“What do you think it will take to restore the confidence and trust of the American people in corporate America?”
There are two main reasons that can account for the corporate crisis that America currently finds itself in. One is the ideology of pragmatism that influences most future businesspeople. The philosophy of pragmatism stresses “practical consequences as standards by which concepts should be analyzed and their validity determined,” rather then moral consequences. Pragmatism stresses immediate welfare rather then long term prosperity and furthermore encourages fraudulent behavior, because it claims the ends justify the means. Every experience students and future businesspeople have reinforces the idea of pragmatism: If you can get away with cheating on a test, why not? Eventually a pragmatic approach applied to business results in, if you can get away with changing the books, why not?
The second reason is the counter-intuitive slew of business regulation. Logic would suppose that more regulation might increase investor trust, but results have shown the opposite. For example how can the American people trust their money to an “independent board of directors” that has no “financial stake in a company”? Should investors not worry that the officers of the companies are making decisions based on what will conform to the SEC’s rules rather then what’s in the best interest of the company?
To prevent business fraud we need to counter both the reasons listed above. First, the deep rooted ideology of pragmatism needs to be replaced with a philosophy that not only introduces a moral element, but shows why amoral behavior is actually harmful in the long run. For example, students and future businesspeople need understand that cutting corners in academics has no long-term gains just as business studies have shown that an ethical standard of accounting and trust builds good will with customers and has proven more successful for firms even if it means sacrificing short term gains. Second, law makers need to take positive steps towards a healthy business environment by reducing regulation rather then adding to the existing slew of regulations.