The business of ethics and the ethics of business

This is an essay in personal business ethics of executives as distinguished from the institutional ethics of corporations. Its purpose is to give practical moral guidance to executives for the conduct of their lives both as corporate decision-makers and as human beings. The pivotal concept in this model of personal business ethics is a direct appeal to the self-interest of executives in their being moral. Our thesis is that generally there is a twofold return on investment in ethics (ROIE) for executives. The first one is related to employee output: by becoming a self-actualizing moral type, executives indicate commitment to excellence. Accordingly, they so manage employees that the latter can also live up to their full potential and excell. And that would increase corporate productivity and product or service quality. The second payback of morality is personal: fully developed, self-actualized managers are generally happier people than those whose growth has been arrested. In brief, moral self-actualization is the same as commitment to excellence and there is a payback in being the best. Return on investment in ethics and return on investment in excellence can both be abbreviated as ROIE. We accomplish the purpose and establish the thesis of this essay by seeking answers to the following questions: What business does ethics have in business? What business does business have in ethics? Is there a return on investment in ethics for executives? and Does being moral help executives become more effective managers? In sketching answers to these questions, we first show why executives need a personal business ethics especially in today's world. Then, we sketch the nature of ethics and of business. After these introductory materials, the body of the paper argues for a personal business ethics for executives by correlating elements of management theory with ethics. Specifically, it links a theory of employee motivation with a scale of values, management character types with moral types, and management leadership styles with morality. Then, the practical technique of life by objectives (LBO) is explained. It can help executives manage their lives more effectively in both the business and ethical sense. We conclude by explaining ideals of excellence which can guide executives in their work and development both as managers and as human beings.     

The ethics of greenmail

In the contemporary flurry of hostile corporate takeover activity, the ethics of the practice of greenmail have been called into question. The authors provide an account of greenmail in parallel with Daniel Ellsberg's conception of blackmail, as consisting of two conditions: a threat condition and a compliance condition. The analysis then proceeds to consider two questions: Is all greenmail morally wrong? Are all hostile takeovers morally wrong? The authors conclude that there is no basis for answering either question in the affirmative. While there is no cause for moral concern per se, the practices of both greenmail and hostile takeovers yield deeper and more interesting questions for the theory of corporate governance.     

The ethics of investing

In this paper, I examine various popular notions concerning the ethics of investing. I first consider and reject the absolutist view that it is always wrong to invest in “evil” companies and the view that what makes investments in evil companies morally objectionable is the fact that by making such investments, investors are taking steps to benefit from the wrongdoing of others. I then defend the view that what makes certain investments morally objectionable is the fact that by making such investments, investors enable others to do wrong. According to this view, when weighing the purchase of a certain company's stock, investors should ask themselves the following question: “Would this sort of investment, if made by many people, enable others to do wrong?” If the answer to this question is yes, and if an investor nevertheless makes the investment in question, he can justifiably be accused of moral wrongdoing.     

The ethics of empowerment

Driven by competitive pressure, organizations are empowering employees to use their judgment, creativity, and ideas in pursuit of enhanced organizational performance and both employee and shareholder satisfaction. This empowerment offers both benefits and potential harm. This article explores the benefits and harm associated with role, reward, process and governance empowerment and makes recommendations for minimizing the harm while maximizing the benefits.Jeffrey Gandz is a Professor and the Director of the MBA Program, at the Western Business School, teaching courses in Organizational Behavior, Human Resource Management, and Industrial Relations in both degree and executive programs. His current research is focused on the achievement of organizational effectiveness through the matching of organizational strategies, cultures, and individual values. Frederick Bird is a Professor of Comparative Ethics at Concordia University in Montréal, where he directs the Ph.D. in Religion and teaches in the Religion and Management Departments and in the Executive MBA. He is the co-authors with Jeffrey Gandz of Good Management: Business Ethics in Action (Prentice-Hall) and the author of Good Conversations: A Practical Role for Ethics in Business (Boston College) and numerous articles. He is currently directing a research project with Manny Velasquez and Jeffrey Gandz studying how corporation manage moral issues.     

