The Confucian Business Ethics Equal importance to Profit, Process and Principles - Essay Example

?The Confucian Business Ethics – Equal importance to Profit, Process and Principles Introduction Today’s world faces more dangers from the profit frenzy businessmen than any other terrorist organizations in the world. They deplete the natural resources of mother earth recklessly through mines, spoil our rivers with chemicals and keep their workers poor forever, all for the sake of money. Trade and business had been the veins of human society ever since ancient times. All the ethics, moral codes and rules followed by the previous generation have been long forgotten. It is the right time to re-study the business ethics and educate our young generation on the same. Else they will follow the footsteps of the current relentless businessmen, leaving no place to live and no resource to use for the next generation. The Confucian philosophy on business management giving equal importance to profit, process and principles is the right way to manage modern day trade and commerce. Chinese Business Ethic Rules The Chinese philosopher Confucius (551-479 B.C.) laid down clear rules on how to do business and live life generally. He believed business could be done in harmony with others without exploiting anyone, with collective interest in mind. He believed such a business would return back the goodness to the giver, many folds back (reciprocity) and this could be achieved only by following strict process and hierarchy (Confucian Business Ethics, 2009). The Confucian theory of business concentrates on four main principles 1. Ren – the quality of compassion towards fellow human beings 2. Xin – honesty and trustworthiness 3. Yi – giving importance to collective goodness more than personal profits 4. Li – following a etiquette and uniform process Ren implies the compassion every businessman should show towards, their workers, customers and fellow businessmen. Xin implies the ethics which should be followed in producing quality products, delivering on time to the customers, transparency in paying taxes etc (The Confucian Ethics and the Traditional Chinese Business Culture, 2012). Yi refers to giving importance of the every person involved. For example, a company who wants to save money can decrease jobs by sending home some employees or cut down on the extra benefits given to all employees to save the jobs of the few. Li gives importance to etiquette and defined process in any business. Any simpleton will not buy a diamond from a beggar. Each business has its own set of etiquette to be followed without which it cannot prosper. A merchant dealing with diamonds should look and act refined manner matching his customer’s status to sell his products to them. Each of this quality is important to do business ethically and properly. Practical Difficulties in Implementing Ethics Several business gurus and universities teach the young executives only about gaining more profits and winning over others. They do not teach them about the ways to do it ethically. As a result the business industry has grown into a massive barbaric ground where each one tries to swallow the other. Taking ethical decisions in everyday life is neither easy nor practical. Even if one person inclines to act in an ethical way, the company principles and the other fellow workers cease to co-operate with them. It is near impossible for any business executive or a business as a whole to stay very ethical in their business process. How Confucianism Connects Business with Principles These arguments might sound quite convincing for any normal man. But, there are still a thousand ways any person can stay ethical, if they choose to follow the Confucian principles in day to day life. O.C. Ferrell lists a few practices which result out of declining ethical standards. They are 1. Misuse of company resources 2. Abusing the fellow employees 3. Stealing from the company by altering accounts 4. Producing defective products 5. Bribing the government officials to market them Half of these non-ethical practices are directly related to individuals and others as a business on whole. If every person decides to follow Ren, he would never harass a new employee, create problems for his subordinates or choose to steal or misuse company resources. Thousands of employees in several farms, offices and factories are subjected to demeaning work with very low wages, just to spare money for the company. It is a common practice all over the world because the modern business world does not take ethics seriously (Jones, 2005). Confucianism puts Ren in front of all the business ethics to avoid such exploitation. A businessman following Xin would never produce inferior quality products or cheat the government for taxes. He will remain honest to himself and his clients, his workers and the government. Such businesses produce the best quality products, by paying their employees well and keeping them happy. They will have no need to bribe the government or anybody else. Following Yi will enable each person and businessmen to see the collective goodness of the world instead of their own material benefits. Over digging mines, polluting the environment just to spare a few thousand dollars, killing the bio-diversity of an area for the sake of minerals hidden beneath them, everything would be avoided if Yi is taught and practised properly. “Do not stand before a lion and expect not to be eaten because you are a vegetarian.” This ancient Chinese proverb fits business perfectly. A