Ethics and Values: June 2005 Archives

The Williamson County insert in the Sunday Tennessean ran a story about a group of young entrepreneurs gone bad.

They had started a business installing audiovisual systems in people's homes in the Nashville suburb of Brentwood. As an entrepreneurship professor I love to hear about young folks exploring the world of entrepreneurship. I developed a couple of small businesses when I was young and I know that is part of the reason I caught my life-long passion for entrepreneurship.

However, it seems these young boys were after more than a little experience and spare cash. They got greedy. The profits they made from their work were not enough.

"The alleged robbery happened last week while the owner of a Belle Meade home where the company had done work in the past was out of town, according to Brentwood Police.

"The teens entered the client's garage and stole a new Mercedes-Benz that was delivered while the homeowner was away. The suspects allegedly returned a second night, broke into the house and took more than $100,000 worth of property including jewelry, plasma televisions, computers and other personal items."

While I encourage young entrepreneurs to dream about the financial gains they can make as entrepreneurs, it is critical to ground their ambitions, the skills they develop, and the lessons they learn in values.

Entrepreneurs have no corporate code of ethics or even basic rules to follow in their work unless they develop them on their own. That is why it is so very important to understand how to integrate a sense of right and wrong, fair and unfair, just and unjust into your business from the very beginning. You set the rules and you enforce them.

I try to help my students understand the importance of this and how it can be accomplished in every class I teach. Sadly, it seems clear that these kids never got this lesson.

There are many groups still fighting the recent changes in the bankruptcy laws, including (no surprise) several law schools. So how are they continuing the fight for their cause? Why by confusion through statistics, of course.

While the percentage of small businesses failing may be dropping, the number of failures is increasing. Given the fact that the number of business start-ups per year has grown from 200,000 in the mid-1900s to over 3.2 million today, it is no surprise that the number of bankruptcies is up. And given the improvement in preparation that many entrepreneurs are now able to receive in the form of training, education, counseling and support materials it also is not surprising that success rates are up.

However, that is not even the point. Bankruptcy is a social issue as well as a legal issue. Business failure is traumatic and unfortunate. But, how the owners approach their obligations after a failure speaks volumes about their character. The increasingly casual attitude so many have toward financial obligations signals the deterioration of a key part of our culture and our social contracts we share with each other. A free culture is built upon the collective characters of its citizens. When we abdicate more and more of what was once the domain of our character to the law, we drift away from our freedom.

A free society is built upon trust. The lawyers do not create the increases in litigation and bankruptcies. They are just those who come behind our parade and clean up the mess we leave behind. If our society is sound and just there will be less for the lawyers to scoop up. When we defer to lawyers and the government and do not take responsibility for our own messes, we enter the spiraling decline we now see in our society and our culture. Legislation, litigation and the courts should never be the foundation of culture. That should be the stuff of our character and our shared values.

Our freedoms are vanishing. And through our actions, and more importantly our inactions, we are hastening this process.