Dominant Trends in the Field
An insistence on the features described above would not be controversial among
most business ethics scholars, even if representatives of different schools of thought
might emphasize some features more than others. Nevertheless, within the field
there are still very few examples of fully comprehensive theories that integrate principles from the micro- to the macro-levels, and that do so in ways that are consistent
with the best contemporary work in law and the human sciences. It is more typical
for particular business ethicists to focus on principles and institutional design at
only one or two of the levels, often taking for granted institutional or behavioral
assumptions at the other levels.
Micro-Level Focus on the Individual
Scholars and textbook authors focusing on individuals in business have tended to
cluster around an emphasis on character (see character) and virtue ethics, on the
one hand, or on attempts to apply ethical principles to difficult dilemmas that face
businesspeople, on the other. Aristotelian models of virtue, character, and judgment
have been very well represented in the field from its inception (see aristotle). But
non-Aristotelian accounts of the virtuous businessperson abound as well. One
suspects there is no major living tradition of religious or secular ethics in the world
today that has not had its implications for business ethics teased out in scholarly
articles with titles like “The Relevance and Value of Confucianism in Contemporary
Business Ethics” (Chan 2008) or “Business Ethics and Existentialism” (Ashman and
Winstanley 2006). And because most traditional and religious ethical traditions
emphasize basic virtues and character, most attempts to “apply” these traditions to
the world of business focus on individuals and their virtues. But various modern
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theories of virtue come into play as well, from attempts to recuperate Adam Smith’s
theory of moral sentiments and his account of bourgeois “commercial” virtues like
prudence, temperance, industriousness, and honesty, on the one hand (see Wells
and Graafland forthcoming), to various contemporary feminist approaches, on the
other (Liedtka 1996; Wicks 1996; see feminist ethics; glass ceiling).
By and large, virtue ethicists paint a picture of a prudent, fair-minded, morally
courageous, and empathetic manager that fits well with the models of effective
leadership developed by their more empirically minded colleagues in organizational
behavior departments (see, e.g., Hartman 2001; Sitkin et al. 2010). There seems to be
an irresistible tendency to explain how virtuous management is also likely to be
more successful – a view proudly reflected in the title of a book by the late philosopher
Robert Solomon, A Better Way to Think about Business: How Personal Integrity leads
to Corporate Success (1999). The virtuous manager will be viewed by employees and
other stakeholders as a person of integrity, who is credible, “walks the talk,” and
inspires trust. This, in turn, lowers transaction costs and motivates employees so
that they will be less likely to break rules or take shortcuts that expose the firm to
risks (Paine 2003: Ch. 2).
Such an approach to business ethics has met with resistance in both the academy
and the larger culture of business. While few want to assume that “business ethics” is
an oxymoron – whereby it would be virtually impossible to be both ethical and
successful in business – it is very common for people with a strong academic or
practical understanding of the demands of management in highly competitive sectors
to be skeptical that “nice guys will finish first,” even in the long run. They might, for
example, point to individuals throughout the financial services sector, from mortgage
brokers to investment bankers, who took home seven- and eight-figure bonuses during the bubble years of the US housing market in the first decade of the twenty-first
century. We know now that dishonesty, deception, conflicts of interest, and the like
were rampant in many segments of this industry. But for the most part, these people
lost none of their accrued bonuses, and faced no criminal charges, after the market
inevitably collapsed. It is hard to avoid the conclusion that they, and in some cases
their companies, profited in the long run from unethical behavior.
One response by virtue ethicists to the existence of real-world pressures to do
things that would normally be unethical is to counsel against taking career paths
that will place one in such positions of moral peril. This may be good advice for
some MBA students, but it cannot be an adequate response to negotiating the “moral
mazes” in our world of business (see Jackall 1989).
Another approach is to look beyond the ethics of individual character or
decision-making, and to inquire instead about how, for example, corporate boards
or senior executives might reshape the incentives and culture of the firm to promote
more ethical behavior (see corporate governance; corporate culture; codes
of ethics); or to show how sharp business practices might be adequately regulated
and monitored by the state or other agencies (Paine 2003: Ch. 3). We will turn to
proposals for the ethical design of firms and market regulations at the “mid-level”
and “macro-level” in a moment. But for now it is worth noting that after considering
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reforms at these other levels, it will still be necessary to think about how individual
managers ought to behave in a highly competitive business environment in which
many sharp practices cannot be outlawed. In particular, we will have to consider the
possibility that norms, principles, and virtues appropriate for individuals working
within institutions that have been designed to be adversarial may differ significantly
from those we use in “everyday” morality. Individuals working in the modern
business system are often expected to act competitively and aggressively within a set
of written and unwritten rules. The basic idea here was most famously articulated by
Adam Smith (1976 [1776]), if only in passing, when he noted that individuals pursuing
their own self-interest, or the interest of their firm, can be led by an “invisible hand”
to advance social interests that were no part of their intention. Adapting the contractualist ethical model of Tim Scanlon (1998), Arthur Applbaum (1999) has argued that
deliberately adversarial institutions like business, law, and politics can justify systematic departures from everyday morality (deception, for example) only if it would be
unreasonable for those who are harmed by these institutions to reject them (see contractualism). In general, business ethicists have focused much less on justifying the
departures from everyday ethics which may be required by optimizing institutions
than have their colleagues who theorize about legal ethics (Markovits 2008).
As noted earlier, not all business ethicists who have focused on the ethics of the
individual businessperson have worked within the virtue-ethics tradition. It is also
natural to think that an ethical businessperson will have to be adept at decisionmaking when faced with difficult and constrained options. Managers, for example,
will often have to choose among courses of action that will benefit some individuals but harm others (e.g., when they have to decide who to promote, or who to lay
off). They may also find that they have several prima facie duties (e.g., to be open
and honest, to keep secrets, to be loyal to their employers, to be loyal to those they
supervise or to their profession, to maximize returns, to be fair [see prima facie
and pro tanto oughts]) that inevitably conflict in certain situations. When
philosophers entered the field of business ethics, as either teachers or scholars,
they were often drawn to the question of how to resolve these kinds of dilemmas.
Early textbooks in the field introduced students to the principal schools of normative ethical theory, especially utilitarianism and deontology (see utilitarianism;
kant, immanuel), and students were invited to apply these theories to examples
and case studies. But in both pedagogical and scholarly contexts this approach –
that we first settle upon the best ethical theory or decision procedure and then
simply apply it to real-world dilemmas – has largely disappeared. This is in part
because we no longer expect to find consensus about the best normative ethical
theory. But it is also because actual actors in the world of business must pay attention to the rules and procedures in their organizations, their professions, and the
law. These rules and codes may be consistent with the guidance given by different
ethical traditions, but they may also conflict. When they do conflict (say, where
you are required to do something that is legal and will help your firm but will not
maximize social welfare or satisfy the categorical imperative: see categorical
imperative), it is not obvious that the option favored by the careful application of
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an ethical theory will always trump an organizational duty. We cannot conceive of
a large hierarchical organization functioning in a stable way if all of its members or
agents are entitled to make decisions about everything based on their own personal convictions. If institutions and organizations are to enable human societies
to solve collective-action problems and to achieve things that individuals could
not do on their own, they will have to have their own decision procedures, chains
of authority, and an ethos. So discussions of ethical decision- making by individuals in the world of business will soon have to move from the micro-level to the
mid-level and macro-level, where we must justify the way organizations are structured, governed, and regulated.