Ethics and Competitiveness
by John F. Akers
1 I should like to consider a subject central to international economic competitiveness: ethics. Let me urge at the outset that all of us in management look at both these words —
ethics and competitiveness — with a wide angle of vision. When we think of competitiveness we should think not just as Americans, Europeans, or Japanese seeking our own selfish beggar-thyneighbor1 advantage, but as managers striving to succeed in an increasingly interdependent world, with the potential for improved living standards for all. And when we think of ethics, we should think not just as managers focusing on a narrow preserve labeled business ethics, but as citizens of a large society.
2 Ethics and competitiveness are inseparable. We compete as a society. No society anywhere will compete very long or successfully with people stabbing each other in the back; with people trying to steal from each other; with everything requiring notarized confirmation because you can’t trust the other fellow; with every little squabble ending in
litigation; and with government writing reams of regulatory legislation, tying business hand and foot to keep it honest.
3 That is a recipe not only for headaches in running a company; it is a recipe for a nation to become wasteful, inefficient, and noncompetitive. There is no escaping this fact: the greater the measure of mutual trust and confidence in the ethics of a society, the greater its economic strength.
4 I do not say the sky is falling here in the United States. I do not think we had a great ethical height in the good old days from which we’ve been tumbling downhill. We do face ethical and competitive problems, to be sure. We have all been reading about religious leaders who steal from their congregations,Wall Street brokers who profit from their insider status, assorted politicians and influence peddlers, law students who plagiarize, medical professors who falsify their research results, and Pentagon employees who sell classified information. But most of us can agree with Thomas Jefferson that all human beings are endowed with a moral sense — that the average farmer behind a plow can decide a moral
question as well as a university professor. Like Jefferson, we can have confidence in the man in the street, whether that street is in Armonk, San Francisco, or Cambridge — or in London,
Paris, or Tokyo.
5 That common moral sense, however, does not come out of nowhere or perpetuate itself automatically. Every generation must keep it alive and flourishing. All of us can think of means to this end. Here are three suggestions.
6 First, we should fortify the practical ethical buttresses that help all of us — from
childhood on — know and understand and do exactly what is required of us. The simplest and most powerful buttress is the role model: parents and others who by precept and example set us straight on good and evil, right and wrong. Of all the role models in my own life, I think perhaps the most durable is my grandfather — a flinty New England
headmaster whose portrait hangs in my home. To this day, whenever I go by it I check the knot in my tie and stiffen my backbone.
7 There are many other ethical buttresses. Some, despite condescending sophisticates, are simple credos: “A Scout is trustworthy, loyal, helpful, friendly, courteous, kind, obedient,
cheerful, thrifty, brave, clean, and reverent”; or “a cadet will not lie, cheat or steal or tolerate those who do.” There are institutionalized buttresses like the honor system, by which college students police themselves — no plagiarism, no cheating on examinations. I find it
ludicrous that even divinity schools6 and law schools and departments of philosophy — not
to mention other parts of the university — have to pay proctors to pad up and down the
aisles at examination time to make sure nobody is looking at crib notes or copying from a neighbor. A century and a half after Jefferson introduced the honor system at the University of Virginia, it is unfortunate that every college and university in America has not yet adopted it.
8 Finally there are professional standards and business codes of conduct, which spell out strict policies on such things as inside trading, gifts and entertainment, kickbacks, and conflicts of interest. It is naive to believe these buttresses will solve all our problems. But it is equally naive to expect ethical behavior to occur in the absence of clear requirements and consequences.
9 Can Our Schools Teach Ethics?
The time has come to take a hard look at ethical teaching in our schools — and I don’t just
mean graduate schools of business. We know John Shad is giving the Harvard Business School most of a $30-million endowment to be devoted to studying and teaching ethics. And we know that MIT Sloan School9 Dean Lester Thurow and other educators have openly disagreed with this undertaking.
10 Let’s begin by defining what we are talking about. Many business people facing student audiences have been appalled by knee-jerk assertions that it is open-and-shut immorality to do business in South Africa, to produce weapons for the military, to decide against setting up a day-care center, to run a nuclear power plant, or even to make a profit. An enormous amount of work needs to be done to help young people think clearly about complex questions like these, which defy pseudomoralistic answers. They require instead incisive definition and analysis, and a clear-headed understanding of a company’s sometimes
conflicting responsibilities — to its employees, its stockholders, and its country. And these responsibilities often require some agonizingly difficult choices.
