The individual investor in securities markets: An ethical analysis

In this paper we consider whether one type of individual investor, which we call at risk investors, should be denied access to securities markets to prevent them from suffering serious financial harm. We consider one kind of paternalistic justification for prohibiting at risk investors from participating in securities markets, and argue that it is not successful. We then argue that restricting access to markets is justified in some circumstances to protect the rights of at risk investors. We conclude with some suggestions about how this might be done.Robert E. Frederick is Assistant Professor of Philosophy at Bentley College and Assistant Director of the Center for Business Ethics. Before coming to Bentley College he worked at a large financial institution for nine years, where he was Vice President for Administrative Services. Dr. Frederick has authored or co-authored over fifteen articles and has co-edited four books. He has consulted on business ethics for several major corporations. W. Michael Hoffman is the founding Director of the Center for Business Ethics, and Professor and Chair of the Department of Philosophy at Bentley College, Waltham, MA. He was President of the Society for Business Ethics in 1989. He has authored or edited ten books, including Business Ethics: Readings and Cases in Corporate Morality (McGraw-Hill, 1984; 1990) and published over thirty articles. He has consulted on business ethics for many major corporations and institutions of higher learning, and he serves on the board of several journals.     

The Texaco incident

The topic of this paper concerns corporate responsibility and worker safety. In particular it focuses on the notions of willing and intending and how these relate to risk-taking in the workplace. I discuss the metaphysical status of the corporation, the distinction between willing and intending and the motivations of each, and Austin's distinction between accidents and mistakes in light of a single industrial accident which occurred at the Texaco Oil Refinery, Port Arthur, Texas, in October, 1982. My aim is to argue that corporations do not alleviate themselves from moral responsibility in the workplace solely because they might not intend to produce harm in a given situation. Joan Catherine Whitman Hoff is Assistant Professor of Philosophy at Bentley College. She has been given the NEH 1983 Summer Seminar for College Teachers award and the Northern Kentucky University 1985 Faculty Summer Fellowship. Her most important publications, with J. Ferrante Wallace, Women in Sports and The Black Athlete, appear in Sports History: Selected Materials from Colleges and Universities (eds. D. A. Novern and L. E. Ziewarz).Many sincere thanks to the NEH for having provided the time and money for this research, to Dr. Peter French for his helpful seminar, and to Mr. Peter Applebome for his stimulating comments.     

Ethical theory and practice: Is there a gap?

Archie Bahm argued recently that there is a gap between theoretical and applied ethics, and that those working in applied ethics must assume the burden of bridging it. Evidence of a gap is considerable, but it seems also partly due to much ethical theory having relatively little to offer to those grappling with practical moral problems. Some aspects of utilitarian theory are examined in this connection. Finally it is suggested that other areas of theory developing new models of man may partly bridge the gap and aid those dealing with problems of moral decision-making. John Hoaglund is Professor of Philosophy at Christopher Newport College. He is at present Chairman of Philosophy. He was formerly Lecturer at the Free University of Berlin. He is Fulbright Fellow, University of Bergen, Norway, 1980. He is the author of: The Voluntary One-Parent Family, in A. C. Cafagna et al. (eds.), Philosophy, Children, and the Family, New York, 1982, pp. 43–50 and published several articles on aesthetics in Journal of Aesthetic Education, British Journal of Aesthetics, Zeitschrift für Aesthetik and Allgemeine Kunstkritik, and Studia Estetyczne.     

Business and games

This paper responds to the popular argument that business is like a game and is thus insulated from the demands of morality. In the first half of the paper, I offer objections to this argument as it is put forward by John Ladd in his well-known article, Morality and the Ideal of Rationality in Formal Organizations. I argue that Ladd's analysis is flawed both because it deprives us of the ability to assert that a business is acting badly or that its goals are irrational, and because it is internally inconsistent. In the second half of the paper, I give reasons for thinking that business is not like a game.Peter Heckman teaches business ethics at Santa Clara University. His publications on Nietzsche can be found inThe British Journal of Aesthetics andPhilosophy and Rhetoric.     

