Abstract and Keywords
This introductory article explains the coverage of this book, which is about business ethics. It discusses the differences in the understanding of business from a philosophical and from a business orientation. This volume is divided into nine parts ranging from basic philosophical issues to the moral culture of business organizations. The topics covered include the nature of ethical theory and the methods used in the work of business ethics, corporate responsibility, economic justice, and the relativity of moral judgments.
Business ethics has long existed in the form of reflection on the ethical dimensions of business exchanges and institutions. As such, business ethics is traceable to ancient times. However, only in the last half century has business ethics developed as an identifiable field of study. About the same time that biomedical ethics was taking shape in the 1970s, conferences were being held and articles and books on business ethics were being published. This book reflects the work that has been done in these last four decades.
Two Understandings of Business Ethics
“Business ethics” is understood in two distinctive ways by those who have a major interest in its development. One group approaches it from a background in philosophy, and the other group approaches it primarily from the business community. Since this volume has been prepared for those who view business ethics from a philosophical approach, we start with an explanation of this very important distinction.
Business Ethics from a Philosophical Orientation
The philosophical ethics orientation consists of the analysis of moral problems and case studies using categories such as justice, utility, rights, obligations, and personal virtues. Problems of business ethics involving these concepts include issues internal to businesses such as problems of discrimination in hiring and promotion as well as issues external to them such as consumer, governmental, and environmental problems. In this approach, a consideration of moral theory is basic for a proper understanding of how to treat moral problems and engage in the analysis of perplexing cases in business ethics.
A reason for using the theoretical orientation to business ethics preferred by philosophers is to avoid situations in which discussion of moral problems in business is little more than an exposure to the prejudices of persons who do not generalize beyond their own viewpoint. Discussion and reflection on issues of sexual harassment, executive salaries, whistle‐blowing, and the like may lack critical distance due to cultural blindness, rash analogy, or mere popular opinion. For example, if one limits one's study of some issue to the facts of cases and to problems of management, the outcome might only be that one becomes immersed in the current system of doing business without achieving any distance from the prejudices or blindness of the current system. The philosophical goal is to reach moral understanding through a general and impartial framework or theory. This approach does not assert that philosophical reflection is a fully adequate basis for business ethics, but it does assert that reflection through theory and principle allows us to examine and, where appropriate, depart from certain dominant or tradition‐bound assumptions.
Business Ethics from a Business Orientation
By contrast, the business orientation tends to view its endeavor in terms of various relationships that obtain largely within business. In this conception business ethics pertains to relations between employer and employee, between manager and workers, and between supervisors and supervisees. This understanding of business ethics has developed in the United States in step with practical developments such as the U.S. Federal Sentencing Guidelines, the Defense Industry Initiative, and the Ethics and Compliance Officer Association. Each of these has been concerned with developing programs to foster employee compliance with legal and regulatory strictures as well as background values, motivation formats, rules, and norms that would help foster employee legal and ethical behavior. As a result, many major U.S. businesses have ethics officers who oversee these programs. Their focus is practical rather than theoretical by design and by the nature of the institutions in which they function.
The business approach is often focused on moral problems and apparent dilemmas that could have been avoided or minimized through more skillful management. Particularly difficult and important case studies are often used to stimulate reflection on whether, by whom, and when certain actions should be taken. Often cases and problems are examined in terms of alternative strategies and actions. Usually such a rich array of alternatives is available that it is not feasible to reach agreement on a single best solution; however, complete agreement or a single solution may not be the purpose of the investigation. Learning how to spot and manage problems is of high importance. The focus is meant to be practical.
The business orientation sometimes stays close to empirical work on subjects under study. Problems of environmental pollution, for example, are studied by detailing empirical facts about pollution and disease and by examining social processes that have diminished the scope of decision making in business and have created new responsibilities through government requirements. The economic aspects of pollution control are an influential example. The responses of corporations to (p. 5) changing legal and regulatory situations may be emphasized, as may considerations of what has been and may become public policy. Tax policies and the economic consequences of proposed public policies may be studied in detail and are likely to be viewed as central to the investigation.
The two different orientations to business ethics mentioned in this section are not mutually exclusive, though the philosophical orientation is probably the broader of the two. The most constructive approach is to acknowledge that moral problems and the analysis of cases invite multiple forms of productive analysis. The editors of this volume strongly encourage this way of thinking about the field. However, this book is committed almost entirely to philosophical approaches. This is not because the editors see this approach as superior or of greater significance. The commitment of this volume is to see how far and in what ways philosophy can help us develop an impartial and probing business ethics.