11 I wholeheartedly favor ethical instruction — in a business school or anywhere else in
the university — that strengthens such analytical capabilities. I also favor ethical examination of workplace safety, consumer protection, environmental safeguards, and the rights of the individual employee within the organization.
12 But recall what Samuel Johnson10 once said: If a person doesn’t know the difference between good and evil, “when he leaves our house, let us count our spoons.” If an MBA candidate doesn’t know the difference between honesty and crime, between lying and telling the truth, then business school, in all probability, will not produce a born-again convert. 13 Elementary, grass-roots instruction on why it is bad to sneak, cheat, or steal — such
instruction in a school of business administration is much too little, far too late. That’s not the place to start. The place to start is kindergarten.
14 There are, to be sure, vexing constitutional and other problems over prayer in the classroom. But we need not wait for the debate to end — if it ever does — before we begin to
reinvigorate ethical instruction in our schools. We can start now, in kindergarten through twelfth grade, and not by feeding our children some vague abstractions called “values.” I
mean we should start with a clear-cut study of the past. Our ethical standards come out of the past — out of our inheritances as a people: religious, philosophical, historical. And the more we know of that past, the more sure-footedly we can inculcate ethical conduct in the future.
15 If you want to know about Tammy Bakker, Senator Daniel Patrick Moynihan says, read Sinclair Lewis if you want to know about insider trading, read Ida Tarbell. If you want to know what it is like to operate in a jungle where the individual predator profits as society suffers, read Thomas Hobbes and John Locke. If you want to understand the conflict between the demands of the organization and the conscience of the individual, read Thoreau on civil disobedience and Sophocles’s Antigone. If you want to know about civility, read the words of Confucius. And if you want to know about courage, temperance, truthfulness, and justice, read Aristotle or the Bible.
16 When I hear reports that American high school students know little or nothing about Chaucer or Walt Whitman or the Civil War or the Old Testament prophets, what bothers me most is not that they exhibit intellectual ignorance. What bothers me is that they have
missed the humane lessons in individual ethical conduct that we find in the annals of world history, the biographies of great men and women, and the works of supreme imaginative literature.
17 A great classical writer once defined history as “philosophy learned from examples.”
And a distinguished Brattle Street resident of Cambridge, Henry Wadsworth Longfellow, gave us this eloquent summary:
Lives of great men all remind us
We can make our lives sublime,
And departing, leave behind us
Footprints on the sands of time.
First Things First
18 My third suggestion is this: let’s keep our sense of order straight. Let’s put first things first.
19 We have all heard shortsighted businesspeople attribute a quotation to Vince Lombardi: “Winning is not the most important thing; it’s the only thing.” That’s a good quotation for firing up a team, but as a business philosophy it is sheer nonsense. There is another, much better Lombardi quotation. He once said he expected his players to have three kinds of loyalty: to God, to their families, and to the Green Bay Packers, “in that order.”
20 He knew that some things count more than others. Businessmen and women can be unabashedly proud of their companies. But the good of an entire society transcends that of any single corporation. The moral order of the world transcends any single nation-state. And one cannot be a good business leader — or a good doctor or lawyer or engineer — without
understanding the place of business in the greater scheme of things.
21 There is an incandescent example of a group who understood this fact: who saw life steadily, saw it whole, and saw it in a hierarchy — the delegates who drafted the U.S.
Constitution in Philadelphia 200 years ago. What do we remember the oldest of them —
Benjamin Franklin — for? Not for his vigorous advice on how to get up early in the morning,
drive a business, make a profit, and win success in the marketplace, though he did all these things with gusto. We remember him and the others in Philadelphia — and those who signed
the Declaration of Independence — because they did not see winning or self-advancement or even life itself as the only thing. To something greater than themselves — to a new nation
“conceived in liberty and dedicated to the proposition that all men are created equal” — to
that concept they pledged all subordinate things — their lives, their fortunes, and sacred
22 We should never forget their example.
23 So there are three suggestions:
• Fortify our ethical buttresses — role models, codes of conduct, the honor
• Reinvigorate our children’s study of the past.
• Keep our priorities straight.
24 If we do these things, we shall go far toward discharging our responsibilities as managers and as human beings: contribute to our countries’ strengths, heighten their capacity for leadership in an increasingly competitive and productive world, and keep them on the right track as we close out this century and enter the twenty-first.