Showing papers in "Business Ethics Quarterly in 1991"

Business Ethics and Stakeholder Analysis

Abstract: Much has been written about stakeholder analysis as a process by which to introduce ethical values into management decision-making. This paper takes a critical look at the assumptions behind this idea, in an effort to understand better the meaning of ethical management decisions.A distinction is made between stakeholder analysis and stakeholder synthesis. The two most natural kinds of stakeholder synthesis are then defined and discussed: strategic and multi-fiduciary. Paradoxically, the former appears to yield business without ethics and the latter appears to yield ethics without business. The paper concludes by suggesting that a third approach to stakeholder thinking needs to be developed, one that avoids the paradox just mentioned and that clarifies for managers (and directors) the legitimate role of ethical considerations in decision-making.So we must think through what management should be accountable for; and how and through whom its accountability can be discharged. The stockholders’ interest, both short- and long-term, is one of the areas. But it is only one.Peter Drucker, 1988Harvard Business Review

Business Ethics and Extant Social Contracts

Abstract: Extant social contracts, deriving from communities of individuals, constitute a significant source of ethical norms in business. When found consistent with general ethical theories through the application of a filtering test, these real social contracts generate prima facie duties of compliance on the part of those who expressly or impliedly consent to the terms of the social contract, and also on the part of those who take advantage of the instrumental value of the social contracts. Businesspeople typically participate in multiple communities and, as a consequence, encounter conflicting ethical norms. Priority rules can be devised to resolve such conflicts. The framework of extant social contracts merges normative and theoretical research in business ethics and specifies a domain for empirical studies.

Challenging the egoistic paradigm

Abstract: Most economists are committed to some version of egoism. After distinguishing among the various sorts of egoistic claims, I cite the empirical literature against psychological egoism and show that attempts to account for this data make these economists' previous empirical claims tautological. Moreover, the assumption of egoism has undesirable consequences, especially for students; if people believe that others behave egoistically, they are more likely to behave egoistically themselves. As an alternative to egoism I recommend the commitment model of Robert Frank.The equivalent of egoism at the organizational level is that business firms seek (should seek) to maximize profits. I present arguments to show that a conscious attempt by managers to maximize profits is likely to fail. A committed altruism is more likely to raise profits. I suggest that a firm should take as its primary purpose providing meaningful work for employees.

Adapting Kohlberg to Enhance the Assessment of Managers’ Moral Reasoning

Abstract: This paper presents an adaptation of Lawrence Kohlberg's Moral Judgment Interview and Standard Issue Scoring method. The adaptation emphasizes four points: (1) a mixture of less familiar and more familiar moral dilemmas, (2) followup questions which probe managers’ moral reasoning by focusing upon key organizational values, (3) the flexibility of utilizing either an oral or written interview method, and (4) a simpler, yet reliable, system for scoring the managers’ responses and identifying their stage of moral reasoning. An empirical investigation found that each adaptation could enhance the assessment of managers’ moral reasoning.

Shrewd Bargaining on the Moral Frontier: Toward a Theory of Morality in Practice

Abstract: From a traditional moral point of view, business practitioners often seem overly concerned about the behavior of their peers in deciding how they ought to act. We propose to account for this concern by introducing a mutual trust perspective, where moral obligations are grounded in a sense of trust that others will abide by the same rules. When grounds for trust are absent, the obligation is weakened. We illustrate this perspective by examining the widespread ambivalence with regard to deception about one's settlement preferences in negotiation. On an abstract level, such deception generally seems undesirable, though in many individual cases it is condoned, even admired as shrewd bargaining. Because of the difficulty in verifying someone's settlement preferences, it is hard to establish a basis for trusting the revelations of the other party, especially in competitive negotiations with relative strangers. Brer Rabbit had got himself caught by Brer Fox and was well on his way to becoming evening dinner. Brer Rabbit was in a great deal of deep trouble. There didn't seem much he could do about this one, but he didn't seem concerned at all at being the Fox's dinner. He just said, "Brer Fox I don't mind if you eat me. But, oh, whatever you do don't throw me in that briar patch." Now Brer Fox was surely looking forward to eating his old enemy, but he was mighty curious about Brer Rabbit's sweating and crying about being thrown into the briar patch. And the more he questioned it the more Brer Rabbit wailed about how much he hated and feared that briar patch. Pretty soon it did seem that Brer Rabbit would rather be eaten than be set among those briars. So Brer Fox threw Brer Rabbit into the heart of the briar patch. Brer Rabbit gleefully scampered away. From the tales of Brer Rabbit 1

