Contrasting the Behavioural Business Ethics Approach and the Institutional Economic Approach to Business Ethics: Insights From the Study of Quaker Employers

The article suggests that in a modern context, where value pluralism is a prevailing and possibly, even ethically desirable interaction condition, institutional economics provides a more viable business ethics than behavioural business ethics, such as Kantianism or religious ethics. The article explains how the institutional economic approach to business ethics analyses morality with regard to an interaction process, and favours non-behavioural, situational intervention with incentive structures and with capital exchange. The article argues that this approach may have to be prioritised over behavioural business ethics, which tends to analyse morality at the level of the individual and favours behavioural intervention with the individual’s value, norm and belief system, e.g. through ethical pedagogy, communicative techniques, etc. Quaker ethics is taken as an example of behavioural ethics. The article concludes that through the conceptual grounding of behavioural ethics in the economic approach, theoretical and practical limitations of behavioural ethics, as encountered in a modern context, can be relaxed. Probably only then can behavioural ethics still contribute to raising moral standards in interactions amongst the members (stakeholders) of a single firm, and equally, amongst (the stakeholders of) different firms. Dr. Sigmund Wagner-Tsukamoto is researcher in business ethics, organisational economics and economic issues that concern the Old Testament. He is placed at the School of Management of the University of Leicester, UK. He holds two doctorates, one in social studies from the University of Oxford, UK, and one in economic studies from the Catholic University of Eichstaett, Germany. He has widely published on green consumerism and institutional economic issues that concern organization theory, business ethics theory and an economic interpretation of the Old Testament. His publications include the books Understanding Green Consumer Behaviour (Routledge, 2003) and Human Nature and Organization Theory (Edward Elgar, 2003).     

The Ethical Wealth of Nations

Michael Porter argues that some nations manifest a competitive advantage deriving from key elements of their economic structure. Some nations are thus disposed by structure to possess what Porter calls a "competitive advantage of nations" (Porter, 1990). In this paper I examine the prospect of an ethical advantage of nations, and in particular, of a set of advantages that extend far beyond the simple dimension of trust so often discussed. I consider, further, how such a range of ethical features would be structured, and what the implications of those features would be. Three conclusions are reached: 1. Morality may create economic advantages for nations in ways that extend beyond the notion of an idealized market; 2. In order for ethics to drive economic advantage, ethical concepts must rise to the status of intrinsic value; and 3. If claims for national ethical success factors are true, then nations should attend to the issue of moral education.     

Putting ethics and economic rationality together: an Aristotelian and philosophical approach

The gap between economic rationality, as embedded in utility maximization, and ethical rationality, identified with a set of rules that prescribe the right course of action, has been a challenging issue for economists, philosophers, and business ethicists. Despite the difference and the noncompetition between a scientific economic approach of economics and business ethics, and a behavioral and philosophical one, we highlight the importance of the Aristotelian concept of prudence or phronesis applied to business activity. Phronesis allows for a conceptualization of rationality that can be simultaneously applied to economics and ethics. It also allows conceiving the intrinsically ethical nature of economic rationality. This relationship requires an appropriate education and the intervention of the state.     

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.     

Business is not a Game: The Metaphoric Fallacy

Sport and game metaphors are ubiquitous in the culture and language of business. As evocative linguistic devices, such metaphors are morally neutral; however, if they are indicative of a deep structure of understanding that filters experience, then they have the potential to be ethically problematic. This article argues that there exists a danger for those who forget or confuse metaphor with definition: the metaphoric fallacy. Accordingly, business is like a game, but it is not the equivalent of a game. If business is equated to a game, then the potentially negative implications for ethical content and the application of ethical theories are numerous. This article suggests a fresh approach to issues of contemporary business ethics discourse, by attending to the business-as-game metaphor.     

The Chinese business system and its authoriliberal economic model

China's position as one of the most powerful nations in the world is undisputed. However, in an evolving landscape, China's utilization of a path-dependent business system may hinder the ability of the country's institutions to undergo necessary change, which will have important implications for international business literature. Through business system theory, empirical evidence, and a mixed methods approach, we discuss China's business system explaining how the system may impair sustainable growth and the transformation required by a less dependent industrial society. Our research suggests that the Chinese business system is still very arrested due to its recent past, and the Chinese Communist Party has only partial interest in improving some of the most important bases for the development of modern enterprises, even if fostering a somewhat liberal economic approach. Since similar political (authoritarian) and economic (liberal) approaches are found elsewhere, we theorize on what we called an authoriliberal economic approach.     

