Business Ethics 3.0

The New Integral Ethics from the Perspective of a CEO

Erhard Meyer-Galow

• Publisher: De Gruyter Oldenbourg
• Year: 2018
• eBook ISBN: 9783110572421
• Edition: 1
• Topic: Business
• Subtopic: Business Ethics
• Index: Business

The reputation of business managers is declining due to their disregard for moral decisions and ethical practices. Business students are currently taught only technical knowledge without concern for being compassionately and holistic engaged. However, when entering the business sector these graduates encounter a world which necessitates difficult, personally challenging decisions, ones for which technical knowledge is insufficient.

Successful, sustainable resolutions can only be expected to result from a holistic, sustainable approach which accommodates the difficulty in balancing ethical practices with the demands for ever-increasing profits.

This unique graduate textbook addresses the issue of business ethics from the perspective of an individual's internal growth facilitated by a consideration of the principles of depth psychology, spiritual wisdom, meditation, and quantum physics, written by a CEO with an enormous business background.

It not only promotes a new ethical approach, but also addresses the implementation of this new approach in the most important business sectors as a replacement for previous ineffective codes of conduct which have failed.

It's a must read for business students with aspirations of becoming managers or entrepreneurs in the economic sector as well as for all young professionals, managers and entrepreneurs to improve their ethical performance and sustainable success.

Message from the author

This book creates an impetus for change in a business world where unethical practices are rampant by providing a suggested a New Integral Ethics for the economy, an ethical approach based upon inner psychological and spiritual development arising from a serious consideration of Depth Psychology.

Readers will learn how adoption of specific Practices, which lead to inner growth and spiritual maturity, will result in ethical, morally sound business practices not because they are mandated, but because once the SELF is actualized, you cannot do otherwise. Laws, appeals and directives which have never successfully resulted in ethical practices become unnecessary, replaced by intrinsically ethical individuals who collectively influence corporate ethical behaviour. This is a giant leap into a new dimension in our globalized, digitized economy.

Finalist at the 2018 Humanistic Management Book Awards

Finally – A New Spiritual Advocate for the coming Millennia

Professor Meyer-Galow presents a qualitatively wiser and considerably expanded framework of current business ethics by connecting dimensions of Depth Psychology, Metaphysics and Quantum Physics with the wisdom inherent in many religious and philosophical teachings.
He challenges corporate leaders to not only conscientiously seek out universal knowledge, but also to engage in their own personal inner journey in order that their service and dedication to corporate responsibilities are authentic and trustworthy. He predicts that long-term sustainability of enterprises will occur when reason coupled with the application of spiritual knowledge, which includes the individual exploration of our 'dark' or shadow side which is influenced by our ego, has taken place and been integrated so we are able to truly serve both the immediate and more advanced goals of the business, along with those of its employees and customers. Dr. Meyer-Galow's work is unique, well researched, meaningfully presented, inspiring and refreshing. It provides us with practical, achievable guidelines which when undertaken will position us for undertaking sustainable personal and professional transformation. Kudos from all my heart!
Anneli Driessen, PhD, PhD, MCC, Intl. Metaphysical Academy, Victoria, BC, Canada

Business Ethics 3.0, by Erhard Meyer-Galow provides a much needed beacon of light to a segment of our society that seem to be sinking deeper and deeper into darkness. The term "business ethics", once an important topic within the business community, has slowly descended through the fog of profitable ends justifying unprincipled means to become nothing more than a self-contradictory oxymoron -- especially among large international corporations. In Business Ethics 3.0, Erhard Meyer-Galow has taken a fresh approach that appeals to individual personal growth rather than the usual proffering of academic arguments that are not implementable in the real world of relentless Machiavellian competition. Only through raising and improving individual awareness and responsibility can real long-term change have a chance of developing. Business Ethics 3.0 is on the right track with a positive and compelling message…may it succeed where the academics have failed.
Thomas Campbell, physicist, consciousness researcher, author of My big TOE

