Profit maximization: The ethical mandate of business

The authors propose a model for business ethics which arises directly from business practice. This model is based on a behavioral definition of the economic theory of profit maximization and situates business ethics within opportunity costs. Within that context, they argue that good business and good ethics are synonymous, that ethics is at the heart and center of business, that profits and ethics are intrinsically related.Marist Father Pat Primeaux is a Professor of Theology at Saint John's University, (New York). John Stieber is a Professor of Finance and Economics at Southern Methodist University's Edwin L. Cox School of Business (Dallas). They have collaborated on several articles on the behavioral dimension of economic efficiency. They have also designed and taught courses in business ethics at both the graduate and undergraduate level.     

Theological ethics and business ethics

Philosophers have constituted business ethics as a field by providing a systematic overview that interrelates its problems and concepts and that supplies the basis for building on attained results. Is there a properly theological task in business ethics? The religious/theological literature on business ethics falls into four classes: (1) the application of religious morality to business practices; (2) the use of encyclical teachings about capitalism; (3) the interpretation of business relations in agapa-istic terms; and (4) the critique of business from a liberation theological point of view. Theologians have not adequately addressed the questions of whether there are particular theological tasks in the field as they define it, and whether, if they define it, the theological definition is different from the philosophical.     

Transatlantic business ethics

The Business Ethics Center of the Budapest University of Economic Sciences organized a Transatlantic Business Ethics Summit on September 15–17, 2000 in Budapest, Hungary. The Summit was sponsored by the Community of European Management Schools (CEMS) and Procter & Gamble.
The main function of the Summit was to provide a forum for leading American and European scholars to explore the background theories and value bases of business ethics from the perspective of the 21st century. The participants reflected on the state of the art of business ethics as it has been practised in the USA and Europe; however, the future of business ethics as a discipline was the main focus of the Summit. Since business ethics is closely related to business and capitalism, some considerations of the 21st century economic, political, and social reality were presented too. The paper is based on and composed from the abstracts provided by the participants of the Transatlantic Business Ethics Summit. The abstract booklet can be obtained from Laszlo Zsolnai, the Convenor of the Summit.     

The crisis of American business

This paper is a response to the preceding papers. It is maintained that American business is failing to live up to its obligations to society. One reason for this is acceptance of what De George calls the Myth of Amoral Business. Businessmen believe that morality is either not applicable to business or that business has a special morality of its own. Several arguments are advanced to show why this is not true. A second reason business is failing to fulfill its obligations is that egoism seems to be an essential feature of capitalism. Harrington believes that this should be changed, but that attempts to change it are bringing about a more collectivist society. Kirk sees no need for change because he believes capitalism the best possible economic system. It is argued in reply that they are both mistaken because their analyses are based on outmoded ideologies which impede rather than aid us in solving problems caused by the irresponsibility of business. Gene G. James is Professor of Philosophy at Memphis State University. He is Managing Editor of The Southern Journal of Philosophy. He is the author of a number of articles on ethics and political philosophy, and is co-author of a logic text.     

Economy suspended: the possibilities of a Badiouian business ethics

In the philosophy of Alain Badiou, ethics can only arise in relation to an evental truth procedure that breaks from the economic logic of a situation. Further, because for Badiou there cannot be economic truths per se – rather, economic matters must be understood in their relation to one or more truths in the domain of love, art, science or politics – a Badiouian business ethics would look entirely distinct from any ethics that simply places limits on certain kinds of economic activity. Although Slavoj ?i?ek, among others, has suggested that this marks an essential weakness in Badiou's economic/political theory, it may actually be the greatest strength of his position. Within a capitalist system, a Badiouian business ethics would then be a question of mobilizing economic resources in order to serve the ongoing construction of a truth procedure. For a business to be considered ethical on Badiou's terms, it must break – and continue to break – from the dominant logic of capitalism and its merely economic pursuit of profit maximization.     

A new look at ethics in international business

In many countries there are stated rules that gift-giving and solicitation in business practice are unethical and prohibited. However, except for the American FCPA, all the rules and guidelines seem to govern only domestic business practices and there are no clear-cut rules for international business practices in this respect. This study investigates gift-giving and solicitation in international business practice, using the data collected from 111 New Zealand international business firms. The research findings show variable conduct and contradictory attitudes. These findings suggest that, with the variety of ethical standards and levels of morality which exist in different cultures, neither Deontology nor Utilitarianism could be the answer to the dilemma of ethics and pragmatism that faces today's international business managers. Instead, “Culturalism,” as developed in this study, should be the guiding principle to international business ethics.     

A quick justification for business ethics

The article examines the question of whether business ethics courses ought to have an impact. Despite the still common attitude among students and some business professionals that ethical considerations are less pressing in business, I argue that moral obligations are just as important there as elsewhere. The emphasis on profits in business is related to other realms (e.g., hobbies and seeking and education) in which, though private goals are dominant, moral limits remain in force. Business ethics courses can play a crucial role in emphasizing the necessity of ethical analysis in business. Louis G. Lombardi is Assistant Professor of Philosophy at the Lake Forest College and the author of Inherent Worth, Respect, and Rights in Environmental Ethics.     

