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What happened to Business Ethics and Responsibility?
I remember a "business ethics" seminar I took in University, which confirmed everything that my parents had taught me a child. I heard clearly that capitalism was not an easy way to steal money from others, but a way to make an honest living, providing a service or product to people who needed and wanted. This secured my desire to become a businessman. During my career I have held different positions in small, medium and even large Fortune 100 companies. I had the opportunity to work with great visionaries, empty "suit" assembly workers, and, yes, those guys who just wanted to get everything he could while making as little as they could.
The constant I've always seen in the free market system in the U.S. is that a quality company with a product or service quality with quality employees always seem to do better in the long term that the snake oil salesman. Successful companies work hard to inject ethics and morals in everything they do and take responsibility for their actions. leaders quality business do not expect a "rescue" or feel they do not even deserve one. If they can not assemble a team of enthusiastic employees who can succeed is Clearly understand and believe that you must fail and do something else. I've been involved in several business failures and none of the owners or employees of these companies felt anything but shame and failure for leaving with debt providers, employees without jobs and customers without a supplier. These leaders would have failed, but many of them took their personal failure and worked as hard as he could to pay all its debts and satisfy all those who lost due to bankruptcy. Those who have no ethics and morals just launched a new company with a new name and immediately began taking advantage of others and repeat failure.
I have been absolutely amazed by the automotive industry, which very easily and arrogantly demanded ransom from taxpayers and was quick to blame the current economic crisis in their place and their management equipment. In our system of free enterprise, a company that can not adequately manage its assets, has a product or service that people want to buy, and get a benefit its shareholders out of business. Awarded to employees, customers and suppliers lose money because of this, but then everyone finds a replacement carrier and continue with their future.
Our concept of free market is not very complex, but should include ethics, morality and responsibility of securing the highest success and quality. The U.S. business model for many years, was that ethical concept and quality of the rest of the world not only envied, but expects to be. Even the Russians and the Chinese Communist fiercest enemies for decades, are now embracing capitalism, because we have become the superpower of the world with our ethical business model and quality.
Now here we are about to enter 2009, and last year we expect of our biggest recession story in the past 50 years, watching the CEOs of the Big Three fail to admit their failure management that has allowed over labor costs to be twice of any other auto manufacturer and provided pension and retiree health care costs exorbitant. For decades, the "Three Great "bowed to their unions and were able to pass all the costs along to the consuming public with little or no competition to keep them honest. They fought and fought against all government agencies in the U.S. seeking higher CAFE standards when oil was $ 25 per barrel but now believe they can redesign and make incredible products and standards within the next two years if the U.S. loan them only a mere fifty billion dollars. This is equivalent $ 200 for every American man, woman and child living in the U.S. Our auto industry was for several decades, the best in the world and an example of what that innovation and technology can achieve. Many of us in the business world, studied case after case of General Motors in the business school and were impressed with the success and vision of the U.S. auto industry
While this is an amazing and sad commentary on the ethics and morals of the management these companies, I find something even more disgusting. The media and many politicians are discussing a "prepackaged bankruptcy" as a possible response to the failure of management. While we all have from time escaped our ethical pedestal, this suggestion is the permanent loss of ethics and responsibility in our society.
I always advise my clients that bankruptcy is a process that must be avoided at all costs. It is the final point of failure for each business entity. If a company has serious problems, the company and its management should do the right thing and negotiate with all parties to resolve their problems and do everything possible to stay out of bankruptcy. Bankruptcy is only good for lawyers and take complete control of a business. How many businesses by lawyers and the courts ever succeed? Insolvency by definition, normally requires the vast majority of all parties lose money and should only be used as an absolute last step. Bankruptcy does not have the ethics or moral. It carries a stigma for many years and labels the company as being unable to negotiate successfully or perform a valuable service to the public. What makes someone wants to buy a car from a manufacturer that has gone into bankruptcy because he could not properly handle your business?
The automobile industry must take the responsible and ethical way to solve their problems. It must negotiate with employees, unions, retirees, suppliers and customers to solve their problems. They also must work to immediately change its corporate culture and restore a sense of ethics, integrity and responsibility in their employees that probably means changing the direction and a Board of Directors who have already demonstrated their inability to run their companies successfully.
I am not so naive as to believe that trade unions, Some employees and suppliers will take steps to become part of the solution and ultimately bankruptcy, may still be necessary to achieve the goal end to save these companies. This would be a great injustice to all concerned because the legal costs would be astronomical and culture of the company probably will not see change needed to redo the auto industry the best in the world. I'd be able to discuss business with my grandchildren in college case studies of General Motors. I remain very optimistic that ethics, morality and responsibility will again be a part of U.S. corporate culture.
As our politicians, I'm not as optimistic as we have seen that many of our elected officials voting based on surveys of constituents and campaign contributions from lobbyists. Am agree with the vast majority of Americans who give the U.S. Congress a very sad passing rate. His agenda is more focused on their next elections in ethical decisions and responsible for their constituents. It is also a sad commentary on the meaning of the United States of ethics and responsibility when a criminal convicted in Alaska was very close to winning reelection in the Senate. His fellow Republicans in the Senate are extremely happy that he did not win because many of them have had to make a new poll in your state before deciding whether to allow a criminal to sit in the next session of Congress.
A very positive note in this situation is that an examination of U.S. history reveals that ethics, morality and responsibility increasingly common in the U.S. after a serious economic recession. Religion and personal introspection to be more important for U.S. citizens when their savings and retirement accounts loose half its value. assistance to church, volunteering in charity operations, spending time with our children and even family dinners all see increases during recessions and I am sure that is the case with that history is recorded in the recession of 2008-2009. Politicians running for reelection in 2010 should be prepared for this moral change.
Our current economic crisis is not the last we'll see in our lives and the U.S. will recover and be better then as has been the case in the past. However, I hope we can say the same of our ethics, morality and corporate responsibility.
About the Author
Mel Luigs is the President and CEO of AML & Associates, a national management consulting company, which provides a “Part Time” CFO for small and medium business that want to grow and expand. He is a highly accomplished executive with a solid history of developing critical business solutions and demonstrated leadership in both small and Fortune 500 companies. He has a strong combination of operational and financial expertise in both the manufacturing, retail and franchise business areas along with a solid background building strong working relationships, growing small companies or departments, building customer oriented teams and obtaining results. His company website is www.aml-associates.com
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