The two-tiered ethics of EDP

Ethical questions regarding access to and use of electronically generated data are (if asked) commonly resolved by distinguishing in Lockean fashion between raw (unworked) and refined (worked) data. The former is thought to belong to no one, the latter to the collector and those to whom the collector grants access. Comparative power separates free riders from rightful owners. The resulting two-tiered ethics of access is here challenged on the grounds that it inequitably establishes a rule of law for the strong while leaving the weak in a Hobbesian state of nature. Efforts at legislative constraints are reviewed; but such constraints are found to afford inadequate protections of privacy if a data subject may not prohibit others under ordinary circumstances from using recognizably name-linked data.Edmund F. Byrne is Professor of Philosophy at Indiana University in Indianapolis. His research interests center on policy and practices regarding technology, community, and social welfare. His most recent book isWork, Inc. (Temple University Press, 1990); and he is now writing another tentatively subtitledDemocracy, Civil Society, and Benevolence.     

The ethics of psychoactive ads

Many of today's ads work by arousing the viewer's emotions. Although emotion-arousing ads are widely used and are commonly thought to be effective, their careless use produces a side-effect: the psychoactive ad. A psychoactive ad is any emotion-arousing ad that can cause a meaningful, well-defined group of viewers to feel extremely anxious, to feel hostile toward others, or to feel a loss of self-esteem. We argue that, because some ill-conceived psychoactive ads can cause harm, ethical issues must arise during their production. Current pretesting methods cannot identify the potentially psychoactive ads; therefore, we offer some tentative guidelines for reducing the number of viewers harmed by psychoactive ads.No professional, be he doctor, lawyer, or manager, can promise that he will indeed do good for his client. All he can do is try. But he can promise that he will not knowingly do harm.... Peter F. Drucker, Management ... [C]oncern for consumer welfare includes an obligation to critically evaluate all marketing techniques that have indeterminant psychological effects. Spence and Moinpour, 1972, p. 43 Dr. Michael R. Hyman is an Assistant Professor of Marketing at the University of Houston — Clear Lake. He is a member of the American Marketing Association, Institute for Management Science, Academy of Marketing Science, Southern Marketing Association, and World Future Society. His work has appeared in the Journal of Marketing, Journal of Business Research, Journal of Retailing, Business Horizons, and several AMA national proceedings. His current research interests include foundations research and philosophical analyses in marketing. Dr. Richard Tansey is an Instructor of Marketing at the University of Wisconsin — Green Bay. He has his Ph.D. in history from the University of Texas, at Austin, Texas. He received his B.A. in philosophy from the University of West Florida. He minored in philosophy of history and psycho-history while earning his Ph.D. He received a Woodrow Wilson graduate fellowship in philosophy in 1971–1972. His work has appeared in Business Horizons.     

The ethics of rent control

Residential rent control is a contentious issue in many jurisdictions throughout the world. While tenant groups have often argued vociferously in defence of control, landlord groups and the vast majority of economists have been equally vehement in their criticisms. This paper examines some key normative issues involved in rent control. In particular I examine arguments in favor of control based on the alleged unfairness of winfall profits, upon affordability, and finally on the creation of rights to security of tenure. Various objections by libertarian and free market philosophers and economists are examined. I conclude with a somewhat limited defense of rent control as used in specific situations as part of a more comprehensive policy to satisfy the normative demands at the root of tenant pressure for rent control. Ken Hanly is an Associate Professor of Philosophy at Brandon University. His most recent publications are two book reviews in January and March 1990 in Canadian Philosophical Reviews. His research interests include business ethics, moral, and political philosophy.     

The challenge of global ethics

The authors argue that the time is ripe for national and corporate leaders to move consciously towards the development of global ethics. This papers presents a model of global ethics, a rationale for the development of global ethics, and the implications of the model for research and practice.Paul F. Buller is an Associate Professor of management in the School of Business Administration at Gonzaga University where he teaches courses in strategic management. Dr. Buller holds a PhD degree in Business Administration from the University of Washington, and has published a number of articles appearing in academic and practitioner journals.John Kohls is an Associate Professor of Management at Gonzaga University. He teaches classes in Business Ethics, Business, Government and Society, and Organizational Behavior. He has written numerous articles in these areas and conducts Management Development workshops including Ethics, Organizational Culture, and Leadership.Kenneth S. Anderson is an Associate Professor of management at the School of Business Administration, Gonzaga University. His research interests include ethics, burnout, and linkages between strategy and human resource management.     

