers and generations of management scholars. The future is glorious.

Tom LeeFoster School of Business, University of Washington, Seattle, Washington, USA