Business and Environmental Ethics

Abstract: A6stract: This paper explores some interconnections between the business and environmental ethics movements. The first section argues that business has obligations to protect the environment over and above what is required by environmental law and that it should cooperate and interact with government in establishing environmental regulation. Business must develop and demonstrate environmental moral leadership. The second section exposes the danger of using the rationale of "good ethics is good business't as a basis for such business moral leadership in both the business and environmental ethics movements. The third section cautions against the moral shallowness inherent in the position or in the promotional strategy of ecological homocentrism which claims that society, including business, ought to protect the environment solely because of harm done to human beings and human interests. This paper urges business and environmental ethicists to promote broader and deeper moral perspectives than ones based on mere self-interest or human interest. Otherwise both movements will come up ethically short.

Narcissism project and corporate decay: the case of general motors

Abstract: When I left graduate school and began teaching organizational behavior courses, I was struck by the irrelevance of what I had learned to the actual organizational experience of my students. My students experienced and understood organizational life as a kind of “vanity fair,” in which individuals who were interested in “getting ahead” could do so by playing to the vanity of their superiors. One needed to do this in two respects. One needed to flatter the superior as an individual and as an occupant of the superior role. This latter process tended to trail off into an adulation of the organization in general.

When is “Everyone's Doing It” A Moral Justification?

Abstract: The claim that “Everyone's doing it” is frequently offered as a reason for engaging in behavior that is widespread but less-than-ideal. This is particularly true in business, where competitors’ conduct often forces hard choices on managers. When is the claim “Everyone's doing it” a morally valid reason for following others’ lead? This discussion proposes and develops five prima facie conditions to identify when the existence of prevalent but otherwise undesirable behavior provides a moral justification for our engaging in such behavior ourselves. The balance of the discussion focuses on testing these conditions by applying them to a series of representative cases in business ethics.

The Ethical Roots of Business Ethics

Abstract: This paper traces the historical roots of some of our current preoccupations with the ethics of business. Its central argument is that many of the contemporary criteria that we use to evaluate the ethics of business are not new; rather, they date back several centuries. This paper illustrates this thesis by comparing historical and contemporary discussions of three sets of issues: the relationship between ethics and profits, the relationship between private gain and the public good and the tension between the results of capitalism and the intentions of businessmen.The fact that these tensions are inherent in the nature of capitalism, if not in human nature itself, does not make our contemporary concerns or standards any less valid. On the contrary, it underlies their significance. Contemporary discussions of business ethics constitute part of an ongoing moral dialogue with both deep secular and religious roots.

What's the Point of a Business Ethics Course?*

Abstract: A6stract: The paper argues that the point of a business ethics course is to improve behavior in business, and that an essential ingredient in that improved behavior is knowing what's right or wrong. To make that claim, the paper attempts to dispose of three arguments which support the contrary claim, that business ethics courses are useless. First, it is argued that morals can't be taught, since they only result from training. Second, it is argued that such courses are unnecessary because business executives already know right from wrong. Third, it is argued that ethical knowledge is impossible, so there is nothing to teach. The first two arguments are dealt with briefly, and the third is addressed extensively. The paper argues that the scepticism about ethical knowledge is part of a penzasive 'relativism" in our society, but shows that such a relativism/scepticism is untenable and indicates how ethical knowledge is possible. If, then, knowledge of right and wrong is an essential ingredient for improving business behavior, and such knowledge can be imparted in an ethics

The course in business ethics: why don't the philosophers give business students what they need?

Abstract: A6stract: Ethical theory in business ethics texts lacks sufficient specificity to be used as a tool of analysis. The result is that business faculty do not see the course in business ethics as helpful to their students, and the students do not see the course as helpful in their careers. A further difficulty is the inclusion of material which is not seen by business faculty, as appropnate or germane to the practice of decisionmaking. Issues such as the legitimacy of the corporation, or capitalism versus MaIxism, are of little interest or help to the person in business. Finally, the text cases are too often of a policy nature, and do not deal with issues faced by a majority of those in business. The result is the lack of engaging the moral imagination of the students. Unless the course is redesigned so that it is seen by business faculty as more relevant, it will continue to be required by only a small number of business programs.

