Businesses behaving badly

We are suffering some significant shocks to our economy, from oil prices and environmental anxiety, to a variety of contaminated consumer products, and now a major financial crisis. Corporate greed, stupidity, regulations, and corruption are blamed for these problems, but the causes run much deeper.

What about consumer responsibility?

Poor risk management by the financial industry may have triggered the economic meltdown, but lack of transparency and poor consumer financial education made it possible. Oil and car companies may encourage over-consumption of gasoline and the resulting carbon dioxide emissions, but lack of regulation and consumer purchase decisions reinforce these consumer habits and encourage the trend to continue.

In short, companies make the products and services, but we buy them. In turn, our consumption habits reinforce the behaviour of companies, who continue to encourage us to consume more.

Business decisions are driven by profit motive

For all of the talk about corporate social responsibility, the primary objective of a business is to make profits from its activities. If that means making products that are legal but bad for us, they will do it. If that means taking advantage of natural resources, like oil or water, without paying the full price to society, they will do it. If that means layoffs, outsourcing, and other low-cost labor practices, they will do it. But the root cause here is not really a lack of “social caring” by business leaders; the root cause is embedded in the nature of the institution of business and how it is currently engineered to operate.

Addiction: uncontrollable use of a substance or practice, even in the face of negative economic, environmental, or social consequences

The principal levers that we have to change the behaviour of a business are laws and costs. Over the past few years, we have heard proposals about carbon taxes, tariffs on outsourcing, and increased inspection of consumer products. Opponents to these proposals use extreme words, saying they would “screw everybody” and “destroy the economy”. The reality is that many of the operational practices of our businesses are addictive and toxic, and if we desire different outcomes from what we have today, we need to take action.

Detox: process or interventions to remove the effects of addictive substances or practices

The Business Detox Project is an open participation initiative focused on collaboratively developing research tools, methodologies, and business processes for detoxifying the “business of business”.

We believe that the way business is engineered to work today causes it to have an overwhelmingly toxic relationship with three critical stakeholder groups; (i) the natural environment, (ii) the human resources, and (iii) the consumers. The goal of this project is to openly research and discuss the impacts on business of better accounting for the costs and risks incurred by these stakeholders. All of our assumptions, research sources, and calculations are here. We do not claim to have all of the answers. But we do think that this discussion is important.

The long term objective of this project: Changing business behaviour.

More immediate goals:  develop and produce practical tools for helping businesses to “detoxify”; help formulate and facilitate new social, economic, and legal policies to better align business with evolving societal needs”

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