Promoting Ethical Behaviors in the Business Community

This article examines the proposal that “…Corporations and the people who make them up must have high moral standards and monitor their own behaviour because there are limits to what the law can do to establish and ensure that business behaviour is socially and morally acceptable (Shaw, Barry and Sansbury, 2009, p.206).


We begin by identifying the parties involved (i.e. the message giver and message receiver), clarifying a number of preliminary concepts and then applying ethical theory to deepen our insight on how they might respond. The discussion concludes by suggesting an alternative approach that would achieve the desired outcomes implied by Shaw et al. (2009) by appealing to the business community’s sense of enlightened self interest.

Discussion

There appear to be two parties to this statement; the message giver represented by Shaw et al. (2009) and the message receiver being the business community at large. I believe Shaw et al. (2009) is attempting to induce the business community into becoming more ethical in their behaviour. Given that the business community is primarily concerned with the outcome of generating value for shareholders, I would suggest that the ethical position for most (if not all) of the target audience members could be classed as consequentialist in the way Crane and Matten (2007, p.91) describes it. On the other hand, the stakeholder orientated language used by Shaw et al. (2009) suggests a non-consequentialist ethical position.

In the discussions that follow we will consider the key ethical responses to this statement however first there are a few preliminary concepts to clarify for the purposes of this essay; i) the assumptions underlying the statement, ii) a definition of morality and iii) origins of morality.

i) Assumptions underlying the Shaw et al. (2009) Statement

During the discussions on how the business community might respond we will reduce the Shaw et al. (2009) statement to the following key assertions:

1) Corporations have an obligation to maintain high moral standards.
2) Individuals have an obligation to maintain high moral standards.

3) Business behaviour is currently socially and morally unacceptable.
4) High moral standards are both definable and attainable.
5) Self monitoring of business behaviour will address the perceived gap left by the legal system

ii) Definition of Morality

Wines (2007) describes morality as the rules people have within them to operationalize their va

lues. However for the purposes of informing our sense of moral standard we will use the Crane et al. (2007, p8) definition of morality:

Morality is concerned with the norms, values, and beliefs embedded in social processes which define right and wrong for the individual or community” (Crane and Matten, 2007, p.8).

ii) Origins of morality

Dawkins (2006) offers an interesting commentary on the origins of morality in human beings. Dawkins (2006) suggests we are genetically predisposed to be moral and that these char

acteristics emerged from the lengthy evolutionary process. He cites in his supporting argument; genetic kinship, reciprocal altruism, reputation (of altruism) and advertising altruism to support this proposition (Dawkins, 2006, p.219). In essence individuals are statistically more likely to benefit if they adopt a behavioural strategy that exceeds a critical frequency in the population. This seemingly natural mechanism appears to have given rise to the complex moral awareness that human beings have today. Given our interest here in promoting ethical behaviours it’s important to understand how this natural mechanism can work in favour of improving the overall ethical disposition.

Apart from some evolutionary compulsions to exhibit altruistic behaviours the question of why we should be moral appears to be a key topic for ethical philosophers. Melden (1948) and Frankena (1958) seem to think this is an impossible question to answer due to, amongst other things, the difficulties defining ‘good’. Doing ‘good’ it seems, is a matter of perspective and there are many perspectives to choose from.

For the purposes of this essay, we will assume that what constitutes ‘good’ is in the eye of the beholder and in this case the beholder is the business community at large.

According to Crane et al. (2006), there are two consequentialist theories which may help us to understand how the Shaw et al. (2009) statement might be perceived by the business community. These are Egoism and Utilitarianism.

An Egoist interpretation:

I think this type of ethical lens (Crane et al., 2007, p.110) would feature strongly in the minds of the business community both as individuals and as a collective. The Egoist is chiefly concerned with their individual self-interest (Crane et al., 2007, p.93). To an Egoist business person reading this statement, the idea that individuals have an obligation to maintain high moral standards would certainly strike a chord. Especially since this would probably mean having to comply with an imposed set of moral standards that challenges their freedom of choice.

In a world where Shaw et al. (2009)’s statement has been realized, the Egoist would be looking for a personal benefit and probably won’t find one. I doubt whether the Egoist will care about corporate obligations or how business behaviour is currently perceived. On the other hand the Egoist may treat this statement as an opportunity to develop a moral façade as a way to enhance

career prospects. How this might be utilitised is of more interest to the next perspective, Utilitarianism.

