Arnold Hiatt, the former chairman of Stride Rite Corporation, sees public service as "enlightened self-interest." Citing his company's family leave policy as an example, he notes that the program costs next to nothing financially. In human terms, however, it makes a statement of caring that creates goodwill with employees and motivates them to be more productive.
Unfortunately, most managers and business executives are more inclined to view profits-not people-as the lifeblood of their organizations. Profits are the master they serve. People only get in the way. That kind of thinking makes the phrase "business ethics" sound like an oxymoron and drives ethical people underground into the ranks of the alienated and dissatisfied, or out of the corporate sector altogether.
In many cases, the "bottom line" rationale is a convenient excuse to operate "below the line" of human decency and social responsibility under the guise of good business practices. But is it really good practice to cheat your customers and exploit your employees for the sake of short-term profits? Apparently, a lot of people think so.
In The Predatory Society (1991, New York: Oxford University Press), author Paul Blumberg examined deceptive business practices. His research uncovered 600 different accounts of consumer fraud (as reported by company employees), including:
- Retail establishments that mark prices up before sales.
- Gas stations that sell regular fuel as high-test.
- Auto mechanics that spray paint old car parts and sell them as new.
- Pharmacies that sell generics and charge brand-name prices.
On the other hand, respondents did say they personally would do anything for money. Well, here's proof-positive they weren't kidding. In each and every case, profit motive was the force that drove businesses to consciously engage in fraudulent and deceptive business practices. The paradox for capitalists is that many profit-minded people apparently think the best way to make money is to trick consumers into thinking products are good quality. Why not actually produce and sell quality prod-ucts, instead?
The spectacular cases make headlines when they're uncovered. In 1992, a once-celebrated Park Avenue attorney named Harvey Myerson was convicted of overbilling clients, including Shearson Lehman Hutton, more than $2 million. Besides ordering younger partners to inflate their hours (or else lose their jobs), he was happy to have Shearson pay his personal expenses large and small. These included family vacations, travel on the Concorde and dry cleaning of his toupee.
Equally troubling is the well-publicized case of consumer fraud by two high-ranking Beech-Nut executives who were jailed and fined for marketing bogus apple juice as "100% fruit juice." In doing so, they tricked millions of unsuspecting consumer-parents into feeding their children what was mostly a mixture of beet sugar, apple flavor, caramel color and corn syrup. They rationalized their behavior by saying that "everybody else does it, too." But of course, not everybody acts in a way that brings them a more than 350-count federal indictment.
Prior to this incident, these men were not criminals. Both were considered upstanding pillars of their respective communities. Unfortunately, they must have left their spiritual ideals and morals at the church door on Sundays, in order to wear the hat of "corporate patriot" again on Monday mornings. For that moral failing, both of them went to jail, were fined $100,000 apiece and racked up more than $2 million in penalties for their beloved Beech-Nut. They also destroyed consumer trust, shattered their own reputations and ravaged the organizational spirit. As an employee, these events didn't make you proud to call yourself a member of the Beech-Nut family.
