'Practice of Business Ethics in Business Management in the 21st Century'
Indo-German Chamber of Commerce (IGCC) in cooperation with the Friedrich-Ebert-Stiftung (FES) and XLRI- Xavier School of Management recently conducted a Discussion Forum on ‘Practice of Business Ethics in Business Management in the 21st Century’ in Mumbai.
The Forum titled “Business Management in the 21st Century: Legal, Ethical, Moral, Spiritual (LEMS) Challenges” was attended by representatives of industry and academia, who discussed on the need of ethics in workplace and industry and re-evaluated the moral justification of business choices, decisions, actions and their consequences.
Fr. Oswald Mascarenhas, S.J. JRD Tata Chair Professor of Business Ethics at XLRI delivered the keynote address, where he pointed out the nuanced differences between legality, ethicality, morality and spirituality (LEMS) and their connections to and implications on business operations. He said in his address, “Being Legal (L) means acting according to the law, which is the basic minimum for business management. Doing the right thing is Ethicality (E). Whereas, Morality (M) includes the right way of doing the right thing. Having the right reasons for acting moral, makes an action Spiritual (S). Given LEMS, corporate Ethics is a concrete challenging way of life for corporate executives to think and act legally, ethically, morally and spiritually in the turbulent markets of today.”
Explaining about Corporate Ethics, Fr.Mascaren has said, “We need strong corporate ethics at all levels. We define and study corporate ethics and morals as lived, experienced and shared dynamic systems of socially accepted, morally universal, values and principles, standards and rules that can spiritually empower our life and society, our markets and our world. Business ethics studies lived and shared values in buyer-seller exchanges, corporate executive ethics centres on governance values and principles that power corporate decisions and choices, strategies and implementation processes that have corporate-wide consequences, and often, industry-nation-wide ramifications. Accordingly, we explore and analyze corporate decisions and choices, especially in the context of current turbulent markets ridden with risk, uncertainty, chaos and ambiguity, which, when further infected by buyer-seller information asymmetries (BSIA), can lead to corporate fraud, corruption, bribery and money-laundering.”
Following the first session, a panel discussion was held where experts deliberated on the driving forces of modern-day business and how changes taking place are impacting their constituents. Among the panellists, Kelvin A. Sergeant, Sustainable Enterprise Development Specialist at the International Labour Organization’s Decent Work Technical Support Team (ILO DWT) for South Asia spoke about the social responsibility and fundamental principles and rights at work necessary in labour as well as participation in general; Shahana Mazumdar, Sustainability Manager at the Indian Hotels Company Limited talked about the need for a political framework for responsible business conduct, the companies’ code of conduct as well as the benefits for the society at large. Anjali Bedekar, India Coordinator for the UNI Global Union sharing her views, raised concerns on increasing contractualization and the basic minimum enforcement of labour laws.
Dr.K.R. Shyam Sundar, Professor of HRM Area at XLRI moderated the question and answer session where participants showed great interest in the topic and dwelled upon the role of workers’ organizations and corporate management in realizing LEMS approaches in business operations.
Explaining about the LEMS theory, Prof. Shyam Sundar said, “Prof. Fr. Mascarenhas’ Legal, Ethical, Moral and Spiritual (LEMS) theory of Business Ethics assumes importance in this age of neoliberal globalization which has driven most firms to resort to low-labour-cost and high capital intensive product and labour market strategies citing competitive pressures as the reason for the same and especially when even the big firms consider mere law compliance as an act worthy of emulation. This is so because in LEMS perspective law compliance is the basic expectation and a firm in order to do the right thing rightly and with right intentions has to elevate its business consciousness to travel beyond even ethical and moral levels but peak at the spiritual level. While profit maximization is not questioned the distributive question and the ethical, moral and spiritual means of handling business issues including the labour issues of the modern corporates which still rely on the 19th century business management principles. His emphasis on the dignity of labour and the need to create a just society resonates well with the Decent Work paradigm of the International Labour Organisation (ILO) which is celebrating completion of one hundred years of its existence during 2019. Profit maximization and cost minimization business strategies then hurt the normative framework of business management. Pursuit of LEMS could in fact lead to a better corporate governance and lead to social and economic progress of a society.”