Unredistributable corporate moral responsibility

Certain cases of corporate action seem especially resistant to a shared moral evaluation. Conservatives may argue that if bad intentions cannot be demonstrated, corporations and their managers are not blame-worthy, while liberals may insist that the results of corporate actions were predictable and so somebody must be to blame. Against this background, the theory that sometimes a corporation's moral responsibility cannot be redistributed, even in principle, to the individuals involved, seems quite attractive.This doctrine of unredistributable corporate moral responsibility (UCMR) is, however, ultimately indefensible. I show this in several steps. After first locating UCMR in the context of the evolving debate about corporate moral agency, the paper reexamines cases cited in defense of UCMR and takes up the attempt to defend it by identifying corporate moral agency with corporate practices. A further section explores the claim that UCMR is a convention distinct from, yet compatible with, traditional natural notions of responsibility. The final section develops a notion of combined akratic agency to provide an alternate explanation, compatible with rejection of UCMR, of the phenomena which make the doctrine attractive. Jan Edward Garrett is Associate Professor of Philosophy at Western Kentucky University, with major interests in business ethics, the metaphysics of social organizations, and ancient philosophy. He has published on Aristotle's conception of techne (craft) in The Modern Schoolman (1987) and his article Persons, Kinds and Corporations: An Aristotelian View has appeared in Philosophy and Phenomenological Research. He attended Peter French's NEH Summer Seminar on Corporate Responsibility in 1983.     

Ethics in business education: Working toward a meaningful reciprocity

This paper outlines and argues against some criticisms of business ethics education. It maintains that these criticisms have been put forward due to a misunderstanding of the nature of business and/or ethics. Business ethics seeks a meaningful reciprocity among economic, social and moral concerns. This demands that business organizations autonomously develop ethical goals from within, which in turn demands a reciprocity between ethical theory and practical experience. Working toward such a reciprocity, the ultimate goal of business ethics education is a moral business point of view through which one can live with integrity and fulfillment.To everyone who proposes to have a good career, moral philosophy is indispensible. Cicero, De Officiis, 44BC W. Michael Hoffman is Chair and Professor in the Department of Philosophy and Director at the Center for Business Ethics, Bentley College, Waltham, MA. He has received the following Grants: Council for Philosophical Studies, NEH Fellow, NDEA Fellow, Matchette. His most important publications are: Kant's Theory of Freedom: A Metaphysical Inquiry (UPA, 1979); Proceedings of the National Conferences on Business Ethics, 5 volumes (1977–1984); Business Ethics (McGraw-Hill, 1984) and articles in Journal of Business Ethics, Idealistic Studies, International Journal for Philosophy of Religion, Journal of Thought, The Journal for Critical Analysis, and The Southern Journal of Philosophy.Paper presented at the 16th Conference on Value Inquiry, entitled: Ethics and the Market Place: An Exercise in Bridge-Building or On the Slopes of the Interface.     

A Kantian approach to codes of ethics

The paper discusses whether codes of ethics are Kantian notions through an analysis of their intention and structure. The article also discusses some of the ideas put forward by William Starr in his article, Codes of Ethics — Towards a Rule-Utilitarian Justification,Journal of Business Ethics 2(2) (May 1983).The paper refers to recent definitions of codes of ethics and considers reasons for the proliferation of such codes. It examines the moral justification for these codes and analyses the underlying ethical theory particularly in relation to Kantian ethics. There is an account of how Kant's views of the source of morality and moral obligation, the structure and nature of Kantian moral law and the role of the individual and his/her relationship with others, which is relevant to the development of a theoretical base for codes of ethics. There is some discussion of potential problems in the practical application of Kantian ethics to a specific code.Jacquie L'Etang studied for her BA(Hons.) in American and English History at the University of East Anglia, her MA in Commonwealth History at the University of London and her M.Sc. in Public Relations at the University of Sterling. She worked for a year in the External Relations Department of the London School of Economics and for eleven years at the British Council a period which included four postings in the public relations and design and editorial departments. Since 1989 she has been Assistant Director of the M.Sc. in Public Relations by Distance Learning and in 1991 completed her second dissertation on corporate social responsibility for her M. Phil. in Social Justice which she studied for at the University of Stirling's Philosophy Department.     

