The entertainment industry has glamourised and highlighted many instances of businessmen and women who allow their ethics and morals to fly out the window in the pursuit of ambition or avarice.
Yet despite the frequency with which unethical and immoral commercial is exposed it remains a frequent headline in the press and exposure or prosecution seems to make little or no difference in discouraging it.
Business ethics also known as corporate ethics is professional ethics applied in the field. In academia it is an area of study that examines ethical principles and moral or ethical problems that arise in the context of conducting business.
Followers will not forgive the leader a lack of integrity
Peter Drucker says of ethics, that there is no real difference between personal ethics and business ethics. The latter applies to all aspects of how individuals lead and conduct business and whilst it largely focuses on individual behaviour it has relevance to the culture and demeanor of an entire organization and its employees and officers.
Although blatantly unethical or immoral behaviour on the part of entire organizations tends to be called out less frequently these days there are occasions when companies get called out for bad behaviour even when they’re operating completely within the law.
A recent case of being legal but being unethical might be considered when businesses don’t pay what the general public considers to be their fair share of the tax burden. Most recently this has been highlighted by the public shaming of Google, Amazon and Starbucks in the UK media around the topic of their ‘tax shame’ where tax efficiency measures lead to their various European operations being headquartered in low corporate tax havens and where they charge heavy franchise fees, brand fees or royalties on their subsidiaries that are otherwise operating profitably in various markets. There are other ways but these seem to be some of the simpler ones to explain and understand.
More disturbing is where businesses engage in deliberately negative practices that either harm markets or present a risk or devaluing of benefits to society at large.
Blaming consumerism
There is a general consensus that things simply don’t last the way that they used to. A frying pan, for example, made from pressed aluminium, loses it’s non stick surface, develops a warped bottom and develops a loose handle.
Compare this with a frying pan bought a generation ago and still in daily use, that frying pan is made of more sturdy materials and doesn’t suffer the same issues.
I
t’s different, but for consumers, perceived as pretty much the same. Households spend thousands every year on goods that seem to have a very limited life span.
Llewellyn H. Rockwell Jr. – chairman and CEO of the Ludwig von Mises Institute in Auburn, Alabama, editor of LewRockwell.com, and author of Fascism versus Capitalism argues that this “obsolescence” is paradoxically not necessarily a bad thing but more a sign of growing affluence – he views it as a sign of prosperity that we prefer the new to the repaired. It is us who prefer throwing away and replacing with newer and shinier.
Rockwell claims that anti-market thinkers in the 1950s described “planned obsolescence”—a practice of manufacturers to design products to wear out and break down at a certain point in the future. Rockwell and others view this as an unjustified conspiracy-theory view of manufacturers and their behaviour and gives manufacturers more intellectual credit than they are due. The article is an interesting read even if you don’t completely agree with it.
I call out planned obsolescence as an ethical dilemma for a couple of reasons – not least of them being that I honestly believe corporations and their officers have moral responsibilities regarding the environment, public and national safety and taxation among other things but also because of a recent article that featured in the IEEE magazine Spectrum.
The Phoebus Cartel
The article by Markus Krajewski described the Phoebus Cartel a group of light bulb manufacturing companies that deliberately looked for ways to reduce the life expectancy of incandescent light bulbs and this act of unethical behaviour could have changed circumstances materially for me and my extended family.
A more complete story is found in The Light Bulb Conspiracy a documentary that combines investigative research and rare archive footage to trace the untold story of Planned Obsolescence, from its beginnings in the 1920s with a secret cartel, set up expressly to limit the life span of light bulbs, to present-day stories involving cutting edge electronics (such as the iPod) and the growing spirit of resistance amongst ordinary consumers.
My paternal grandfather worked in public utilities around the turn of the 20th Century and around the time of the Great War disappeared off the radar until he reappeared in South East Asia in the 1920’s working for the Straits Trading Company in Singapore and Malaysia as a chemical engineer and metallurgist. In the 1930’s he left Singapore and returned to England where he worked for various organizations before the second world.
According to my grandmother, my grandfather had devised a method for extending the average life of the humble incandescent light bulb and although he had plans to commercially produce his new design for a global market, was not able to find an independent bulb manufacturer in Western Europe that would be willing to produce his designs due to cartel restrictions.
At the time, the market was controlled by the biggest players in the market led by Osram, Philips and GE. The Phoebus Cartel as this triumvirate was known, supposedly existed to control the manufacture and sale of light bulbs globally and to ensure that lightbulbs were manufactured according to quotas with a limited life span. By controlling quotas, design and quality, bulb prices could be held artificially high and a guaranteed perpetual opportunity for new sales could be secured. Companies that failed to toe the line, suffered penalties. Newcomers to the market were unwelcome.
For my grandfather, his dream of the multi-filament bulb never materialised, though he managed to secure cartel-busting manufacturing in Czechoslovakia his vision was confounded when Nazi Germany declared the Protectorate of Bohemia and Moravia in 1938 and the rest as they say is history. As an engineer and entrepreneur the potential for his plan to bring a long-lasting bulb to consumers could potentially have been revolutionary for its day but it seems that it was not to be. The outbreak of war basically killed the cartel and recent innovations in LED’s and CFL have effectively destroyed the filament light bulb industry – ultimately progress won out.
For a while unethical corporate practices and market manipulation succeeded but importantly short-term unethical behaviour stifled innovation and product quality. For this industry, temporarily at least, a lack of ethics was a feasible means of sustaining consistent consumption and extraordinary profits.
As a parting shot take a look at the home of the World’s longest Burning Light Bulb – it’s a Guinness Book of World Records item.
- The Great Lightbulb Conspiracy by Markus Krajewski
- The Pheobus Cartel
- Planned Obsolescence: The Light Bulb Conspiracy By Clement Wong
- The Conspiracy to Control the World’s Electric Lighting by Dan Lewis
About the author
Clinton Jones has experience in international enterprise technology and business process on four continents and has a focus on integrated enterprise business technologies, business change and business transformation. Clinton also serves as a technical consultant on technology and quality management as it relates to data and process management and governance. In past roles Clinton has worked for Fortune 500 companies and non-profits across the globe.
