Business EthicsEthics is a branch of philosophy that inquires into the nature of ultimate value and the standards by which human actions can be judged right or wrong (“ethics,” Collegiate). Ethics is not primarily concerned with the description of moral systems in societies. That task, which remains on the level of description, is one for anthropology or sociology. In contrast, ethics deals with the justification of moral principles.
A Brief History of the Study of EthicsEthics has been studied since ancient times.
In the oldest of the Indian writings, ethics is an integral aspect of philosophical and religious speculation about the nature of reality. These writings date from about 1500 BC. They have been described as “the oldest philosophical literature in the world, and what they say about how people ought to live may therefore be the first philosophical ethics” (Everson 5).
In ancient China, he humane teaching of Confucius and his followers, the peaceful wisdom of Lao-zi, and the universal love of Mo-zi offered alternatives to frequent wars.
Early Greece was the birthplace of Western philosophical ethics. In the poetic literature of the 7th and 6th centuries BC, there were ethical precepts but no real attempts to formulate a coherent overall ethical position. The Greeks were later to refer to the most prominent of these poets and early philosophers as the seven sages, and they are frequently quoted with respect by Plato and Aristotle.
During the Classical Period of Greek ethics, three great philosophers – Socrates, Plato, and Aristotle – flourished in the 5th and 4th centuries BC. Their ideas have served ever since as the cornerstone for the Western ethics.
In the later Greek and Roman periods, the two dominant schools of thought, Stoicism and Epicureanism, represent important approaches to the question of how one ought to live.
The Middle Ages did not give birth to any major new ethical theories. It is worth mentioning that Christian ethics is distinguished from the philosophical discipline of ethics, which relies upon the authority of reason. Christian ethics, also called moral theology, appeals to the authority of revelation, specifically as found in the preaching and activity of Jesus Christ.
The significance of Renaissance for ethics lies in a change of focus. For the first time since the conversion of the Roman Empire to Christianity, man, not God, became the chief object of interest, and the theme was not religion but humanism (Becker 25).
In the 16th century there occurred the breakup of Western Christianity known as the Reformation. From this time, distinctively national traditions of moral philosophy began to emerge in Europe; the British tradition, in particular, developed largely independently of ethics; the continental tradition had a different line of development in continental Europe.
Ten Major Ethicists, Their Theories, and Applications to Modern BusinessConfucius (551-479 BC) is the most famous Chinese philosopher, whose ideas have influenced the civilization of East Asia. His teachings aim at guiding people in what is necessary to become a better person, a concept translated as “gentleman” or “the superior man.” Elements like integrity, respect for others, trust, and justice in the sense of treating each and every man in an equal way are honored by Confucians, and are essential for a healthy business environment as always, but perhaps take on a different dimension and special significance in a global knowledge economy. For example, globalization has brought together people of different cultures into business relations, and it may be more difficult to build up trust between two very dissimilar people than between two similar ones, especially if both fail to see the commonness between them, or even worse if they see their own way of doing business as being more superior rather than just different. The global ethic inherent in Confucianism promises to support harmonious relations among diversified communities.
Thomas Hobbes (1588-1679), an outstanding British philosopher, had a severe view of human nature: all of man’s voluntary acts are aimed at self-pleasure or self-preservation. According to his egoist theory, an act is moral when it advances the individual’s long-term self-interest. This theory is not consistent with the ethical principles for many professions, such as accounting.
Georg Wilhelm Friedrich Hegel (1770 – 1831), a German philosopher, was the last of the great philosophical system builders of modern times. He believed that history progresses as a result of a series of conflicts. A concept (known as a thesis) inevitably generates its opposite (or antithesis), and the interactions between them lead to a synthesis of the two. This synthesis then becomes a new thesis, and the process starts all over again. From this aspect, we can view the ethical environment of the late 1990s as a thesis that, after the following business scandals, generated an antithesis in the form of social outrage, new regulations, heightened levels of stockholder activism, the Sarbanes-Oxley Act, greater attention on the support roles of Finance and HR, and other changes.
Adam Smith is a Scottish social philosopher and political economist in the eighteenth century. He has been called the father of the Industrial Revolution. Smith is obviously arguing that people in commerce tend to act in their own self-interest (i.e., seek personal economic gain). But this neither means that people of commerce are, or should be, necessarily selfish or greedy. Smith is arguing that markets (the famous invisible hand) work best under conditions of economic liberty, when people are parsimonious and prudent, and cooperative as well as competitive.
Henry Sidgwick (1838 – 1900) was an English philosopher and author remembered for his forthright ethical theory based on Utilitarianism. His Methods of Ethics (1874) is the most detailed and subtle work of Utilitarian ethics yet produced (Ashby 38). Utilitarians recognize that trade-off exist in decision making. Morality is seen from the point of view of what is good for society as a whole. The utilitarian approach is common in certain types of business decisions, such as performance measurements and evaluations.
Friedrich Nietzsche (1844-1900) was a literary and social critic, not a systematic philosopher. Nietzsche’s position on ethical matters represents a contrast to that of Henry Sidgwick, who believed in objective standards for ethical judgments and thought that the subject of ethics had over the centuries made progress toward these standards. Nietzsche, on the other hand, would have us sweep away everything since Greek ethics and not keep much of that either.
Herbert Spencer, the great British nineteenth century radical liberal, sociologist, and political philosopher, is usually referred to as the father and founder of Social Darwinism. Spencer concludes that the best society is a laissez-faire private enterprise political economy with almost no government except to protect us from deliberately harming or interfering with each other. A laissez-faire economy best permits individual entrepreneurial economic development where each individual can control his/her economic life and receive the full benefits of his/her labor. He argues that, roads, schools, money, mail services, land, parks, and utilities should all be private; taxes should be the minimum possible.
Watsuji Tetsuro (1889 – 1960) is a Japanese moral philosopher outstanding who have tried to combine the Eastern moral spirit with Western ethical ideas. He developed his view of life as it applies to mutual personal and social relations, from the family to the state. From the Watsujian and Confucian perspectives, relations are for life; the person of humanity does not form new relations lightly; and the sense of obligation to relations may extend beyond death. For example, the friend may feel it is necessary to help the child of a dead friend to get a college education. Commercial relations are long-term as well. Businesses are not, therefore, selling products or marketing their reputation. They are establishing a relation between their customers.
John Rawls (1921 – 2002), an American political and ethical philosopher, is widely considered the most important political philosopher of the 20th century. He is an important modern contributor to the theory of justice. A just society, according to Rawls, would be a “property-owning democracy” in which ownership of the means of production is widely distributed and those who are worst off are prosperous enough to be economically independent.
ConclusionConflicts of interest are fundamental to the nature of business. Although society wants companies to create many well-paying jobs, those same organizations want to limit compensation costs and raise productivity levels. Customers want to purchase goods and services at low prices, but businesses want to maximize profits. Society wants to reduce pollution levels, but businesses want to minimize the cost that environmental regulations add to their operations.
Managers must continuously and consciously balance the needs of the organization and its stockholders with the needs of other stakeholders, including workers, customers, and the larger community. Managers must also balance their personal needs and desires against those of their organizations.
Works CitedAshby, W. Allen, Warren Ashby. A Comprehensive History of Western Ethics: What Do We Believe? Amherst: Prometheus Books, 1997Becker, Lawrence C., and Charlotte B. Becker, ed. A History of Western Ethics. New York : Routledge, 2003.
“ethics.” Collegiate Encyclopadia. 2005. Collegiate Encyclopadia. 4 June 2005.
Everson, Stephen, ed. Ethics. Cambridge, U.K. ; New York : Cambridge University Press, 1998.
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