I attended a fascinating lecture on October 18 on principles in business by the consultant/coach Paul Palmarozza who has organised a group of like-minded business people under the banner Philosophy in Business. In the lecture, he presented a “moral hierarchy” which is a telling tool for finding where a company or person stands on the ladder of morality. At the top of the ladder, morality is the most important factor in a decision, but as you come further down, morality is replaced by expediency or personal opinion, until you reach the bottom where there is little or no regard for morality.
The eight levels
Here are the eight steps in the ladder:
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- Work is a sacred activity and must be performed for the sake of all.
- Actions are fully guided by faith in one’s spiritual/religious teachings. There is obedience to its commandments.
- One acts from a strong sense of duty – doing what should be done for honour’s sake.
- Decisions are made based on a utilitarian view, i.e. one is good because it pays to be good, also known as enlightened self-interest.
- One acts so as not to violate the rights of others.
- One acts based on an established code of practice or standard.
- The basis for morality is whether the action is legal, i.e. whether it violates the written laws of the land.
- One acts based upon what he/she thinks they can get away with.
Looking closer at Level 8 – anything goes in order to achieve the desired result, which is usually short term and involves immediate gratification; be it money, recognition or personal pleasure. The end fully justifies the means. This is the stage in a society when morality and respect for authority have diminished. Each individual feels that his or her opinions are equally valid as another individual or the view of the Church, holy masters or the state. This is the stage when greed and selfishness can take over from wisdom and virtue.
“My word is my bond”
The motto of the London Stock Exchange is “My word is my bond.” This is an example of Level 3 where a handshake is enough to seal a business deal and no lengthy contracts need to be signed.
As an example of the point about honour, I met a retired insurance broker at the lecture who used to work in the city of London in its heyday. He remembers how he would feel obliged to point out to customers who made claims that there were items they had not claimed but were entitled to. How many insurance companies would do this today? Indeed, today most insurance companies have a reputation for doing all they can to avoid paying out money.
It pays to be good
In my opinion, many companies are comfortable being at Level 4. They argue that there is a good business case for being responsible towards the environment, their employees and society at large. For example, cutting emissions of greenhouse gases is good for the planet but also saves on energy costs thus helping the bottom line. A strong business case can often be made for companies being altruistic and responsible (Level 4). However, what the hierarchy illustrates is that there is a higher moral ground above this level.
Do you ever ask: Is this right?
To quote from Paul Palmarozza’s book, From Principles to Profit. The Art of Moral Management, cowritten with Chris Rees: “Quite commonly, we ask such questions as, Will this decision produce the most profit? Will it help reduce costs? Will it please the boss? Will it solve the immediate problem? How many times has the question been raised, Is this right?”