Why So Many Irresponsible Enterprises Come Out?
It"s possible that people become leaders of major businesses with the full intention of earning money in the most unethical, disreputable way possible
. But more likely, they don"t. Companies end up doing the wrong things for a variety of reasons - none of which necessarily begin with evil intent. It"s ironic that businesses are, in theory, the types of human organisation that are most adaptable to change, and many of which have succeeded by exploiting or creating change in a way that helped them overtake slower moving competitors. And yet, the natural human state is to resist change - and it keeps getting in the way for all businesses. It"s the difference between seeing climate change as a logical basis why the business environment is going to radically change in coming years - with all the threats and opportunities that implies - or seeing it as a potential additional cost imposed by legislation, the solution to which is to lobby against that legislation. Likewise, the application of this logic to the recent financial crisis was best summed up by the now-famous quote by Chuck Prince, former CEO of Citigroup, who said at that time: "When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you"ve got to get up and dance. We"re still dancing". By the way, stakeholder engagement should be one of the routes you take to addressing this problem. Good quality stakeholder engagement is about putting you in touch with the potential consequences of your decisions. It"s not always the way it"s practiced, however. In the UK, this has led the government and regulators on a never-ending quest to provide the right tools to force the companies to clean up. This has taken the form of the "treating customers fairly" initiative. The trouble with this is that it is pretty much impossible to avoid the situation where a company can sell a sub-optimal product. Doing the wrong thing on the basis that it"s difficult to see how you could be caught, and it"s all deniable, plus the fact that everyone is doing the same so there"s strength in numbers - that"s the kind of logic that gives succour to companies that have slipped into an irresponsible business mindset. You"ve heard everyone complaining about how the bankers seem to be out of touch with reality with their addiction to eye-watering bonuses. Well, yes. They literally are. Most people at higher levels in business are as well - it"s just that the micro-reality around their business sector isn"t so far removed from what seems reasonable to the wider population. People get caught in a world made up of their own beliefs, the things that they see, and the terms of reference that make sense to their own values. You don"t have to be in business for this to happen. Those people, of course, can storm the barricades of your gleaming marble edifice if they are motivated to do it. Governments are now starting to prove it across the world by taking a more direct route to punishing the banks than would have been thought possible only a couple of years ago. Actions and consequences. It"s not always pretty.No business benefits from seeing reality through a distorting lens. You would be right to think these four points have a common element - all of them involve factors that seduce companies into making decisions with unintended negative consequences. And over time, they do so either so far removed from reality that they don"t see those consequences - or they become so vested in the business model that is creating them that they believe they have no choice but to continue. They can also all be addressed - with good leadership, with constant energy into opening out to see what"s really happening, what the consequences might be, and how can things be improved.As the professional manufacturer of complete sets of mining machinery, such as
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