With the death of Milton Friedman, on November 16th 2006, the last high-profile critic of corporate social responsibility was rendered silent. We live now in an age when academics and business people of all political colours pay lip service to the idea.
By Gabriel Donleavy – Honorary Advisor | Macau Institute for Corporate Social Responsibility in Greater China (MICSRGC)
The Duc de La Rochefoucauld (1613-80) produced a maxim that hypocrisy is the tribute vice pays to virtue. In 1983, Di Maggio and Powell updated this notion with their framing of the institutional theory postulate of ‘decoupling’ of corporate actions from corporate words. In 1984 , Edward Freeman invented normative stakeholder theory which asserts that the interests of corporate shareholders are only maximised long term when the interests of all other stakeholders are also met. There is accordingly a veritable blockchain of theories to buttress the construct of corporate social responsibility.
Adam Smith in 1776 sanctified the iconic doctrine of the invisible hand as the economic mechanism which turns private selfishness into social benefit. Modern game theory has since 1944 elaborated how and when that can manifest. It makes a critical distinction between the zero sum game and the positive sum game. In the former, value is only contested and appropriated by competing players but in the latter value is newly created and economic welfare of all concerned rises. The leaders of business schools and of neoliberal political group see business in this latter framework, whereas trade unions and socialist political groups are apt to use the former frame. Normative stakeholder theorists from Freeman onward see business as necessarily a positive sum game and say that a zero sum game is inherently ephemeral and unsustainable.
In the aftermath of the global covid crisis, universities are making difficult decisions about securing their survival. Society is re-examining their role and governments are reconsidering their financing. The covid crisis has more than decimated the ranks of the mercantilist universities outside the top rankings. The crisis has seen a great increase in the number of articles and published comments on the importance of ensuring the cadres of the future have an effective commitment to, and a capacity for, ethical leadership. Central to such a notion is an ability to balance a focus on efficiency, profitability and value creation with an ability to understand, serve and honour the common good, the public interest and the culture of one’s domicile. Universities have tended to shirk this in the past, saying students come to universities with characters already fully formed, and anyway it is not the mission of the university to mould character, only to develop the intellect. That will not do for any university seeking to thrive in the times ahead. Effectiveness in developing ethical leaders will become a primary driver of competitive advantage in the battle for good students.
How then to become a top rated ethical university?
First and foremost; no decoupling. No saying what one thing and doing another. No favouritism, no cronyism, no corruption, no victimisation, no tolerance of plagiarism or any other kind of cheating at any level for any reason.
Second, the courses and researches of the university must commit to a universal scale of values, putting humanity first, and eschewing all frameworks that promote ethical relativism.
Third, the causes of unethical conduct must be tirelessly researched. Genetics, psychology, sociology, behavioural economics, neuroscience, moral science and biology are just the more obvious disciplines that make a contribution. Of course, the very idea of ethics presupposes the existence and the validity of ethical universals. Universals transcend religious, ideological, cultural and jurisdictional boundaries. They judge as evil deliberate acts of murder, rape, theft, fraud, arson, false imprisonment, callous negligence, and damaging the public interest in order to obtain a private advantage.
A final recommendation for the ethics driven university is a study of the public interest. There are concentric levels of public interest that have a claim on a person’s selfish interest. The innermost public is the family household. Next outermost is the neighbourhood, then the city, then the country, then the world, then posterity, then all life. As we move our attention from one circle to the next outermost one, we move from a public perspective to a public one – for that level. Family is public relative to me myself but private relative to neighbourhood, city, country etc. Let me finish with a question with no easy answer. Does the interest of the most outermost public trump the interests of all the inner ones or can private interests sometimes trump public ones – in the interests of “all”?