Nowadays, it became very fashionable among many business-owners to declare their allegiance to the principles of a so-called ‘ethical management’, as the direct pathway to generating even bigger incomes. According to proponents of this type of management, the extent of every company’s competitiveness is being somehow reflective of its managers’ operative ‘progressives’. In other words, the more managers indulge in rhetoric about the existence of their company being beneficial to a community/humanity, the better are the chances for this company to stay afloat, in commercial sense of this word – this is exactly what the concept of ethical management stands for, in a nutshell. Nevertheless, the application of commonsense logic exposes the principles of ethical management as being conceptually fallacious, simply because they have nothing to do with the process of making money – and yet, it is solely the prospects of financial enrichment, which provide a momentum to just about any kind of commercial activity.1 Therefore, it is utterly inappropriate to suggest that vaguely defined ethical principles somehow do apply to business – once, a commercial enterprise appears particularly lucrative, it automatically renders it ethical, and vice versa. Despite the fact that people who believe in otherwise are entitled to have their own opinions, in regards to the subject matter, it is utterly inappropriate for these people to go about imposing such their opinions on others. In our paper, we will aim to explore this thesis even further, while using the case of Tom’s of Maine as illustrative example of ethical management’s pure irrelevancy, within the context of a particular commercial enterprise trying to increase its profits. Given the fact that there is no universally accepted criteria, as to operational essence of ethical management (this type of management is simply assumed being beneficial for both: employers and employees), in our paper we will intent to show that practical application of this managerial concept may directly lead to employees’ unethical treatment.
The concept of ethical behavior/management has gained popularity among business owners during the course of recent decades, associated with the process of euro-centric virtues of rationale, discipline and hard work being increasingly criticized, on the account of these virtues’ ‘intolerance’. Essentially, the operational framework of this concept implies that business owners and managers should think of their professional agenda in terms of how it can contribute to the process of a workplace being turned into an equivalent of a kindergarten, where employees would be encouraged to indulge into abstract philosophizing about how to make world a better place to live, as opposed to executing their professional duties as their primary task.
In its turn, this allows us to refer to Chappell’s way of thinking about ethical behavior as quasi-Socialist, which is why we have strong doubts about whether this type of ethical philosophy can be successfully utilized by American business-owners – after all, American society is founded upon the values of individualism. These values are being metaphysically opposite to the values of communal well-being.
Out of the case-study, it appears that the only reason why Tom Chappell decided in favor of ‘ethical management’, is that he had spent some time in a Divinity School (case-study tactfully avoids mentioning what he studied there): ‘The years that Chappell spent as a part-time student at the Divinity School brought him to a new understanding of his role’ (Assignment, p. 4). In other words, while socializing with organic-coffee-drinking and magical-pedant-wearing New Age affiliates, Chappell became ‘enlightened’ to such an extent that he decided to turn his firm into nothing less of a charity: ‘The Company began donating ten percent of its pretax profits to charities ranging from art organizations to environmental groups… The company also urged its employees to get involved in charitable causes’ (Assignment, p. 4). Predictably enough, Tom’s of Maine became essentially a socialist enterprise, where hard working employees had to cover for lazy employees’ excuses at not showing up for work: ‘Other employees had to pitch in to cover volunteers’ absences, which amounted to the equivalent of 20 days a month’ (Assignment, p. 5). The whole process has been followed by Chappell indulging in demagogy about his commitment to ‘communal values’ and about the importance for company’s employees to spend time socializing with homeless hobos: ‘After spending a few hours at a soup kitchen or a shelter you’re happy to have a job. It’s a morale booster’ (Assignment, p. 5). Apparently, the time spent in Divinity School had taught Chappell how to be proficient in the ways of hypocrisy – just as Jesus, who encouraged his followers to accept him as a ‘savior’ by threatening them to be cast into the ‘lake of fire’, if they failed to do so, Chappell went about boosting his employers’ professional enthusiasm by exposing them to the sight of smelly bums – thus, providing them with the insight onto their possible future, had they failed at sharing his personal morality-based beliefs.
Thus, the true essence of ethical management, as perceived by Chappell, is being concerned with managers’ intention to turn the functioning of a commercial enterprise to serve the needs of employees’ ‘moral’ enlightenment – after all, morally ‘enlightened’ workers would be less tempted to demand from business-owners a concrete material/financial incentives, as the ultimate mean of boosting their professional excellence. Instead of giving them bonuses, morally advanced business-owners, such as Chappell, can simply be giving workers ‘fresh fruit’. What individuals like Chappell cannot understand though, is that when business-owners subject the functioning of a commercial enterprise to their own highly irrational ‘ethical’ beliefs, this functioning ceases to be effective.
