The recent economic and financial crisis shows that business ethics lost its credibility and relevance. It became evident that business ethics teaching did not change the general attitude of managers in mainstream business. Ethics and compliance programs were not able to prevent major banks and big corporations to enter into questionable practices and make dirty businesses all over the world.
One explanation of the betrayal of business ethics is that our discipline did not question the underlying models of mainstream business, namely profit maximization and agency theory. Also, business ethics did not have the courage to challenge the institutional structure of contemporary global capitalism. The consequence is that exploitation of our planet’s finite sources is continued, the basic needs of society are disregarded and the interest of future generations are neglected. By its institutionalized greed culture and the “enrich yourself” mentality mainstream business became a retrograde force in the development of humanity in the 21st century.
Therefore, alternative managerial paradigms and business practices are badly needed. This calls for an in-depth reframing of the prevailing assumptions in economics and management based on a negativistic and reductionist view of human nature. If business ethics scholars want to foster careful, collaborative, and responsible attitudes in doing business, they have to foster innovative research at four levels:
- Individual (individual level), beyond the unrealistic homo oeconomicus conception;
- firm (micro level), beyond profit maximization and agency theory;
- districts, clusters, industries, and sectors (meso level), beyond the five forces model;
- the economy as a whole (macro level), beyond the infinite growth idea.
These research efforts need to aim at building a new vision of management for really sustainable patterns of development beyond the current competitive, disruptive, and, thus, self-defeating approach. This should also have a huge impact on universities and business schools and their role in educating future practitioners.
In conclusion, to gain legitimacy and relevance business ethics should aim to develop a normative but usable theory of ethical management. This theory needs to address systemic and operational issues of managing business in a sustainable, future respecting and pro-social way. It implies that (i) business activities may not harm nature or allow others to come to harm, (ii) business activities must respect the freedom of future generations, and (iii) business activities must serve the well-being of society. Ecology, respect for future generations and serving the well-being of society call for a radical transformation of business. If business ethics cannot contribute to the much needed transformation of business it may disappear as a discipline which did not delivered its promised benefits.