1Introduction

None of us has unfailingly applied the highest ethical practices in either our personal or our professional lives. We are all guilty of lapses in morality, be they deliberate or unintentional. Sometimes our thoughts, words or actions have contributed to others taking upon themselves the experiences of disappointment and anger. In hindsight, we often deeply regret those occasions, realizing that greater empathy and compassion would have better served all of us, along with our common goals. We are fortunate that maturation is generally accompanied by an increase in mindfulness, a quality which allows us insight into ourselves, helping us to thwart inappropriate thoughts, words or actions in time to avoid behaviors which our seductive dark side, our ego’s ally, informs us will massage our ego and further our personal agenda. Mindfulness encourages us to choose actions which are in accord with our actual self, that intuition within all of us which encourages more empathetic behavior. Thoughts, words and actions arising from our actual self are the antithesis of those encouraged by our ego, which is formed by an accumulation of our superficially pleasurable experiences.

This book makes no pretense of being a comprehensive study of the benefits of moral decisions or ethical practices. The wish is simply to encourage personal psychological and spiritual evolution with the confidence that it will lead to a reevaluation of ethical business practices, something which will benefit both employers and employees. A New Ethic, such as that espoused by Erich Neumann (Neumann 1990) is well established and defended in the literature, but not yet so well understood or established in our personal consciousness. Despite the profusion of books, articles, seminars and forums on ethics, with new keywords and pervasive ethical guidelines presented as Corporate Social Responsibility, Shared Value practices and Governance Ethics becoming fashionable, we continue to hear, almost daily, reports of unethical practices, many of which appear to be stretching the boundaries of insensitivity, actions almost completely devoid of compassion and common sense. Ruthlessness in business has increased dramatically during the past 20 years. Globalization and digitization allow for far greater damage to be unleashed far more quickly than ever before. We must conclude that current policies aimed at turning around this rush toward destructive, self-centered practices are insufficient. Attempts at remedial approaches are diluted due to a lack of recognition of personal responsibility, of insufficient attention to spiritual maturity. It is far simpler to acquire ego-centered knowledge, of which much is available, than to embrace intuitive knowing and acting, of which little is in evidence. As a result, societal credibility in the area of ethical business practices, in spite of well-meaning interventionist efforts, is on the decline.

An academic understanding of ethical business practices without actually applying them is not going to pay dividends. One must transcend ego-centered knowledge with intuitive, spiritual-centered knowing. Then, and only then will ethical practices become manifest in our personal and professional life and begin to catapult, each step building upon the one before, each success multiplying the following, resulting in a degree of satisfaction which will make it difficult to believe that we procrastinated implementing something so obviously beneficial, for so long.

What criteria may best establish our decisions around behaving responsibly in economic endeavors? Many criteria from the past are no longer morally acceptable, economical or defensible in the present. The paradigm shift initiated and fueled by the globalization of information available from the internet promises even further quantum shifts in the evolution of managing both responsibly and economically. This shift necessitates not merely tinkering with the existing machine, but rather completely re-thinking, reevaluating and re-defining that which is of fundamental importance to us. Consideration of the human factor leads us to morally defensible practices; those which value and promote individual growth and contributions. This in turn encourages us to tap into far-too-long ignored ideas, support and excitement from those who were previously often viewed simply as impractical economic philosophers. How will we decide to proceed? Profit at any cost, or ethical, efficient, economical business practices which result in even greater profitability? We need to find a way to win back our credibility and trust as managers and entrepreneurs. Perhaps C. G. Jung’s and Erich Neumann’s new ethics approach (Neumann 1990) can help us to better understand the causes of individual immoral decisions and unethical behavior, and to propose practical approaches which will lead us to beneficial changes.

This book is intended to create a desire for change in both our conception and our application of ethical business practices.