Two views of business ethics: A popular philosophical approach and a value based interdisciplinary one

I distinguish between two problems related to business ethics. (1) How can business ethics help morally conscientious business people to resolve moral problems in business? (2) Given the widespread belief that immorality, or at least amorality, is too prevalent in business, how can one discover both the sources of business amorality and immorality and make business as morally respectable an institution as possible? Philosophers who have concerned themselves with business ethics have emphasized (1), i.e., they consider the normative ethical principles applicable to solving moral questions in business. Although some benefit can be derived from this approach, there are a number of problems with this position. I then argue that, in considering (2), we ought to analyze business life styles (ideals) that have determined the character of American business people, and show both their negative and positive moral consequences. This analysis reveals the morality, or lack of it, in modern American business, possible changes in business morality, and possible ways of developing a desirable and viable business ethic. In a sketchy way, I show how this project can be developed.     

Marxism,Business Ethics,and Corporate Social Responsibility

Originally delivered at a conference of Marxist philosophers in China, this article examines some links, and some tensions, between business ethics and the traditional concerns of Marxism. After discussing the emergence of business ethics as an academic discipline, it explores and attempts to answer two Marxist objections that might be brought against the enterprise of business ethics. The first is that business ethics is impossible because capitalism itself tends to produce greedy, overreaching, and unethical business behavior. The second is that business ethics is irrelevant because focusing on the moral or immoral conduct of individual firms or businesspeople distracts one’s attention from the systemic vices of capitalism. I argue, to the contrary, that, far from being impossible, business requires and indeed presupposes ethics and that for those who share Marx’s hope for a better society, nothing could be more relevant than engaging the debate over corporate social responsibility. In line with this, the article concludes by sketching some considerations favoring corporations’ adopting a broader view of their social and moral responsibilities, one that encompasses more than the pursuit of profit.     

Marxism and business ethics

I explain how a Marxist would understand and respond to the phenomenon of business ethics. In Section I, I maintain that a Marxist would supplement traditional explanations of the increased interest in business ethics by an emphasis on class needs created by a situation of declining profits. I argue, in Section II, that business ethics might be used to address two needs created by this situation: (1) to legitimate the system of capitalist production: and (2) to discipline individual members of the bourgeoisie so that they will refrain from pursuing their individual interests when these conflict with the interests of their class. In Section III, I argue that there is no guarantee that business ethics will develop to meet these class needs, and that the questions to which an interest in business ethics gives rise may themselves lead to serious and effective criticism of business.An earlier version of this essay was read at a meeting of the Society for Business Ethics, American Philosophical Association (Boston, 28 December 1980), and I am grateful to the participants, especially George Brenkert, for their helpful discussion. The position I present has also benefited from comments on that earlier version by David Bayless, David Schweickart, and Daniel Wikler. I would especially like to thank Thomas Donaldson and Richard W. Miller both for their comments on this paper and for discussions of the topics of Marxism and business ethics.     

Economic efficiency: A paradigm for business ethics

Current teaching, writing and thinking in business ethics reflects (more than) a tendency to subsume business into the theoretical, idealistic and impractical objectives of philosophical ethics. Professors Primeaux and Stieber argue against this tendency. They propose the basic business model of economic efficiency as a practical and appropriate paradigm for business ethics. Understood from a behavioral perspective, economic efficiency reflects all of the ethical considerations of the academic study of philosophical ethics, but in a much more concrete and applicable manner. In effect, they are proposing that any study of business ethics defines its starting point and focus of reference in terms of economic efficiency. qu]Is there a need for business ethics? Yes, of course! Can business ethics be taught? Well, yes. But ... But, what? But, how?     

Is there “no such thing as business ethics”?

What are we to make of the claim that we often hear, that there is no such thing as business ethics? This essay first examines two arguments that might be in people's minds in making such a claim — that business is a “game,” and hence the ordinary constraints of morality do not apply, and that one cannot survive in business if one is too “ethical.” The critique of these arguments begins the process of making clear what business ethics is. The paper then proceeds in a more positive vein to define and explain for the sceptic what business ethics is. Everyone must confront the question, what should I do in my business relationships? Business ethics is defined, then, as the effort to develop Socratically one's answer to this question, that is, through the critical examination of alternatives. In the process of explaining this notion, several other senses in which someone might say that there is no such thing as business ethics are explored and the basic distinction between the moral point of view and ethical egoism is introduced.     

Economic criteria versus ethical criteria toward resolving a basic dilemma in business

Today's headlines suggest that economic criteria alone is the basis for business decision-making. This paper argues that while profitability is a legitimate end of business, it must be moderated by ethical considerations. But can business be both successfuland ethical? Practical examples highlight individuals who chose profitability over ethical responsibility and those who chose and continue to choose both. The authors propose that there is an ethical person profile. Corporate managers can resolve the profits vs ethics dilemma by modeling ethical behavior.     

