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.     

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.     

An applied ethical analysis system in business

Much of the discussion on business ethics is philosophical in nature. There is no lack of theories and ideals on moral reasoning. What is missing is translating these moral theories and principles into specific, operational procedures that can indicate a proper course of action. Although most business actions are routine and do not raise serious ethical questions, many people experience difficulty in applying their personal moral principles to specific business decisions in ethically-dilemmatic situations.This study seeks to develop a framework that can be utilized to implement personal moral reasoning based on the teleological theory of Utilitarianism and the deontological theory of Ross's Prima Facie Duties in the business decision-making process. The central feature in the framework is a point-system that quantities the ethical worth of a proposed business action and determines whether the action would be ethically desirable if taken. It provides an objective element in an otherwise qualitative ethical inquiry process. This study also illustrates practical applications of the system by analyzing the ethical implications of a proposed action where foreign bribery is involved.Alan Wong is Assistant Professor of Finance, Indiana University Southeast. His areas of academic research are managerial ethics and financial options. He has published in theReview of Business and Economic Research.Eugene Beckman is the Director of the MBA Program at Indiana University Southeast. He was awarded the Faculty Excellence Award in 1989 and his primary areas of research are business ethics and marketing.     

Business Practice, Ethics and the Philosophy of Morals in the Rome of Marcus Tullius Cicero

Moral behaviour, and more recently wisdom and prudence, are emerging as areas of interest in the study of business ethics and management. The purpose of this article is to illustrate that Cicero—lawyer, politician, orator and prolific writer, and one of the earliest experts in the field recognised the significance of moral behaviour in his society. Cicero wrote ‘Moral Duties’ (De Officiis) about 44 BC. He addressed the four cardinal virtues wisdom, justice, courage and temperance, illustrating how practical wisdom, theoretical/conceptual wisdom and justice were viewed in Rome of the first century BC. ‘Moral Duties’ is a letter admonishing his son, Marcus. It refers to personal behaviour, business practice and analyses terms such as good faith and criminal fraud. In addition, it contains material which would be suitable for tutorials/seminars and discussions, particularly in the areas of critical thinking in business ethics and general management. A study of De Officiis in respect to present day management and business practice could give a wider perspective to business ethics and management students. If concepts such as moral virtue, moral propriety and moral goodness, many of which seem to be ignored in business situations today, are to be embedded in business leaders of the future, it is reasonable to expect that these qualities will be analysed and discussed by business students today. Further, a study of Cicero’s six-step approach, when preparing an address/speech, could be useful and productive for practitioners and students in this area.     

Moral Luck and Business Ethics

Moral luck – which seems to appear when circumstances beyond a person’s control influence our moral attributions of praise and blame – is troubling in that modern moral theory has supposed morality to be immune to luck. In business, moral luck commonly influences our moral judgments, many of which have economic consequences that cannot be reversed. The possibility that the chance intervention of luck could influence the way in which we assign moral accountability in business ethics is unsettling. This paper argues that if we cannot explain moral luck away, we should give consideration to moral risk in our moral judgments and the associated assignment of economic rewards regarding episodes in which moral luck plays a role.     

Peter French, Corporate Ethics and The Wizard of Oz

For more than two decades, Peter French has been arguing in books, articles and symposia that corporations are genuine actors in the moral universe. Like adult human beings, they can and should take moral responsibility for their actions and be held accountable by the other actors in this universe. I have always argued with my students that the position is both metaphysically incorrect and practically harmful. Now (1995) French has redeveloped his position through 380 pages in Corporate Ethics, probably the most challenging and original Business Ethics textbook yet to appear. It is a work of intellectual sophistication with real world applications. Using the metaphor invaders throughout the book, French argues not only that corporations are moral agents, but also that their moral agency has made the business world of the late twentieth century and of the coming century different from anything of preceding epochs. It is, in his argument, an agency of great potential danger and of great potential benefit, one in terms of which we can address every ethical problem of business. In the essay, I explore Corporate Ethics both on the metaphysical and the practical level.     

When Responsibility Can't Do It

Is being responsible good enough? Stone (1975) argued that we need corporate moral responsibility because neither law nor market is adequate to forestall harmful effects of business activities. However, it is not possible for businesses to become responsible for all forms of foreseeable, preventable harm that they produce. This is illustrated here by cases from insurance, television programming, automobiles and weapons production. Reflection on these examples leads to the formulation of a new conception of unintended harms as moral externalities of business activities. Although one might argue that these (negative) moral external effects are outweighed by the desirable end products of business activities, three reasons not to accept the results of such a “moral subtraction”(or double effect) argument are presented. Instead, the article concludes by offering four techniques for a qualitative, ethical analysis of produced artefacts and their consequences; intended not to displace but to supplement the study of moral responsibility in business.     

