Seeing social enterprise through the theoretical conceptualisation of ethical capital

conceptualisation of ethical capital

BULL, M., RIDLEY-DUFF, R. <http://orcid.org/0000-0002-5560-6312>,

FOSTER, D. and SEANOR, P.

Available from Sheffield Hallam University Research Archive (SHURA) at:

http://shura.shu.ac.uk/758/

This document is the author deposited version. You are advised to consult the

publisher's version if you wish to cite from it.

Published version

BULL, M., RIDLEY-DUFF, R., FOSTER, D. and SEANOR, P. (2008). Seeing social

enterprise through the theoretical conceptualisation of ethical capital. In: Institute for

Small Business and Entrepreneurship Conference, Belfast, 5-7 November 2008.

Copyright and re-use policy

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We live in an anti-hierarchical age, in which deference to traditional sources of authority

– the social order of class, the churches, the traditional family – is in decline. The ethic of

individual self-fulfilment and achievement is the most powerful current in modern society. .

. . For many people, social progress is measured by the expansion of individual choice

within this private sphere. This individualism is not just consumerist. It is also moral. In

many ways this is a more moral time than in the 1950s and 1960s. Young people these

days feel more passionately and morally about a wider range of issues than they used to –

from our treatment of the environment and animals, to gender, race and human rights

around the world. People are more likely to challenge the right of established figures of

authority to lay down the moral law. For many people, especially young people, [these

are] arguments that we need to rebuild a sense of community.

(Leadbeater; 1997:14)

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‘There is one and only one social responsibility of business – to use its resources and

engage in activities designed to increase its profits so long as it stays within the rules of

the game, which is to say, engages in open and free competition without deception and

fraud.’

(Friedman, 1970/1993, p. 254)

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One of the most interesting things I have come across recently is that a lot of people in the

city reckon that corporate life as we know it is going to be dead in thirty years. And I

would say that Eden would be a good example of why. When I look at my top executives,

the top eight people who work for me are all people who have decamped from very

successful jobs in very successful organisations, because they no longer want to work for

corporations where there is no

ethical capital

, and this is happening all over the place.

Nowadays 40% of school leavers apparently do not want to work for a corporation.

[emphasis added]

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“the market frees individual acquisitiveness from moral, social and/or religious

constraints. While this acquisitiveness can be a source of great energy and creativity, it is

also a turbulent, disruptive, and potentially disintegrative force. Moreover, the market is

believed to contain an expansionary dynamic, so that unless it is contained it

progressively invades and colonizes other spheres of our social lives.” (1997:18).

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“• It releases self-interest from moral restraints.

• It erodes all social ties other than purely economic ones and/or converts social

relationships into instrumental ones ("commodifies" them).

• It promotes a preoccupation with narrow individual advantage at the expense of

responsibility to the community or social obligations.

• It substitutes competition for voluntary cooperation.

• It favors materialistic or hedonistic values.” Maitland (1997:18)

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“economics is amoral and that it cannot be used to answer normative questions like the

fairness of the distribution of income. In essence, the neoclassical economic ideal

presents us with an ethic by placing economic efficiency before us as the highest end,

and utility/profit maximization as the only means to that end.”

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‘So far the literature offers some evidence that trust is founded in values and beliefs and it

is important because it facilitates collaboration, but trust depends on reciprocity and

engagement’.

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…once morality is transformed into an economic asset, corporate moral agency yields

competitive advantage, increases profitability and increases survival prospects of the firm.

In this respect, insufficient corporate moral agency can be analysed not as a systemic,

rule-based condition of defective incentive structures but as a capital utilisation problem

in firm-stakeholder interactions.”

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“It is contended that modern business theory, as represented by the Neo classical

economic paradigm, has established a moral code of business based on efficiency of

outcome and the assumed link of efficiency to self-interested behaviour. The result is

markets as the arbitrators of ethical outcomes, and profit maximization as the ultimate

moral code” (2007:159)

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…companies

must

learn to treat their workers, suppliers and customers, as well as their

senior management and shareholders, as members of a shared community…

[emphasis

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(Tam, 1999:10):

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should be

democratic organizations with a few authoritarian exceptions

rather than authoritarian organizations with a few participatory management exceptions…

[emphasis added]

(Collins, 1997:503):

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‘In order to fully grasp the implications of these visions and realise the potential of

social enterprise, we need to break out of our usual ways of looking at the world,

particularly about the ‘natural’ business model or the narrow but hugely powerful

concepts and implications of mainstream economics’

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“What has been lost of Adam Smith in the translation to neoclassical economics is the

basis of morality and control that Smith envisioned would go hand-in-hand with market

efficiency and that the goal of an economy must be the greater economic welfare of the

society. In short, efficiency is not an end in itself.”

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