“Business ethics” is not an oxymoron

Madeline Diamond, News Editor

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University of Virginia Professor of Business Administration R. Edward Freeman spoke about the need for a revolution of ideas during his lecture at the University titled “The New Story of Business” on Sept. 25.

Freeman is a professor at UVA’s Darden School of Business and a leader in the field of stakeholder management. His lecture was sponsored by the Managing for Sustainability Program and Fitz Walling Speakers Series.

Freeman is known for his work with stakeholder theory, which addresses ethics and morals in relation to managing a business.

“We can be the generation that retells the story of capitalism,” Freeman said. “But we need a revolution.”

Freeman noted that there is a disconnect between business and the way business is taught in school. He acknowledged common misconceptions about business, including the place of greed and the importance of profits, although he later explained these fallacies.

Profit is not, in fact, the most important element of business, Freeman said. He noted the examples of Bill Gates and his friend John Mackey, the co-founder and co-CEO of Whole Foods, as people who started business not because of money, but out of passion.

“To run a kick-ass business, you’ve got to stand for something,” Freeman said.

The second disconnect that Freeman pointed out focused on the idea of business ethics, and how this is actually an important element in business. Freeman’s third disconnect is the idea that self-interest is the main motivation behind business. On the contrary, there are many more rewarding elements of business, according to Freeman.

Freeman also discussed sustainability, and how it can be used most efficiently.

“To really make sustainability work, we have to see it as how we make a set of stakeholder relationships sustainable over time,” Freeman said.

He stated that a successful business is not necessarily defined by profit, greed, or other disconnects, but rather by people collaborating to create value. According to Freeman, capitalism is the greatest system of social cooperation. All over the business world, people collaborate in order to become successful in ways that individuals cannot.

Freeman shared his knowledge of the business world through his own personal experience, as well as examples of other businesses. He also spoke about how people, especially students, can change business today.

“You need to get involved. You need to help change the story,” Freeman said.

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