The sustainable organisation as a working community
Throughout this book I’ve been arguing that the organisation, whether for-profit or not-for-profit, is as much about its people as it is about its work or (in the case of firms) about its financial outcomes. There have been two main themes:
First, I’ve proposed that the simple fact of people being part of the enterprise brings to the organisation a range of crucial obligations, which have to do not with the business itself but with purely human matters. In formal terms this means ethical behaviour and the upholding of human rights. But it also means the consistent practice of the respect, trust, consideration and courtesy that upholds relationships between people everywhere.
Second, I’ve argued that treating people this way allows for the relationship between people and their work to incorporate naturally the commitment and motivation that brings organisational outcomes, as a by-product of the increasing fulfillment people experience in their work and in the workplace.
In this chapter I want to take the argument one step further. What happens if we take the organisation first as a group of people, working together? What implications does that perspective have for the workplace, for work, and for organisational outcomes?
Organisations as communities
Here I am following a path laid out by an eminent writer on business ethics, Robert C. Solomon[i]. Solomon draws on long-established principles of ethics, notably those of Aristotle’s virtue ethics. Broadly speaking virtue ethics is the view that right action is associated with the attitudes we commonly value in practical life, things like honesty and generosity, not just because they are useful, but because they are intrinsically right[ii]
When these principles are applied to organisations, they emerge in a new concept: the organisation as a community, held together by the values that bind every successful human community.
Solomon begins with a simple, powerful proposal:
Corporations are neither legal fictions nor financial juggernauts but communities, people working together for common goals.
By the term ‘legal fiction’ he is referring to the idea embedded in modern corporate law that the corporation is a legal person in its own right, separate from directors or membership. The implication of this legal fiction is that a firm can act in its own right, in certain business-related areas, much as persons do: for example, to hold property and to enter into contracts.[iii] The problem with this idea is that it is easily extended to notions of moral obligation: the idea, for instance, that managing the firm in such a way as to maximise profitability or to return as much as possible to shareholders are moral requirements, just as one might have moral obligations to a person–which override other moral obligations (to employees, to people in the supply chain, to customers, to the broader community, and so on); hence the idea of a ‘financial juggernaut’.
Instead Solomon is proposing that we start with the idea of the people in the firm as a community, which he defines as ‘people working together for common goals.’ In this Solomon is adopting a familiar idea:
Community ties may be structured around links between people with common residence, common interests, common attachments or some other shared experience generating a sense of belonging.[iv]
“A sense of belonging”–just the concept of ownership we have been supporting in this book. The values that hold people together in communities are well known to everyone. In the context of the workplace, these values are derived from how people relate to each other and to the work they are doing together. Solomon puts it in these simple terms, which would, I think, be agreed by most people in most workplaces:
What is worth defending in business is the sense of virtue that stresses cooperative joint effort and concern for consumers and colleagues alike.
On this view corporate culture, which is based in the shared knowledge, experience, values, beliefs and attitudes of the community, moves to the centre. These values come into the organisation with its people and are embedded and developed in the normal exchanges and interactions of everyday work. The informal directions of corporate culture and known to be very powerful in determining the outcomes of the workplace: here is the discretionary work which acts as the generator of new ideas, the resilience of the organisation in times of crisis, and the motivator of the collective intention to succeed in delivering the organisation’s purposes.
With community and integrity at the centre of the business organisation, human well-being secured by ethical business practice thus becomes as important an outcome of the firm’s activities as its profitability. The purposes of the firm expand well beyond the demands of delivering ‘shareholder value’ to delivering broader kinds of values to all the stakeholders of the firm, including employees and the community at large:
. . .not only the fulfillment of obligations to stockholders (not all of them ‘fiduciary’) but the production of quality and the earning of pride in one’s products, providing good jobs and well-deserved rewards for employees and the enrichment of the whole community and not just a select group of (possibly short-term) contracted ‘owners’.
In this sense the firm is seen as an organisation that has public as well as private purposes: it has responsibilities not only to its own people, but to the people it interacts with, such as suppliers and customers, and to the wider society. The idea of community thus expands to include the broader goals of the local and even international society, such as the elimination of poverty and the achievement of social justice.
This, in modern terms, defines what has come to be called the sustainable organisation. All the principles which are taken as characterising modern sustainable organisations and firms—health, safety and welfare, flexibility in working hours, participation, equity, transparency, diversity, personal development, human rights and so on – have ethical foundations based on the shared norms of the firm, conceived of as a community.
The humane workplace
This then brings us to a view of the workplace which is much more recognizable, as well as being more humane and more effective.
