The members of the Business, Innovation and Skills Committee recently discussed last year’s takeover of Cadbury by Kraft. They concluded that they “cannot help feeling that some of the soul of Cadbury has already been lost”. In this story it’s hard to escape the family business angle.
Cadbury was founded by a Quaker family and one family member described the takeover as a “horror story”. Cadbury has not exactly been a mom and pop outfit for quite some while, in fact the family sold the business well before Kraft came on the scene, but most people agree that some of that family spirit – exemplified in it being a fair trade producer, treating its staff well and loyalty to its roots - was in its DNA. People often use language like this about family businesses. But does it make sense to say that a business has a soul?
Let’s digress slightly for a moment. This is meant to be a business ethics blog, and it’s worth wondering for a moment what “ethics” really means; the idea has been stripped back, at least in our parched modern language, to being about right and wrong. But it’s about far more than that. The word ethics is related to the word ethos, which immediately leads us into far richer and more resonant territory. It’s about a way of doing things, a worldview.
Some businesses like to parade a list of core principles that they say embody their ethos. I once worked for a Californian business with a list of five or six principles (I can’t remember the number and, to the horror of my boss, couldn’t do so even when I was working there). The bosses took it embarrassingly seriously, but the workers just laughed at the whole thing. The real ethos was different, and obvious to everybody.
There’s a parallel here with modern ethics. Thinkers influenced by the Enlightenment such as Kantians or utilitarians tried to come up with simple lists of principles which you could use as a basis for morality. Add logic, and you can discover the right thing to do. But it doesn’t really work – you quickly get all sorts of odd conclusions that offend our moral intuitions.
And so there’s a backlash in modern philosophy called virtue ethics, whose proponents argue that the idea that goodness can be reduced to a set of principles is a crass way of looking at human behaviour. In fact, it says, things are far more complicated and are hard to quantify: ethical decisions flow from a worldview and an ethos. You might get things wrong but if your heart is in the right place, that counts for a lot. Good intentions are important – perhaps more important than good results.
Businesses are more than the sum of their parts and customers understand their soul which, somehow, gets into their products. You might not be able to say how that happens or exactly what that soul is. But as anybody who’s eaten a Dairy Milk recently will tell you, you know when it’s not there.
Just wish to make a simple, yet deep point (first made to me by my former PhD student and now ethics teacher at Pompeu Fabra's business school in Barcelona, Marc Le Menestrel),
namely that ethics is interesting only to the extent that there is a tradeoff between what your virtue(s) would suggest you to do,
and what you might have to do for other reasons (corporate reasons). If there is no conflict or tradeoff, there is no issue.
Or in the words of a donor to a major business school "ethics pays," which implies the absence of a dilemma. And such action then does not allow anyone to state that one is ethical - for the motives (or virtues) push the individual in the same direction.
So it is not just about intent, and not just about behaviour. It must be about dilemma, or conflict.
Ludo Van der Heyden
Mubadala Chair in Corporate Strategy and Governance at INSEAD