Just as one’s body, commercial firm is an organism, consisting of organically integrated operational cells. Therefore, just as a particular cell of one’s body cannot ‘steer’ the rest of cells, a particular business-owner cannot ‘steer’ own company by utilizing clearly authoritarian managerial approaches, because the extent of company’s competitiveness and profitability is being primarily defined by its owner’s willingness to recognize the objectiveness of market-economy’s workings. And, the workings of such economy have absolutely nothing to do with the concept of ‘serving the community’. While trying to meddle with well-established principles of commercial company’s functioning, Socialist-minded managers unintentionally create preconditions for such company to end up on the brink of bankruptcy. This is exactly the reason why in 2006, Tom’s of Main had ceased being an independently owned company.
The potential dilemma, which Chappell was facing in nineties, had to do with his insistence that Company’s products should only include organic ingredients. In its turn, this resulted in the actual quality of these products being lowered to a considerable extent – there are numerous references in the case-study as to the fact that the scent, emanated by Company’s products, was causing even the most environmentally minded customers to think twice, before they would pay for them: ‘In 1992. Tom’s deodorant accounted for 25 percent of its business. Chappell reformulated the product for ecological reasons (replacing petroleum with vegetable glycerin), but the new formulation “magnified the human bacteria that cause odor» in half its customers’ (Assignment, p. 3). Nevertheless, as it appears out of the case-study’s context, throughout the nineties, Tom’s of Maine was able not only to remain competitive but even to expand the range of its commercial activities. Can we think of it as the result of Chappell’s adoption of philosophy of ‘communal wellness’? Most definitely not.
In the case-study, Chappell himself provides us with the insight on what allowed his company to remain commercially successful, despite the fact that the quality of most company’s products was clearly lesser, as compared to the quality competing companies’ products – the fact that Tom’s of Maine never ceased targeting a specific sector of the market, which consists of so-called ‘ethical consumers’: ‘We just tell them our story. We tell them why we have such a loyal base of consumers who vote with their dollars every day (Assignment, p. 5). Why would anyone be willing to ‘vote’ with hard-earned dollars, instead of spending these dollars to pay for goods and services, as normal people do?
This is because, while buying Tom’s of Maine products, company’s loyal customers perceived these products as not representing actual, but only an emotional money-worth. In their book Harrison, Newholm and Shaw (2005, p. 4), provide us with a better understanding as to what accounts for particulars of ethical consumers’ purchasing behavior: ‘Ethical purchasers have political, religious, spiritual, environmental, social and other motives for choosing one product over another’. Apparently, while buying Chappell company’s products, with ‘fully organic’ and ‘not animal-tested’ labels on them, these customers seriously believed that they were ‘saving the planet’. These customers would reject logical arguments, exposing the nonsensical essence of such their beliefs, out of hand. And, as psychiatrists are well aware of, one’s inability to cope with objectively existing reality, is the foremost indication of his or her mental abnormality.
In their article, Brenton and Hacken (2006, p. 4) state: ‘Loyal customers are more likely to focus on the relevance of the positive information and discount the actual negative information, whilst also creating irrational counterarguments’. Also, psychiatrists are well aware of the fact that the percentage of psychologically inadequate individuals in Western societies is a constant category and approximately amounts to 15% of total population. In its turn, this explains the following quotation from the case-study: ‘By the mid 1990s, Tom’s of Maine was facing increasing competition… Tom Chappell did not appear worried, however’ (Assignment, p. 6). Of course, there was not much of a reason for Chappell to worry – apparently, he was smart enough to realize that there would always be a demand for his company’s organic products, for as long as environmentally minded Americans have dollars on their hands to ‘vote’ with. Company’s toothpastes could have been made of clay – but for as long as they would be equipped with ‘organic product’ labels on them, psychologically inadequate but loyal customers would still be buying them enthusiastically. This was exactly the reason why, instead of investing into improvement of the actual quality of company’s products, Chappell decided to invest into PR campaign under disguise of promoting ‘ethical business values’.
