Wall St and Business Wednesdays: No, 'Business Ethics' Is Not An Oxymoron by Lloyd Eby

It happened again just days ago. When I tell people that I teach courses in business ethics, someone inevitably tries to make the joke, "Isn't that an oxymoron?" Although I'm somewhat disconcerted by this lame comment, I'm no longer very much annoyed by it, because I've heard it so often that I anticipate it. In fact I'd probably have tried to make it myself some years ago, before I began studying and teaching business ethics.

Another comment that's made almost as often goes something like this, "Well, good for you. That's what they really need, and I hope you're successful at it." Although you might expect otherwise -- after all, it's intended to be something along the lines of "Way to go! Kudos to you!" -- I find that comment to be more disconcerting. Among other things, it assumes that "they" are the problem, and if "we" could just get "them" to understand and accept and act on what "we" know to be good and true, this would solve the problem for us all. The hubris of that attitude is apparent. It also tends to want to make me, the teacher of business ethics, into some kind of powerful healer or therapist who is responsible for fixing whatever ails business and business persons. I'm willing to accept some of that load, but the thought that the lack of ethics in business is a problem that teachers of business ethics can solve is mistaken, just as it is mistaken to think that medical doctors can solve the problems of AIDS or therapists the problem of pedophilia.

Ethical problems inevitably arise for all human beings because we have the ability to make choices, and we are thus necessarily faced with situations in which more than one claim or pull or tug toward some good choice is made on us. Each of us is an individual and we need to satisfy certain individual needs and desires -- food, water, sleep, and some other things -- in order to survive. But each of us is also a member of numerous groups -- family, business or workplace, church or other social group, and so on -- and each of those groups has certain needs and desires that it reasonably can and does impose on us. Inevitably there will come conflicts between these demands and our desires to respond to them because fulfilling one of those demands will make it impossible to fulfill another.

If, for example, I have only $10 and want to buy my lunch that will cost $10 and also want to give $10 to my pastor who asks for a donation for a project she is undertaking, I must decide which of those desires or demands to fulfill, for I cannot fulfill both to the same degree at the same time with the resources at my immediate disposal. Or, for another and perhaps better example, if I am at work and something important comes up at the end of the day that will require my working late to solve the problem or fulfill the project, but my child wants me to come home early and attend her music recital, I cannot fulfill both of those demands -- demands which are both completely good and legitimate. This becomes especially difficult if I have already had to forego attending several of her past recitals because of my job commitments.

The ethical problem(s) break out when we succumb to the temptation to do something wrong in order to get ourselves out of one of those jams -- jams that will inevitably come to each of us many times in our lives.

In order to do business ethics, one must accept a number of basic assumptions. One is that business, including business profitability, is -- or at least can be -- inherently good, ethically speaking. A second is that business can be done in either an ethical or an unethical way. A third is that the study of ethics and business ethics can have some benefit toward sensitizing people to ethical problems and providing them with means and tools to find a good solution to those ethical jams.

Not everyone accepts those basic assumptions. Some people think that business is inherently bad or unethical. A controversy has raged for several decades within the field of business ethics over whether a business can be an ethical agent. Some theorists see business as a quasi-mechanical affair or structure that can only operate to maximize profits. If that is so, then there can exist no ability for business to choose between alternatives on any basis other than profit-maximization, and this would mean that a business cannot be an ethical agent. The ability to be an ethical agent requires that the agent has the power or capacity -- the ability -- to choose on the basis of ethical considerations, not just financial ones. Other theorists reject this view that business cannot be an ethical agent by pointing out that businesses do have internal decision mechanisms and procedures and that these are controlled by people, and people do have the ability to choose on bases other than purely financial ones.

The view that a business cannot do other than seek to maximize profits is mistaken, because it is over-determined. Yes, it is indeed true that a business other than a non-profit needs to be profitable in order to survive. It must serve the interests of its investors, who invest in a particular business or company -- usually anyway -- precisely because they expect the business to increase the value of their investments. It does not follow from those facts, however, that businesses and the people making decisions for and within them must consider only what will maximize profits, or that they must maximize profits at the expense of every other consideration. They can choose to do different things within the bounds of overall profitability, and some of those things can be good, ethically speaking, while others can be ethically bad.

Another important question has to do with whether studying ethics has any benefit. Here I may be accused of arguing in favor of what supports me, but it is true that our sensitivity to ethics and our the ability to understand and have good responses to ethical situations are not necessarily innate or inborn, despite the claims of those theorists of ethics -- such as the ethical naturalists and the moral sense theorists -- who think that we have an innate ethical sense, analogous to our physical senses. Even if their claim is true, we know that our physical senses need development and training, otherwise what would be the purpose of music or art education and training, or developing people's palates for food or wine? So much more is it true that we need training and education for our ethical sensitivity and our ability to deal with and solve difficult ethical problems.

This is as much true for businesses and business people as it is for anyone else. Why are some professional sports figures and entertainers such insufferable jerks? Because they did not have sufficient training in good behavior and good attitudes when they were in their formative stages. It is the same with business people: Why are some of them greedy and selfish and monstrous? Because they have not been sufficiently educated and trained in being unselfish and generous. So, indeed, business ethics is not an oxymoron, but it is instead one of the most important topics and considerations of our day because of the importance and prominence of business in our world. That does put some pressure on me and other teachers of business ethics to do our job in the best way we can.

But there is always the fact that every person is ultimately his/her own governor. The philosophers known as existentialists made the point that there is always a gap between a rule or principle and any given individual's action because the individual must always decide whether to follow that rule or accept that principle. Even then, the individual has to decide whether the rule or principle fits his/her case or situation, and how it does so. Attempting to set up a rule for following a rule would lead to an infinite regress, and that problem can be solved only by individual decision and choice, beyond any rule or principle for the choice.

It's the same with doctors and counselors. If the patient will not take the prescribed medicine or undergo the therapy or cease the risky behavior that is causing the disease, there is little the doctor can do to solve the problem. If the one being counseled will not heed the advice or help of the counselor, the ability of the counselor to help the one who needs healing will be stymied.

So it is with teachers of business ethics. We can do a lot to help. But we cannot ultimately solve the problem of unethical business practices because that is in the hands of those who manage the businesses themselves, and they have to discover what is good and decide to do it.

Lloyd Eby teaches business ethics at the George Washington University in Washington, DC. Mr. Eby can be reached at lloydeby@verizon.net. This article was published by the World Peace Herald.

Lloyd Eby

Wednesday, June 21, 2006