A Utilitarian interpretation:

I think the Utilitarian business person would look at the Shaw et al. (2009) statement from a cost to benefit viewpoint. On the cost side the main part might be the moral obligations for both individuals and corporations over and above those required by company law. From the statement (Shaw et al., 2009) it’s not clear how onerous a high moral standard might be to maintain however it is likely to be a significant social investment. A move to this new moral world would also likely impact other social systems such as; the legal framework for businesses or the welfare system not to mention changes to the role of management. Corporations would be saddled with yet more obligations besides the usual shareholder focus.

On the benefit side meeting these obligations might position businesses well to meet an increasing public demand to behave ethically (Crane and Matten, 2007, p.9). Behaving ethically may actually be good for business according to research by Hosmer (1994) and commentary by Covey (2006). The utilitarian might also consider the distribution of benefits to be an improvement since an overall improvement in moral judgement might lead to better circulation of wealth. In my opinion the Utilitarian might view this as a worthwhile investment to make.

For Shaw et al. (2009) to appeal to consequentialists, it would need to use the language of outcomes. Outcomes that are ecologically checked and inform the participant not just on what needs to be achieved but also how it should be achieved. We now turn our attention to a compelling economic case put forward by Covey (2006) for improving ethical behaviour which would appeal to both the Utilitarian and Kantian perspectives.

Business behaviours to improve the organisational climate

I’d like to present a slightly different way of engaging the business community to achieve the same ends. To persuade the consequentialist business folks to adopt a form of enlightened self interest. That is to change to a self serving mode of existence designed to generate systemic trust.

In his latest book, ‘The Speed of Trust’, Stephen Covey (2006) proposes that trust (in organisations) affects two outcomes, speed and cost. When trust diminishes (often as a result of unethical behaviour), speed decreases while cost increases (Covey, 2006, p.13). Conversely if trust increases, speed increases and costs decrease (Covey, 2006, p.13).

This can be expressed as follows:



Figure 1. The economics of trust (Covey, 2006, p.13)

This relatively simple formula gives us the means to use a familiar language to influence business behaviours by quantifying ethical decision making in economic terms. For the Utilitarian perspectives this would support the business case ethos especially since the cost/benefits could easily be articulated. Kantian protagonists and relationship oriented perspectives (such as feminist ethicists) will enjoy the principle-centered implications of promoting trust as an attribute that can be actively cultivated.

Covey (2006) proposes a number of conduct changes that will dramatically improve levels of trust and judging from the level of book sales, this message seems to have caught the attention of the business community. ‘The Speed of Trust’ remained in the top 10 of the New York Times best seller list for 6 months (NY Times, 2007). I believe a campaign of winning hearts and minds will achieve much more than simply imposing these conduct changes with policies, codes on conduct or other methods of corporate coercion.

Conclusion

In conclusion, we have considered the statement made by Shaw et al. (2009) from the business community perspective paying particular attention to the ethical lenses described by Crane et al.(2007, p.119) of Egoism and Utilitarianism. Engaging the business community by projecting a set of values and obligations on them is not likely to achieve the outcome Shaw et al. (2009) desired. To address this we have suggested a more enlightened approach that appeals to the inherent self-interest in the community. An approach that achieves a more evolved mode of existence that is designed to generate trust system wide to the benefit of all.

References

Covey, S. M. R. and Merrill, R. R. (2006). The Speed of Trust. New York. Free Press.

Crane, A. and Matten, D. (2007). Business Ethics. London, Oxford University Press.

Dawkins, R. (2006). The God Delusion. London, Bantam Press.

Frankena, W. (1958). Macintyre on Defining Morality. Philosophy, Vol. 33, No. 125 (Apr., 1958), pp. 158-162, London, Cambridge University Press. Retrieved November 20, 2009 from http://www.jstor.org.ezproxy.massey.ac.nz/stable/3748565

Hosmer, L. T. (1994). Why Be Moral? A Different Rationale for Managers. Business Ethics Quarterly, Vol. 4, No. 2 (Apr., 1994), pp. 191-204. Retrieved November 20, 2009 from http://www.jstor.org/stable/3857491

Shaw, W. Barry, V. and Sansbury, G. (2009) Moral Issues In Business, Melbourne, Australia: Cengage Learning.

The New York Times, (2009), Best Sellers, Retrieved November 22, 2009 from http://www.nytimes.com/2009/04/05/books/bestseller/bestpaperbusiness.html?_r=1&scp=1&sq="speed%20of%20trust"&st=cse

1 comment:

  1. Hi Colt, a very interesting and highly topical essay. Having studied Classics (a few years ago now admittedly) I am reminded that morals and ethics in ancient times were perhaps a bit different from our 21st Century perspective. Whilst I am a huge fan of Dawkins and understand the arguments he posits around memes I would like to add a philosohpical question: Are morals and ethics static or are they a social construct which vary from culture to culture and generation to generation?

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