Regrettable Ways in Which Business Ethics Has Been Viewed
In both of the ways just outlined, business ethics is a matter of serious study and investigation. Almost everyone engaged in business ethics views the field in this way. However, business ethics is not always regarded by others as having an important status as an area of investigation. It has, especially in its philosophical forms, received less recognition and acceptance than some areas of practical ethics—many believe that it is derivative from other areas of philosophy and possibly even conflicted as a result of the connection to business. It is sometimes suggested that the idea of ethics is not taken seriously as a constraint on business conduct, and some even hold that there is no ethics in business. It has also been said that business is not a profession and therefore cannot have a professional ethics of the sort expected in medical ethics and legal ethics.
These perspectives need to be heard, but they also need to be restrained and carefully stated. They have often been stated inaccurately, and they also are likely to retard development of good moral practices in business. Business is, perhaps, the premier institution that influences the lives of everyone in society, from hourly workers to physicians and philosophers. It is regrettable when an institution of such significance is treated in the discipline of philosophy as if it has only a subordinate status and is not an important subject of ethical analysis and evaluation. Business raises some of the most important and difficult ethical issues ethicists and philosophers need to consider—conflicts between self‐interest and the interests of others, manipulation and cooperation, trust and distrust, honesty and deception, responsibility for future generations, and so on. Business ethics also does not use different methods or forms of reasoning than those found in other areas of applied ethics, nor does it have less connection to some of the most important public policy issues (p. 6) of our times. As this book goes to press, the United States and much of the world face a financial crisis that was fed by unethical conduct and lax oversight. Some of the conduct underlying this crisis is now considered scandalous, yet little moral reflection had been invested in the practices involved. Both activities in business and failures of government oversight of business are involved. These kinds of issues deserve the closest kind of ethical and philosophical attention.
The Organization and Contents of This Volume
This book is divided into nine parts ranging from basic philosophical issues to the moral culture of business organizations. Each part provides the relevant background history in business ethics, presents the major current issues, and offers solutions to leading problems.
Part I: Basic Philosophical Issues
We all grow up with an understanding of how to meet society's moral expectations, but philosophical assessment of this morality and of how its scope can be extended involve a different kind of understanding and practice than that provided in our moral upbringing. The terms “ethical theory” and “moral philosophy” refer to reflection on the nature and justification of right actions as well as the nature and role of moral character. Philosophers seek to introduce clarity, substance, and precision of argument into the discussion of moral rightness and wrongness, the virtues, social justice, and intrinsic value. Their goal is usually to justify a system of standards or some moral point of view on the basis of carefully analyzed and defended norms of distributive justice, human rights, trustworthiness, contractual relationships, and the like. The writers in this book take such a philosophical approach to the topics in business ethics they address.
A number of different methods have been employed in business ethics, and not all of them are either distinctly philosophical or attempts to justify a position. Some approaches are descriptive and do not involve taking moral positions. Other approaches are normative and make explict appeals to ethical theory in order to develop arguments to support their positions. Still other approaches are almost purely conceptual. They pay close attention to one or more central concepts in business ethics, such as capitalism, whistle‐blowing, conflict of interest, and liability.
Both the nature of ethical theory and the methods used in the work of business ethics are studied in part I. In “The Methods of Business Ethics,” Ronald M. Green and Aine Donovan examine how the mission of business ethics has fostered several methodological approaches—chiefly drawn from philosophical analysis and (p. 7) descriptive methodologies. They treat the work of several leading business ethics scholars and include in the scope of their discussion a number of ways in which these methods have affected methods of teaching business ethics. In “The Place of Ethical Theory in Business Ethics,” Robert Audi explains the nature of ethical theory, provides an account of the leading theories, and explores the ways in which these theories form a critical resource for the treatment of practical moral problems. He discusses how theory connects to practice and provides several concrete illustrations of how ethical theory helps address practical problems in business ethics. In particular, he shows how theory can be helpful in the analysis of problems of affirmative action, whistle‐blowing, and advertising,
Part II: Competitive Markets and Corporate Responsibility
A famous maxim is that “the business of business is business,” meaning that the responsibilities of a business should be confined to the business world of contracts, stockholders, profits, record keeping, taxes, and the like. This position resists the encroachment of government into competitive markets and rejects the proposition that corporations have moral and social responsibilities other than responsibilities that the corporation voluntarily assumes. However, corporations are chartered by society. This charter permits a corporation to conduct business only within contractually imposed limits, and there are, in addition, moral and social norms that further limit and prescribe the activities of business. Precisely what this free market system is and how much freedom it gives to corporations are topics taken up in this part.
