Corporate Ethics as One Analyst Term Paper

  • Length: 12 pages
  • Sources: 15
  • Subject: Business
  • Type: Term Paper
  • Paper: #25353986

Excerpt from Term Paper :

Capitalism does force us sometimes to make decisions in a context narrower than we need in order to make them morally, socially, environmentally (Rolston, 1988, p. 324).

Rolston points to several cases of corporate myopia that was changed as customers and potential customers made their views known and demonstrated that hurting customers would harm shareholders as well. He points to the DDT scare in the early 1960s which led to the banning of the chemical, which harmed shareholders of the company producing it; the improvement of the Alaska pipeline so consumer complaints served the needs of shareholders and added to the value of the pipeline; and automobile companies that responded to consumer complaints and produced cars with better emissions standards, thus serving shareholders by maintaining sales (Rolston, 1988, p. 325).

However, it is also evident that companies that pretend to be responsible toward their customers and the demands of those customers and that are found not to be have abrogated their responsibility to their shareholders just as they have to consumers. They might have tried to justify such actions by claiming they were being responsible to shareholders by increasing profits, but this is a short-term strategy belied by the long-term reality. Once found out, these companies lose business and leave their shareholders in financial trouble.

Ethical Grounding

Several different approaches have been suggested for businesses today to cope with the issue of ethics. It is generally agreed today that ethics should be taught, and this is being implemented. More than this, corporations need to develop ethical guidelines and to consider and reconsider these guidelines in the light of actual cases and perceived business practices. A set of guidelines should thus be flexible enough to adapt to a changing environment while having a core of principles that do not change and that help determine the ethical behavior to be allowed in a changing business environment.

In developing guidelines, a number of questions should be asked and answered as part of the development process, and these questions should be returned to from time to ascertain whether or not the guidelines remain fresh and viable or whether some adjustment needs to be made. Consider the following questions:

1) How will we define ethical behavior? Such a definition should be simple and should relate to the prevailing business, social, political, and legal climate. There are certain behaviors which are considered ethical or unethical on their face, but there are others that may be considered unethical in ne environment or period of time and not in another. To a degree, these views do change.

2) What does the manager need to know in order to assess the merits of a given decision? The intent of the guidelines is to give the individual manager the tools he or she needs in order to make ethical decisions in keeping with the corporate ethos of the company. To accomplish this task, the manager needs to understand what an ethical decision is and to know how to analyze a given problem to see that the answer arrived at is ethical.

3) Should the manager be able to make these decisions solely on his or her own or should there be a mechanism to refer to higher authority? It is likely that there should be such a mechanism only for the most extreme cases, while the manager needs tools to make direct decisions the rest of the time.

4) Should the ethical structure be made to apply in the same way to foreign operations as to domestic operations? This is a difficult question for any company wishing to compete in foreign markets, and the issue may require a higher sense of ethics from the company than would be required for companies indigenous to that country.

5) How "solid" are the guidelines meant to be? That is to, what degree are the guidelines to "guide" and to what extent are they to "prescribe"? This relates to how the manager and employee is to view the guidelines, and how this question is answered will also determine whether those who are to follow the guidelines will give them sufficient attention.

Business ethics must be considered in terms of the social responsibility of business and not simply by seeing business as different from other sorts of social transactions. Too often, of course, the latter is precisely the way business is viewed, as if the rules for business were inherently different. What is being suggested here is what is called the commonweal approach to business decision-making, which elevates the idea of social responsibility. The corporation serves as a major resource for our society, emphasizing the benefits that accrue to society rather than on the rights and needs of the corporation or its owners. Corporate responsibility should identify corporations that control the use of socially important assets and show that they have the responsibility to use those assets in a way which makes social sense. This is quite different from the need merely to maximize profits. In this conception, decisions are to be made in a way that fulfills the social responsibility of the corporation, utilizing the assets it controls for the benefit of society at large and not merely for itself. What we do as corporate managers has more social significance than what we do in our private lives.

Such an approach is in keeping with the Theory of Justice of John Rawls. Rawls discusses the idea of justice and offers a theory that begins with the familiar theory of the social contract as found in Locke, Rousseau, and Kant. Rawls calls the original principles of justice to regulate all future agreements "justice as fairness" and states that these principles are acceptable to "free and rational persons concerned to further their own interests" as such persons are found in the "original position of equality."

This view also extends the idea of the categorical imperative of Kant to business decisions, holding that in business it is necessary not just to ask what one must do but what one ought to do. To determine this, some sense of morality must be held out as paramount. The moral imperative Kant celebrates must command actions as good in themselves and at all times and places. There must be universality in the command and in the volition that recognizes the command. Kant sees man as a rational being, capable of obeying the categorical imperative. There is thus no moral difference between actions in one's personal life and actions in business.

Aristotelian phronesis fits with principle-based ethics in that phronesis involves method more than outcome, applying practical reasoning to an issue so as to decide what is good or bad for the human being. This means what is good or bad for the human being, not what is good or bad for the business alone. This offers a framework within which to ask what specific actions should be taken in any specific situation. Aristotle saw phronesis itself as an intellectual virtue allowing the individual to be able to determine what is good. Such a skill should be nurtured in a business context as in others so that the choices that are made are good ones benefiting the human being, and by extension benefiting the society of human beings, and not merely a narrow area defined by the business alone.


MacIntyre stated that modern morality has been changing and has been creating chaos. In business, MacIntyre has suggested that the conception of character should serve as a cultural and moral ideal, and he also sees the manager in business as one of the characters most representative of modern times (Mangham, 1995, p. 183). Jackall agrees with MacIntyre on many points and also cites the fact that there is a shift taking place in the ethical concerns in business, finding that this is an ethical conception of the self emphasizing moral values as determined by individual choice and a conception rooted in a social structure differing substantially from that which is supported by modernism:

Specifically, MacIntyre holds that the structure of modern societies, in calling upon us to play too many distinct roles, deprives us of the opportunity to create a substantial identity for ourselves and prevents us from rendering our lives meaningful (Mangham, 1995, p. 192).

Clearly, Mangham sees MacIntyre as deploring the shift taking place in the definition of ethics in business. This shift has given more power to the manager as the determiner of what is and is not ethical instead of toward some more consistent, broad-based set of rules.

The size of the modern corporation is, as noted, one of the reasons for the development of the role of manager as elucidated by MacIntyre. Randels (1995) argues with the premise of Mangham and MacIntyre. He sees the MacIntyre manager as a Weberian bureaucrat who practices a form of rationality divorced form a moral evaluation of ends. Randels points out that real-life managers do not always…

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