Nachiket Mor: The Business Of Morality
Tuesday, May 15, 2012
In India, businesses and businessmen, particularly from the private sector, have always been viewed with some suspicion. Given our underlying socialist ethos, this is perhaps not surprising, but in recent times, this has worsened with reportage about the various means that some businesses have used to gain an advantage, be it bribing government officials and elected representatives, indulging in coercive practices with their customers, misusing monopoly power, concealing information, or ill-treating employees.
Businesses may be thought of as bundles of resources, both human and financial, that exist to address specific societal problems. The revenues and the profits generated by a business are intended to be a joint measure of the importance of the problem being solved and the skill of the business at solving it. Viewed in this manner, highly profitable businesses would indeed be the ones taking on the largest problems of society in the most skilled manner and would therefore need to be celebrated as such, instead of being vilified.
It also follows from this construct that the only moral responsibility of a business would be to maximise its profits because doing so would require it to maximise its contribution to society. In practice however, while businesses that thrive over the longer term do tend to adhere more closely to this vision, there is no question that this utopian capitalist ideal is capable of being subverted by managers and investors who discover flaws in the regulatory mechanism and seek to survive and grow by exploiting them, instead of focussing their attention on solving ‘real’ societal problems.
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