“Capitalism” is generally understood in these discussions as a market‐based, economic system governed by capital—that is, the wealth of an individual or an establishment accumulated by or employed in its business activities. Entrepreneurs and the institutions they create generate the capital with which businesses provide goods, services, and payments to workers. Defenders of capitalism argue that this system maximally distributes social freedoms and desirable resources, resulting in the best economic outcomes for everyone in society. On this view, business's only social responsibilities are to maximize legally generated profits. However, over the past several decades there has been a significant reaction against this view. It is argued that businesses have responsibilities far beyond following the law and profit making. When society accepts capitalism, this view holds, it need not also accept the view that economic freedom always has priority over competing conceptions of the collection and distribution of social goods, or of other responsibilities owed to employees, customers, society, and the environment.
In “The Idea and Ideal of Capitalism,” Gerald Gaus considers what a relatively pure form of capitalism would look like if we were to have one. He then asks what would be required for its justification and asks whether traditional justifications work. Gaus analyzes what he calls the rather vague idea of “capitalism” into distinct elements and asks how each element might be justified. The main aim is not (p. 8) to defend capitalism but to analyze it in order to better understand the context in which business, and therefore business ethics, occurs. His chapter, Gaus says, is not so much an essay in business ethics as it is an essay on the foundations of the very practices of business and business ethics—the idea of a capitalist economic order.
Christopher McMahon notes in “The Public Authority of the Managers of Private Organizations” that it is a commonplace of political philosophy that authority must be legitimate. Less discussed is what establishes the legitimacy of managerial authority. One view is that a consent model is at work: Employees voluntarily join the corporations where they work and accept managerial authority. McMahon argues that matters are not so simple. He proposes that we view managers of private corporations as exercising the same kind of authority as governmental officials. McMahon argues for what he calls “a political theory of the corporation.” Through this lens he sees business ethics as grounded in values and norms that apply to a whole society, including its collective life.
In “Corporate Responsibility and its Constituents,” Kenneth E. Goodpaster addresses an issue of corporate responsibility that has, in recent years, attracted a great deal of attention. Often this issue is referred to as “corporate social responsibility,” but increasingly business ethicists maintain that the inclusion of “social” misrepresents the responsibilities that business has. Goodpaster develops his position by first examining stockholder and stakeholder views of corporate responsibility. He finds both views inadequate and in need of supplementation by a “comprehensive moral thinking” that makes for a better model of corporate responsibility.
Part III: Economic Justice and Consumer Rights
Economic disparities among individuals and nations generate many controversies over systems for distributing goods and services and for taxing income and wealth. Central issues are the justification of structures of taxation, international debt relief, uses of corporate profits, corporate gifts, executive salaries and bonuses, plant closings, and exploitative conditions in factories. What a person deserves or is entitled to is often decided by specific rules and laws, such as those governing health care coverage, salary scales, and procedures for hiring and firing. These rules need to be evaluated, criticized, and revised by reference to moral principles and theories.
The word justice is often used in the discussion of these principles and specific rules. A basic question is whether the market itself is a fair arrangement. If so, what makes it fair? If not, what makes it unfair? If health care and other critical goods and services are distributed nationally or internationally with vast inequality, on what basis do we say the system is unfair? If a multinational company has a monopoly on an essential foodstuff, is there no such thing as a price that is unjust? What would constitute an executive compensation package that is unjust? These questions of fairness fall under the topic of distributive justice.
If people have a right to a minimal level of material means to items such as health care (a right many do not acknowledge), it seems to many writers that their rights are violated whenever economic distributions leave persons with less than (p. 9) the minimal level. A commitment to individual economic rights, then, may go hand in hand with a theory of justice that requires an activist role for government. This may be true even if one starts with free market assumptions. Almost everyone agrees with the premise that economic freedom is a value deserving of respect and protection, but they disagree over the claim that the principles and procedures of unmitigated capitalist markets adequately protect the basic values of individual and public welfare. Many theories adopt some form of a principle specifying human need as basic to economic justice.