business man or a business executive cannot expect the raging bull world around them to go soft on them, just because they are ethical. You have to be both smart and good to stay successful. Li emphasizes on a set of processes to follow for smart businesses. Any business following a defined process will achieve more success than its competitors. Modern corporate companies insist their employees to follow a set of defined process in their day to day activities. They install advanced software to monitor the same. This modern principle followed by the western countries was emphasized by Li before thousands of years. Another important aspect of Li is etiquette or rituals. It can be roughly interpreted polite conduct and customer’s service, respect for seniority in organizations etc. There are certain rules on how a doctor should act and how a dancer should behave. Each personality can achieve success in their field, only if they pertain to these rules and prove they are special or better than others in a certain way (Po Keung Ip, 2009). Hierarchical management is given ample importance in Chinese culture. Respecting elders in families and seniors in institutions is a quality insisted by Li. The western world which gives importance only to talent might find this unnecessary. But, any business or a family cannot strive successfully without the proper guidance of the experienced seniors or elders respectively (Confucian Business Ethics, 2009). Business without Exploitation Ren, Xin, Yi and Li all emphasize one main point, profit or gain to the business, to the workers and the world as a whole. If any one of these entities will suffer because of more profit to another, the system should be altered immediately to maintain balance. For example, if the business exploits workers by paying low wages to gain more profit, or the employee cheats the company to earn more money, or if the business spoils land, air or any other public properly, law or the ruling party should intervene immediately to restore balance in the area. Each business should concentrate on expanding itself constantly, by building a great brand image of its own and increasing the value of the products they produce. Just like Marx and Engels views, Confucianism never encouraged using machineries to increase production. It only insists on increasing the value of the products produced and underlines they should be produced without any sort of exploitation human or natural. They insist on Li or following rituals to make up for the unavoidable dependencies. For example, if a tree is cut, they plant another one immediately as a ritual. An Example of Confucianism Oriented Business A program about the artistic chopsticks used by the imperials and the ruling class in China was aired in TLC before a few days. The chopsticks are handmade and exported all over the world, from a small garage like factory in rural China. The proprietor and his family do the business religiously. The young son visits their bamboo farm, every morning and hand picks one bamboo tree to cut. He immediately plants another bamboo tree in its place. Back in their factory garage, the father and the son, cuts and polishes the bamboo into small pieces. The mother and the daughters of the home carve artistic designs into them and get them packed. By the end of the day, the father and the son, arranges for the goods to be transported to the required clients through the local courier. It might seem like a simple household business. But, their turn over is in millions equivalent to that of a medium level software company. They produce hundreds of purely eco-friendly chopsticks every day. They maintain a brand value which is so famous that an international channel travels across continents to cover them. Each of their chopsticks is purely handmade and exported to selected customers like kings, ministers and millionaires. The family would have easily set up a factory, opened their branches across the world and turned their business into a huge corporate company. But, they chose to refrain from it, made their business resources sustainable, enjoy themselves, do not cause any harm to the environment or the other chopstick producers and live peacefully and prosperously. Conclusion The western world views the business Confucianism only through the way the Chinese immigrants work. They interpret their sacrifices and hard work as hard and violent most of the time. They feel a work they strive to do so hard can be done with a machine so easily. But, machine oriented capitalism will lead to unemployment and recession in course of time. Though most of the businesses in China struggle with the western influence, there are some like the example cited above which have its strong ethical roots. It is such businesses that are transforming China into the next economical superpower, capable of lending millions of dollars to the US government. The Confucianism business ethics should be followed not only for the sake of ethics and profits, but to gain sheer peace of mind and happiness. References 1. “Chinese Business Culture Confucian Business Ethics” SecondChina.com. 2009. 6 Oct 2012. 2. Ferrell, O.C. & Fraedrich, J. Business Ethics: Ethical Decision Making & Cases. Mason: Cengage learning, 2012. 3. Jones, C. Business Ethics: A Critical Approach. New York: Routledge, 2005. 4. Po Keung Ip. “Is Confucianism Good for Business Ethics.” StudyMode.com. 2009. 6 October 2012. 5. “The Confucian Ethics and the Traditional Chinese Business Culture” ChinaCulture.org. 6 October 2012. Read More