Ron Kaatz - Senior Vice President
Published February 1, 1990 | February 1990 issue
Edited by Tom L. Beauchamp and Norman E. Bowie
By Tom L. Beauchamp and James E. Childress
Oxford University Press
You, the reader, will quickly discover the discussion below is, in truth, a personal opinion piece flimsily disguised in book review clothing. I must admit, too, right at the outset, that the views expressed are based on my experiences as a hands-on manager and my peculiar world view, both of which are, without doubt, not representative of investigations into business ethics everywhere, or the state of mind of all investigators. But, I guess, that's why they are called opinions and are subject to debate. My purpose is to stimulate debate.
Whatever you may think of my opinions, I hope you will look into the two books recommended. Beauchamp and Childress may be recognized one day as a classic of its kind and simply should be read by anyone who wants to participate meaningfully in a dialogue on applied ethics. Beauchamp and Bowie brings together in one volume a rich range of essays and case studies in the application of applied ethics to business.
Business ethics is getting a lot of attention these days. Scores of books on the subject have appeared over the past several years. The popular press frequently reports activities of Wall Street functionaries thought by many to be unethical. Plant closings are said to sacrifice the well-being of whole communities in exchange for corporate profit. Takeover mania driven by bald greed is said to have made a small number of individuals fabulously rich, again, at the expense of employees and others economically dependent on the firms consumed.
Muddled in with these problems, some observers condemn employee drug testing and the use of polygraph tests in the workplace as an attack on individual privacy. Others support such measures as necessary for public safety. Whistle-blowers accuse their employers of wrongdoing including bribing public officials, polluting the environment, knowingly marketing unsafe products, and unfair hiring, training and promotion practices. And the whistle-blowers themselves are vilified by some for lack of loyalty, while praised by others for the courage and ethical strength to speak out.
Not all news is bad. Some corporations publicize examples of their commitment to social responsibility in the form of contributions to worthy community programs and other actions they believe should be judged morally admirable. Even here, however, critics are quick to point out the tax deductibility of contributions and the self-serving goodwill corporations expect to gain from their altruism. Some go so far as to claim that stockholders are unjustly shortchanged in the process, or that corporate executives are not empowered by anyone to judge which social needs are most deserving.
Pursuing this line of reasoning leads some to conclude that the sole legitimate mission of business firms is to make the greatest possible profit for shareholders while conforming to the rules of society. No, this is not greed, they argue. It is merely a matter of proper roles. Business firms should do what they were designed to do and presumably do well-efficiently supply products in the marketplace and, in the process, provide employment and all the attendant benefits. They should leave social programs to other institutions organized, chartered and managed specifically for that purpose. Furthermore, they say, operating within our legal and regulatory framework, and with market forces that also impose constraints on conduct, business firms, even though acting in their own self-interest, will not be a force for social injustice.
Interest in ethical conduct, or the lack of it, is not confined to business firms. Government officials, elected as well as staff, are increasingly on the hot-seat for questionable activities, as are leaders of not-for-profit organizations. In fact, it may be better as a rule to talk more generally about organization ethics.
Just one additional thought about issues not in the realm of business ethics.
How much has been written and said about insider trading and other illegal activities on Wall Street? And there's not a nickel's worth of ethical content in any of it. True, our criminal laws rest on ethical foundations. But stealing, as a conceptual issue, is hardly on the cutting edge of major puzzles facing ethical inquiry today. They are criminals. They stole money, got caught, were tried, convicted and punished. Except for some who feel grand theft may be defensible in certain circumstances, there is no ethical dilemma in this. Talk about it if you wish, but don't pretend you're doing ethics. Sociology maybe, or administration of legal justice, or abnormal psychology, but not ethics, not even economics. Let's get serious. Let's get organized.
What is to be made of all this? Is our nation in a period of moral decline? What are the values against which behavior ought to be measured? Do worthy ends always justify the means to achieve them? Never? Sometimes? When? Why? Is it ever right to lie? Should agreements voluntarily entered into always be honored regardless of the consequences? Who decides the relative importance of competing values and how they should be balanced in instances of ethical ambiguity or conflict? On what basis? The list of issues goes on and on.
With all the books, articles and seminars addressing business ethics, how well are we doing in the search for a better understanding of the problems and potential solutions?