It is more recognizable in that the principles governing such a workplace–things like respect, trust, cooperation, community–are very familiar to us from our everyday lives, over decades. We have argued that there doesn’t seem to be any reason why principles of human interaction, at any level, on any scale, should be any different in the workplace to those that have proven themselves in our general lives. People are people, wherever they are: they don’t become something else when they cross the threshold of a business, as if walking into an alternate universe–one where people can be used as resources, can be abused and coerced, or diminished as individuals. Those kinds of assumptions, that kind of behaviour, wouldn’t be tolerated in the wider society. We wouldn’t run our families or our friendships or our communities with them, because we know that not only would they fail but that quickly the fabric of our social lives would collapse. Why then do we think that the workplace is any different? Courtesy, transparency and consideration–all of which which are regarded with suspicion in modern management practice–are the basic elements of well-being in human relationships. We know this as well as we know anything, and it makes simple sense to apply this knowledge in the workplace.
It is more humane because it recognises that there are important obligations which must be accepted by any organisation, for-profit or non-profit, which chooses to employ people. We have noted that it is simply the case that there are unequivocal rights that people have, as human beings, which go beyond the legal OHS&W requirements (although as we’ve noted these are being strengthened all the time). These are articulated in the human rights international conventions to which Australia is a party. As importantly they are articulated in the ethical beliefs we hold in common as a society–what has been called ‘common morality’, which we will discuss in some detail below.
Finally, it is obvious that such a workplace, with people who are treated with respect and are allowed to use their creativity and talents to the full, the results of the work will be greatly enhanced. This is the business case for human workplaces. But the business case is not enough: human action is required because they are ethically right first, and only second because they help the business. As Norman Bowie remarks:
. . .we should view profits as a consequence, or by-product, of ethical business practices, rather than as the sole goal of business, an end to which all means are subjugated.[v]
Commonsense morality (or common morality) has been described as the common moral outlook we all share. Shelly Kagan[vi] notes: “People may differ about the details, but at least the broad features are familiar and widely accepted.” For example, we all know respect and trust when we see it; and on the other side, unfairness or bullying.
In making decisions, Kagan argues–including decisions in the workplace, whether as managers or as employees–we work from this platform of commonsense morality to try to promote what we understand to be “the goodness of outcomes.” It may not be the only factor we consider; but in a truly human workplace it is, I would argue, non-negotiable. It may not always be simple, either, in that it may be that none of the possible choices lead to particularly good outcomes; but we are committed to making the choice which promises the least bad, or the most good, overall.
Most importantly, Kagan points out, this principle implies that we should include all the results of an action: immediate, short term and long term; side effects and indirect consequences as well as direct; and as wide a range of the people affected by the decision as we can encompass. In a firm that means all the stakeholders, both internal and external, as we have described above. In a truly sustainable firm it also means people who are far away in space (the employees of international suppliers, for example) and in time: future generations. Everyone’s well-being counts.
Ronald Francis[vii] proposes a simple set of four ethical principles to govern corporate behaviour:
- Preserve from harm.
- Respect the dignity of all persons.
- Be open and honest except in the exceptional cases where privacy and silence are clearly ethically preferable.
- Act so as to preserve the equitability of relationships.
How recognisable these are to us as ordinary people! These are principles most children are taught, because they have proven their worth over centuries in guiding human behaviour and are therefore transmitted generation to generation. Yet simple as these principles appear to be–and simple principles are often, as we’ve seen, the most powerful–no one claims they are easy to put into practice. Real-life challenges in workplaces are inherently complex; often a number of these principles will be relevant to a problem and trade-offs will have to be made; often it is not a black-and-white matter but one of shades of grey, of reasonable claims on different sides. Nevertheless, if a workplace were to adopt these four principles and work conscientiously to put them into practice, it couldn’t go far wrong: the humane quality of the workplace, and the well-being of its workers, would be largely secured.
A positive vision of work and workplaces
You’ll remember that in the Taylorist model of work (outlined in chapter 2) the distinction is made between the craft tradition of work and the modern, industrial approach. In a sense the Taylorist model was developed to eliminate the craft tradition and to replace it with the modern model–in which task the Taylorist agenda has been remarkably successful. Yet the craft model stubbornly holds on in the background, representing some kind of aspiration in the workplace that is not being currently met. What does this aspiration consist of and how is it to be met?
In chapter 5 I quoted Hugh Stretton’s attractive list of requirements for the workplace, which I will repeat here:
- Interesting, challenging or otherwise pleasing tasks.
- Tasks with some wholeness or independence, so that workers can enjoy some pride of craft.
- Sociable roles in small working groups or teams; or in congenial relations with customers.
- A real concern to develop latent talent.
- A shared concern for excellence, both as a means . . .and as an end; as one of the joys of life.
The second, fourth and fifth of these have specifically to do with the craft tradition. In that tradition the development of specialist knowledge was embedded in the craft organisations, so that anyone (any man) coming into that area as an apprentice would advance their knowledge in a systematic way through the ranks of journeyman to the expertise of a master. The acquisition of this knowledge, the exercise of it in practice the products created by it were in themselves matters for pride.
