The Need for Ethical Business Practices
Commentary by Martin Hill
Last week was not a good one for the prestige of American business. Headline after headline screamed of one business failure or charge of corruption after another.
A review of recent news stories says it all: Arthur Andersen headed to trial on criminal charges just as another of its former clients, Peregrine Systems, watched its stock crash after as much as $100 million in accounting irregularities were disclosed. Internal documents from Enron Corp. showed the one-time energy giant had, indeed, manipulated the electricity market in California, reaping millions in unjustified revenues. Nationwide unemployment reached its highest point in nearly a decade, despite assurances the latest recession has passed.
Like a knee-jerk reaction, each time bad news strikes industry, industry strikes back with a scapegoat. Employees at Arthur Andersen blame federal prosecutors for the death throes of their company. The energy industry blames lawmakers and regulators for the collapse of the energy market in California. None, it seems, takes responsibility for their own actions.
Headlines such as those seen last week invariably are the result of the American passion for profit. There’s nothing wrong with earning a profit, of course, but forcing a profit is altogether different, especially when the profit being forced is far out of scale of what the market can bear.
The problem with pushing profit beyond reasonable and sensible expectations is that those expectations can only be reached by standing on a foundation as shaky as a house of cards. One misstep, one small bump, and the entire enterprise crumbles.
Unfortunately, good and decent people are often ensnared by this web of greed and, unable to extricate themselves once trapped, are taken down along with the company.
Arthur Andersen’s questionable accounting practices now seem to have extended beyond Enron. If so, that would indicate far more than a handful of Andersen employees had signed on to the firm’s practices. The same is true of Enron, which could not have practiced its market manipulation without large numbers of workers being aware of it.
A change of business philosophy is needed in this country, one that sees business as a means of building enduring dreams, not grabbing what one can and leaving behind a dust bowl of lost opportunities. Business ethics need to become a vital part of business education, not just with MBA candidates in college, but also with those already in the business world, from the wealthiest CEO to the office mail clerk.
An I-got-mine-you-get-yours market philosophy cannot build a sustainable business environment. It can only lead to the same moral decay that has destroyed so many great societies before ours. Let’s not let that happen here.
, Martin Hill