Not very well, I would argue. And the basic reason is that most of us are not really working at it. We are merely talking-endless, undirected, unstructured talk that goes round and round the mulberry bush but converges on nothing. Half-day seminars on business ethics are popping up like toadstools in the swamp and accomplishing nothing to speak of. Simplistic ideas uttered with heartfelt conviction are a tribute to the sincerity of the utterers, but they don't solve problems. "Stakeholder," a current rallying cry, is a clever play on words, but other than emphasizing the obvious interdependencies and shared responsibilities among employers, employees and probably all the other elements of human society, it seems merely to represent a heartfelt appeal to move toward some undefined more egalitarian world view. Kenneth F. Goodpaster, recently appointed to the Koch Chair in Business Ethics at the College of St. Thomas in St. Paul, Minn., has begun to develop a framework of ideas focusing on alternative types of management that gives more substance to the stakeholder concept. But Goodpaster's ideas are not yet flowing out of the academy into the public dialogue on ethics.
Don't get me wrong. However unproductive business ethics seminars are today, I believe it is good that they are happening. They may raise the consciousness of someone previously unaware of certain problems. They probably do help some clarify certain points in their own minds. They may even lead a few individuals to honestly reassess and investigate more carefully some aspect of their feelings on certain matters. But good intentions and interesting, even thoughtful, conversation, however pleasant, do not solve hard problems.
If this is so, we might ask why more serious efforts aren't being made. ... and how matters could possibly be improved.
As to why, I suggest two factors. They are not unrelated. Two sides of the same coin you might say. First-let's be honest-we all like to have fun, and sitting around talking about this stuff is fun. It's fun as long as we don't make too much work of it. If registration in the next popular seminar dealing with a currently hot topic in business ethics required reading a moderately demanding text, I predict attendance would be inversely related to the number of pages of reading required. Thus, cocktail conversations masquerading as work are frequent and well-attended-serious working sessions rare.
Take the Goodpaster article for example. It runs 16 pages of moderately small print. No pictures, one diagram and no mathematical formulas. You don't have to understand syllogisms or other Socratic esoterica to get the drift of Goodpaster's message. You don't even have to know how to spell existentialism. But you do have to be willing to spend a couple of hours reading it through carefully the first time. If you want to participate meaningfully in the dialogue you may also want to spend time reviewing and rethinking the main ideas, perhaps several times.
The second possible reason so much of the business ethics dialogue is unproductive relates to motivation, or to put it another way, most of us don't like to work. Fun and work, two sides of the human enterprise coin.
While specific issues often excite passion and vigorous action on the part of adherents, these actions are most often single-issue efforts driven by special interest groups. The Sierra Club wants a clean environment and that's that. Underground mine workers want safer working conditions. Communities surrounding chemical plants want greater assurance catastrophic accidents won't happen in their neighborhoods. But, there is no dilemma in the minds of these antagonists. Whatever may be required of business to achieve the sought-after end is what they want. Thoughtfully weighing trade-offs among important competing, legitimate interests is not their self-appointed role. They are advocates for a particular point of view, one actor in a larger, primarily adversarial, framework.
However, our interest and enthusiasm for constructive dialogue to develop and perfect a broader framework for cooperatively exploring and debating conflicts of organization ethics do not appear to be strongly ingrained. It is, for most of us, not a deeply held ultimate concern. Balancing the rights of employees to privacy in the workplace against employers' legitimate needs for information and society's right to public safety, while important, does not often hit most of us where we live as a life and death issue. Thus, motivation is not sufficiently high to persuade us to invest our time and effort in several hard hours of reading and rigorous thinking. We are not clamoring for copies of Ken Goodpaster's article to lay along side our prized copy of The Region.
But unless a deliberate effort is made to think hard, to structure discussion, to provide a framework for defining and analyzing the issues, we cannot hope to escape from the severe limitations of one person's loosely organized and vaguely understood subjective opinions versus those of another. Worse, we expose a vulnerability to rhetoric and demagoguery playing on our emotions. "You can't calculate the value of a child's life in dollars and cents" is a dangerous expression. It contains obvious, but unenlightening, truth. It is sinister, however, in providing an emotional foothold from which to persuade us that expenditures of resources in any amount are morally mandatory for whatever crusade the demagogue is promoting, without consideration of equally legitimate and compelling alternative uses of those resources.
"Now just a doggone minute!" I hear some of you out there saying. "We've heard that song before. It's that same old rationalist attitude that science and mathematical logic can solve human problems just like they can send a rocket ship to the moon. All we need is a couple of ethicists, an economist and a computer to calculate the right set of ethical formulae. Do the cost-benefit analysis, follow the resulting rules and everything will be fine."
"Not so," I hear you saying. "Problems that ethics struggles with are matters of the heart, not the head. They involve feelings and human values beyond microbiology and Boolean algebra. Conscience, not intellect, is needed to bring us a just and humane society. We must reach beyond mere engineering. We must look to the arts for understanding-to put us in touch with the human spirit. Music, drama, dance and reflection provide the inspiration and sensitivity needed to reach the essence of ethical questions and how to deal with them. You're barking up the wrong tree and we don't buy it."