Moral Markets and Moral Managers Revisited

In the wake of recent corporate scandals, this paper examines the claim made by John Boatright that business ethics, as it is currently conceived, “rests on a mistake.” Ethics in business should not be achieved through managerial vision, discretion or responsibility; rather, ethics should shape the design of institutions that regulate business from the outside. What ethicists should advocate for, according to Boatright, are moral markets not moral managers. I explore the empirical and normative dimensions of his claim with special attention paid to the extent to which Boatright’s development of the economic theory of the firm supports his position. I conclude by suggesting some reasons why moral markets and moral management are compatible frameworks for corporate reform.     

An empirical study of moral reasoning among managers

Current research in moral development suggests that there are two distinct modes of moral reasoning, one based on a morality of justice, the other based on a morality of care. The research presented here examines the kinds of moral reasoning used by managers in work-related conflicts. Twenty men and twenty women were randomly selected from the population of first level managers in a Fortune 100 industrial corporation. In open-ended interviews each participant was asked to describe a situation of moral conflict in her or his work life. The results indicated a clearly preferred mode of moral reasoning among the participants who described moral conflicts. Nearly all of these predominated with a justice orientation. These findings suggest that a correlation between gender and preferred mode may be context specific.Robbin Derry is an associate professor at The American College in Bryn Mawr, Pennsylvania, where she holds the Lamont Post Chair in Business Ethics. She recently completed a year as a Rockefeller Fellow at The Ethics Institute at Darthmouth College. She has presented and published numerous articles on the ethical decision-making of managers and is currently working on a business ethics textbook.     

What's So Special About a Special Ethics for Business?

In business ethics literature, debate over a special ethics generally has framed examination of the rules governing business. By constructing a dilemma faced by proponents of a special ethics, I argue that this framing is misguided. Proponents must adopt either an insular or a derivative conception. The former, the view that business is insulated from moral rules, is problematic because arguments used to support it force proponents to accept the idea that each aspect of life is insulated from moral rules. This idea, however, renders philosophically insignificant the claim that business has a special ethics. Proponents no longer make a claim about business, but, rather, a relativistic claim about ethics in general. The derivative conception is the view that business is a set of circumstances that bear on the application of moral rules. This, however, is true of each aspect of life, and is simply an application of the principle 'ought implies can'. The result is that there is nothing special about this sense of a special ethics. Despite lacking specialness, however, the derivative conception provides proper framing for examination of the rules governing business. It subjects business to moral rules, but, also, accounts for the challenging circumstances businesspersons face.     

Breaking the Rules: Examining the Facilitation Effects of Moral Intensity Characteristics on the Recognition of Rule Violations

This research project seeks to discover whether certain characteristics of a moral issue facilitate individuals’ abilities to detect violators of a conditional rule. In business, conditional rules are often framed in terms of a social contract between employer and employee. Of significant concern to business ethicists is the fact that these social contracts are frequently breached. Some researchers in the field of evolutionary psychology argue that there is a biological basis to social contract formation and dissolution in business. However, although it is inescapable that biological forces shaped a fixed neural structure that guides and limits humans’ abilities, we argue that characteristics of the situation in which the person finds himself or herself moderate the activation of these neural circuits in ordinary business social contract situations. Specifically, the moral intensity associated with the social contract conditional rule is likely to influence peoples’ abilities to detect violators of the rule. This study utilizes adapted versions of the Wason selection task and manipulates the issue-contingent moral intensity characteristics of magnitude of consequences, proximity, and social consensus to assess if moral intensity facilitates detection of rule violators. Results from this empirical study indicate no relationship between moral intensity characteristics and issue recognition but do provide insights into the evolutionary psychology approach. David M. Wasieleski is an Assistant Professor in the Leadership and Change Management Division of the A.J. Palumbo School of Business Administration and the John F. Donahue Graduate School of Business at Duquesne University. He received his Ph.D. from the University of Pittsburgh. David’s recent research focuses on individuals’ biological propensity for ethical behavior and its effect on workplace relationships. His other research interests include moral intensity, cognitive moral development, stakeholder agenda-building, and policy learning. Sefa Hayibor is an Assistant Professor of Management in the Sobey School of Business at Saint Mary’s University (Canada). He received his Ph.D. from the University of Pittsburgh. His research interests include business ethics and ethical decision-making, stakeholder motivation and management, charismatic leadership, and cognitive heuristics and biases.     