Preferential hiring and the question of competence

It is widely believed that preferential hiring practices inevitably result in hiring less qualified candidates for jobs. Indeed, this follows analytically from some definitions of preferential hiring (e.g. George Sher's). This paper describes several preferential hiring strategies that do not have this consequence. Sher's definition is thus shown to be inadequate and an alternative definition is proposed. Michael Philips is professor of philosophy at Portland State University, and a visiting professor at the University of British Columbia (1989–91). His articles in ethics and applied ethics have appeared in Mind, The American Philosophical Quarterly, Ethics, Philosophical Studies, The Philosophical Quarterly, The Canadian Journal of Philosophy and other journals. He is currently completing a book on ethical theory.     

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.     

Ethics and management: A controversial issue

This paper is a part of a broader research project which aims to examine how ethical paradigms are related to theories of organization and management. Using an analysis of various studies on the issue of Business Ethics as its point of departure the paper points out that there are two converging lines of thought. The first emphasizes that management should be reexamined in the light of the cultural changes taking place and maintains that management is a key factor in this change. The second proposes that ethics in general (and Business Ethics in particular) should be understood to mean more than simply applying certain values and stresses that this definition of ethics should be rethought in order to foster a closer relationship between ethics and the decision-making processes.Josep M. Lozano teaches Social Philosophy and Business Ethics at ESADE (Barcelona). He hasLicenciatura degrees in Philosophy and Theology and is currently working on his doctorate, researching the correlation between concepts of ethics and management. He is a regular contributor to a number of Spanish journals, writing on cultural analysis, ethics and theology. He is the author of three books which are systematic studies of these subjects.     

Business ethics and doing what one ought to do

There are situations in human life where the failure to perform a certain act can be morally blameworthy and at the same time not constitute the failure of moral duty or obligation. While traditional approaches to ethics have not acknowledged the possibility of these acts, recent contributions to the literature have made a strong and convincing case for their existence. Here I explain the nature of these acts, present some examples of these acts as they might arise in one's business or professional life, and point out the importance of recognizing and performing these acts for those who wish to practice good ethics in their business or professional lives.Gregory Mellema is Professor of Philosophy at Calvin College. He has writtenIndividuals, Groups, and Shared Moral Responsibility andBeyond the Call of Duty and has published articles inAmerican Philosophical Quarterly, Philosophical Studies, Canadian Journal of Philosophy, Philosophia, Analysis, andJournal of Value Inquiry. In recent years he has taught courses and spoken widely on topics in Business Ethics.     

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.     

An empirical examination of three machiavellian concepts: Advertisers vs. the general public

This paper examines the perceived ethics of advertisers and the general public relative to three ethical concepts. Based on the survey findings, it can be concluded that with regard to the ethically-laden concepts of manipulation, exploitation, and deviousness, advertisers are perceptually as ethical as the general public. The research also clarifies some of the differences between ethics and Machiavellianism.John P. Fraedrich is an Assistant Professor of Marketing at Southern Illinois University at Carbondale. Dr. Fraedrich's teaching and research interests are primarily in the areas of business ethics, international channels, strategy, and theory. His recently completed dissertation was entitled Philosophy Type Interaction in the Ethical Decision Making Process of Retailers. O. C. Ferrell is the Distinguished Professor of Marketing and Business Ethics in the Fogelman College of Business and Economics at Memphis State University. Dr. Ferrell is the author of articles in the Journal of Marketing, Journal of Marketing Research, Journal of Business Research, Journal of the Academy of Marketing Science, Journal of Advertising, Journal of Risk and Insurance, Journal of Consumer Affairs, Journal of Health Care Marketing, as well as others. He is co-author of Marketing: Concepts and Strategies, 6th ed., Marketing Strategy and Plans, 3rd ed., and Business. William M. Pride is a Professor of Marketing at Texas A&M University. Dr. Pride's teaching and research interests are primarily in the areas of consumer behavior, promotion, and advertising. He has written several books and has published numerous articles in a variety of journals including the Journal of Marketing, Journal of Marketing Research, Journal of Retailing, and the Journal of Advertising.     