2The Problem

2.1The Burden of an Anachronistic Economic System

In my early professional life practices which are unthinkable today were common. When our work environment condones, or even encourages questionable practices, it is difficult, as a young professional, to stand against the accepted norm. While my personal and professional conduct may not have always been impeccable, I have not intentionally betrayed others for personal gain. It is fortunate that moral and ethical awareness evolves over time, both within us as individuals, and within society at large. Unfortunately, in spite of greater personal and societal awareness, immoral decisions and unethical practices remain entrenched in many workplaces. Making them especially dangerous is that like an iceberg only about one-sixth of them are readily evident.

Behind all immorality in the economy lies the irrational fear that our business opportunities, the performance of our employees or some other uncontrolled factor will cause our profits to decline. This fear breeds greed! Those managers who suffer from low self-esteem are seeking greater recognition through implementing greater controls, and those managers who possess an exaggerated self-worth are fearful of failure as their ego wishes to demonstrate it is infallible. In either case, bolstered by their deluded belief that they are acting in the best interests of the company, there is often no sense of injustice with the immoral policies and unethical practices being regarded as trivial. But failure is immanent, as are the resulting burn out, depression and debilitating anxiety.

Meanwhile, if a manager’s unethical behavior becomes public knowledge and the media find a story they can sell, there is a short period of turmoil, but it is short lived. Time heals all wounds and the consumers are soon once again lining up to buy the offending companies’ products or services.

2.1.1Falsifying Balance Sheets

Balance sheet fraud is a form of economic crime. What is a balance sheet? Ideally a balance sheet itemizes the complete assets and liabilities of a company. As the legal requirements differ from country to country, it is difficult to accurately compare balance sheets internationally, or to determine how well they comply with the appropriate legal requirements. This makes it tempting to “fudge” valuation approaches, resulting in the raising or lowering of individual balance sheet items in order to overestimate the particular company’s worth.

The internationalization of German companies has been growing, and as a result German companies are increasingly being evaluated according to the Anglo-Saxon accounting rules which have been adopted in Germany in recent years. This makes it increasingly difficult to compare international balance sheets with German balance sheets in accordance with the German Stock Corporation Act, that dictates of which are now often not taken into account. However, not every aspect of the Anglo-Saxon accounting rules is acceptable in Germany; it is a legal obligation for German companies to be evaluated and accounted for under the German Stock Corporation Act. In Germany, creditor protection is the first priority, followed closely by the tax assessment of the value of the company. In Anglo-Saxon countries shareholder interest has first priority. International accounting can only be recognized in Germany if it does not run counter to the dictates and intentions of the German Stock Corporation Act. Two examples of where the differences come under careful scrutiny are accounting practices which affect pension provisions, and how the actual value of assets is determined. In the USA the current value of assets is recorded, while in Germany the acquisition cost of assets is determined and then corrected by amortization.

In general, the greater a company’s assets are the greater the profit is and the higher the taxes assessed. If a company owns assets which it fails to list on the asset side of its annual balance sheet the result will be a tax saving.

Because creditor balances are regularly confirmed by auditors the opportunity for falsifying records is less on the debt side of the balance sheet. But never underestimate the creative ways in which balance sheets can be manipulated! Companies sometimes transfer assets to holding companies, with the parent company retaining only up to 49% of the shares. The parent company is only obligated to consolidate on their balance sheets holding companies in which they own more than 50% of the shares, effectively allowing them to shelter numerous valuable assets from taxation. Operating losses can also be manipulated by “selling” assets to an unconsolidated holding company at a higher than market price.

Ultimately the economic foundation of a society is undermined by the balance sheet fraud.

2.1.2Bank Account Manipulation

Traditionally, auditors examined a company’s bank statements, then the company’s commercial banks were asked to confirm the company’s balance at the end of the year. In this way the validity of a company’s bookkeeping practices could be determined. But a company could have bank accounts “off-shore” which are known only to the Executive Board. In these cases even auditors are powerless to detect such fraudulent practices. Fortunately, this loop hole has recently been largely closed.