Ethical Perceptions of Business Students: Differences Between East Asia and the USA and Among “Confucian” Cultures

This paper reports the results of a survey of 842 undergraduate business students in four nations – the United States of America (the USA), the Peoples’ Republic of China (the PRC), Japan, and the Republic of Korea (the ROK). This survey asked students to respond to four scenarios with potentially unethical business behavior and a string of questions related to the importance of ethics in business strategy and in personal behaviors. Based on arguments related to differences in recent historical experiences, the authors suggest that student responses may be as different within the East Asian (Confucian) environment as they are between this environment as a whole and the USA. Survey results indicate a greater perception of ethical problems and more importance placed on ethics per se in business practices, as well as less of an emphasis on social harmony (a key distinguishing characteristic of Confucian values identified in prior research) on the part of USA students. At the same time, substantial national differences in response are also witnessed within the set of East Asian students. A priori expectations as to the manner in which these East Asian responses should vary based on differences in recent historical experiences are partially, but not fully, supported. The authors argue that the key value of the reported research rests on a demonstration that national differences within a common cultural (e.g., East Asian or Confucian) area can be as great as differences across cultural (East vs. West) areas and that practitioners of global business must fine-tune their expectations as to acceptable business and personal actions to accommodate specific national historical experiences to be effective. Professors Chung and Eichenseher are professor of accounting at their respective universities. Professor Taniguchi's primary field of study is economics.     

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.     

Social ethics and the emergence of advertising in China: Perceptions from within the great wall

While interest in doing business continues to rise steadily, information concerning the evolving social ethics of Chinese managers is sparse. This study reports the findings obtained from intensive interviews with thirty-nine Chinese advertising executives. In general, there appears to be developing a cautious optimism about the role of advertising in the Chinese economy. Findings are compared with earlier studies of American and Hong Kong managers and it is suggested that further research and observation is needed to track the development of business ethics in this largest of the world's developing nations. His most important publication is: ‘The Nature of Importance Perceptions: A Test of a Cognitive Model’,Organizational Behavior and Human Performance (April, 1983).     

Personalist Business Ethics and Humanistic Management: Insights from Jacques Maritain

The integration of personalism into business ethics has been recently studied. Research has also been conducted on humanistic management approaches. The conceptual relationship between personalism and humanism, however, has not been fully addressed. This article furthers that research by arguing that a true humanistic management is personalistic. Moreover, it claims that personalism is promising as a sound philosophical foundation for business ethics. Insights from Jacques Maritain’s work are discussed in support of these conclusions. Of particular interest is his distinction between human person and individual based on a realistic metaphysics that, in turn, grounds human dignity and the natural law as the philosophical basis for human rights, personal virtues, and a common good defined in terms of properly human ends. Although Maritain is widely regarded as one of the foremost twentieth century personalist philosophers, his contribution has not been sufficiently considered in the business ethics and humanistic management literature. Important implications of Maritainian personalism for business ethics as philosophical study and as practical professional pursuit are discussed.     

The Italian <Emphasis Type="Italic">Economia Aziendale</Emphasis> and Catholic Social Teaching: How to Apply the Common Good Principle at the Managerial Level

The ongoing global economic and financial crisis has exposed the risks of considering market and business organizations only as instruments for creating economic wealth while paying little heed to their role in ethics and values. Catholic Social Teaching (CST) could provide a useful contribution in rethinking the role of values in business organizations and markets because CST puts forward an anthropological view that involves thinking of the marketplace as a community of persons with the aim of participating in the Common Good (CG) of society. In the light of the CST tradition, and in particular Caritas in Veritate, this article investigates the thinking of some of the historical scholars of the Italian Economia Aziendale (EA), by focusing on the concept of azienda, in order to reinterpret in a more humanistic way the role of business organizations in society. By linking CST and EA, the dichotomy between for-profit and not-for-profit organizations and the stereotype of the so-called business amorality that has, for a long time, driven business managers can be transcended. The conclusions imply a forward-looking application of the ethical concepts embedded in the Italian science of EA.     

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?     

An Economic Approach to Business Ethics: Moral Agency of the Firm and the Enabling and Constraining Effects of Economic Institutions and Interactions in a Market Economy

The paper maps out an alternative to a behavioural (economic) approach to business ethics. Special attention is paid to the fundamental philosophical principle that any moral ‘ought’ implies a practical ‘can’, which the paper interprets with regard to the economic viability of moral agency of the firm under the conditions of the market economy, in particular competition. The paper details an economic understanding of business ethics with regard to classical and neo-classical views, on the one hand, and institutional, libertarian thought, on the other hand. Implications are derived regarding unintentional and passive intentional moral agency of the firm. The paper moves on to suggest that moral agency can be economically viable in competitive ‘market’ interactions, which is conventionally disputed by classical/neo-classical and institutional, libertarian economics. The paper here conceptualises active moral agency of the firm as the utilisation of ethical capital in firm--stakeholder interactions. This yields a reinterpretation of instrumental stakeholder theory.     

Integrating Personalism into Virtue-Based Business Ethics: The Personalist and the Common Good Principles

Some virtue ethicists are reluctant to consider principles and standards in business ethics. However, this is problematic. This paper argues that realistic Personalism can be integrated into virtue-based business ethics, giving it a more complete base. More specifically, two principles are proposed: the Personalist Principle (PP) and the Common Good Principle (CGP). The PP includes the Golden Rule and makes explicit the duty of respect, benevolence, and care for people, emphasizing human dignity and the innate rights of every human being. The CGP entails cooperation to promote conditions which enhance the opportunity for the human␣flourishing of all people within a community. Both principles have practical implications for business ethics.     