Social welfare, positivism and business ethics

It appears that there is a conflict of values running through business ethics between profits accruing to shareholders and the cost of entrepreneurial activities on wider stakeholders. In the ethics research literature, the multiplicity of normative ethical stances has resulted in much debate but little in the way of consistent policy proposals. There is, by comparison, an extensive literature in positive economics that attempts to resolve value conflicts similar to those faced by business ethicists. In this paper the adoption of positive welfare statements are advocated and the value judgements implicit in economics are used as the starting point. It is argued that there is merit in expressly stating a set of value judgements to demonstrate the intractable nature of finding a social consensus without a positive social welfare function that explicitly weights the values. This paper reviews the arguments surrounding corporate objectives, particularly with regard to ethical considerations and the profit maximisation orthodoxy. This is discussed within the stakeholder-stockholder narrative. A range of ethical positions in the management strategy literature are analysed and discussed. It is argued that the values underpinning business ethics research can be conceived of via a function of social welfare (including an ethical 'auctioneering' model). The paper concludes by suggesting that all ethical positions can be captured by a Bergson-type welfare function.     

The development of international business in Africa (1947–1997)

The genesis of international business in Africa from 1947 to 1996 is traced to colonial times. The article analyzes the dynamics and observes that international business in Africa witnessed growth but has not meaningfully influenced Africa's general economic development because of constraints: poor infrastructure, lack of maintenance culture, inadequate funding, debt burden and overemphasis on export of raw materials instead of manufactured goods. The article suggests placing a greater emphasis on the development of intermediate and capital goods industries and granting debt relief to all African countries as a means of further promoting international business entente in Africa.     

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.     

What is the American business value system?

The model of free enterprise that has developed in the United States presupposes a value system. The central value is freedom. Next come goods and the means of acquiring them, viz., money and profit. Competition is central. But fairness of transactions is presupposed, and this implies honesty, truthfulness, and general respect for persons. Optimism and faith in the future have been ingredients from the start. Each of these values can be abused, and such abuses characterize the seamy side of capitalism. The Myth of Amoral Business helps undermine the values. Yet the changes American society is demanding of business can be seen as reaffirming the values the system presupposes. The imperative is for business to live up to its own best traditions — a social demand that business can and should meet if it wishes to continue as a system of free enterprise. Richard T. De George is University Distinguished Professor of Philosophy and Co-Director of the Center for Humanistic Studies at the University of Kansas. He is author or editor of thirteen books, including Ethics and Society; Ethics, Free Enterprise and Public Policy; and Business Ethics.     

Is business ethics philosophy or sophism?

The contrast between the philosopher and the sophist is subtle and significant. The significant difference is identified by Socrates when he claims, in the Apology 21d, to be the wisest man in Athens: “Neither of us has any knowledge to boast of, but he thinks that he knows something which he does not know, whereas I am quite conscious of my ignorance.” Nearly two and one half millennia later, business ethics has transported street corner conversation into the meeting room and board room, where ethical leadership is cultivated or stifled. Are these conversations about ethics philosophy, or are they sophism? In this paper, I will evaluate the philosophical soundness of business ethics as it is practiced in business situations. My objective will be to outline the unfulfilled value of philosophical wisdom to ensuring the value of business ethics, and business, to society at large.     

The Good Manager – A Moral Manager?

In this article two problems with the recently developed "practice or virtue approach" to business ethics are discussed. The first problem concerns an alleged harmony between common demands of morality (generally understood) and the internal goods of actual business practice. The claimed harmony is strong in essence since it holds that the role expectations a good manager has to live up to, do in fact coincide with what morality demands. The second problem is related to the first and concerns the alleged relevance of a virtue perspective for business ethics. According to the virtue perspective discussed in this article, moral reasoning should take actual practice, and only actual practice, as a point of departure. In so doing ethics is claimed to become insulated from e.g. putting irrelevant demands on practitioners. Such demands are understood as based on abstract principles alien to the practice in question. The thesis of this article is that neither of the above mentioned two claims are plausible. This is so basically because one needs to turn elsewhere than to actual business practice in order to detect a morally laden notion of managerial goodness.     

Ethics from the top: top management and ethical business

Codes of ethics and conduct typically demand the highest standard of ethical behaviour from every single employee. This implies a democratic or lobbyist understanding of ethics in business. The contrasting view would argue that business ethics is an elitist undertaking that can only be instigated from the top, by managing directors or owner managers. This article looks at three types of ethical businesses, three types of approaches to ethical problem-solving, and three possible incentives for ethical business to see which of the above is more convincing. It will be argued that the impulse for value-driven business has to come from the top. Only top management and owner managers have the opportunity to foster major change in business practice.