The current regime of corporate governance also implicitly promotes crime (and by extension immoral behavior) by top executives. Of all the major corporate scandals to break out in the last decade, including that of Enron and Lehmann Brothers, the guilty almost never receive a prison sentence. The cases are seldom prosecuted criminally. Hence, from the economic standpoint of a business corporation, it is cost effective to break the law than to abide by it. The top executives of transnational investment and finance corporations are motivated by narrowly defined self-interests. (Griffin, 2001, p.44) The short-term profits they bring to the firm ensure that their income is multiplied and career growth accelerated. In this scenario,
“The calculations of advantage made by these corporate leaders, who have six- and seven- figure incomes, are not that different from those made by drug dealers. The gains outweigh the risks. We tend to think of the latter as criminals with whom we would not associate, while the former are honored associates of our political and arts leaders. While they bring less direct harm to the community than the drug dealers, these executives spread the burden of taxation to those less able to bear it and reduce the amount of revenue available to deal with community problems. More important, they help to undermine the moral codes that preserve our civilization.” (“How the Market Fosters Immorality,” 2001, p. 10)
Hence, it is quite clear that in the environment of the economic imperative (under which all business corporations operate) quarterly profits and competition for market share supersede all other considerations. This precludes the allocation of resources owned by the corporation in developing moral virtues in employees. It is fairly evident that there is divergence between a worker’s ethical values and actual behavior in his/her role within a corporation. Just as cognitive dissonance leads to tension and conflict in an individual’s mind, most workers operate with the burden of an ethical dissonance, where they are compelled to act in ways they would ideally not prefer. This is
“demonstrated by an array of scandals – such as Enron and its accounting firm Arthur Andersen; the real-life images of war and death used by Benetton in their advertising campaigns; the safety of the retailed Ford Pintos; and the recent oil spillage of British Petroleum, costing the company over $20 billion possibly because of a neglect of safety checks and failure to apply morality to the decision making process due to time pressures. It is arguable that managers may be subjected to situational pressures of the organization and thus waver from their personal values, adopting immoral practices in order of achieving sales targets, status and recognition in the business environment.” (McManus, 2010)
- Carson, A. S. (1995). The Nature of a Moral Business Person. Review of Business, 17(2), 16+.
- Griffin, G. R. (2001). Machiavelli on Management: Playing and Winning the Corporate Power Game. New York: Praeger.
- How the Market Fosters Immorality. (2001, March). The World and I, 16(3), 10.
- McManus, J. (2010, Autumn). Under Pressure. Management Services, 54(3), 29+.
- Newton, L., Englehardt, E., & Pritchard, M. (2011). Taking Sides: Clashing Views in Business Ethics and Society (2nd). New York, NY: McGraw-Hill.