Online Education: Values Dilemma in Business and the Search for Empathic Engagement

Online education lacks the moral and ethical engagement as well as the empathic interactions that are essential and integral to true liberal education, including business. While the online venue can provide useful information and put libraries at the hands of the student or employee, there is an implicit lack of focus on the sacredness and centrality of the person, his or her values, attitudes, needs, and expectations. The focus of online education is on the delivery of data, not the student’s engagement with the material or the process. Critically absent from online education is the ability to explore the transformation of data as it changes, first to information, then to knowledge, and finally to wisdom, within each person. Finally, absent is the ability to raise the level of abstraction. Since all needs to be measurable in concrete terms in online education, we are left with the language of metrics, such as deliverables, outcomes, inputs, and outputs. Where is the person in all of this? Where is the focus on the moral compass that is so necessary in any type of education?     

Value, Business and Globalisation – Sketching a Critical Conceptual Framework

Value is a basic concept in economics, ethics and sociology. Locke made labour the source of value, whereas Smith referred to an ideal exchange and Kant specified that commodities only have a market price, no intrinsic value. One can distinguish two modern concepts of value, an economic one trying to explain value in terms of utility, interest or preferences, and an ideal one considering values as ends in themselves. On this basis, Durkheim constructed his theory of value, which was developed by his followers Mauss and Bouglé and further by Bataille. Their line of thought makes it possible to develop a conceptual framework, which can be used to criticise neo-liberalism, big business and the effects of globalisation, while at the same time defending the moral value of business and giving an interpretation of the anti-globalisation protests.     

Editorial Adieu: Cultivating Moral Courage in Business

Leaving an editorial chair provides an opportunity for the departing incumbent to deliver a final message to his readers. Seven years after founding Business Ethics. A European Review the editor can offer no better valedictory than to explore the role of moral courage in the ethical conduct of business. Not only does this provide an excellent illustration of the recent recovery of the subject of “virtue” ethics in moral philosophy in general, as well as in the application of morality to business. It also serves to highlight the important difference between ‘business ethics’ as a term applied to the study of right and wrong behaviour in business, and ‘ethical business’, which is business actually conducted on ethical lines. For the difference between behaving rightly and wrongly in any area of human activity, including that of business, is not simply a matter of knowledge, or of finding the “correct” answer. There is a crucial psychological gap between knowing what one ought to do and then actually doing it; as Ovid ruefully observed, we see and approve the better things, yet we follow the worse. This is where courage comes in, for the gap between ethical perception and ethical performance is bridged by moral courage, as the following article suggests. More colloquially, the author is accustomed to conclude his classroom teaching on business ethics by observing that it is one thing to work out, often laboriously and hesitantly, what is the correct line of behaviour to follow; it is quite another thing to have the guts to follow it. An early version of this paper was delivered in Gresham College, London, while a more developed account dates from the First World Congress of the International Society of Business, Economics and Ethics, held in Tokyo in 1996. The following is reprinted from International Business Ethics: Challenges and Approaches , edited by George Enderle earlier this year and published by the University of Notre Dame Press and Hong Kong University Press.     

Integrating Leadership Development with Ignatian Spirituality: A Model for Designing a Spiritual Leader Development Practice

Prominent scholars note that current approaches to leader development in business are insufficient in at least three ways, and call for approaches that teach leaders to process and reflect, take personal ownership, and develop their capacities for both proficient and morally centered leadership. This paper explores three related research questions: Can we use evidence from management research to build a process-based model of leader self-development? Does the spiritual leadership literature offer implications for integrating moral development into such a model? Can spiritual development processes from a long-standing tradition be integrated, to further bring spiritual and moral development into leader development? Based on the leader and leadership development, spiritual leadership, and Ignatian literatures, one approach to building a spiritual leader development practice is presented. Using this model, business leaders are guided in forming leader development practices based on six categories of interdependent developmental activities: planning with discernment, experiences based on vocation, reflection including spiritual notes, assessment including examining present faults, education including on the lives of moral and effective leaders, and relationships including spiritual direction. This approach is differentiated from other approaches to leader development and to spiritual leadership. The role of the specific spiritual practices used here versus other traditions and the interplay of religion and spirituality in leader development are discussed, along with limitations of this approach and suggestions for further research.     

Moral theory and defective tobacco advertising and warnings (the business ethics of Cipollone v. Liggett Group)

Traditional moral theories help corporate decision-makers understand what position consumers, like Rose Cipollone, in Cipollone vs Liggett Group, will take against cigarette manufacturers who fail to warn of the dangers of smoking, conceal data about addiction and other dangers, from the public, as well as continue to neutralize the warnings on cigarettes by deceptive advertisements. John F. Quinn teaches philosophy and management at the University of Dayton. He did his doctoral studies at the University of Washington in philosophy and his legal doctorate at the University of Dayton. Recently new to business ethics, after years of teaching medieval philosophy and aesthetics, he brings a knowledge of business law and management to his work in business ethics. His book with J.M.B. Crawford on The Christian Foundations of Criminal Responsibility, an integration of medieval moral theology and the common law tradition of criminal responsibility, will soon be published by Mellon Press. He also practices law in Ohio in select corporate issues.     

