There has been a perennial battle between those who view business as good and those who view it as greed besotted evil that must be held on a strong and very short leash. Each side has legitimate points in favor of the positions they assume on the issue and each has points against.
On the anti-business side, among other things, some argue that business is cold and unconcerned with human rights and welfare while being utterly consumed by the drive for profit. While this is sometimes true, there are tacit elements at play just below the surface that are blatantly false.
On the pro-business side, people argue in favor of free market capitalism on the premise that the freedom to engage in business and pursue profit is a fundamental human right that provides real and practical benefits to all. While demonstrably true on the whole, the tacit belief that such pursuits can be conducted blindly without much consideration of side effects and unintended consequences to others presents a host of problems of its own. The assumption here is that the fiduciary responsibility to shareholders can trump one's ethical responsibilities to his fellows.
The central issue in this debate is one that few people are able to identify, much less articulate with clarity and sufficiency. The issue in question is that of the proper relationship between fiduciary responsibility and ethics.
The pursuit of profit is an eminently legitimate undertaking and the fiduciary responsibility of corporate managers from the CEO all the way down to first line managers is to maximize profit for the shareholders. That much is clear, sensible, and is one of the first and most fundamental lessons business students receive. What is not given sufficient coverage, however, is the context of ethics within which profit maximizing goals must be pursued. This omission represents a ubiquitous and grave error on the part of the business schools in general who hint at it but rarely if ever make the clear and explicit connection between ethics and fiduciary goals. Ethics comprise the framework that underpins and defines much of the character of busainess activity. That is to say, such activity is bounded in certain ways by the requirements of proper ethics.
Business schools do in fact teach and even strongly emphasize ethics, but they do so in a way that does not appear to connect them directly, explicitly, clearly, completely, and correctly to the fiduciary drive. The responsibility a manager holds to the shareholder must in some respects be subordinated to the ethical obligations he holds to his fellow men, and in all cases must be tempered by it. It is obvious to most that one must avoid marketing products that perforce kill customers, for example. It is, however, quite an interesting phenomenon to observe the difficulty many organizations face in arriving at decisions that are sufficiently sound in terms of ethics where the cases in question do not enjoy the easy clarity that such extremity lends. The less obvious cases appear to pose serious problems for many managers who seem willing and even eager to move forward with plans pursuant to a fiduciary goal. In such cases managers often feel entitled to act without giving very much weight to ethical questions if the known results of their decisions do not obviously expose them to criminal or civil liability and they are not personally effected. The results can be terrible in some cases and are perhaps most often unintended, but managers will nevertheless proceed because they usually fail to see the ethical lapses in their decisions, having been blinded by the vigor of their pursuit of maximum returns for investors and the rationalizations to which such pressures often lead.
On the other side of the coin are those who tend to rail against business as being unethical and even criminal in nature. Such persons also fail to understand the nature of the relationship between fiduciary motives and ethics and indeed tend to hold a significantly flawed understanding of proper ethics in general. They, too, fail to understand where the lines lie, what the definitions are, and therefore make the error of declaring unethical attitudes and practices that are in fact perfectly legitimate, even though they may generate regrettably unpalatable results at times.
One example of this may be found in the business of leveraged buyouts (LBO). Companies in the business of conducting LBOs purchase other businesses, ones that are often in trouble. Regardless of the causes, a common enough characteristic of LBO targets is that they are often in danger of failure. The goal of LBO businesses is to purchase such companies that they have assessed as having attractive but under-realized market potential, determine the precise nature of the needs, and devise and implement action plans to correct the problems and return those companies to the path of profitability and healthy growth.
During the analysis phase it is often the case that certain areas of the business may be judged as non-viable in terms of its long term prospects. Such operations may not only be unsustainable, their very presence often threatens the survival of the business as a whole. When this is determined to be the case, much as a surgeon may remove a gangrenous leg in order to save a patient's life, so may the LBO company sell off or dissolve portions of a purchased company in order to restore it back to health, thereby avoiding total failure. This often involves loss of jobs and this aspect is one against which the ignorant, if well intending, anti-business personality rails and offers as proof that the businessmen in question are nothing but greedy people who seek to destroy jobs and take some unarticulated pleasure in putting employees on the street. Such activity is often referred to as "gutting the business", the implication being that it is an unethical thing to do. This, of course, is mostly false and disturbingly irrational, particularly given that such people appear to hold the belief that a man is somehow entitled to his position once he assumes it, which of course is strongly and even dangerously mistaken. Those who hold such beliefs hang on to them with the fervor of the religious zealot such that no amount of fact, reason, or TNT is likely to dislodge it. This is a manifestation of good intentions running seriously afoul of truth and cold hard reality.
We therefore are presented with a twofold problem. On the one side we do have businessmen who at times suffer significant lapses of proper ethical judgment that often occur due to conflicts between ethical requirements and the demands of their fiduciary responsibilities. On the other hand we have large numbers of people whose ill-conceived ideals of how business should operate lead to outrage. This anger stems in large part from a blindly steadfast refusal to accept truths that do not comport themselves "properly" with their unsound ideals. Were such ideals to be forced into practice, the world would come crashing down into a great smoking pile of rubble in very short order because they chafe so violently against the sometimes unpleasant but nevertheless inescapable truths of daily reality.
Many of those on either side of the issue need to reevaluate their positions in some manner and degree in order to understand, think, and act properly. Business per se is decidedly neither evil nor immoral, but fiduciary responsibilities can never trump our ethical obligations to each other. Businessmen need to keep this in the forefront of their thought with every decision they make. Likewise, others may not make unreasonable demands of businessmen simply because they do not care for the results of legitimate business decisions. Understanding ethics properly and accepting the occasionally unpleasant aspects of life is a moral obligation each man must bear.