Sam Zell on “Business Ethics”

Connie Buck has a fun profile of Chicago mogul Sam Zell in a recent issue of the New Yorker. Zell is a worthwhile study for anyone in business, particularly anyone who’s interested in the newspaper / media industry. A couple months ago Zell bought the Tribune Company (owner of the L.A. Times). The best quote of the article comes from Zell during the Q&A session after his speech to a business ethics class at the University of Hawaii:

…Someone in the audience asked Zell whether, in the current environment, “where some seem to be doing almost anything to be profitable, does not the concept of ‘business ethics’ seem to be an oxymoron? And do you accept that there is a concept of greed? And how would you define it?”

“Jesus Christ!” Zell replied. “I mean, would you like a pulpit as well? I mean, when does the indictment come out? I mean, are people in the business community different from you, or you, or you?” He pointed angrily at the questioner and others nearby. “C’mon! We’re talking about weaknesses and we’re talking about strengths! Are human ethics an oxymoron? I don’t think so. Neither do I think business ethics are an oxymoron. It’s real fun to take a shot at the business community. After all, those motherfuckers are getting all the money, right? But let me tell you something: I’ll put my work schedule against anybody you know, including you, and I work my ass off every day! The idea that somehow or other the business community is full of all these greedy characters—you should see the greed in teachers’ unions! You should see the greed in any political organization! Business is made up of a whole group of individuals, and within that group there are straight people, there are not-straight people, and then there’s a whole bunch of us in the middle, who some days are straight and some days we’re not.”

Amen, Mr. Zell, amen.

8 comments on “Sam Zell on “Business Ethics”
  • Errr…he didn’t even answer the question. The person asked a pretty straight-forward, non-confrontational question: in a business environment where the bottom line seems to be only thing that matters, is there room for ethical behavior that does not result in profit? It’s a pretty valid question that I certainly would have liked to have answered substantively by someone like Mr. Zell. Instead, he went off on some moral equivalency tirade.

    No me gusta.

  • Jesse,

    I would hesitate to call the question non-confrontational.

    By saying that “business ethics” is an oxymoron, the implication is that ethics and business are fundamentally incompatible, and by extension, that businessmen are immoral, or at best, amoral.

    If someone told me that I and the members of my profession were immoral or amoral, I might find that a bit confrontational.

    And ultimately, Zell does answer the question. He states that businessmen, like any other group, come in different flavors, with some that are always straight, some that are always crooked, and some that are in between (which is where he classified himself).

    I’m paraphrasing to take out all the “motherfucker”s, but I think it’s a fair assessment.

    As a businessman, I think it’s fair to ask why businesses should be evaluated more harshly than teacher’s unions and politicians, both of whom are groups that are far more inimical to society than businessmen.

    Businesses are responsible for the vast majority of our economy’s productivity, and the profit motive has helped bring us any number of advances which allow the middle class of today to live better than a reigning monarch of just 200 years ago. We are not (for the most part) criminals, parasites, or more unethical than the rest of humanity.

  • First, he asked “does not the concept of business ethics seem like an oxymoron?”–a far cry from actually claiming that it is an oxymoron. Moreover, the question really doesn’t get answered in a meaningful way: what considerations are there? when do ethical issues trump the bottom line? I agree that there are issues with unions and politicians–no debate there–but issuing some moral equivalency statement and being done with it is far from the root of the issue. Moreover, I don’t think the person asking the question was unfairly labeling businessmen; again, it was a purely hypothetical–albeit rather practical–question, especially in the globalized economy where corporations can easily avoid American labor laws intended to enforce ethics by simply outsourcing.

  • Here I am, agreeing with Mr. Zell. Call the paper, that’s news.

    What struck me was his reference to his work schedule. It’s filled with long days, and I can see where that can make him a bit testy. Does that to me too.

    As for greed, I don’t think that business has the monopoly on it. I’ve seen quite a bit of it in the education world, and not just in the teachers’ unions. Hell, I’ve even seen greed in nonprofit organizations.

    Thanks for posting this one, Ben.

  • The wrath is not against every businessman, it’s only against the successful ones. Profit is bad only when others make it; not when you pocket some yourself.

    Sam Zell is most qualified to get the stick because in February, he made a cool $39 billion by palming off Equity Office Properties trust and its 540 prime office buildings to Blackstone Group (at the peak of real estate bubble).

    Appreciate his judgment and sense of timing, if you have the latitude.

  • Jesse,

    Let’s examine the exact quote:

    “…in the current environment, ‘where some seem to be doing almost anything to be profitable, does not the concept of ‘business ethics’ seem to be an oxymoron?'”

    You argue that the question is a far cry from calling business ethics an oxymoron. Technically, that is correct. But how would you feel about being asked the following:

    “In the current environment, where teacher’s unions claim to care about the welfare of underprivileged children, yet fight vouchers, which are overwhelmingly supported by parents, especially minority parnets, does not the concept of “caring teachers” seem to be an oxymoron?”

    The question implicitly assumes that the sins of some show that businessmen are inherently amoral…the use of the word “seem” is more of a figleaf than fair play.

    And again, Zell answers the question. He states that it is foolish to generalize about the ethics of businessmen, when, like any group, there are ethical players and unethical ones.

    While I don’t doubt your good intentions, again, it seems to me that you are ignoring or misinterpreting Zell’s words.

  • It seems to me that there’s a fundamental question here that remains unanswered by Zell–essentially, how do you balance the profit motive with a sense of ethics? This is not exclusive to Zell, or businessmen in industry X, or even just the profitable ones (keep thumping your Rand, Krishna!). It’s a pretty basic question. We could argue the tonality of the question or the way it was raised, but I think we can agree that it was ostensibly and quite apparently there.

    Now, Zell could have answered this in a myriad of ways. But he didn’t. He indicted teacher’s unions and avoided it by warning against generalization. But how does he deal with it, personally? Has he felt that the question is at least being addressed and dealt with in the cultural conscience of the business world?

    You can defend him by claiming that the question wasn’t specific enough, but it certainly doesn’t seem that he deserves the praise people are lavishing on him in the comments.

  • Nice to see such a lively discussion going on about this! It seems to me that Zell was right on in a lot of respects – greed isn’t limited to the business community, and I have to applaud anyone who gets passionate about ethics.

    You’re right, however, that he really didn’t answer the question. I’m also struck by the pungency of his language – have we really reached the point where the only way to demonstrate conviction is to load on the four letter words? Surely, a man of Zell’s stature has a more expansive vocabulary than he demonstrated here. It would have been nice to see Zell make the case for business ethics in a positive way, rather than going on a semi-profane rant.


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