It seems clear that most people would like to see the workplace organised in such a way as to allow for this development. But few workplaces provide for it today; mainly because the education of workers has been divorced from the workplace. Training institutions have taken over the role of education, and the workplace has become only a place of work, not of growth or development. Reversing this–allowing for the systematic development of people in their work, in the workplace, supported by educational institutions but not appropriated by them–seems to be the first element that needs to be put in place in a humane and productive workplace. People need to be able to rediscover personal fulfillment in their everyday work, to enjoy the process of carrying it out, to take personal pride in its products and services, to be supported in creating new ways of doing things and new ways of accomplishing goals.
Interestingly, it may be in the most contemporary of the professions–computing and information technology–that the early signs of this re-emergence of a craft tradition are presenting itself. Many of its professionals bypass academic institutions altogether, learning from their peers and from online sources, taking charge of their own training and development, and working in online communities–the early stages, perhaps, of a new craft tradition.
The second, linked characteristic of a humane workplace derives from Stretton’s third requirement, which concerns how people relate to each other in their work. Here is the domain we have been exploring in this book: the domain of people at work. We have argued for a comprehensive restructuring of the principles which govern this domain. We have articulated new (or old, depending on how you look at it) principles which generate a truly humane workplace; and, just because it is humane, a workplace of sustained productivity and excellence. These are principles which relate to the inherent worth and dignity of individuals, with all their rights to well-being and development; to the way in which people interact within the workplace, on the ground of respect, trust and consideration; to the nature of the workplace as a whole, as a community, with a commitment to commonsense moral and ethical principles; in an environment which encourages and supports collaboration and cooperation, and collective achievement. This kind of achievement is something really worth celebrating: in achieving the goals and purposes of the organisation; in providing fulfillment to people in both process and product; all on the ground of community ownership:
But of the best when their task is accomplished, their work done/ The people all remark, “We have done it ourselves.”
There will be those, I know, who will disparage the approach taken in this book as unreasonably idealistic and as disconnected from the demands of the modern competitive environment of global business. Any firm which attempted to operate this way, it will be claimed, would go out of business: securing maximum productivity from one’s workforce, within legal limits, at least cost is seen as a prerequisite for survival, as a simple matter of economics–whatever that may mean for the well-being of one’s own people. This view is, I would argue, entirely misconceived, even naive: the everyday costs of treating people like disposable resources, as in the standard model–the multiplying costs in passive resistance, in working to rule, in the lost opportunities of creativity not applied to solutions, and so on–vastly exceed any direct costs generated by treating people well and humanely. And that doesn’t include the wider costs picked up by the public purse: for example, in health and welfare costs.
The standard model of people management, I have argued, is undocumented, unthinking, unethical propaganda which somehow has become the common wisdom of modern management. The historical record of societies stands against it. It lacks any substantial support in the body of management research and even less in the body of management practice. Yet it has been adopted as the standard model of management and applied by lazy managers the world over with enormously damaging results. It is shameful that it has continued for so long, and still continues.
In fact I argue the reverse. Any firm which thinks it can effectively ignore its ethical and humane obligations to its own people will fail, and fail quickly. As it happens, people, as is so often trumpeted, are in fact, in reality, the biggest resource of a company; by far, by many orders of magnitude. People can work miracles, if they are allowed to; and in the modern business environment of rapidly accelerating change miracles are an everyday requirement. But attention to their well-being is a requirement, if you want that kind of business contribution from them.
In the end, however, the business case for looking after your people is not enough, and in many ways even taking such a position is an unethical approach. You look after your people first and always because it’s right to do so, just in the same way that it’s right to treat your family and your friends, and strangers, well; not because you want them to do things for you and need to manipulate them into it. You create a healthy, humane workplace because that is how mature, intelligent, adult people behave with each other, with consideration and respect, in building a healthy and humane society.
These principles are non-negotiable, even in the interests of business success: if the only way you can succeed in your business is to damage people, you are in the wrong business and should get out. The entire apparatus of Taylorist assumptions, which so infect modern management theory and practice, is unacceptable, in terms of human rights and in terms of common morality, let alone in terms of the waste of human potential it represents to our society.
We are better than this. We have a society of real worth to build, firm by firm, organisation by organisation. We know how to do it, each one of us, if we give ourselves a chance to put into practice what we have known as ordinary people, interacting with other people every day of our lives, to be right.
[ii] Aristotle (1925), The Nicomachaen ethics. Oxford, UK: Oxford University Press; entry on virtue ethics in the Stanford Encyclopedia of Philosophy.
[v] Bowie, N. (2002), ‘A Kantian approach to business ethics.’ In T. Donaldson, P. Werhane & M. Cording (eds.) Ethical issues in business: a philosophical approach, Upper Saddle River, NJ: Pearson Education, pp.70-71