The multiple ‘crises’ faced by both governments and businesses today highlight the fact that we live in a radically changing world full of chaos and uncertainty. So it may seem logical that we’ve turned to ideas like ‘responsibility’, ‘sustainability’ and ‘ethics’ to respond to these feelings of uncertainty and ensure long-term growth and future prosperity. But is this enough?
“For me, the way we talk about business ethics and corporate social responsibility is too simplistic,” says Laurent Bibard, Professor of Management at ESSEC Business School. “If we want to understand and respond to the profoundly chaotic world in which we live and manage, we need first to find real meaning behind what we do. This means taking a step back and looking at the bigger picture. This is what I try to show in my book La gestion, entre éthique et politique.”
“We can talk about ‘green’, and about being ‘responsible’ or ‘sustainable’, or we can evoke an ‘ethical’ or ‘moral’ obligation to the world in which we live. The trouble is, these concepts have been reduced to slogans and lost their meaning along the way. Not to mention the fact that the word ‘ethics’ comes from the Greek word for behavior, whatever it be, good or bad, while the word ‘morals’ simply means ‘way of life’. The language we use to confront the chaos and give meaning to what we do has today lost all its value. An authentic approach to business ethics requires a fuller understanding of the complexity of organizational behaviour”.
Reinventing doubt as a desirable competency
As professor Bibard explains, philosophy is the key to really taking this needed step back and objectively answering the question of why we do what we do. This means going right back to the founding fathers of philosophy and the well-known quote that Plato attributes to Socrates, ‘I only know one thing, that I know nothing.’ This states an imperative of constant learning across time which has deep significance for management today.
“Short-termism is a global sickness pushing us to take refuge in what we believe we know,” he explains. “Business leaders are under so much constant pressure to prove the worth of their management by reaching specific performance targets, that they’re in danger of losing the capacity to see beyond them and learn new ideas and approaches. In failing to admit what they don’t know, they’re not learning enough from their environments, they’re not taking risks with a deeper understanding, and they’re not innovating. Business can be about knowledge, about skills and all the rest, but building a collective capacity for doubt and questioning evidence is also an essential competency, crucial for innovation.”
Indeed, the failure of to embrace doubt collectively has brought about the ruin of companies in the past. Professor Bibard cites the example of Enron which had a supposedly excellent code of business ethics. However the problem was, employees weren’t being allowed to doubt everyday methods and patterns of behavior, so there was no collective vigilance. Enron’s problems were not just about “a failure of business ethics”. The question of ethics is really subordinate to a bigger philosophical question concerning vigilance.
“Enron had a sophisticated written code of ethics. But what’s really important is the link between what we write, what we say, and what we do! This is what truly responsible business is all about and if we’re really just focusing on formal rules, on what’s written in black and white, we may be forgetting reality, which is shaped by the ways humans relate rules or norms to real behavior and everyday action. And when we lose touch with what’s really going on, crisis ensues,” says professor Bibard.
“The up side is that crises can encourage self-doubt, they can help us step back and look at the bigger organizational picture and help us reevaluate what’s really important,” he continues. “In Greek, the word crisis means change. And change is often exactly what we’re looking for. I for one am encouraged that today we are living through a period of crisis, because it may make room for real changes towards future.”
Remembering that it’s not all about the money
Professor Bibard also believes that money is one of our biggest problems today: we’ve put too much emphasis on the importance of profits. And if we only wanted profit, drugs, pornography and guns would be the businesses to be in, all of them ventures that can only be disastrous for society. If business is constructed only around financial goals, there is a serious problem.
“I think Milton Freidman’s logic – that the only responsibility of a business is to increase profits – is fundamentally wrong. Of course, money lets you hire people and reinvest. But making ‘profit first’ a slogan, or even dogma, is undeniably irresponsible. And it’s frightening when I hear this slogan repeated by practitioners,” he says.
“Money doesn’t give meaning or sense to a business; it doesn’t give it a ‘raison d’être’. This comes from its products and services, and from the way it does its work. Forget Milton Freidman: we need to put more focus on ideas like those of Karl Weick who talks about ‘sense making’ and ‘mindfulness’. He understands that organizations will only have a positive development if managers and employees understand the sense of their day-to-day activities in the context of the wider society. And many of the questions we’re talking about today need to be linked to the sense or meaning that is being given to tasks.”
Professor Bibard says that before profits even come into the equation, businesses provide a good or service to society: they make shoes, the sell medication, they build houses, for example. And when terms like “care” are elevated to the status of fashionable buzzwords, it almost seems absurd that the primary role of a business has been forgotten. Crises have made us recall that, in business, we have to take care of something or someone. It’s not business for business’ sake, but business for the sake of customers and clients, manufacturers, suppliers and all other members of the chain of production and distribution.
Realizing that it’s not just about social responsibility, it’s also about political responsibility
There’s no question today that many multi-nationals have political power comparable to national governments and have more cash at their disposal than many states. So we have to conclude that businesses have a huge responsibility – not only social responsibility, but ‘political’ responsibility, understood in a broad sense.
“The fullest political responsibility of a business is about answering the question: how should we live together?” adds professor Bibard. “When we see global companies hiding away billions of dollars without paying tax or giving back to national governments, this question of political responsibility becomes even clearer.”
“Marx was wrong about the solution to wealth inequalities, but not the problem. There are more and more poor people, fewer and fewer rich, and the difference between the highest and lowest incomes is always increasing. The new generation is aware of the problem and I’m counting on them to change the way we think about the links between business and society, and embrace the real meaning behind why we do what we do.”
Professor Bibard feels that the end of the crisis will only come when we truly understand the broader political responsibilities that business entails, when we truly understand that it’s not about ‘business against society’ but about finding ways of working together and constructing shared meaning. Philosophy has an important role in this endeavour.
After receiving a first habilitation in Management in 1991– granting him the authority to direct doctoral research projects in Management – ESSEC Professors Laurent Bibard has this year been awarded a second habilitation, this time in Philosophy, by Université de Paris 8 Vincennes-Saint Denis. Habilitation is the highest qualification a scholar can achieve and Professor Bibard has hereby become the only business school professor to have received habilitation in both Management and Philosophy.
In practice, this means that he will be in the capacity to direct Doctoral research in both Management and Philosophy –no other French professor has this level of legitimacy on these two topics.