In “Executive Compensation: Unjust or Just Right?” John R. Boatright tackles the controversial issue of executive compensation that has provoked a great deal of moral outrage in many quarters. In order to narrow the discussion of this large topic, Boatright assumes that some form of capitalism is morally justified and that consequently “both the principles of compensation in a free market and the patterns of distribution of income and wealth produced by the market are just.” Given these assumptions, Boatright argues that the normative and empirical issues that surround executive compensation lead to the conclusion that high levels of executive compensation can be justified. However, he also argues that there have been significant abuses and excesses in the compensation packages of some executives.
In “Just Access to Health Care and Pharmaceuticals,” Paul T. Menzel discusses why access to health care is a subject of interest to business and its employees, particularly in the United States, where businesses commonly supply health care insurance as a benefit for employees. Eventually, access to health care, including pharmaceuticals, came to be discussed in terms of employee rights and employer obligations. But are there such rights or obligations? Menzel also treats concerns about consumers, especially the alleged obligations of health insurance companies and pharmaceutical companies to their consumers. In his final section, he explores just access to health care and pharmaceuticals from a society‐wide perspective. Menzel is optimistic that there is a possibility at present of finding common moral ground on today's contentious issues about health care access.
Part IV: Universal Norms and the Relativity of Moral Judgments
Multinational corporations often find themselves perplexed by the laws, rules, and customs of a host country in which they conduct business or have subsidiaries. They wonder whether they should do as the locals do or conform to the different and even conflicting cultural guidelines of their home states. For example, should a Canadian firm follow the rules of financial disclosure required in Canada or the rules in certain Arab countries in which it has subsidiaries? Should a U.S. firm that does business in Japan sanction payments for services that are encouraged in Japan but legally prohibited in the United States? Should a company liquidate its stock of artificially sweetened fruit by selling to customers in Germany, Spain, or Third World countries when the product has been declared hazardous and outlawed in (p. 10) the home country? Would it make any difference if a culture has rules that are inconsistent with human rights?
No international body has answered these questions authoritatively, and there is currently no uniform agreement about the measure of control that governments and corporations should introduce for circumstances in which standards or expectations vary. The multinational setting presents numerous ethical complexities of universality and particularity—for example in the treatment of employees and consultants, in practices involving consumers and clients, and in different government expectations and types of government‐industry relationships. An employer engaged in manufacturing or marketing in a foreign culture cannot simply assume that workers should be governed by the same salary standards, grounds for dismissal, workplace standards, requirements of company loyalty, and promotional standards as those prevalent back home. Some writers hold that morality has no place in a country that demands that a business participate in immoral actions to survive, but others take the position that some moral values transcend any policy imposed by another country and that these values may not be ignored.
In “Relativism, Multiculturalism, and Universal Norms: Their Role in Business Ethics,” Tom L. Beauchamp considers the question whether moral standards are merely personal opinions and cultural conventions or whether some moral standpoints transcend the personal and cultural. He discusses moral relativism, how universal morality can be distinguished from particular moralities, moral conflict and disagreement, human rights as universal standards, multiculturalism, cultural moral imperialism, and global social justice. Beauchamp argues that some moral standards are universal, whereas others are particular forms of institutional or social custom. He also argues that a true multiculturalist point of view requires universal morality, not merely cultural standards. He concludes that certain norms constrain corporate activities in all cultures, whereas other norms constrain corporate conduct only in specific contexts.
In “Business and Human Rights: A Principle and Value‐Based Analysis,” Wesley Cragg examines the responsibilities businesses have to conform their practices to human rights standards. With the creation of the United Nations Global Compact for Business and appeals to the U.S. Alien Tort Claims Act, this topic has become increasingly important for business. Cragg examines three models for understanding the human rights obligations of business organizations each of which, he argues, is seriously flawed. In their place, he defends a “hybrid model” that allocates human rights responsibilities to business organizations based upon the contexts in which a business is active.
In “Moral Issues in Globalization,” Carol C. Gould focuses on the forms of globalization that are “often thought to be the defining social, political, and economic development of our times.” Her chapter examines several key issues in business ethics raised by globalization, including global poverty, labor standards, and outsourcing. Underlying these issues are fundamental moral notions of global justice, transparency, and sustainability. After providing the reader with an analysis of these issues and ethical concepts, Gould traces the implications for business ethics. In her (p. 11) final major section, she devotes attention to corporate social responsibility, human rights, and social inequality.