Reflections on Teaching of Business Ethics

Abstract: There is a moral dimension in all business decisions. When planning a corporate takeover, which substance to use for a product, whether to hire temps or full-time workers, or where to invest, all reflect values and hence moral considerations. It is not enough to change people, we must change the structure. Within the corporate structure it is important to have special divisions dedicated to the implementation of ethics such as internal audit committees. The same might be said about business schools; to enhance ethicality, we need both that all faculty become more committed to moral education and special departments dedicated to it. Also the neo-classsical, deontological paradigm needs to be combined with deontological, social paradigms. The challenge that one cannot teach ethics because it's unclear whose values we are going to teach, can be dealt with by teaching values we all share, and knowledge and respect for those that divide us.

Reflections on Business Ethics: What Is It? What Causes It? and, What Should A Course in Business Ethics Include?

Abstract: Business ethics courses have been launched with professors from business pulling on one oar, and professors of philosophy pulling on the other, but they lack a sense of direction. Let's begin with the basics: What is an ehtical decision? More fundamentally, why the interest in professional ethics in the first place?There are over 300 centers for the study of applied ethics in this country—why? The events which face our society today (income and wealth disparity, environmental degradation, etc.) are outside the business-oriented collection of shared beliefs that set our public policy agenda. Our beliefs are too narrow, thus we see, understand, and control small slices of life.Business ethics should be the study of the structure and impact on us of what we call “business science,” e.g., accounting, marketing, economics, law, etc., and the corresponding study of the process of what Carl Jung called individuation: learning to become one's own unique self in the face of these bodies of professional knowledge which have structured our lives and charted the direction for our sensibilities for too long.

A Critique of Business Ethics

Abstract: The dominant approach to the analysis of issues in business ethics consists in the articulation and use of a set of mid-level moral principles. This approach is geared to business practitioners who are not interested in the difficult problems of moral and political theory. I argue that this “practitioner model” is philosophically suspect. I show how the theoretical frameworks prominent business ethicists employ are insufficiently developed. I also show how many of their analyses presuppose substantive views about issues of social justice which they rarely defend or acknowledge. Since no neutral position on these issues is available, I argue that the only alternative is to address the problems such issues raise for the analysis of institutions and the conduct of persons acting under those institutions. I offer suggestions about how we can develop a more philosophically defensible approach to business ethics.

Ethics in declining organizations

Abstract: This paper explores the relationship between declining orga- nizations and unethical behavior. Data from a four month long man- agement simulation indicate that declining organizations demonstrate a greater propensity for unethical activities than do more successful companies. The results indicate that: I) organizations in decline are more likely to be involved in unethical activities; 2) the more severe the decline is, the more unethical the behavior is likely to be; and 3) it is organizational decline and not initial propensities toward unethi- cal conduct that explains the unethical behavior. The paper also dis- cusses the implications of these findings and outlines future streams of research.

A Reaction to Vogel’s “The Ethical Roots of Business”

Abstract: n AVID Vogel has written a provocative and challenging article on the LJhistory of business ethics. It is provocative insofar as the author claims that the medieval philosophers and theologians condemned business and the making of a profit, specifically on money transactions. It is challenging in as much as the author almost begs the reader to provide proof that the medieval scholars did indeed have some form of a market ethic. It is my role to limit this paper to Vogel's discussion on the just price (a concept dear to medieval philosophers and theologians); just profit and interest on loans all of which have some effect on each other. Before entering into the just price controversy, I would like to comment on some of the author's other statements. He rightly claims that i*...much of contemporary writing on business ethics lacks an historical focus." His criticism also includes the lack of reference to the writings of the ancient philosophers, such as Aristotle, medieval philosophers and theologians such as Thomas Aquinas, as well as such more recent social critics as Max Weber. Unfortunately Vogel overlooks Gerald F. Cavanagh's American Business Values in Transition which contains a chapter entitled, '*Historical Roots of the Business System."2 Although Cavanagh wrote in a popular and condensed style, he surveyed attitudes towards business from the ancient Greeks to the American business creed. Some contemporary philosophers have told me that they have left out medieval writers because most of them were really theologians who used philosophy merely as a 'shandmaid' and thus lost the purity of rational thinking alone, untampered by faith and theological concepts. Vogel seems to reflect the same position when he states that Catholic theologians relied on i'.*.the only ethical advice Christ gave to the merchants and tradesmen he encountered was to abandon their work and follow him. A moral businessman was thus a contradiction in terms."3 Christ did not require that Lazarus, Martha, Mary, or Zucchaeus give all

