Ethical Business Essential For Greater Good

Business is the area of exchange of goods and services to satisfy material needs and wishes of people for a good life.  Its feat of genius rests on the performance of specialised tasks, not reflecting the natural selection theory of the survival of the fittest. 

This theory eerily ignores the social nature of human beings, their bond with other species and physical environment and their ability to manage social disorder without the ferocity of unfair competition and conflict deemed as an economy of violence. Neither business is fully a dissembled part of a complex society nor does it operate in a linear fashion.  It is embedded in human passion, social division of labour, management skills, institutions, laws, technology and nature.

Social norms and laws set ethical value to business conduct. In the shift of managerial society to entrepreneurial one, the state is known not only for regulation but also for coordination of many actors from petty shops to bi-national chambers to diasporas so vital to attain economy of scale. 

A sensible approach to future business transcends short-term gains and goes beyond supply-demand balance or socialisation of costs by making people pay them. 

New business culture seeks genuine transformation of the existing one through digitisation and technology to address ecological, social, economic and political complexity.

Mutual support

 Nepali constitution has adopted the right and dignity of work, social inclusion, security, protection and distributive justice as vital conditions for the coexistence of diverse Nepalis in an ethical framework enabling them to engage in the pursuit of their business. Future economy will be based on non-commercialisation of common goods so that they will be equally shared by all Nepalis, holding the vital essence for keeping ecological resilience and collaboration between the state, private sector and people. 

Business can cope with the economic progress by shifting Nepali political economy from tribalism to national community and engage in national dialogues with other actors of society in an ethics of conviction, responsibility and action underlying mutual support. The unmet basic needs of people exhaust the praxis of liberty.

 Nepali constitution has licensed the business to earn profit but within the frame of law, social responsibility to the community and sincerely pay taxes to the state.  Profit, however, is not the sole motive of business for it cannot flourish in the absence of a business-friendly milieu which is the job of the government. Profit must be followed by ecological and social responsibility and tag along the due process of law. Otherwise, it becomes unfair and loses public trust. The economics of business professes to realise basic needs and overcome necessity, alienation, exploitation and discrimination. It alleviates the scarcity of public goods through market mechanisms, philanthropy and charity-based initiatives. 

Production investment, transaction and distribution are determined by social code of fairness and profits to shareholders. Robust ethical business promotes good corporate governance which can improve the prospect of the communities where they operate and spur economic amphetamine. Media, civil society and leaders have to oversee, monitor and report to the concerned agencies of the state whether family-run business practices in Nepal are fair and people’s rights to buy quality goods at just prices is protected without harming the legitimate interest of business to pump profits. 

 The state authorities and corporate sectors need to understand that their powers must be balanced with the principles underlined in the International Covenant on Human rights, ILO Declaration on Fundamental Principles and Rights at Work, OECD Guideline for Multinational Enterprises 2011, ILO’s Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy, ILO Declaration on Fundamental Principles and Rights at Work, ILO Declaration on Social Justice for a Fair Globalisation, and the UN Guiding Principles on Business and Human Rights. In Global Framework Agreements companies and trade unions negotiate a framework for addressing workers’ rights and welfare. 

Business compliance of international and state laws, formulation of policies for compliance and controlling adverse effects on constitutional and human rights improve the image and creditworthiness of business institutions. Social responsibility builds the trust of society and perks up a company's rank and status. 

Nepali business houses often advertise how they are committed to spout aid to those in tremors of social risks, disability, poverty and victims of conflict, quake or natural disaster. Some of Nepali business houses have created internships for business management, set up charities, volunteers, support the park, scholarships to the poor and promising students, trusts, etc. while many financial institutions are entrapped in misdeeds. 

 Nepal’s classical business ethics is shuva lav (fair benefit) which is inscribed in the business houses in many shops in Terai. Business enterprises need to respect the civic rights of Nepalis as per the constitution, avoid infringing and address the malfeasances such as denationalisation of public enterprises to liberate the market through protection. 

Without social support business cannot thrive. It thus needs to disburse part of their resources to society, address consumer problems before they emerge, try to uplift the standards of living and balance between the need to earn profits and maximise social benefits such as care work, child care, educational, health facilities and skill up gradation of workers spurred social peace.

In a precarious political situation unfair extortion of business stokes fear harming peaceful business pursuit. The ethical business practice enhances the reputation of enterprises in selling its products. Customers’ faith in the ethical practices prompts them to buy the same products over and over again and fosters the competitive ability against those who are less ethical in “activities,” “business ties” and keep weary eyes on the weak state and radicalised society by ideologies. Sound business practices rest on creating ethical measures that govern the business conduct and transactions.

 Business enterprises should hold high deference to people not only as consumers but as voters, citizens and human beings. They shape the power of the economy and political decision making.  Business reputation rests on ethical transactions with customers and control of negative impact of business monopoly and ugly practices, such as use of child labour, pollution, exploitation, gender discrimination, etc. One cuts off labour from the reward of work by low wages, poor working conditions and violation of labour rights while the other brings harmful effects through supply chains and business relationships.

Responsibility of business prompts customers to spread information about the fair transaction in the market and minimises the damage of their reputation by foul practices. Nepali business chambers have forged partnership with the community and local government on the supply of public goods. It has improved their reputation while its creeping collusion with bureaucracy, politicians and interest groups dents the potential to transform individual egotism to the community of “we” Nepalis.

 Nepal’s constitution has given people the right to information. The Right to Information Act pivots all public institutions and business practices to operate in a transparent manner. But the culture of confidentiality, discretion and back-channel dealing has not gone. So do the predatory practices of rent-seeking, corruption and shady dealing spoiling the national integrity system and civic culture of the nation. Business ethics braces customer trust.  

Spread of business guidelines, ethical training of its leadership, general staff and workers can ensure transparency, cultural adaptation and stifle ugly practices of money laundering, capital flight, tax evasion and public deceit. This is vital to boost the nation’s capacity and will to realize SDGs and graduate to the rank of developing nation by 2026.

Green growth

 About 90 years ago famous economist Simon Kuznets said that national welfare can hardly be measured by economic income. The single minded fixation on growth for long has masked the warning sign of financial crisis, climate change, migration, energy crisis, debt loads and now geopolitical tussle. Economic growth alone blinds the policy makers to other areas of progress and spurs the costs for it. The climate accord of nations marks a hopeful sign of global cooperation on reducing global temperature to 2 to 1.5 degrees Celsius, undertake collective responsibility, start national review of progress in every five years and report transparently. 

The Nepali state and its business community are obliged to promote green growth, green jobs, green technology use and optimal resource utilisation as they are connected to intergenerational justice, human security and human rights without undermining the capacity of nature for renewal and without burdening the future with unresolved problems.

(Former Reader at the Department of Political Science, TU, Dahal writes on political and social issues.)