Part V: The Use and Protection of Information
Information about products, employees, strategies, and resources forms the core of business. Its value is of unquestioned importance. Some of this information is rightfully private to business, for example, information about pricing strategies and intended mergers and acquisitions. Business has a responsibility to make other information public, such as that regarding the actual price it will charge customers for its products, its environmental impacts, and the results of pharmaceutical drug trials. Some information regarding employees, customers, and competitors business ought not to collect at all. Business goes beyond the rightful bounds of information collection when it pries into certain areas of the private lives of its employees or customers or when it uses illegal means to obtain information on competitors. Some information regarding its products—such as how they are produced, what goes into their production, or simply information that constitutes the product itself—ought to be protected for a business's own benefits and perhaps for those of society. For example, consumers do not have a right to know the exact ingredients and their proportions that go into the creation of Coca‐Cola. How to sort out these difficult issues is the common thread that unites the articles in this part.
In “Deception and Information Disclosure in Business and Professional Ethics,” Thomas L. Carson focuses on moral questions about deception and the many circumstances in which there are obligations to disclose information. He defends a definition of deception and connects it to related concepts of lying and withholding information. He also proposes a version of what he calls the Golden Rule and argues that it affords a strong moral presumption against deception even in cases in which deceptive practices may be common in business. He provides a general account of the duties of salespeople and analyzes several cases of deception and the withholding of information in sales. He also argues that advertising and bluffing in negotiations, though generally wrong, can sometimes be justified on grounds of “self‐defense.” His treatment includes a discussion of the fiduciary obligations of professionals to act for the benefit of their clients by giving truthful answers to questions.
Richard A. Spinello discusses the subject of “Informational Privacy” in his chapter. He starts with the body of problems of privacy that have been introduced in recent years through the arrival of cybertechnology, which allows large amounts of information to be rapidly collected and manipulated at minimal cost, affording businesses greater access to information about prospective customers, employees, and other key stakeholders. Cybertechnology creates many business opportunities that threaten personal privacy. Spinello proposes a definition of informational privacy and then distinguishes the concept of privacy from the value of privacy and the right to privacy. He notes that his stance on informational privacy is very different than traditional concerns about “physical privacy,” that is, protection from (p. 12) an unwarranted intrusion into homes and similarly private spaces. He argues that the appearance of the computer and its capacity to gather massive amounts of information have changed our sense of privacy and about what will be required to maintain it.
Information that may affect the price of a corporation's stock raises other issues. If a person is able to gain inside information regarding new mineral finds that a company has discovered, or about the impending resignation of an effective CEO, then the price of that company's stock may be significantly affected. In his essay, “The Moral Problem in Insider Trading,” Alan Strudler identifies the moral wrongness involved in insider trading. His discussion assumes a standard legal view of insider trading in which “a corporate insider engages in a securities transaction on the basis of material, nonpublic information.” Given this understanding, Strudler examines both consequential and deontological accounts of the moral wrong of insider trading. He argues that standard consequentialist and deontological accounts are unpersuasive. Arguments morally condemning insider trading based upon harm, deception, theft, unfairness, or breaches so fiduciary duties are either normatively or empirically inadequate. Strudler argues it is the unconscionability of insider trading that is the most persuasive moral basis for wrongfulness of insider trading.
Finally, the chapter by Richard T. De George delves into the complex issues of “Intellectual Property Rights.” He begins with a discussion of the complex notion of intellectual property that leads the reader through some of the crucial features of trademarks, patents, copyrights, and trade secrets. The upshot is that our understanding of intellectual property is closely tied to the various laws that protect its different forms. De George then examines three different justifications of intellectual property rights: a natural rights and justice argument; a utilitarian argument; and an argument based upon property being an extension of one's personality. Each has its strengths and weaknesses, but De George argues that the first two best stand up to critical scrutiny. These justifications apply only to the most general forms of intellectual property. Finally, De George considers more particular relations of legal and ethical considerations regarding intellectual property, with special emphasis on cases of copyright with respect to software and the digital information that constitutes music and film.
Part VI: Incentives and Influence
Business organizations involve wealth, valuable information, and the power to affect people and societies in which they operate. Of course, they may also be affected by the similar qualities of other businesses as well as the legal, regulatory, and political power of the societies in which they operate. How and on what bases businesses make decisions within this complex situation are crucial questions of business ethics.