The financialisation of business ethics

Business schools have become implicated in the widespread demonisation of the financial classes. By educating those held most responsible for the crisis – financial traders and speculators – they are said to have produced ruthlessly talented graduates who have ambition in abundance but little sense for social responsibility or ethics. This ethical lack thrives upon the trading floor within a compelling critique of the complicity of the pedagogy of the business school with the financial crisis of the global economy. An ethical turn within the curriculum is now widely encouraged as a counteractive force. Within this paper, however, we argue that taking this ethical turn is not enough. For business ethicists to learn from the financial crisis, the crisis' legacy needs to be taken account of, and financialisation needs to be taken seriously. Pedagogical reform cannot bracket itself off from the crisis as if it were coincidental with or separate from it. Post-crisis pedagogy must rather take the fact that it is requested now, in light of the crisis, as its very point of departure. The financial crisis must not be understood as something to be resisted in the name of Business Ethics. Instead, the financial crisis must be understood as the very foundation for contemporary Business Ethics in particular and for contemporary business and management education more generally.     

The institutionalization of organizational ethics

The institutionalization of ethics is an important task for today's organizations if they are to effectively counteract the increasingly frequent occurrences of blatantly unethical and often illegal behavior within large and often highly respected organizations. This article discusses the importance of institutionalizing organizational ethics and emphasizes the importance of several variables (psychological contract, organizational commitment, and an ethically-oriented culture) to the institutionalization of ethics within any organization.... institutionalizing ethics may sound ponderous, but its meaning is straightforward. It means getting ethics formally and explicitly into daily business life. It means getting ethics into company policy formation at the board and top management levels and through a formal code, getting ethics into all daily decision making and work practices down the line, at all levels of employment. It means grafting a new branch on the corporate decision tree — a branch that reads right/wrong (Purcell and Weber, 1979, p. 6). Ronald R. Sims has been an Associate Professor of Business Administration at the College of William and Mary since 1986. He is the author of more than fifty scholarly papers and chapters and these books: An Experiential Learning Approach to Employee Training Systems, and co-author of Readings in Organizational Behavior, and Managing Institutions of Higher Education into the 21st Century: Issues and Implications, both forthcoming.     

The ethics of business intelligence

A review of the strategic management, policy, information management, and the marketing literature reveals that many large and medium sized companies now collect and use business intelligence. The number of firms engaging in these activities is increasing rapidly.While the whys and hows of this practice have been discussed in the academic and professional literature, the ethics of intelligence gathering have not been adequately discussed in a public forum. This paper is intended to generate discussion by advancing criteria which could be used as the basis for judging actions of those involved in business intelligence and for creating reasonable policies in this sensitive area of practice.Norm Schultz is an Associate Professor in the Department of Accounting and Taxation at Colorado State University.Allison Collins is an Assistant Professor in the Department of Accounting and Taxation at Colorado State University.Mike McCulloch is an Assistant Professor in the Department of Philosophy at Colorado State University.     

The ethics of impression management

There are differences among forms of impression management that are relevant to its ethical evaluation. Sometimes, moral appraisal is to do with impression management as a tactic of influence, but not about deception. In other cases, an audience is given a true or a false impression, and ethical questions of deception arise, but they are made more complex by the need to consider the responsibility of an audience in reaching its conclusions. Cases where that is an issue blend into a third category in which impression management is joint social performance. Such cases raise additional possibilities of the problematic influence of one agent by another, but also begin to move ethical concerns from the behaviour of an individual agent to the social practices that sustain their expectations. Such social practices invite ethical appraisal because they may impose constraints. But they may also provide opportunities for achievement and pursuit of excellence.     

