Business Ethics
Source: ETCO, 21/11/2007
On November 22, Prof. André Franco Montoro Filho, President of the Brazilian Institute of Competition Ethics - ETCO, gives a lecture on “Business Ethics” at the Annual Cocktail of the Abrasive Industry Union. Professor André Montoro will talk about the importance of a good business environment for economic development and show that obedience to the rules is fundamental to create a healthy environment in the productive activity.
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Business Ethics
Source: Gazeta do Povo - PR, 27/08/2007
It is common, in Brazil, for many people to consider profit to be almost sinful and the private company that seeks profits to be a necessary evil that must, therefore, be well controlled by the government. The government, in this view, is seen as the reliable and efficient repository of the collective interest. For those who think in this way, it is almost paradoxical to talk about business ethics, because, consciously or unconsciously, they associate business with unethics.
On the other hand, there are those who see the government as an enemy. An entity that only collects in an almost extortionate way and provides almost nothing - or, at least, nothing compatible - in exchange for the resources withdrawn from the taxpayers. For them, tax evasion, contraband, piracy, non-compliance with labor legislation and other “disobediences” are justified acts as a means of defending the taxpayer against the government's fiscal ferocity and do not represent a lack of business ethics.
Unfortunately, the number of Brazilians who think this way is large and growing. However, as we will show below, business ethics are indispensable for economic growth, healthy and sustained, in a market economy.
To prove this statement, we must start by remembering that life in society requires rules of coexistence. If these rules did not exist or were not respected, the law of the jungles, the strongest or the smartest, would apply. In this environment, the space for human progress is extremely small.
It was precisely the drafting of laws that established norms of behavior that allowed humans from different clans to live together and enabled civilization to progress.
Logically, the mere existence of laws was not enough. It was necessary that they be considered fair and adequate to be respected by the majority of the population. And those who did not obey them would be punished.
In a market economy, the need for rules of behavior, rights and duties that are respected and obeyed is perhaps even more important.
Economic activity, whether in the sphere of production or that of exchanges, requires the confidence that the agreement is fulfilled - and, if not, that there are ways to demand compliance. The more there is spontaneous compliance with the rules (ethical behaviors), the less time and money will be devoted to the defense of possible unethical behavior and to activate the mechanisms for the defense of rights. As a result, more resources and efforts can be applied to production and exchange activities, increasing the social product and economic well-being.
Especially in relation to investments, trust in the fulfillment of contracts is essential. Investments - a necessary condition and, in most cases, sufficient for economic growth - represent a bet on the unknown future. We invest today to reap results in the future. In other words, you pay today to receive later. For someone willing to make such a transaction, it is necessary to rely on respect for the treaty. The more confidence there is, the more willing people are to save and invest. Therefore, the greater the prospects for economic growth.
Conversely, if there is widespread distrust about respecting what has been agreed, the less willingness to save and invest and the lower the growth prospects. Investing would represent a great risk that would only attract adventurers and opportunists who would demand a high return in the shortest possible time. Receive a lot and quickly and then get out.
These considerations raise serious concerns about the future of Brazil. We live in a very delicate moment of national life, in which ethical behaviors are not only not valued but also come to be considered outdated and outdated. Where the claim that everyone is dishonest becomes justification for breaking the law. And in which the repeated impunity generates great discouragement in those who fulfill their obligations and becomes a great incentive to illegal activities.
It is necessary to put an end to the perverse process of social breakdown generated by the lack of ethics in social relations. It is necessary to put an end to the process of cannibalization of economic activities generated by disrespect for tax, labor and social security legislation. This is the main objective of the struggle for business ethics.
ANDRÉ FRANCO MONTORO FILHO is an economist, PhD in Economics from Yale University (USA), full professor at USP's School of Economics and Administration and president of the Brazilian Institute of Competition Ethics (Etco). He was secretary of Economy and Planning of São Paulo (1995 to 2002) and president of BNDES (1985 to 1988).
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Business Ethics
Author: André Franco Montoro Filho
Source: Article published in the Folha de S. Paulo newspaper
É
COMMON, in Brazil, many people consider profit to be almost sinful and the
private company that seeks profits a necessary evil that must therefore be well
controlled by the government. The government, in this view, is seen as the repository
reliable and efficient collective interest. For those who think this way, it is
almost paradoxical to talk about business ethics, because, consciously or
unconsciously, they associate business with a lack of ethics.
On the other hand, there are those who see the government as an enemy. An entity that only
it collects almost extortionally and provides almost nothing - or at least nothing
compatible- in exchange for the resources withdrawn from taxpayers. For these,
tax evasion, smuggling, piracy, non-compliance with legislation
labor and other “disobediences” are justified acts as a form of defense
taxpayer against the government's fiscal ferocity and do not represent a lack of
business ethics.
Unfortunately, there is a large and growing number of Brazilians who think
thus. However, as we will show below, business ethics are
indispensable for economic growth, healthy and sustained, in an economy
market share.
To prove this statement, we must start by remembering that the
life in society requires rules of coexistence. If these rules did not exist
whether or not they were respected, the law of the jungles, the law of the strongest or
the smartest. In this environment, the space for human progress is extremely
diminutive.
It was exactly the drafting of laws that established norms of behavior
that allowed humans from different clans to live together and made possible the
progress of civilization.
Logically, the mere existence of laws was not enough. It was necessary that
considered fair and appropriate to be respected by the majority of the
population. And those who did not obey them would be punished.
In an economy
market, the need for rules on behavior, rights and
duties that are respected and obeyed are perhaps even more important.
Economic activity, whether in the sphere of production or exchange, requires
the confidence that the agreement will be fulfilled - and, if not, that there are means of
demand compliance. The more spontaneous compliance with the rules
(ethical behaviors), less time and money will be diverted to the defense of
eventual unethical behavior and to activate the defense mechanisms of the
rights. With this, more resources and efforts can be applied in the activities
production and exchanges, increasing social product and economic well-being.
Especially in relation to investments, confidence in the fulfillment of the
contracts is indispensable. Investments - necessary condition and, in most
often enough for economic growth - represent a bet on
unknown future. We invest today to reap results in the future. In others
words, you pay today to receive later. For someone willing to do such
transaction, it is necessary to rely on respect for the treaty. The more confidence
there are, the more willing people are to save and invest. Therefore,
the greater the prospects for economic growth.
Conversely, if there is widespread distrust about respect for what has been
combined, the lower the willingness to save and invest and the smaller the
growth prospects. Investing would represent a great risk that only
attract adventurers and opportunists who would demand a high return in the shortest
possible term. Receive a lot and quickly and then get out.
These considerations raise serious concerns about the future of the
Brazil. We live in a very delicate moment in national life, when
ethical behaviors are not only not valued, they are
considered outdated and outdated. Where the claim that everyone is
dishonest becomes a justification for breaking the law. And where the repeated
impunity generates great discouragement in those who fulfill their obligations and becomes great
encouraging illegal activities.
It is necessary to put an end to the perverse process of social breakdown generated
for the lack of ethics in social relations. It is necessary to stop the process of
cannibalization of economic activities generated by disrespect for legislation
tax, labor and social security. This is the main objective of the struggle for
business ethics.