2.1.3Inventory

All companies must create an annual inventory. This allows for an annual determination of assets. Fixed assets must then be reevaluated every five years. But how are they evaluated? Therein lies the possibility for manipulation and deception. If acquisition value is used as a basis, how is the actual acquisition value of thousands, or tens of thousands of products purchased each year determined? Sometime the LIFO (last in first out) procedure is used and sometimes the FIFO (first in first out) procedure is applied.

There are numerous opportunities for manipulation of the net worth of a company’s assets. Auditors can only confirm what they can see. It is relatively easy to withhold essential information from them. There may be inventory which is not obvious, or a shortage of inventory in a company with both retail and consignment outlets. The greater the declared inventory the healthier the company appears to currently be, but what if prices fall? Then the following year the company appears to have suffered greater losses than it actually did. It is highly unlikely, in spite of industry guidelines, that most inventories are an accurate reflection of assets. It is entirely possible, given today’s general acceptance of profit at any cost to society, that company directors do not even believe their actions are unethical. But any intention to deceive, no matter how universally “acceptable” it may have become, is immoral.

Even with diligent and meticulous reporting a company can become bankrupt if revenues do not cover expenses. But if the assets are over evaluated insolvency proceedings may be delayed. This is a common occurrence. The delay may be deliberate, for example when the Board of Directors are hoping for a rise in prices or for sales to improve so that the company can recover. It is also often the case that underwriting banks don’t call in debts until the company is in dire straits, with insufficient inventory to make sufficient sales to remain solvent.

2.1.4Illegal Price Fixing

When I began my career as sales representative in the 1970s, the director of sales routinely informed us about his price agreements with competitors, further telling us to which customers we should offer special prices, and to which we should not. We did not consider this behavior to be unethical. Now, almost 50 years later no one can argue ignorance of the price fixing laws. In spite of this, illegal price fixing remains pervasive.

The following is a list of some of the largest cartel antitrust penalties in the EU: Truck cartel, Google cartel preference, Libor cartel, TV tube cartel, car glass cartel, gas market sharing, Intel discounts, elevator and escalator cartel, rolling bearings cartel, vitamin cartel, airfreight cartel, cartel for gas insulated switch gear, wax cartel, butadiene rubber cartel, flat glass cartel, pre-stressing steel cartel, gypsum board cartel, sanitary cartel, bleaching agents cartel, sausage cartel, beer cartel, cement cartel, detergent cartel, zipper cartel, high-voltage cable cartel, sugar cartel, carbon fiber cartel, chloroprene rubber cartel, liquid gas cartel, food retailers and brand manufacturers cartel, acrylic glass cartel, rail cartel, graphite cartel, graphite electrode cartel and carbon brush cartel.

Many of the best known and respected companies dealing in the above products and services have been involved in price fixing.

2.1.5Bribes

In many countries and numerous businesses payment of a bribe is commonly necessary in order to close a sale or purchase. It can be difficult to differentiate between a commission payment and a bribe. Commissions as a compensation for reliable and acceptable services in connection with a deal are normally in the range of 1–5%. Bribes are generally much higher, and reflect a personal relationship between a supplier and a consumer with the intention of excluding competitors. This is immoral. If the supplier is overpricing the product and then paying a bribe out of the excess, the customer is ultimately disadvantaged. Since competitors are excluded, they are also disadvantaged.

In Germany, up until the middle of the 1990s bribes could be listed as expenses in a company’s Profit and Loss Statement. Beginning in the latter half of the 1990s, companies were compelled to disclose the recipients of bribes, which remained legal until January of 2002, when they became illegal. Regardless, there can be no doubt that bribes continue to play an active role in the business world in the closing of deals with targ...

Table of contents

• Cover
• Title Page
• Copyright
• Acknowledgments
• Foreword
• Contents
• 1 Introduction
• 2 The Problem
• 3 The Solution
• 4 The Application
• 5 Reflections by Richard Warrington
• 6 Closing Remark from C.G Jung
• References