Kant on Virtue

In business ethics journals, Kant’s ethics is often portrayed as overly formalistic, devoid of substantial content, and without regard for the consequences of actions or questions of character. Hence, virtue ethicists ride happily to the rescue, offering to replace or complement Kant’s theory with their own. Before such efforts are undertaken, however, one should recognize that Kant himself wrote a “virtue theory” (Tugendlehre), wherein he discussed the questions of character as well as the teleological nature of human action. Numerous Kant scholars argue that Kant already erected precisely the kind of integrative moral architecture that some of his modern interpreters (while aiming to supersede him) wish to construct. For business ethics, this divergence of scholarly opinion is of crucial importance. It shows first that the standard portrayals of Kant’s ethics in business ethics textbooks—as rigidly deontological, narrowly individualistic, and hence unsuitable for the specific demands of corporate agency—might have to be revised. Second, discussions in the business ethics literature on stakeholder-engagement and managerial decision-making likewise stand to gain from a more nuanced picture of Kant’s moral philosophy. Third, a reassessment of Kant’s ethics with regard to questions of personal character and moral sentiments might also lead to a more favorable view of the relevance of his ethics for managerial practice. Last, but not least, the many current attempts to reconcile Kant’s freedom-oriented philosophy with virtue theories stand to benefit considerably from a better understanding of how Kant himself conceived of one such synthesis between the formal and substantial aspects of morality. This, ultimately, could lead to an important overlapping consensus in the academic literature as to the role and relevance of virtuous conduct in business.     

Dissolving the Moral Dilemma of Whistleblowing

The ethical debate on whistleblowing concerns centrally the conflict between the right to political free speech and the duty of loyalty to the organization where one works. This is the moral dilemma of whistleblowing. Political free speech is justified because it is a central part of liberal democracy, whereas loyalty can be motivated as a way of showing consideration for one’s associates. The political philosophy of John Rawls is applied to this dilemma, and it is shown that the requirement of loyalty, in the sense that is needed to create the moral dilemma of whistleblowing, is inconsistent with that theory. In this sense, there is no moral dilemma of whistleblowing. This position has been labelled extreme in that it says that whistleblowing is always morally permitted. In a discussion and rejection of Richard De George’s criteria on permissible whistleblowing, it is pointed out that the mere rejection of loyalty will not lead to an extreme position; harms can still be taken into account. Furthermore, it is argued that the best way is, in this as in most other political circumstances, to weigh harms is provided by the free speech argument from democracy. Lars Lindblom is a Ph D. student in philosophy at the Royal Institute of Technology, Stockholm, Sweden. He has worked as a business ethics consultant and has written on efficency, workplace inspections and business ethics.     

Embodied ethics: Some common concerns of religion and business

De George's understanding of theology is limited to one of five commonly recognized models of theology, the orthodox model. This model is vulnerable to De George's criticisms. When religious ethics operates out of the revisionist model of theology, however, his criticisms lose their sting. Revisionist religious ethics, moreover, can make a fruitful contribution to business ethics. Such a religious ethic acknowledges the embodiment dimension of business activities, it complements philosophical analysis with the practice of moral discernment, and it recognizes irony as an active component in decision-making.John T. Leahy is an Associate Professor of Religious Studies at DePaul University.     

Judging the morality of business practices: The influence of personal moral philosophies

Individuals' moral judgments of certain business practices and their decisions to engage in those practices are influenced by their personal moral philosophies: (a) situationists advocate striving for the best consequences possible irrespective of moral maxims; (b) subjectivists reject moral guidelines and base judgments on personal values and practical concerns; (c) absolutists assume that actions are moral, provided they yield positive consequences and conform to moral rules; (d) exceptionists prefer to follow moral dictates but allow for exceptions for practical reasons. These variations, which are based on two fundamental dimensions (concern for principles and concern for promoting human welfare) influence a variety of moral processes and have implications for ethical debates over business practices.Donelson R. Forsyth is Professor in the Department of Psychology at Virginia Commonwealth University. A social psychologist, his three major interests are affective and attributional reactions in interpersonal, education, and clinical settings, individual differences in ethical ideology, and the dynamics of interacting groups. He is the author of numerous journal articles, as well as several books dealing with social psychology, group processes, and health.