Chappell’s personal views
There can be very little doubt as to the fact that Chappell’s personal views on the concept of ethical management played an important role in shaping Company’s managerial policies. As we have mentioned earlier, it was namely after Chappell had spent time in the ‘Divinity School’ that he became endowed with an irrational belief that it was solely up to him deciding upon what employees should be doing in their time off work. Apparently, while in school, Chappell was continuously prompted to think that business activities should be concerned with serving the cause of making this world a better place to live. Nevertheless, as we have implied earlier, the concept of free-market business and the concept of ethics do not quite correlate with each other. The reason for this is simple – whereas, the value of money is universally recognizable, the value of ethics is the subject of countless interpretations. As it was rightly suggested in Henry Arthur’s (1984, p. 321) article: ‘Business has to do its own job… not being an instrument exclusively subservient to what one or another ethical theory propounds’. However, as it appears from the study-case, turning its business into the tool of forcibly imposing his ethical beliefs unto employees represented Chappell’s foremost agenda. This is why, even though Chappell genuinely believed in otherwise, the way in which he treated his employees was highly immoral, as he denied them their sovereign right of utilizing their own rationale, while deciding on whether to participate in charitable activities or not.
It appears that Chappell thought of company’s workers as being essentially brainless robots, incapable of realizing a simple fact that, despite ‘progressive’ sounding of ‘doing well by doing good’ slogan, there was no actual meaning behind it. While indulging in pretentiously sophisticate rhetoric about the importance of ‘serving community’, ‘helping needy’ and ‘saving environment ’, Chappell was simply trying to increase the commercial appeal of company’s low-quality products. In his article, Schwab (1996, p. 500) provides us with the insight onto true motivations, behind many business-owners’ obsession with ethics: ‘Ethical behavior only obtains value when it is visible to others, and any ‘ethical’ action should be milked for all it is worth through wide publicity’. If Chappell was truly committed to ‘helping the needy’ as his foremost priority, he would have sold Tom’s of Maine and distributed the money among the poor, as the teachers in Divinity School were probably encouraging him to. Instead, by the time he realized that it was only the matter of time, before his Socialist methods of managing the company would put it on the brink of bankruptcy, he sold Tom’s of Maine to Colgate-Palmolive in 2006 for $100.000.000.000 and kept the money to himself.
The utilization of Chappell’s approach to ethical management by larger firms
Despite what Chappell was taught to believe in the ‘Divinity School’, his intention to address employees’ needs within the methodological framework of ethical management had more to do with his sense of greed then with his genuine desire to benefit workers. Even though case-study implies that Tom’s of Maine was providing its employees with not only emotional but also ‘substantial’ material incentives: ‘…coffee breaks were designed with employee preferences in mind, providing them with fresh fruit’ (Assignment, p. 5), these incentives were meant to serve as the instrument of workforce’s psychological manipulation. In a similar manner, Bible-thumping owners of Wal-Mart expect company’s employees to work hard in exchange to be paid minimum-wage salaries, while taking pride in their ‘belonging to the team’.
In his article, DiMaggio (2006) states: ‘Wal-Mart doing what it does best: making huge profits while keeping its workers in poverty, driving small businesses into bankruptcy, exploiting workers in poor countries, and disregarding the environment’. Similarly to Tom Chappell, company’s owners never ceased telling the public that their primary agenda is not being concerned with buying private islands in the Caribbean and decorating toilet pans in their yachts with pure gold, but solely with ‘serving community’.
Yet, the fact that hired psychologists try their best to instill Wal-Mart workers with a ‘team spirit’, company’s annual turnover rate amounts to 70%. The same can be said about McDonald’s – upon being hired, company’s employees get to be told that they should think of ‘serving community’ as their foremost priority. Yet, for those who struggle hard to make ends, while being paid peanuts for their work, it makes very little sense to be concerned about the overall well-being of some hypothetical ‘community’, especially given the fact that Western multicultural societies are sharply divided along ethnic, religious and cultural lines. As a result, the overwhelming majority of newly hired McDonald’s employees do not stay on their jobs for longer than a few months.
Thus, all the talks about a particular company’s commitment to social responsibility are essentially meaningless, for as long as the owners of this company believe that they can win workers’ loyalty by providing them purely imaginary incentives to work hard. The reason for this is simple – for an employee, who lives from paycheck to paycheck, £20 hidden under the pillow means so much more then the well-being of the whole world. Therefore, case-study’s suggestions that by being communally-minded (due to Chappell’s insistence that they should have) the employees of Tom’s of Maine were able to benefit enormously, appear preposterous. It is only in Third World countries, where one’s communal mindedness might come in handy (because it increases the chances of physical survival), but the realities of Western urban, post-industrial living only favor citizens endowed with strongly defined sense of individualism, who profess the values of enterprenual industriousness. Educated urbanites simply do not have time to preoccupy themselves with working in soup kitchens and with telling homeless bums how beautiful they are, as individuals – this is the job for representatives of Salvation Army.
