In his book Moral Sentiment, which preceded Wealth of Nations, Adam Smith explained how foundational to the success of our systems is the moral foundation : how we treat each other, the spirit of benevolence, of service, of contribution. If we ignore the moral foundation and allow economic systems to operate without moral foundation and without continued education, we will soon create an amoral, if not immoral, society and business. Economic and political systems are ultimately based on a moral foundation.
To Adam Smith, every business transaction is a moral challenge to see that both parties come out fairly. Fairness and benevolence in business are the underpinnings of the free enterprise system called capitalism. Our economic system comes out of a constitutional democracy where minority rights are to be attended to as well. The spirit of the Golden Rule or of win-win is a spirit of morality, of mutual benefit, of fairness for all concerned. Paraphrasing one of the mottos of the Rotary Club, "Is it fair and does it serve the interests of all the stakeholders?" That's just a moral sense of stewardship toward all of the stakeholders.
I like that Smith says every economic transaction. People get in trouble when they say that most of their economic transactions are moral. That means there is something going on that is covert, hidden, secret. People keep a hidden agenda, a secret life, and they justify and rationalize their activities. They tell themselves rational lies so they don't have to adhere to natural laws. If you can get enough rationalization in a society, you can have social mores or political wills that are totally divorced from natural laws and principles.
I once met a man who for five years served as the "ethics director" for a major aerospace company. He finally resigned the post in protest and considered leaving the company, even though he would lose a big salary and benefit package. He said that the executive team had their own separate set of business ethics and that they were deep into rationalization and justification. Wealth and power were big on their agendas, and they made no excuse for it anymore. They were divorced from reality even inside their own organization. They talked about serving the customer while absolutely mugging their own employees.
Stephen R. Covey
"Dr. Stephen R. Covey - one of the world's leading management consultants and author of the best selling book The Seven Habits Of Highly Effective People - is co-chairman of Franklin Covey located in Salt Lake City, Utah in the U.S.A. Franklin Covey provides consultancy services to Fortune 500 companies as well as thousand of small and mid-size companies, educational institutions, government and other organisations world-wide. Their work in Principle Centered Leadership is considered to be an instrumental foundation to the effectiveness of quality, leadership, service, team building, organisational alignment and other strategic corporate initiatives.
Excerpts from Chapter 7 - Seven Deadly Sins - Page 87 to 93
Mahatma Gandhi said that seven things will destroy us. Notice that all of them have to do with social and political conditions. Note also that the antidote of each of these "deadly sins" is an explicit external standard or something that is based on natural principles and laws, not on social values.
To be continued