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January 29, 2004
Half right
BusinessPundit has an interesting commentary on corporate social responsibility in reaction to an essay in the Economist entitled ?The Two Faced Capitalism?. But this commentary addresses only half of the equation.
While I agree with many of the arguments of BusinessPundit, it is another example of the false premise that the only choice is either market forces or government regulations. Culture, guided by shared values, is the third force that keeps getting overlooked. At a basic level there are certain moral imperatives that can and should guide business decision making.
I agree that it would be ludicrous to blame Wal-Mart for the impact of their business model. If suppliers cannot compete within the marketplace, they will and should go out of business. We do not need regulators or judges passing judgment on such consequences of Wal-Mart?s business practices.
There are, however, more fundamental concerns that get overlooked if this is all the further corporate ethics is taken. For example, does Wal-Mart seek to equitably distribute the wealth it creates with all of those in the organization that helped to create that wealth? Many entrepreneurs have recognized that they could never have built their businesses without the hard work and expertise of their management and employees, and have found ways to share this success through real profit-sharing and better salaries.
The more we keep government out of the details of business the better. Markets work. But, that is only part of the equation. To assure that the social contract of market capitalism survives requires prudent, just, and moral actions on the part of its stewards. Otherwise we are at risk of society backing out of this contract.
Posted January 29, 2004 01:39 PM
Comments
I have not been in the business world, other then a lowly worker, so I can not comment on government staying completely out of the details of business. I can say, however, that government does have a job to regulate some ethics in business. If government does not do such a task, who will? As one source said, ethics are a process not a static code. With ethics forever changing, government has to set boundaries so extremes to do not happen (like the Microsoft monoploy). The thing with Wal-Mart is the company, in many ways, is unethical. The corporation takes advantage of small towns building a "Super Wal-Mart" that puts out all hardware stores, grocery stores, clothing stores, etc. that would otherwise be in business. Though some view this as seeing opportunity, I see it as a disgrace. I am not a fan of the idea of two or three major corporations running the whole nation. Between Pepsi, Coke-Cola, and Wal-Mart that is about what is happening in society. Wal-Mart may give back to community, but only after it has successfully dominated small town America. I have seen one too many small towns and small town businesses go under because they do not have to ability to have prices as low as Wal-Mart. It would be a shame to see another small town become a product of corporate America.
Posted by: Ali Sullivan at February 3, 2004 07:45 PM
at Belmont University in Nashville, Tennessee. He consults with a variety of businesses on start-up and growth related issues, and with larger corporations on re-establishing entrepreneurial cultures within their organizations. Dr. Cornwall's current research interests include entrepreneurial finance and entrepreneurial ethics. He has authored or co-authored four books.