Moral Decision Making and Multinationals

Abstract: American business schools are going international Courses in international business are blossoming everywhere and international topics are being added to existing courses Although business ethicists have addressed international issues for the past fifteen years or more, there has been no systematic book length treatment of international business ethics Thomas Donaldson's entry provides an auspicious beginning to systematic reflection on international business ethics

Epistemological Structures in Marketing: Paradigms, Metaphors, and Marketing Ethics

Abstract: This article uses Arndt's depiction of marketing epistemology to suggest a possible explanation for the lack of emphasis on marketing ethics within the marketing literature. While a growing number of writers are turning their attention to the area, marketing's heavy reliance on logical empiricism has contributed to a disinclination in the development of this area. Only through recent and numerous revelations of misconduct has the discipline of marketing responded to its ethical dimensions.

Green and Everybody's Doing It

Abstract: The claim that “everybody's doing it’ is not usually taken as a moral justification for an act that is otherwise immoral. Children frequently use this argument on their parents, without success. Business people sometimes try this argument, for instance, in claiming that since everyone else in a given country pays bribes, they are allowed to do so also. Abraham knew better than to use that argument on the Lord. He pleaded that Sodom and Gomorrah be spared if ten just men could be found there; not that anyone was just for doing what all the rest were doing.

Bridging the gulf between management practice and ethical theory

Abstract: Having taught management ethics for several years, l have been repeatedly frustrated by the practical mismatch between management problems and moral philosophy.... Unless we can connect ethical theory more closely with management practice, we may be dressing our business curriculum windows with philosophical finery but failing to meet the urgent need for clarity of tholught in management ethics. (F. Neil Brady, Ethical Managing; Rules and Results) To anyone who has ever taught a course in management or business ethics these words are bound to strike a responsive chord. Those of us on both sides the yawning gulf between philosophical ethics and management education feel at once the importance of connecting theory with practice and the immense difficulty of doing so. Philosophers (among whom I count myself) are unaccustomed to being practical, but we fancy that our abstract theories constitute an indispensable foundation for the field of business ethics. So far, though, attempts by philosophers to explain the connection have not been very convincing. Evidence on this point, if any is needed, can be obtained from a survey of the treatment of ethical theory in twenty-five leading business ethics texts done by Robbin Derry and Ronald Green (Derry and Green 1989). The picture they paint is one of indecision and confusion. Perhaps someone from the management side can do the job better. That was my hope, at least, as I began reading Ethical Managing: Rules and Resullss a short book by F. Neil Brady, who teaches in the Management Department at San Diego State University. Certainly, the passage quoted above raises high expectations. The task Brady has set for himself is to bridge the gulf between traditional ethical theory and the workaday world of corporate managers. His doubt about the usefulness of ethical theory as REVIEW ARTICLE 449

Punitive Damages: New Twists in Torts

Abstract: While jurisprudence in the United States has been cast in the general mode of the English common law, modifications over time have produced enough significant variations that American law has a distinctive quality. To illustrate: The exclusionary rule in criminal cases prohibiting the use of evidence (even from reliable witnesses) acquired through illegal search, is not followed in Britain—or, for that matter, in Canada, Germany, and Israel. The punitive-damage concept (PD) in tort law is also a jurisprudential novelty. Punitive damages are imposed in addition to compensatory awards given to tort victims to warn manufacturers and sellers to be careful in their safety and marketing practices. PDs are society's warning signals: Seller beware! Because they are one of society's ways to protect itself, PDs have recently been considered as fines which, to prevent excesses, should be under the rubric of the Eighth Amendment. This essay introduces new elements into the discussion on torts by hypothesizing (1) PDs are fines which belong to the public purse; (2) that expenditures from the public purse should be given to local organizations (like orphanages and inner-city hospitals) which provide vital services for those unable to pay; and (3) that the victim (or the victim's survivor) has a right to designate what local organizations should benefit from his or her punitive-damage awards. The hypotheses require reexamination of the concepts of citizenship, community, and work, respectively. Tort law is an integral part of the American law of injuries, a body of judicial doctrine and legislation and a set of legal arrangements that also include compensation systems and safety legislation. It would have been unthinkable as recently as twenty-five years ago that the tort system would become a source of bitter contention. Today, however, it generates sharp rhetoric and dramatic proposals for change to address its contested problems, as well as strong views in favor of continuing the system essentially intact so as not to disturb its contended benefits .