Entering into this decision process are some danger zones. For example, if ethical decisions are to be made on the basis of objective considerations, unbiased by personal advantage, then how should business persons make decisions when their (p. 13) own personal interests, or those of others close to them, are involved? When do their interests conflict with the responsibilities they have as a result of the positions they occupy in the business? Unless business people can sort out these questions they may be accused of being involved in a conflict of interest.
In other situations, people in business may attempt to use their power, wealth, or valuable knowledge to influence or provide incentives to others to act in ways that may unjustly advantage them. Some of these situations involve various forms of corruption and bribery, as when businesses provide valuable incentives to government officials to persuade them to make official decisions that they would not otherwise make. Sometimes government officials use their position to try to force businesses to provide items of value to them. This may occur on a grand scale, or simply on a petty level such as passing expeditiously through customs. In either case, a question of bribery arises as well as the corruption of the system with which one does business.
Businesses have any number of interests that they may rightfully seek to pursue. Businesses may legitimately seek to make their views and interests known to the public and to members of the government. The question is how they may do so in a manner that is ethically justified. One extreme view holds that they may not present their views in any manner to an elected official. A more widely accepted view is that they may do so as long as they do not offer the official something of value that will sway his or her vote on issues of importance to the business. Which view is correct and where the lines of undue influence, manipulation, or even bribery run raise questions any ethical business must seek to answer.
In “Conflicts of Interest,” Wayne Norman and Chris MacDonald remind us of the importance of the concept of conflict of interest to our ethical thinking about business. Though they do not defend a particular definition of “conflict of interest,” they aim to give the reader a sense of the progress made, over recent decades, on settling various disputes regarding this concept. They sketch an agenda of empirical and normative questions that deserve attention and draw our attention to mid‐level questions rather than micro‐ or macrolevel questions regarding conflicts of interest. They argue that the next stage in the development of our understanding of conflicts of interest should merge micro‐ and macrolevel studies with a middle realm. In the end, they aim to give the reader insight into “why our contemporary concept of conflict of interest was only dimly appreciated before the second half of the twentieth century even though we cannot now think our way through the challenges of organizational and professional ethics without it.”
In “Corruption and Bribery,” Manuel Velasquez focuses on the ethical issues that arise when business engages in bribery and corrupt activities. Though it is widely assumed that it is ethically wrong for business to engage in such activities, Velasquez notes that this assumption is often not closely examined. He contends that the main arguments that have been offered why corruption and bribery are wrong each have significant limitations. Still each of these arguments shows that corruption and bribery are generally unethical within modern Western cultural contexts. However, Velasquez argues, these arguments do not show that “corruption (p. 14) is unethical where the norms governing institutional roles are not widely known or accepted and where government is not understood as having the kind of public purpose that it is assumed to serve by members of Western societies.” Given this provocative view, Velasquez concludes by considering how business should address the issues of corruption and bribery.
Andrew Stark argues in “Business in Politics: Lobbying and Corporate Campaign Contributions” that corporate political activity in the form of lobbying must be carried out between the principle of freedom of expression and the principle of a government free from corruption. By examining the interplay of these two democratic principles, Stark proposes “eight guidelines that should govern eight of the most common types of corporate political activity.” Four involve corporate lobbying and four pertain to corporate finance. Though all eight involve risks of corruption, Stark argues that in four of these cases the form of expression is more democratically valuable than in the remaining four and may be permitted, though subject to various safeguards. In other cases, where the risk of corruption is greater and the form of expression less democratically valuable, Stark argues that corporations ought not to engage in these forms of political activity.
Part VII: Employee Rights and Corporate Responsibilities
However one looks at business, employees are central to the design, innovation, production, and distribution of its products. How business should treat its employees has been a major topic in business ethics since its beginning. Though some businesses still treat their employees simply as commodities to be used and then discarded, this view is in decline these days, at least in many leading businesses. However, what criteria should a business use in deciding whether or not to hire a person? May race or gender issues be counted either for or against a potential employee? Though blatant forms of discrimination are less and less frequent in many countries, they are prevalent in some countries and many important ethical questions remain regarding the justification of forms of preference, diversity, and affirmative action.
Once a person has been hired, the ethical issues do not end. May an employee be fired for no reason or bad reasons? The view that they may be dismissed without any kind of due process is one form of the “employment at will” doctrine that continues to hold considerable support in the United States. If a person remains employed, what conditions of health and safety must a business fulfill in order to treat an employee ethically? The highly hazardous conditions we sometimes find in sweatshops are unacceptable. But where is the ethical line in business's responsibilities regarding these conditions?
