Xu Shijun: Ethics is not the charity when enterprises have extra resources, but the essence of .....

The speech of Prof. Xu Shijun was composed of two parts. In the first part, he mentioned that corporate ethics does not equal to building bridges and roads to benefit the society and clarified the concept of corporate, ethics and corporate ethics, their roles, and the relationship between them.In the second part, he explained corporate ethics under the new management mode in detail.

Firstly, Prof. Xu distinguished new corporate ethics from traditional corporate ethics. The latter regards corporate ethics as something that can be done to benefit the society only when enterprises gain profits. In the new mode, corporate ethics is regarded as the essence and deciding factor of corporate management rather than only a moral factor.

Secondly, he pointed out that five kinds of interactive relationship occur inside enterprises. The first is the market-oriented economic relationship, or “no pay no goods” in which the value of goods plays the dominant role. The second is the legal relationship in which people abide by regulations and shoulder responsibilities. The third is the political relationship. The fourth is the technical relationship in which supportive techniques are needed in order that people can manufacture goods and make research on them. The fifth is the ethical relationship, a kind of moral principle different from the previous four. However, morality must also be reflected in economic relationship. In this sense, enterprises are no longer private property of owners. They bear relationship not only with shareholders but also with “stakeholders”, asanimals, trees and everything in the surrounding related to the enterprise. Besides, the concept of morality is also evolving. Therefore, with the change of time, space, society and environment, the dynamic concept of corporate ethics is also evolving.

According to Prof. Xu, the above mentioned changes strengthen the connection between enterprises and ethics. Four aspects are worth mentioning here: First, enterprises are naturally profit driven, which is only concerned with economics, law and techniques. Second, most people agree that enterprises must make social contribution with their profits although they may ignore the relationship between enterprises and ethics. Third, enterprises are morally responsible to clients, employees, distributors, suppliers and other stakeholders. Fourth, ethics are the essence of operation without itenterprises cannot be managed well. Such is the new corporate management mode.

Two other issues are mentioned at that pointof the speech: Firstly, nowadays, enterprises get a foothold in the market not only with their adequate private assets, but also with their proper ways to make profits based on social contribution. Social development cannot be separated with the support of enterprises. Secondly, moral crisis occurs in corporate management: After the company gets listed, the number of shareholders increases. Therefore, board members, who are entrusted by shareholders to make financial decisions, need to be selected to manage the company. They must be devoted to their work for the sake of shareholders’ rather than their own profits. According to Prof. Xu, in Taiwan, despite the fact that many board meetings are recorded or videoed; some critical issues are still discussed before the meeting is monitored. Therefore, socially responsible enterprises appeared. As business operators, enterprises hope to do their own bit for social development and environment protection. But some of their profits will be lost in this way, which runs counter to shareholders’ goals. If board members are socially responsible, they have to set aside the demand of shareholders. Therefore, to alleviate the conflict between corporate profits and social contribution, we must make it clear to shareholders that the enterprise will do something for the society by distributing some of the future profits to social welfare rather than to shareholders. Only those who agree with the idea remain to be shareholders while those who only focus on profits can withdraw voluntarily. Socially responsible enterprises are favored in many developed countries since what they pursue is long-term development.

Then, Prof. Xu elaborated on corporate ethics under the new management mode from the perspective of traditional organizational structures inside companies. In the past, employees think bosses are fraudulent who try every means to exploit their value while bosses regard employees as their own property and demand that they be obedient and cannot violate regulations. This is concerned with the economic relationship. However, in modern innovation-oriented enterprises, standardized task-based management no longer works. A relaxing working environment is needed in which bosses must respect, trust employees, and encourage them to learn new working methods, find opportunities according to clients’ needs so that they can gain legitimate rights, status and reward.Therefore, in modern enterprises, the organizational structure is mainly made up of teams. Nowadays, enterprises cannot independently do all the work. They must cooperate with other enterprises to form leagues through mutual trust and understanding. Such is the new trust-oriented management mode under which corporate relationships are characterized by network, support, long-term, cooperation, culture and innovation rather than hierarchy, authority, short-term, competition, transaction and administration.

In the end, Professor Xu Shijun concluded that as the foundation of corporate operation, ethics play the dominant role in the new management mode in which ownership and management are separated. In the knowledge-intensive economic system, ethics can also boost the work of intellectuals and the efficient operation of the team-oriented enterprises beyond the limits of hierarchical organizations. Therefore, corporate ethics is the essence of new management mode.