Professor Lütge: “It is now important to gradually revive public and economic life”

The corona pandemic could trigger the biggest economic crisis since World War II, experts are warning. Governments have taken unprecedented measures to fight the SARS-CoV-2-virus including the restriction of fundamental rights. But is the price perhaps too high? For weeks, life in Germany and other countries worldwide has been largely paralyzed. In the pursuit to keep things going, millions are currently working digitally at home. But what about those who can not adapt quite as easily? Professor Christoph Lütge from the Department of Corporate and Business Ethics at the TUM School of Management shares his insights on corporate responsibility and strategy in times of the coronavirus as well as his point of view on necessary next steps.

These days, lucky are those whose jobs don’t rely on their physical presence at a certain place. Industries which can lean on the luxury to work remotely and digitally are – of course – not as shell shocked by the current crisis as others who can not. The latter, although, are most. And with each passing day determined by the ongoing restrictions, people around the world fear more for their salaries, businesses and jobs. As a result, many large companies show solidarity for their employees, customers or even with their industry.

Some restaurants have increased their employees’ short-time working allowances even though their locations have been closed. According to a report by “Die Welt”, one of the largest French supermarket chains, Auchan, wants to pay its employees a bonus of 1,000 euros for their work. The same report states that the German retailer Rewe and its discount subsidiary Penny are also planning something similar and are to transfer a total of 20 million euros for this purpose.

The list goes on and on. But as vital as they may be – should we look at these initiatives as pure acts of goodwill? What is the benefit for companies if they present themselves as a socially committed, solidarity brand?

“Generally, I applaud companies if they go beyond what would be required purely from a legal point of view in order to help out their employees and society in total,” says Professor Christoph Lütge from the Department of Corporate and Business Ethics at the TUM School of Management. But of course, companies do not act with such initiatives purely for reasons of solidarity: “It is clear that ethical and economic interests converge here – and understandably so. After all, once the crisis is over at some point, affected companies will have to quickly restore their capacities and hire employees,” Lütge emphasizes. One positive effect of such actions, he says, is that other, rather reluctant companies will give in to peer-pressure, join in and invest money to combat the social consequences of the crisis.

“However, it is very difficult to distinguish between solidarity actions and pure PR campaigns by companies,” he emphasizes. One factor in particular plays a role for Lütge to ensure that company actions are actually carried out in a spirit of solidarity and are justifiable from a business ethics point of view. “Generally speaking, the following question is important when evaluating such actions: Is there someone – besides the company itself – who is substantially profiting from them? If that is the case, I believe it is also perfectly acceptable for a company to gain in reputation,” the corporate- and business ethics expert says.

When it comes to measuring the next steps in defeating this crisis, Lütge has a clear point of view. “What is clear is that in the short to medium term we have to find a way to gradually return to normality. And I’m not talking about putting economic interests before everyone’s health, but about balancing different interests within the population.” According to Lütge, this also includes the concerns of those who are facing existential problems as a result of the current measures. “If we permanently prevent small and medium-sized companies in particular from going about their daily business, we will drive many of them into insolvency and drive us as a nation into a downward current that can no longer be stopped”. Even aid funds initiated by the government would then no longer be able to compensate for such a trend – with devastating consequences for society as a whole. “Therefore, it is now important to gradually revive public and economic life, to relax restrictions and to formulate a clear exit strategy. And we must be careful not to prohibit any points of discussion here.”

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