In an increasingly globalized world of big businesses, multinational corporations, and scandal, some have argued that there is a need to reassess the function of ethical principles within the corporate culture. Rev. William J. Byron, S.J., addressed this issue in his book, The Power of Principles: Ethics for the New Corporate Culture, which he discussed in a lecture on Monday night.
Byron said the book evolved in part as a reaction to an article in The Economist that questioned the sincerity and effectiveness of corporate social responsibility activities by big businesses, as well as an article in The New York Times, which criticized business schools' alleged inability to sufficiently prepare students to deal with ethical dilemmas.
In researching his book, Byron interviewed business veterans and asked them what advice they would give their children who will be entering the business world to avoid the "ethical quicksand" in which companies such as Enron have become embroiled. Ultimately, he described 10 guiding principles of corporate responsibility and business ethics for current and upcoming generations of business decision-makers.
"I would describe the book as an exercise in expository prose intended to engage the mind and consciousness of those who are now or will be decision-makers in the business world," Byron said.
Byron said that these principles guide corporate social responsibility through four levels. At its foundation, a corporation must function on an economic level and be economically viable. As a result, corporations must be profit-seeking, but not profit-maximizing, enterprises in order to survive, Byron said.
"Profit is not a dirty word," Byron said. "It's an essential element of social responsibility."
Corporations must also act within the limits of the law, but cannot depend on the law as the only guideline for their ethical decisions, Byron said. Business leaders must also draw upon their own reason and experiences, the experiences of others, common sense, and religious and revelatory sources, to be implemented at the top, voluntary, and discretionary level. At this level, Byron said, corporations engage in activities that are for the common good but are not necessarily profit-inducing, such as volunteering on and off company time. Byron countered arguments that such companies only act superficially and that ethical capitalism is out of reach.
"I count myself as one who believes that humanistic capitalism is possible," Byron said. "There is need for reform, and it has to be intelligent reform."
This reform can be enacted by following the principles of corporate responsibility, Byron said. He said he believes that these principles, which include veracity, participation, commitment, and fairness, can be instilled in students during their business education.
"Principles of corporate social responsibility and business ethics can, if clearly articulated in the classroom by word, image, and example, be understood and assimilated by the students and remain within them to be drawn upon as prompters of ethical behavior in later years," Byron said.
These principles are best explored through conversations in the classroom, which then become a dominant value which students then incorporate into their daily lives, Byron said.
"Principles are initiating impulses. They direct your actions and your choices. Principles define who you are," Byron said. "That's why I tell business students that they should let their principles do the driving."
Ethical business decisions are rooted, in part, in a liberal education like that found at Boston College, Byron said. Students have the opportunity to draw from the experiences and ideas of others through history and literature, and study in an intellectual culture driven by the same principles that should shape ethical business decisions, Byron said.
Richard Keeley, associate dean of the Carroll School of Management, said students generally do not focus on corporate social responsibility at the undergraduate level because it is something that must be understood at a very high level. They do, however, take courses in applied business ethics and also study ethical theories through the core liberal arts curriculum.
Although some students have said they would prefer to take courses that only focus on the strict business aspect of their education, Keeley said he thought a liberal arts education provides a foundation of ideas that business students might apply in the future.
"I think it's really discouraging when students say they only want to focus on their business courses. We don't want them to do that. We want them to study broadly, not only in philosophy and theology, but also to pursue other things that are of interest to them," Keeley said. "When you get to appreciate Aristotle and Marx and Aquinas and Augustine, you develop a much deeper and nuanced perspective."
Byron said it was essential that students have an education that extends beyond business principles and includes a greater understanding of the humanities in general.
"You're a human being, not a human doing. You're going to be managing not just material sources, but also human beings. If you understand human beings, you will be a better facilitator to the people you will be managing," Keeley said.
"The literature, poetry, the soul, the mind, the emotional side - you cannot compartmentalize your life. You're a full-time human being."
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