Finally, suppose that an employee has been properly hired and enjoys appropriate safety and health conditions, but suppose that the employee learns about something unethical or illegal that some other employee in the business has committed or is planning on committing. Are there responsibilities to report this action? If such reporting is discouraged, does he or she have a responsibility to blow the whistle on (p. 15) those involved in such acts? These are the kinds of questions and issues that frame this important topic in business ethics.
Bernard Boxill takes up the topic of “Discrimination, Affirmative Action, and Diversity in Business.” Many writers on this subject have treated various U.S. policies and laws that encourage or require corporations and other institutions to advertise jobs fairly and to promote the hiring and promotion of members of groups formerly and currently discriminated against, most notably women and minority ethnic groups. Boxill takes a notably philosophical approach to these issues, by contrast to one that merely examines the letter and the spirit of federal laws and requirements. He examines whether several major philosophical theories can lead us to the correct conclusions. In particular, he argues that utilitarianism supports many forward‐looking arguments for affirmative action based on good consequences and that natural rights theory can be used to support both forward‐looking and backward‐looking arguments for affirmative action. He also defends a version of the currently popular view that diversity in the workplace is an important grounding for affirmative action.
In “Whistle‐Blowing, Moral Integrity, and Organizational Ethics,” George G. Brenkert tackles the difficult topic of whistle‐blowing, of how employees should respond when something illegal, immoral, or contrary to company policies becomes known to them. In his chapter, Brenkert surveys three prominent theories of when an employee would be justified in blowing the whistle. He identifies both strengths and weaknesses in each of these theories and defends an integrity account of whistle‐blowing in their stead. At the end, he places whistle‐blowing in its broader context of an organization that has permitted wrongdoing to take place and briefly surveys some organization design issues businesses should undertake to avoid the ethical issue of whistle‐blowing arising in the first place.
John J. McCall and Patricia H. Werhane examine our understanding of the employment relation in their chapter, “Employment at Will and Employee Rights.” In the United States, as opposed to Western Europe (and most of the rest of the world), a common law doctrine of Employment at Will is the predominate model by which this relationship is understood. Central to this view are norms emphasizing individualism, liberty, and property. These norms promote a bargaining relation between employer and employee. In contrast, European views of this relationship emphasize a partnership between employer and employee. McCall and Werhane ask whether there are good moral reasons to prefer one view or the other. They do so in light of purported employee rights against abusive treatment and arbitrary termination, due process and grievance procedures, and political free expression in the workplace. They conclude that there are good moral reasons for “holding that employees are entitled to employment‐related rights that extend beyond those currently recognized in U.S. law.” In their final section they discuss the outlook for their view given trends in globalization.
Another issue that has attracted considerable worldwide attention has been the working conditions that businesses put in place in their operations, not only in their home countries but particularly in developing countries. Denis G. Arnold (p. 16) discusses these issues in his chapter, “Working Conditions: Safety and Sweatshops.” The issue is not whether employers have obligations to protect workers from workplace hazards but the extent of these obligations and whether they may be mitigated by other obligations or interests. Two general duties concerning safety play a key role in Arnold's analysis: the obligation to inform workers in advance regarding workplace hazards and the obligation to ensure minimum health and safety conditions. In response to the former, Arnold defends a reasonable‐person standard that calls for managers to ask themselves, “What information about occupational health and safety conditions the manager would want prior to deciding whether or not to accept a job?” With regard to sweatshops, Arnold rejects various defenses of sweatshops. Instead, he contends that corporations must adhere to local labor laws, disclose workplace hazards to employees in accord with his reasonable‐person standard, and fulfill an obligation, whose conditions he specifies, to improve workplace safety beyond legally mandated minimal standards. Finally, Arnold defends the view that a respectful treatment of workers requires that they be paid a weekly wage consistent with human dignity.
Part VIII: Safety, Risk, and Harm
Corporate activities present several types of risk of harm, including risks of psychological harm, physical harm, legal harm, and economic harm. For example, there are risks to consumers (and their families) from prepared foods (increased fat and sugar), drugs (side effects such as gastrointestinal bleeding), cigarettes (lung cancer), and so forth. Risks are also presented to workers (and their families) and to the public and the environment from carbon and other fuel emissions, toxic chemicals, and the like. The essays in part VIII concentrate on judgments of acceptable risk for consumers, workers, and the environment. The focus is primarily on the responsibilities of corporations to reduce risks to acceptable levels.
