Benchmark Ethics: Good Business: What Is It?

The Institute for Business, Technology, and Ethics that Al Erisman and I launched three years ago is committed to “promoting good business through appropriate technology and sound ethics.” We are “pro-business.” I’ll reflect on the technology and ethics pieces in my next two columns but here I want to ask how we define the “good business” we seek.

Whenever any of us say that “business is good,” we commonly mean that our enterprise is thriving economically. Our products and services are in demand. Sales and profits are up. Our investors are happy. Commissions and salaries rise accordingly. We are often hiring more people.

Business is not usually, or necessarily, a “zero sum” game. That is, our business success does not always mean that others have to be losers. There are trade-offs of course: there are only twenty-four hours in the day and there are other limitations of nature and circumstance on our choices and activities. But more often than not, winning a competitive battle in business means better products and/or lower costs for consumers and motivation to competitors to do even better in the future.

Good business, in this economically profitable sense, can also empower its beneficiaries to do good works outside of the strictly business environment.

Good business has supported the arts, education, religion, and social services in impressive ways over the centuries. We need to “have” in order to give generously to the “have-nots.”
But is that all there is to our definition of “good business”? I don’t think so.

Without being “good” financially, maybe nothing else can be said. An unprofitable business is soon defunct. But given at least some minimum of profitability, what else would make a business “good”?

Business writers often laud the sustainability and durability of businesses over time, in books like Built to Last. That certainly counts for something. Others laud innovation and industry leadership. That’s also impressive and important. But I want to suggest three other criteria of a truly good business.

1. Good business is good for its employees. Sure, this means that they are compensated well and fairly for their contributions. They are rewarded financially — and praised for their work. It is also important that employees work in an environment that is safe and healthy for them. Good business is not destructive of the families and personal relationships that employees have. Good business challenges and empowers employees to grow and learn and improve over time, to become all that they can and want to be in their work lives. I just don’t see how a business can truly be called “good” no matter how profitable it is, if it is not good for its employees in these ways.

2. Good business is good for its customers. This means good customer service and good quality and price factors, of course. But doesn’t it also mean that our products and services are in some recognizable way “good for” our customers? Making money while dispensing products that corrupt, degrade, addict, or enslave customers is not good business, in our view. Consumer demand does not provide a free pass on this question. Good business should be good for its customers.

3. Good business is good for non-customers. It’s just too narrow a horizon to think only of those directly involved in a business (investors, employees, suppliers, customers). How do our business activities affect those “downstream” from our factory? How do our products affect those who don’t buy them but have to live in a world with our products (weapons, pornography, bioengineered products, you name it)? How will our grandchildren be affected by a world full of our products or with a climate modified by our business operations? So truly “good” business must be good for non-customers as well as customers and stockholders.

The fact is that the global playing field is wide open for such good business. There has never been a time and place so congenial as ours for enterprising individuals to rise up with great ideas and entrepreneurial energy to create such good business: good for investors (to be sure), good for employees, good for customers, and good for everyone else. The answers don’t always come easy but the criteria are pretty clear.

David W. Gill was co-founder of IBTE and author of Benchmark Ethics, a regular article in the first 32 issues of Ethix. After eight years of writing, speaking, teaching, and consulting in the Bay Area of California, he joined the faculty of Gordon-Conwell Theological Center (South Hampton, Mass.) in 2010, where he is also Director of the Mockler Center for Faith and Ethics in the Workplace.