Ethics and the organizational person: Revisiting DeGeorge

In this paper I review the dispute over DeGeorge's analysis of the issue of the ethical responsibilities of engineers in large organizations. I argue that this issue is no different than the question of the ethical responsibilities of any other relevantly situated employee because engineers have no special duty to hold paramount the safety of the public distinct from that of others. I demonstrate how critics like Mankin, James, and Curd and May have misread and misinterpreted DeGeorge's position and his argument. I then identify a serious logical problem in DeGeorge, unnoticed by critics, but conclude by defending the spirit of DeGeorge's approach. That spirit recognizes the limitations of attempting to provide necessary and sufficient conditions in response to many questions in applied philosophy. John R. Danley is Associate Professor in the Department of Philosophical Studies at Southern Illinois University at Edwardsville. His Liberalism, Aboriginal Rights and Cultural Minorities, has recently appeared in Philosophy & Public Affairs (1991). Polestar Refined: Business Ethics and Political Economy has recently appeared in Journal of Business Ethics (1991). Other articles have appeared in the following journals: Mind, Philosophical Studies, The Southwestern Journal of Philosophy, Business and Professional Ethics, Journal of Negro Education, and Journal of Business Ethics. Articles have also appeared in Action Theory and The Ethics of Organizational Transformation, and elsewhere.     

Lying and intentions

In this essay I criticize recent attempts to prove that the concept of lying does not include the intent to deceive. I argue that examples by Isenberg and Carson fail to prove that one can lie without intending to deceive and, furthermore, that untoward consequences would follow if these authors were correct. I conclude that since intending to deceive is indeed a necessary condition of lying, the class of statements that constitute lies is smaller than what Isenberg et al. would suggest. Hence the class of deceptive advertisements is also correspondingly smaller. Gary E. Jones is Associate Professor at the Philosophy Department of the University of San Diego. He won the Review of Metaphysics Dissertation Essay Contest, 1977 and he holds fellowship of the University of Cincinnati and the University of Tennessee. His most important publications are The State and the Right to Health Care (in Philosophical Quarterly), Rights and Desires (in Ethics), Vindication, Hume, and Induction (in Canadian Journal of Philosophy), Engelhardt on Abortion and the Euthenasia of Defective Infants (in Linacre Quarterly) and Clendinnen, Jackson and Induction (in Philosophy of Science).     

Polestar refined: Business ethics and political economy

Although Friedman's The Social Responsibility of Business is to Increase Profits is widely read, the central argument is rarely identified. Stone's discussion of Friedman in Where the Law Ends, is often used as a companion piece. Stone claims that the most important argument in Friedman is the Polestar argument but never succeeds in explaining what it is. This paper shows that Friedman's position must be read in the context of his theory of political economy, and that at least four distinct utilitarian arguments are required to account for his views. Specifically, Friedman relies upon what I describe as Realistic Rule Utilitarianism in which utility is understood in terms of actual preferences. The weaknesses of this theory are then explained. John R. Danley is Associate Professor in the Department of Philosophical Studies at Southern Illinois University at Edwardsville. Danley has published pieces on Rawls and Nozick in Mind and Philosophical Studies and in applied ethics in The Journal of Business Ethics and The Journal of Business and Professional Ethics.     

Ethics of managing interpersonal conflict in organizations

Although managers spend over twenty percent of their time in conflict management, organization theorists have provided very few guidelines to help them do their job ethically. This paper attempts to provide some guidelines so that organizational members can use the styles of handling interpersonal conflict, such as integrating, obliging, dominating, avoiding, and compromising, with their superiors, subordinates, and peers ethically and effectively. It has been argued in this paper that, in general, each style of handling interpersonal conflict is appropriate if it is used to attain organization's proper end.M. Afzalur Rahim is Professor of Management at Western Kentucky University. He holds B.Com. (Hons.) and M.Com, M.B.A., and Ph.D. degrees. Dr. Rahim teaches courses on organizational behavior, strategic management, and management of organizational conflict. He is the author of over 65 articles and book chapters, five cases, and three research instruments on conflict and power. He is the author of six books, four of which are on conflict management. He is the editor of theInternational Journal of Conflict Management and theInternational Journal of Organizational Analysis. He is the founder of the International Association for Conflict Management and President of the International Conference on Advances in Management.Jan Edward Garrett is Associate Professor in the Philosophy and Religion Department at Western Kentucky University. His recent publications include Persons, Kinds and Corporations: An Aristotelian Perspective, which appeared inPhilosophy and Phenomenological Research, and Unredistributable Corporate Moral Responsibility, which appeared in this journal.Gabriel F. Buntzman is Associate Professor of Management at Western Kentucky University. His current research interests concern relationships between ethics, conflict and the strategic management of organizations. His work in the area of conflict management has appeared in theInternational Journal of Conflict Management, theJournal of Psychology, and three books.     

