FAZ Article on Corporate Morality and Manager Behaviour by Ludger Heidbrink

© KCG

Business ethics has been a widely discussed topic for years. The need for further research to gain more insights into this area has been enhanced particularly against the background with more and more business scandals emerged in the real life like VW’s software manipulation in diesel powered vehicles and diesel emissions tests on monkeys and humans.

An article by Prof. Dr. Ludger Heidbrink, KCG Co-Head of the project “Cross-cultural differences in the perception of corporate social responsibility and consumer social responsibility along global supply chains” and Professor of Practical Philosophy at the Christian-Albrechts University of Kiel and his colleague, Dr. Alexander Lorch, on corporate morality and manager behaviour was published on FAZ on Feb. 26, 2018. In their article titled “Boni für Manager? Erst die Moral – dann die Ethik (Bonuses for Managers? Morality First, and then Ethics)” they emphasise the key relevance of corporate culture, design of organisation and working environment for determining managers’ ethical behaviour. Even if managers’ own moral beliefs may probably keep them away from some unethical practices, their final decisions for or against such practices are strongly affected by systemic factors, namely corporate culture and firms’ moral principles. In other words, when dealing with business scandals as mentioned above, it may not be sufficient to focus on individuals’ and managers’ own behaviour only. It is of crucial importance to pay more attention to helping firms develop moral corporate culture, organisational structure and working environment so that the applied norms and principles by firms can gradually help adjust individual’s behaviour towards a more ethical way. Giving managers bonuses based on their “correct” behaviour instead of on their contribution to maximizing firm profits may be one of the potential solutions in having more ethical managerial decisions and behaviour.

In a globalized world, many firms have increasingly engaged in business activities abroad, where laws and regulations may not yet be well developed to protect, for example, workers’ rights and the environment. This may provide firms with more opportunities than before to utilise the backwardness of regulations and to practice less ethical business activities there. It, thus, implies that with increasingly intensified globalization, corporate morality becomes even more crucial than before, when striving for higher levels of business ethics.

The article (in German) mentioned above can be found here.