Similarities in Business and IT Professional Ethics: The Need for and Development of A Comprehensive Code of Ethics

The study of business ethics has led to the development of various principles that are the foundation of good and ethical business practices. A corresponding study of Information Technology (IT) professionals’ ethics has led to the conclusion that good ethics in the development and uses of information technology correspond to the basic business principle that good ethics is good business. Ergo, good business ethics practiced by IT professionals is good IT ethics and vice versa. IT professionals are professionals in businesses; a difficulty presented to these professionals, however, is the number and diversity of codes of ethics to which they may be held. Considering the existence of several formalized codes of ethics prepared by various IT professionals’ associations, a more harmonized approach seems more reasonable. This paper attempts to present a review of the purpose of codes of ethics, the persons who should be covered by such codes and to organize codes of ethics for business in general and IT professionals in particular and to make the argument that, once again, good ethics is good business practice, regardless of the profession or occupation concerned     

Pluralistic business ethics: the significance and justification of moral free space in integrative social contracts theory

Integrative social contracts theory (ISCT) has been an influential theory in normative business ethics for well over a decade, drawing attention both as an object of criticism and as a source of inspiration. In this paper I argue that, despite this attention, the fact that it is a genuinely pluralistic theory, in the tradition of pluralistic theories of political philosophy, is often overlooked. It is in the notion of moral free space that this pluralism is most clearly expressed. This oversight is unfortunate for two reasons. Firstly, it prevents the potential of ISCT, as a normative theory of business ethics, from being appreciated fully; secondly, it leads us to ignore resources that could help tackle its most problematic flaws. In this second respect, I show how some of these flaws could be addressed by paying closer attention to the similarities between ISCT and John Rawls' theory of Political Liberalism.     

Globalizing Business Ethics Research and the Ethical Need to Include the Bottom-of-the-Pyramid Countries: Redefining the Global Triad as Business Systems and Institutions

A majority of the countries in the world are still considered “developing,” with a per capita income of less than U$1,000. Hahn (2008, Journal of Business Ethics 78, 711–721) recently proposed an ambitious business ethics research agenda for integrating the “bottom-of-the-pyramid” countries (Prahalad and Hart, 2002, Strategy and Competition 20, 2–14) through sustainable development and corporate citizenship. Hahn’s work is among the growing field of research in comparative business ethics including the global business ethics index (Michalos, 2008, Journal of Business Ethics 79(1), 9–19; Scholtens and Dam, 2008, Journal of Business Ethics 75(3), 273–284; Tsalikis and Seaton, 2008, Journal of Business Ethics 75(3), 229–238). This article is complementary to Hahn’s work and it advocates an urgent need for business ethics researchers to globally integrate the bottom-of-the-pyramid countries through a fundamental re-definition of the global economic triad, including the United States, Western Europe, and Japan [Ohmae, 1985, Triad Power: The Coming Shape of Global Competition (New York: Free Press)]. The definition that we propose is based on business systems and institutional perspectives that include the bottom-of-the-pyramid countries. We also propose to broaden the research in business ethics to enable comparisons across business systems indifferent income levels.     

Integrating Ethical Dimensions into a Model of Budgetary Slack Creation

The "Ibercorp affair" was front-page news in Spain at various times between 1992 and 1995. In itself, there was nothing particularly new about it: a newly formed financial group engaged in legally and ethically reprehensible behaviour that eventually came to light in the media, ruining the company (and the careers of those involved). What aroused public interest at the time was the fact that it involved individuals connected with Spanish public and political life, the media and certain business circles. Above all, it demonstrated the personal, economic, social and political consequences of a business culture based on the pursuit of easy profits at any price (what came to be known as the cultura del pelotazo or "culture of the fast buck"). Again, this is all too familiar in business ethics. But it served to goad Spanish society into a rejection of such behaviour. This article describes the facts and their ethical implications.     

Sweatshops and Free Action: The Stakes of the Actualism/Possibilism Debate for Business Ethics

Whether an action is morally right depends upon the alternative acts available to the agent. Actualists hold that what an agent would actually do determines her moral obligations. Possibilists hold that what an agent could possibly do determines her moral obligations. Both views face compelling criticisms. Despite the fact that actualist and possibilist assumptions are at the heart of seminal arguments in business ethics, there has been no explicit discussion of actualism and possibilism in the business ethics literature. This paper has two primary goals. First, it aims to rectify this omission by bringing to light the importance of the actualism/possibilism debate for business ethics through questions about the ethics of sweatshops. Second, it aims to make some progress in the sweatshop debate by examining and defending an alternative view, hybridism, and describing the moral and practical implications of hybridism for the sweatshop debate.