Between enterprise and ethics

One of our occasional looks at old-ish books
There are times when you find something that just makes sense, irrespective of the data and independent of the criteria we might apply to prove a point through logic. Reading John Hendry's book is one of those. Published in 2004 in the aftermath of Enron and the rest, this isn't just a book about corporate governance. It's bigger, deeper and richer than that. It doesn't recite the platitudes of conventional ethics-in-action texts, with their "how-to-avoid" approaches to the practical but intractable problems that confront business people every day. Indeed, it's about that intractability, but somehow it also avoid the impenetrable language of the ethics-in-theory texts, with their "how-not-to-understand" approaches to the problems left over from the Greeks, the Reformation and the Enlightenment. And yet …

Hendry's book asserts in its subtitle that we live in a bimoral world. This uncomfortable phrase is key to understanding the book. On the one hand, we have – we all seem to have – some inherent understanding of morality that's linked, without the ponderous prose, to Kant's notion of an imperative, things that are simply the right thing to do. Hendry calls this "traditional morality", which many of us got from our parents and the church. But the family and the church are in decline around the Western world, at least, and the power of their voices have diminished. On the other hand, we have – almost all of us, at least – some recognition of good as arising from the benefits to well-being that derive from freedom. These values describe the utility functions of economists and the beneficial force of the invisible hand of markets that Adam Smith described way back in 1776. They have been in the ascendency as the sources of traditional morality have declined. They are both good, but they are not the same. Living in a bimoral world involves recognising the tensions between them, the fact that both are real and signify something of value.

In Hendry's view, both corporate governance and management are fields in which the tensions are laid bare, where we make decisions to side with one view and then the other, reconciling the irreconcilable, because somebody has to. The flexible organisations we need to respond to constant change and market-based competition undermines the traditional morality of hierarchical organisations in evidence in corporate cultures or codes of conduct. Yet our response to crisis – like Enron, then, or Lehman, now – is to grab for hierarchical solutions in law, regulation and codes of conduct, even though their traditional morality is on the wane. "Rules are still used for many of the unimportant things," he writes. "But for the more important things, such as development of markets and products, of the development of people, rules have become a hindrance. The consequence is that management must now learn to manage without rules."

But this isn't just about corporate governance or management. Society as a whole faces challenges in a bimoral world, as we wrestle with the value of saving for the future, helping those in need, or observing some notion of human rights.

This is a good, rich, thoughtful book, but not a dense one. It is a book full of answers that raise questions of a higher order. Don't read this, though, if you're looking for the answer that will settle the debate and tell you what to do. This book will tell you why it's so difficult to decide.

Source document: You can buy the book Between Enterprise and Ethics: Business and Management in a Bimoral Society, by John Hendry, at Amazon.