Given Chappell Company’s operational specialization, it appears that at least half of its employees held university diplomas. Therefore, case-study’s statement that, upon being prompted to spend time with retarded children and with hobos, ‘employees enthusiastically took advantage of the opportunity’ (Assignment, p. 4), cannot be referred to as anything but yet another proof as to enforcers’ of political correctness perceptional ignorance. In a similar manner, Communists used to tell the whole world that Soviet peasants were ‘enthusiastic’ about being forced to indulge in heavy agricultural labor 12 hours per day, without getting paid even a penny. Yet, only people completely deprived of their ability to assess surrounding reality in terms of logic, who may believe in the soundness of these types of statements. Therefore, we have no choice but to refer to the ideas, contained in the assignment, as utterly counter-productive, in economic and social context of this word. Those who seriously believe that working employees should think of benefiting ‘community’ as their primary agenda, as opposed to being simply concerned with earning money, should take a little trip to North Korea – the chances are that, upon their return, they will drastically revise their opinion, in regards to the subject matter. Thus, even though Chappell’s approach to managing employees can be utilized by larger companies (as it was illustrated earlier), the application of ‘ethical management’ in workplace can only bring temporal dividends – as practice shows, it is only the matter of short time, before employees grow to recognize psychological incentives, offered by company’s ‘ethical’ managers in exchange for their hard work, as being of purely imaginary essence.
The conclusions of this paper can be summarized as follows:
- The Socialist/Moralistic managerial style utilized by Tom Chappell, while trying to increase company employees’ commitment to executing their professional duties, is best described as the form of psychological manipulation. Therefore, it is not being only counter-productive, but highly immoral, as it does not correlate with individualistic realities of post-industrial living. In highly urbanized, post-industrial societies, there can be no ‘communities’, in conventional sense of this word.
- The most statements, contained in case-study, are not logically substantiated – readers are just being expected to accept these statements as representing an undeniable truth-value. Yet, even a brief logical inquiry into the soundness of these statements, reveals them as based upon wishful thinking of enforcers of political correctness. It is not whether managers are capable of indulging in ethical rhetoric, which defines the extent of their professional effectiveness, as implied by case-study, but solely their willingness to provide employees with rationale-based reasons to work efficiently. And, for as long that the realities of today’s living continue to defined by free-market’s juxtaposition supply vs. demand, the suggestions that the functioning of a commercial enterprise should serve any other purpose but generation of a financial profit, should be regarded as inappropriate.
- The utilization of Chappell’s managerial style by large companies is being actively practiced today (as illustrated with examples of Wal-Mart and McDonald’s). Nevertheless, it does not result in increasing the extent of employees’ professional commitment, but rather in allowing these companies’ owners to save on providing employees with concrete monetary benefits. What it means is that, contrary to what it is being assumed represents ethical management’s actual purpose; this kind of management is being usually resorted to by those managers who aim at temporarily increasing company’s profits, at the expense of undermining the overall degree of such company’s competitiveness.
- Companies’ promotion of their commitment to ‘serving community’ should be discussed within the context of these companies pulling publicity stunts, in order to increase the commercial appeal of their products and services. The more a particular company is being affiliated with ‘ethical values’, the more its practical functioning is being unethical. In its turn, this substantiates the validity of an old saying that the ‘road to hell is made out of good intentions’.
- Arthur, H 1984, ‘Making business ethics useful’, Strategic Management Journal, vol. 5, no. 4, pp. 319-333.
- Brenton, S & Hacken, L 2006, ‘Ethical consumerism: Are unethical labor practices important to consumers?’, Journal of Research for Consumers, vol. 11, no. 2, pp. 1-9.
- DiMaggio, D (2006). Is Wal-Mart just evil? [online]. Socialism Today. Web.
- Geva, A 2001, ‘Myth and ethics in business’, Business Ethics Quarterly, vol. 11, no. 4, pp. 575-597.
- Harrison, R., Newholm, T., & Shaw, D. 2005. The ethical consumer. London, SAGE Publications.
- Schwab, B 1996, ‘A Note on ethics and strategy: Do good ethics always make for good business?’ Strategic Management Journal, vol.17, no. 6, pp. 499-500.
- Sparks, P & Shepherd, R 1992. ‘Self-identity and the theory of planned behavior: Assessing the role of identification with green consumerism’. Social Psychology Quarterly vol. 55, no.4, pp. 388-399.
1 Geva, A 2001, ‘Myth and ethics in business’, Business Ethics Quarterly, vol. 11, no. 4, p. 585.