It is difficult for corporations and government agencies to adequately grasp the extent of the risks inherent in thousands of toxic chemicals, foods, drugs, energy sources, machines, and environmental emissions. Some conditions have serious, irreversible consequences; others do not. The probability of exposure to a risk may be known with some precision, whereas virtually nothing may be known about the harm's magnitude, or the magnitude may be precisely expressible, whereas the probability remains too indefinite to be calculated accurately. “Wild guess” sometimes best describes the accuracy with which chemical risks, for example, may be determined for products, for workers, or for the environment.
Over the last several decades the subjects of corporate environmental responsibility and product safety have become staples of work in business ethics. The public as well as writers in business ethics have become increasingly concerned about the environmental impact of chemical dumping, airborne emissions, nuclear power, oil pipelines and shipping, endangered species, and the like. Product safety too has had a long history of discussion in business ethics. Household and office accidents caused by many products are common. While major responsibility for the (p. 17) occurrence of a variety of harms rests primarily on the consumer, many risks can be described as inherent in the product and may or may not be reducible. Still other problems of risk derive from use of cheap materials, careless design, poor construction, or new discoveries about risk in an already marketed product.
In “Environmental Ethics and Business,” Lisa H. Newton analyzes patterns of interaction between the for‐profit corporation and the natural environment. She presents the history of concern about the environment, including the rapid growth of environmental awareness since the 1960s. Newton also traces corporate responses to environmental regulation and other environmental initiatives. She addresses new duties that she thinks now must be acknowledged, the new ethical frameworks in which the natural environment must be included and the emerging environmental agenda to be addressed in the twenty‐first century. She argues that the issues should today be framed in business ethics so that there is no barrier between the interests of business and the protection of the environment.
In “The Mirage of Product Safety,” John Hasnas takes up questions of product safety and product liability. He asks how we are to understand the idea that businesses have an ethical obligation to produce safe products. Hasnas argues that the answer is far from clear. He doubts whether the question can even be made meaningful and finds the business ethics literature thin and unconvincing. He argues that the concept of safety is inherently a matter of subjective evaluation, that the concept of an obligation to produce safe products is not well‐formed, and that businesses do not have an ethical obligation to produce safe products. He concludes by arguing that businesses do have an ethical obligation not to produce deceptively dangerous products, but that this obligation derives from the general duty of honest dealing, not from a distinct duty of product safety.
Part IX: Creating Moral Organizations
The preceding parts of this book discuss ethical issues business faces on a variety of levels—from that of individual employees who must decide which information to provide customers or whether to blow the whistle, to managers who confront insider trading, corruption, and privacy, to organizational and societal levels concerned with lobbying and topics of justice that competitive markets raise. A remaining issue is how individual business organizations might be designed so that they foster moral action both within as well as outside their organizational walls. This has been a topic of considerable concern for businesses for decades. Most large North American businesses now have ethics and compliance officers who are charged with monitoring both the legal compliance and ethical behavior of employees. Corporate social responsibility officers have similar charges with respect to at least some of the external relations and activities of business. In recent years, the U.S. Federal Sentencing Guidelines has directed U.S. businesses to develop systems to ensure legal compliance as well as an ethical culture. Thus, what an “ethical culture” amounts to and how a business should go about creating one has become a matter of considerable importance for businesses.
In the concluding chapter, Norman E. Bowie writes on the subject of “Organizational Integrity and Moral Climates.” He starts with the assumption that business organizations have personalities that can be called a culture or a moral climate. He considers what distinguishes an organization with integrity and which factors hinder organizational integrity. Detailing the characteristics of a moral climate is the general goal of this essay. Bowie argues that achieving organizational integrity may require that managers de‐emphasize or even, in certain situations, ignore issues of personal responsibility and that an organization with integrity must put in place certain kinds of organizational structures and incentives. He points to the great importance of a commitment to stakeholder management and a commitment to seeing the purpose of the organization as a cooperative enterprise. Finally, he considers the role of incentives as they support or inhibit organizational integrity and raises questions about whether for‐profit organizations can instill organizational integrity and remain profitable.
A reader who has read through the preceding parts and their chapters will come away with a current, philosophically oriented understanding of some of the major ethical issues and dilemmas that business faces. Upon this basis he or she should be well prepared to engage in further discussion and reflection on some of the most important ethical issues facing individuals, business, and society in the coming decades.