"Everyone's Doing It"—A Reply to Richard De George

Abstract: A short while ago, I participated in a class discussion of a case whose focus was on the auditor's report for a company about to launch an initial public stock offering.l The report showed that the company had taken many liberties with the discretions normally afforded by generally accepted accounting practices (GAAP). The company immediately booked franchises it sold as revenue, while cancelled sales (described as srepurchases" of franchises) were handled as depreciable capital expenditures. What seemed to be interest-bearing loans from corporate officers to the company were booked unambiguously as franchise sales to these officers. The resulting balance sheet made the company seem in far better financial health than it was. Accounting experts present for the case discussion pointed out that at the time they occurred these practices did not violate GAAP, although they i'pushed the envelope" of accepted conduct. During our case discussion, several persons present with experience in investment banking repeatedly sought to defend the company's practices. They pointed out that most firms make efforts to see that audits for IPOs cast the most favorable light on the firm's financial condition. Because so many companies do this, they added, one that didn't skew its audit in a favorable direction would disadvantage itself in the capital markets. As the discussion proceeded, I counted at least ten instances where one or another participant used some variant of the phrase i'Everyone does it." I mention this discussion not because I believe these practices were morally justified. Indeed, they were apparently regarded as so flagrant that they subsequently led to a tightening of FASB standards. Rather, I raise this case to show how prevalent the Everyone's doing it'§ claim is in moral arguments, especially in the field of business ethics. In his response to my paper, Richard DeGeorge repeatedly suggests that the ZEveryone's doing it" claim is either morally irrelevant or mis-

The Shadow of Ethics: A Reply to Laurie Pamental

Abstract: THAT 'business ethics' is an oxymoron, like 'military intelligence' or l 'deficit spending,' is surely the most regular and tiresome conversational chestnut proffered to those of us who teach it by those who don't. (Pity the present writer, who also works in philosophy of religion.) There is some comfort, though howbeit cold- in recognizing that the joke depends for its hilarity upon a conventional wisdom which is, for once, not too wide of the mark. Business and ethics are (or are perceived to be) so incompatible and even polemical that conjoining them like this is like watching a bad Hollywood buddy movie Nick Nolte and Eddie Murphy handcuffed together for yet another forty-eight hours. For the sake of revenge for the professional distress the joke occasions me, I'll gladly run the risk of seeming a bore by trying to explain it. Why is the concept of 'business ethics' so risible? Mentioning 'medical ethics' does not produce the same guffaw quotient; nor does 'engineering ethics,' nor even, oddly, 'military ethics.' (During the recent war with Iraq, Pentagon spokesmen were at great pains during media briefings to detail measures to reduce icollateral damage' and to promulgate a 'battlefield code of ethics' among the ground forces; their words were attended to in respectful silence.) Somehow, ethics and business are thought to be more incongruous than ethics and almost any other profession, with the possible exception of the law. But why should this be so? Surely much of the current attitude is the result of the Petronian excesses of the past decade. Hardly has a day gone by when the readers of even the Wall Street Journal have not been treated to news of yet another moral impropriety, to put it delicately. Affront succeeds affront: the explosion of corporate debt produced by the LBO frenzy of the '80ss; the insider trading scandals of Boesky and Drexel Burnham Lambert; the rise and fall of Michael Milken's junk-bond empire; the defense contractor procurement scandals prior to the 1988 federal election; executive 'compensation packages' rocketing into the stratosphere while quarterly profits and employee wages plod along at ground level; the eminently preventable crackup of the Exxon Valdez; and, to top it off, a savings and loan swindle whose bailout price is nearing defense budget proportions: all have contributed to a rather substantial downward revision of the moral esteem in which business is held in the

And the Blind Shall Lead the Blind: Reaction to a Floating Memoir

Abstract: My anger at the fishermen, I realize, was directed at the conspicuous costliness of their gear, the excessiveness of the new van, because otherwise, I would have to acknowledge them as other versions of myself. Frustrated because they were where I wanted to be and were doing what I wanted to do, I tried to divert the issue to how they were going about it all. I tried to make it an argument about character rather than envy.1