A Moral or an Amoral Decision?

Civitas, 20 September 2010

It is being described by one paper as ‘a battle for the hearts and minds of middle England’, writes Stephen Clarke, and while it’s not clear that the current spat over M&S’s decision to sublet one of its disused premises to the American restaurant chain Hooters is worthy of such grandiose billing, it does raise some interesting questions about corporate responsibility.

The controversy in this case is over the perceived sexualisation of the female staff at Hooters who wear white vests and orange hot pants. The name of the restaurant itself is a colloquial term for breasts and in America the chain has been subject to a series of sexual harassment lawsuits from former employees.
In response to M&S’s decision, a number of groups have begun voicing their opposition to Hooters opening in an old ‘Simply Food’ store in Bristol. A petition against the store has attracted 1,000 signatures and Mumsnet has called on visitors to the website to boycott M&S. On the one hand this could be construed as opposition to a restaurant whose ethos is unpalatable for many in the UK; undoubtedly this is one facet of the dispute.  However, there is another facet which is far more interesting.  Many of the protesters have drawn attention to the fact that M&S in particular should not be aiding the opening of Hooters. Anna van Heeswijk, the campaign coordinator of Object, a women’s rights group, stated that: ‘We are deeply concerned that M&S, which brands itself as an ethical, family-orientated store, are supporting this form of sexual exploitation of women.’ In response M&S said that ‘this is a commercial decision’.

In these two statements lie two conceptions of corporate responsibility. Contained in the statement from Object is the idea that companies have an ethical responsibility to the society in which they operate. This responsibility also seems to differ from company to company; M&S (a family company) should not be supporting Hooters whose ethos seems to fly in the face of the familial values which M&S stands for. In contrast, in the statement from M&S a neutral set of values is promoted. M&S argues that it is not for it to ethically judge the businesses it does dealings with, and that barring any legal concerns M&S should have the freedom to make decisions based on commercial gain. There are thus two pertinent questions raised:  first, should companies take into account ethical concerns when making decisions? And secondly, to what degree should such concerns be considered?

While these questions have come to the fore in this debate, they have a much wider significance in terms of global business practice. In particular it is worth asking: to what extent should corporate decision making be solely driven by commercial or profit motives? The greed and folly of many institutions (banks, insurers, mortgage lenders, etc) caused the global financial crisis in 2007 yet the implications of the crisis for corporate responsibility have not been fully examined. Is it really defensible for banks to emphasize areas of business such as proprietary trading over the more mundane activities of deposit taking and credit extension? Should mortgage lenders lend money to people who have little ability to pay it back, knowing that they can pass on such loans to unsuspecting third parties? Both activities are perhaps valid ‘commercial decisions’ but are not valid decisions if we have a conception of corporate responsibility which does not always place profit as an overriding consideration.

To a certain extent, decisions by businesses are always ‘commercial decisions’, businesses can only provide useful services if they are profitable and can fund their existence. However we should not lose sight of the fact that businesses exist because they provide social utility. In the case of M&S they sell clothing suitable for young children, and tied into this is their support of the ‘Let Girls be Girls Campaign’ which aims to stop the premature sexualisation of children. If they are seen as supporting a company like Hooters then this social utility (that of providing suitable, non-sexual, clothing for young children) may be seen as compromised. Similarly, banks exist to efficiently distribute credit around an economy, providing loans to viable businesses is one important way they do this. When a bank diverts energy away from this activity to others that are less socially useful (despite being profitable) then its activities may also be viewed as compromised.

Appreciating companies for what they provide for society may guide notions of corporate responsibility. A company should have a responsibility not to impair the services they provide. If a company does, either by engaging in activities antithetical to their core activity or by being associated with something antithetical to their professed aim then perhaps there is a good case against such organisations based on corporate responsibility. Although this is still a difficult standard to apply, it is perhaps closer to our moral intuitions than the notion of responsibility based on profitability alone.