Life Cycle of Businesses

Life  Cycle of Businesses

Life Cycle of Businesses

A business ethic may be radical, conservative, or reactionary with regard to the existing social order. There is a moral crisis in management today because the profit ethic is reactionary-it no longer fits the existing social order. This website traces the profit ethic through its life cycle and analyzes the present stage of development of the social responsibility ethic.

Definition of the Moral Crisis in Management

There is both an operational and an ideological aspect to any ethic. The operational aspect is a moral principle or guideline for practical decision making. Underlying it is an ideology-a belief system about the phenomenon calling for moral judgment. For example, the Ten Commandments is an operational ethic based on the Judeo-Christian conception of God, man, and the universe. The difference between the operational and ideological aspects of an ethic is the difference between action and belief. The individual acts (i.e., he makes decisions) in a certain way because he holds a particular set of beliefs.

Action does not always correspond to ideology, however. In fact, people often act in ways which are inconsistent with the ideologies they hold. An individual professing racial equality may choose to live in a neighbourhood where there are no members of minority groups. A leading textbook of social problems takes the position that most social problems are caused by "nice people" who fail to live up to their laudable ideologies.'

Thus it is possible for an individual to employ an operational ethic in decision making that does not correspond to the ideological ethic in which he believes. When this happens he faces a moral crisis. He actually straddles two incompatible ethics. He counterpoises the operational aspect of one against the ideological aspect of another. He faces a moral crisis because he no longer can believe his view of the world is consistent with the moral principles that govern his behaviour in it. to resolve the crisis he must change either his ideological system, the moral principle, or both, and make the operational and ideological aspects of the ethic consistent.

When we say there is a moral crisis in management, we mean that managers are using the operational ethic of social responsibility while believing in the ideology of the profit ethic. We take the position that this crisis will be resolved when the ideological ethic changes and conforms to the operational ethic. Social change in recent decades has led to a situation in which there are compelling reasons for managers to be socially responsible. But there is still strong ideological support of the profit ethic. It will be easier to accommodate ideology to the operational ethic of social responsibility than to remake the world to fit the ideology of the profit ethic. Therefore, the moral crisis in management will be resolved by a change in the ideological, rather than the operational aspect of business ethics.

Let us now turn to the question of why a gap developed between the operational and ideological aspects of business ethics.

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