Enough! I've heard that song too. And while I agree with a lot of it, I would no sooner rely exclusively on a kind-hearted tuba player than I would a clever logician.
Can't we put them together and perhaps get somewhere? Can't higgledy-piggledy cocktail conversation masquerading as earnest thinking about ethics be made more fruitful and rewarding-and more fun-if we organize our thoughts on some basic ideas in advance? Can't questions of human values be put into a sensible intellectual framework without stifling the creative human spirit within us? Can't we agree on a vocabulary that will help organize our thinking and improve communications? Aren't these things possible? Of course they are, and that gets to the second question-how matters might be improved.
If issues in business ethics, while of considerable importance, are not usually of driving ultimate concern to most of us, the same is not true in medicine. Doctors, nurses and other health care staff are faced daily with real life and death situations, many wrapped in very difficult ethical dilemmas. Their hands literally are on "the plug." While medical care, like business, depends critically on engineering, technology and administration, often the greatest burden on health care professionals is deep mental and emotional pain stemming from decisions and human interactions the real stuff of which is love, compassion, the burning desire to help and hope. Hope sometimes fulfilled but often dashed without warning by indifferent forces of nature. Driven by this ultimate concern, serious thinking, discussion and debate-not just talk-over the past decade or more has led to a useful intellectual framework, a set of ideas and a vocabulary widely and fruitfully used to address real day-to-day ethical dilemmas in human health care. Furthermore, understanding and use of these ideas is widespread among a vast segment of health care professionals at all levels, not just a small intellectual elite. In medicine it is working.
I believe we can borrow from and build on progress already made in biomedical ethics to help organize our thinking in business ethics. Both are, at bottom, applications of the more general discipline of applied ethics.
I would go further. I believe it is a compelling duty that we do so. If the ethics of business vis-a-vis medicine sometimes doesn't seem as powerful on the human dimension, the difference may be illusory. When a 55-year-old man comes home to tell his wife he has lost his job and that his defined contribution pension fund has lost 40 percent of its value due to the stock market crash, the consequences for that family may be no less devastating in terms of human suffering than if he told her he has cancer.
Many economists would be quick to interject at this point that, though clearly a destructive blow in the life of this man and his family, his job loss does not necessarily indicate that unjust or unethical forces are at work. The broader perspective of economic activity, including ethical issues arguably surrounding that activity, must recognize the unyielding reality that every firm will have good times and bad. Stock markets will crash. Firms will go bankrupt with devastating effects. In an uncertain world employees will lose their jobs. Economic forces we can't now control are as indifferent to individual victims as are viruses to the infected or gravity to fat people. These events, while tragic in some cases, are not necessarily the result of injustice or unethical behavior.
My objective here is to write a book review not a book. So I must resist the temptation to continue this dialogue, of which our imaginary economist's remarks above are only the opening salvo.
If you buy any of what I'm saying, and if you want to examine some of the ideas I've blatantly asserted, I recommend you start by reading two books.
The first is Principles of Biomedical Ethics, third edition, by Tom L. Beauchamp and James F. Childress. In the first six chapters Beauchamp and Childress explain the nature of applied ethics as a discipline, describe major types of ethical theories and then focus on four principles that they suggest can provide much of a comprehensive framework for organizing competing ideas and values. If you're serious about business ethics you will have to understand utilitarianism, the almost universally accepted moral dictum on human welfare underlying modern economic analysis, and this book explains it through the eyes of an ethicist. Although examples throughout the text are taken from health care situations, it should be apparent that the underlying ideas apply directly to business as well. For no extra effort, you will also learn more than a bit about ethical problems in health care.
The second book I recommend you study is Ethical Theory and Business, third edition, edited by Tom L. Beauchamp and Norman E. Bowie. Although the first chapter of this text provides a discussion of ethical theory and its application to business, it is not a substitute for Beauchamp and Childress, which must be read first to provide the framework needed to critically examine the business case studies and essays that make up the bulk of this book. One essay in particular, by Milton Friedman, presents powerful arguments as to why the sole responsibility of business firms is to make the greatest possible profit for its shareholders. When you have read Friedman and are thoroughly convinced he is right, read the article by Goodpaster and Matthews, which you may well find equally convincing of just the opposite view. If, as you read these and the other essays, you discover unambiguous, final answers to these hard problems, you will have achieved a high state of divinity, ignorance or arrogance. If, on the other hand, you are more confused than when you started, that's progress. You will then have come to know better what you don't know and how to begin organizing your confusion. If you don't read at all, if you are not familiar with these and other important ideas, you haven't done your homework and all you can do is talk.
Good reading. Good thinking.