Purpose is not a substitute for morality

The time has come to look at Purpose from a broader perspective than just product/customer (or company/employee). Business ethics without human ethics don't exist. The strikes are getting closer. Ukraine, Uyghurs, climate change, social conflicts and so on. And companies are always the actors. We realise that there is no such thing as just business. And a concept of mediaeval times - when such thing as „just business“ did not exist in business - could serve as a guide.

The war in Ukraine has shown us that there is no such thing as neutrality. You can’t carry on as before if the ‚before‘ no longer exists. And so, in a very short time, quite a few companies have withdrawn from Russia. And some have not.
The reasoning for both options is almost identical: I stay because I don’t want to make victimise the wrong people – I leave because I don’t want to be involved when someone becomes a victim.

And representatives of both positions have similarly euphonious purpose statements in their corporate visions. Something about „making the world a better place“. That’s what you write in purpose statements when you don’t have a purpose.

What is disturbing, however, is the fact that the stringency on one side (e.g. Russia) is not universal, but only exists on a case-by-case basis. Are tortured Ukrainians worth more than tortured Uighurs? Do you punish a Russian autocrat but cooperate with a Chinese autocrat? Is it so, as Habeck says, in essence:

We cannot do what is good, but only what is relatively better.
This sentence is only true in a world where the bad is already the norm.

However, it is important to remember that in many countries where companies operate, the bad was already there when they first decided to do business there. In other words, a conscious decision was made to leave aside the morally reprehensible aspects of the other party. After all, it is – quite neutrally – only about business and not about conversion. Like Volkswagen in China in 1978. A business option that the first choice at the time (General Motors) did not accept. For moral reasons.

And always, when you confront entrepreneurs with these decisions, the identical excuses come:

  • If I don’t do it, others will.
  • If I don’t take advantage of this opportunity, then I’m damaging my company.
  • Whether I do it or not, it doesn’t change the world (so I can do it).
  • All my competitors are doing it, so I have to do it too.
  • If I do it, it will change the other person for the better.
  • If I don’t do it, then people will be exploited even more than if I do it.

What’s interesting about these excuses – which, by the way, all of us know in small ways too – is that the basis of the decision is always ’someone else‚. And that is exactly what I mean when I speak of morality.

Morality begins with me, not with the other. My values start on the inside, not on the outside.

In other words, companies (and entrepreneurs) engage in reprehensible things not because others do, but because their own morality is reprehensible. And this does not increase the good, but the bad.

And this knowledge of the influence of character, morals and values of an entrepreneur leads us back to a principle that is several centuries old. Because an entrepreneur from his position can influence the lives and circumstances of many, attention must be paid to who is an entrepreneur. And the controlling authority for this is neither the state nor the church, the controlling authority is the entrepreneurs with whom he has to do. In other words, a concept of moral self-control of their own reference group.

This concept is the concept of the honourable merchant (der ehrbare Kaufmann).

A concept from the 12th century! Decisively shaped by the merchants of Northern Germany. Honourability does not only refer to „reliable business processes“, but also to the personal character, values and morals of the individual.

When companies talk about purpose, they are talking about creating meaning through what the company does. Can a company create meaning if it does not live up to its moral responsibility for people?

Is it legitimate to do business in a dictatorship if the living conditions in my factory follow certain principles? If I know that what I do strengthens people who harm people, then – from the point of view of morality – there is no longer any question. Then the answer is: No, I am not doing business here. Business ethics without human ethics don’t exist.

The time has come to look at Purpose from a broader perspective than just product/customer. Only when the entrepreneur/people level is right can Purpose create value.

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