Ethical considerations in frequent flier programs

An overwhelming majority of business travelers are now members of frequent flier programs operated by the airline industry. This article addresses relevant ethical issues, particularly employee perceptions of ethical issues, in such programs. A structured questionnaire technique, supported by personal interviews, was used to gather insights into frequent flier practices and attitudes. A fundamental conclusion of the research is that (1) significant ethical dilemmas are posed by frequent flier programs, (2) employees and employers generally choose to ignore these ethical dilemmas, and (3) employee perception of the ethical issues in frequent flier programs is not significantly influenced by employee attributes such as education level, salary, organizational position, age or sex. Recommendations are offered to reduce the inherent ethical dilemmas in frequent flier programs. Richard H. Deane is an Associate Professor of Management at Georgia State University in Atlanta. He earned his Ph.D. degree in Industrial Engineering from Purdue University. Dr. Deane also holds the J.D. degree and is licensed to practice law before the state and federal courts. His scholarly publication record includes articles in IEE Transactions, Computers and Industrial Engineering, Operations Research Quarterly, Production and Inventory Management, IEEE Transactions on Engineering Management, Business, Industrial Engineering and Operations Management Review. He has also published in The Trial Lawyer's Quarterly, The Golden Gate Law Review, Professional Safety and The Journal of Rehabilitation. His recent publications include articles on employment discrimination, workplace smoking, and ethics in operations management.     

Democratic capitalism: Developing a conscience for the corporation

One way of ensuring that individual actions do not violate a group's moral norms is to develop within each individual a conscience. Conscience consists in the internalization or acceptance of a group's moral norms as correct and overriding one's self-interest when they conflict.Corporations as well as individuals need a conscience to monitor and control their behavior. The correlative of a personal conscience in a corporation consists in the representation of group interests in the running and managing of the firm. This means consumer and employee representation on the board of directors and management is the most effective way to promote corporate moral behavior. Joseph M. Grcic is Assistant Professor of Philosophy at Loyola University of Chicago. (Formerly at the University of Missouri at Kansas City.) He is a Phi Beta Kappa Member. His most important publications are Kant and Rawls: Contrasting Conceptions of Moral Theory in Journal of Value Inquiry 17, Rawls and Socialism in Philosophy and Social Criticism, Spring 1980, and Revolution and Economic Inequality (forthcoming in Kant-Studien).     

Thinking and Acting Outside the Neo-classical Economic Box: Reply to McMurtry

This paper responds to Professor John McMurtry, primarily to his critique (Journal of Business Ethics, Vol. 44, 2003) of my recent book, Economics as Moral Science (Springer-Verlag, 2001). Although agreeing with my attribution of a moral a priorism to orthodox or neo-classical economics, McMurtry takes issue with my conversion thesis, that ana priori, ethically committed theory can be transformed into a testable empirical science of actual behaviour through the application of institutional constraints to individual motivations. McMurtry views such a thesis as logically possible but morally abhorrent. In so doing, he ascribes a version of economic determinism to me which, he claims, leads me to mistakenly understand the neo-classical paradigm as circumscribing the boundaries of reality itself and thereby entrenching the life-destructive values presupposed by this paradigm. I reject such a reading of Economics as Moral Science and explain the manner in which it is inconsistent both with the theoretical substance and practical agenda of my work. I propose that the irreducible basis of disagreement remains one wherein I believe that a more radical reform of the capitalist market order is mandatory to establish more defensible moral ideals than does McMurtry. My reply closes by recommending a constitutional partitioning of material goods such that we may more securely act outside the ethical constraints of neo-classical theoryBernard Hodgson is Professor of Philosophy at Trent University in Peterborough, Ontario, Canada. He received his B.A. (Philosophy and Economics) from the University of Toronto and his Ph.D. (Philosophy) from the University of Western Ontario. Dr. Hodgson has been a Visiting Fellow at the University of Cambridge and, recently, has been the author of Economics as Moral Science (Springer-Verlag, 2001), and the editor of The Invisible Hand and the Common Good (Springer-Verlag, 2004)