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Asking More Commentary: Perspectives from Mendoza College of Business

Commentary Post - Carolyn Y. Woo

Business is a necessary good

January 15, 2010

Carolyn Y. Woo, Martin J. Gillen Dean of the Mendoza College of Business at the University of Notre Dame, served as a keynote speaker along with professors Hans Küng and Jeffrey Sachs, at a high-level United Nations symposium dedicated to establishing business ethics in the global marketplace. The event, held Oct. 6 at the United Nations headquarters in New York, launched a new manifesto titled, “Global Economic Ethic – Consequences for Global Businesses.” Following is an excerpt of Dean Woo's remarks:

I would like to offer three reflections. The first is best illustrated by a question that was posed to me by a student. He  asked: “Dean Woo, all this talk about ethics and a code of behavior, is this real? Or is this just something that people who have made it cloak wrap themselves in?  Where I come into the workplace, I am at the bottom of the pyramid where there is not enough oxygen and only so many people can go up to the top. So is this  real? Is this talk and nothing more? ” That is a profound question because in the end people are wondering, students in particular, “Do people really behave in this way?” Do they  really live by a code of ethics? 

The code is articulated with  eloquence and enjoys a physical presence; there are words on paper, words which are spoken, words that will enjoy immortality on the Internet.  But while the intellect gets it, will  the heart follow?  Research shows that knowing does not lead to doing. There is breakage between those two. Desire is not action.  And so the first caution  I raise is that the manifesto is a first step, a challenge, a guide for right action.  But by itself, it has no power until someone lives it, puts it in action, and internalizes it.  Making a promise is not the same as keeping a promise. What lies ahead is action, courage and commitment, a journey of moral growth and reflection.  From code to conduct: the challenge beckons.

The second point pertains to a general attitude in the discussion of business and moral action.  Repeatedly, business is vilified as an agent of greed, selfishness and callousness.  On television and in literature, there is no portrayal of a business person as the protagonist for  positive change and constructive transformation.  The general tone casts business as a necessary evil. I think it is very important that we correctly note the contribution and potential of business.  Capital and product markets are the mechanisms for communal exchanges with mutual benefits.  Business can improve lives and society as it fosters the development of physical, economic, social and political infrastructures.  Commerce reduces the occurrence of wars between trading  partners.  Hence, I hope that the Manifesto will inspire, not condemn;  elevate the good to be done and not just focus on the prevention of abuse.

Business is a necessary good.  A premise less than that will shortchange the incredible contributions that business stands to be make.

Third, failures, while inevitably personal in nature, are often embedded in systems. When we think about the financial crisis,  the system included  lenders who gave sub-prime loans, bankers who securitized these,  credit rating agencies which  failed to rate  the risk appropriately and  government which  promoted risky borrowing.  As shareholders, through pension funds and personal investments, many among the general public  participated in the returns. The point is that while ethics is a personal issue, we must also recognize the system that fosters  and enables such behavior.  All  sectors – government, civil society, shareholders, customers, businesses – need to be at the table. We need a  multi-stakeholder-approach to address system failure.  The Manifesto must engage the support of all sectors in order to bring about the desired outcomes.  Institutions  such as the UN Global Compact or the Global Ethic Foundation play an important role for convening the different parties.