What is the ethical, social or environmental responsibility of business? The answer to this question rests on whether or not organizations are machines of commerce, profit-producing instruments. The law of corporations says they are run primarily in the interest of stockholders, the responsibility is fiduciary. Let’s assume that this is indeed the case; that they are profit-producing instruments.
A hammer—a tool for driving a nail—has no ethical, social or environmental responsibility. Neither does an automobile, an instrument for transportation. It seems then the organization has no more of a responsibility than any other instrument or tool. However the one employing the instrument does!
We can say the very same for those in authority over a business organization. Yes they have fiduciary responsibility to the owners/shareholders of the business and they also have responsibility to society. Some would argue that this responsibility is to stay within the laws established by society. According to Milton Freidman, “there is one and only one social responsibility of business–to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.” And since the law and ethics are not synonymous, there is no (legal) requirement for ethical responsibility. Consequently following this line of thought corporations haven’t any responsibility to “do good”, only to stay within the law—to do no harm. In short, if it isn’t illegal it’s not in violation of responsibility—it’s not irresponsible business.
Given that, at minimum, the conduct of business involves interaction/transactions with suppliers, customers, governmental entities/agencies (which includes municipalities) and the natural environment then a business enterprise does impact each of these. So looking at each actor as if they were billiard balls on a billiard table, it would seem that as each moved about the responsible action would be to minimize harm to the other. If you bump into another, do so unintentionally and/or minimally. Responsible action is to seek maximum material gain in the exchange with the other and to not intentionally harm the other. Is this sufficient guidance for responsible business action?
This view of the actors on the economic stage is quite surface level (i.e. superficial), since it doesn’t capture the interpenetrating relationship among them. Not only doesn’t it account for the complexity as a result of the three-way, four-way, five-way and higher order interactions it doesn’t consider conditional effects (i.e. the effect on people—say as customers or as society—given the exchange between supplier and producer) as well as the delayed residual effects of the supplier-producer transaction. Clearly the surface level interdependent view falls quite short as a guide for action.
Our understanding of systems must advance beyond mere surface level interdependence—it is not good enough to minimize the harm we do to others. How we conduct business should be informed by a deeper understanding of our place and responsibility in this world.
We are living systems within a hierarchy of living systems, where each lower-level system is necessary for the continued existence of the upper level system. For example, the hierarchy of atoms to molecules to cells to tissues to organs to organism illustrates this nesting of systems. If you destroy the cells you unavoidably increase the risk of destroying tissues, organs and the organism. Negatively impact the lower-level system and you unavoidably destroy the upper level- systems.
We are experiencing this first hand as a result of the shortsighted decisions on the part of BP its suppliers (e.g. Halliburton) and government regulating agencies. The negative impact on the ocean and wetlands in the Gulf of Mexico unfolding is threatening human existence and is evidence of the need for systems thinking among those leading an organization. The BP-Gulf of Mexico disaster is just one of many corporate acts reflective of an absence of understanding the interdependence among living systems. Goldman Sachs’ involvement in the financial crisis of 2008 would be another example.
Our universe is a deeply connected hierarchy of living systems (a.k.a holarchy ) in which higher-level living systems contain lower level living systems. In other words, everything is deeply and reciprocally interdependently related: everything is a whole that is a constituent part of other wholes–systems within systems–all the way up the hierarchy. Now that’s dynamic complexity!
Accordingly, there cannot be separate entities each seeking their own gain as if the unit of survival is that entity. In this view acting in one’s selfish interest is tantamount to committing suicide. Why? Because the world is holarchical, if you negatively impact the viability of the lower level system you unavoidably negatively impact your own viability. Consequently, on the economic stage, the unit of survival is the business enterprise along with every living system at and below its level.
Decisions based solely on what’s in it for me is suicidal: deep interdependence is the organizing concept and ignoring interdependence brings disorder and dissolution.
We (humankind) need a viable earth but the earth does not need a viable human population. If we cease to exist the earth will be just fine. Until we awaken to this reality we will continue committing suicidal acts as we go on believing that more technology will get us out of the mess that our very use of technology got us into.
The technology we’ve developed affords us great ability—the ability to sustain life and the ability to destroy it in a very big way. There is no substitute for understanding and acting on our responsibility as the highest-level living system.
How much profit is worth destruction of the earth (i.e. matter-energy)? How much profit is worth the destruction of the biosphere (i.e. life-energy)? How much profit is worth the destruction of humankind (i.e. mind-energy)? If we do harm to any one of these systems, we do harm to our self and to all of humankind.
We—human beings—must continually seek to remain in harmony with all other living systems as we choose the mode of being-in-the-world to ensure that human life can be lived in the future. Therefore, responsible human beings cannot be-in-the-world in a way that would diminish the prospects for the continued quality of life of (all) the species; our decisions on how to relate to and live in this world must not be short sighted. This is especially critical for those—often referred to as the leadership—with the authority over the use of technology.
Yes we can do as we wish. After all we have the ability to choose. But it would be both irrational and irresponsible of us to commit suicide for the sake of a few bucks! To paraphrase Einstein, you can’t solve problems with the same level of thinking that created them. Isn’t it about time we followed the wisdom of Einstein and learned about how to conduct business of a different mind?