The ethics of subliminal communication

Assume that we communicate for the purpose of trying to change a person's behavior either overtly or covertly. As long as this is done in an honest manner, no concern with ethics is involved. But suppose a communication pattern — subliminals — is developed that covertly tries to change our behavior without our consent. Then, concern with ethics is involved.Very little evidence exists to support a definitive quantitative impact of subliminal communication. There is a suggestion, however, that subliminals do in fact manipulate people to do certain things. If this is so, then we have an over-riding issue in ethics — the ultimate invasion of a person's privacy — his mind.Dr. Gratz has been Director of Business at Shippenburg State College in Pennsylvania, Chairman of the Business Education Department at the University of Iowa and a visiting professor at the University of Vermont, the University of Michigan, and the University of Houston.Currently a professor of Business Administration at Pan American University, Dr. Gratz has published over 30 books and articles. Recently he has been named to the Board of Directors for the National Hall of Fame for Business Education.     

The ethics of corporate governance

The failure of the critics of corporate governance to agree on what should be done to improve the governance process can, in most cases, be traced to a different understanding of the role of corporate directors in that process. This article analyzes and contrasts the obligations of directors under two legal theories, the fictional person theory and the organic theory, of the corporation. A comparison of the director's obligations under each theory indicates that the organic theory provides a better basis for assessing the performance of directors and initiating reform.Among the boards of directors of Fortune 500 companies, I estimate that 95% are not fully doing what they are legally, morally, and ethically supposed to do. And they couldn't, even if they wanted to.E. Eugene Arthur, S.J., is Associate Professor of Management and Economics at Rockhurst College. He is a Visiting Fellow at Trinity Center for Ethics and Corporate Policy.     

The ethics of going private

In this paper, we analyze some of the ethical dimensions of going private transactions (GPTs), wherein publicly traded firms are taken private. Financial theory suggests that efficiencies may be realized in these transactions such that outside shareholders are made better off. Empirical evidence supports this theory. We therefore argue that GPTs are not inherently exploitive or unethical. The issues of the fiduciary duty of corporate managers to shareholders and their obligations to non-shareholders are also explored. Douglas A. Houston is Associate Professor of Business Economics at the University of Kansas. He has written several articles which have been published in journals such as Cato Journal and Kansas Law Review. John S. Howe is Assistant Professor of Business at the University of Kansas. In 1985 he was awarded Outstanding Educator in the MBA Program. His articles have appeared in Journal of Banking and Finance and Journal of Financial and Quantitative Analysis.     

The ethics of talent management

Organisational approaches to talent management are often concerned with the ways that a small proportion of relatively high-performing employees are identified and managed in relation to the majority. Despite a growing literature on talent management, no papers have provided any guidance on how to evaluate it from an ethical standpoint. After considering what is meant by talent, this paper considers the ethical issues that arise from the operation of talent management programmes. These considerations are then used to create a framework that has the potential to influence the practical design of talent programmes and which may focus further debate into the ethics of talent management.     

The ethics of insider trading

Despite the fact that a number of economists and philosophers of late defend insider trading both as a viable and useful practice in a free market and as not immoral, I shall question the value of insider trading both from a moral and an economic point of view. I shall argue that insider trading both in its present illegal form and as a legalized market mechanism undermines the efficient and proper functioning of a free market, thereby bringing into question its own raison d'etre. It does so and is economically inefficient for the very reason that it is immoral. Thus this practice cannot be justified either from an economic or a moral point of view.

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The ethics of insurance professionals: Comparison of personal versus professional ethics

This paper considers the level of ethics for insurance professionals for professional situations (measured with three insurance scenarios) compared to personal (consumer) situations (measured by Muncy and Vitell's 1992 Consumer Ethics Scale). The results of the study illustrate that there are significant differences in the ethical behavior of insurance professionals in professional versus personal situations. The authors found that insurance professionals are more likely to actively engage in unethical behavior in order to benefit professionally than in a personal setting. In general, however, the average respondent was unlikely or extremely unlikely to engage in unethical conduct. The managerial implications and need for future research in this area are discussed.K. L. Eastman is an Assistant Professor of Risk Management and Insurance at Florida State University. He received his doctorate from the University of Pennsylvania.J. K. Eastman is an Assistant Professor of Marketing at Valdosta State University. She earned her doctorate from Florida State University.A. D. Eastman is a doctoral candidate in Risk Management and Insurance at Florida State University.