Theories of Ethics

THEORIES O F E T H I C S
LEARNING OBIECTIVES
After studying tliis chapter, y o u should be able to:
• Assess the various roles o f theories and theorizing i n business ethics.

• Identify the key features o f a representative range o f theories o f ethics.
• Critically evaluate the application o f these theories i n a business context.
INTRODUCTION
In this chapter we look at some o f the most important theories o f ethics. The treatment is o f
necessity selective, given that ethics has a history stretching back over 2000 years. The theor-
ies that we discuss all reflect characteristic perceptions of, and responses to, business chal-
lenges on the part o f managers and other stakeholders o f an organization. Ethics, the study
of right and wrong, is not only the foundation o f business ethics but also underpins the key
arguments and concepts o f corporate social responsibility. The latter is concerned w i t h ,
among other things, how organizations act responsibly. Hence the arguments considered i n
this chapter reflect not only individual issues but also corporate policies and strategies.
THEORIZING ETHICS
There are two connected issues relating to the idea o f a theory o f ethics i n business that
need to be discussed before l o o k i n g at any theories proper. One o f these is the tension
between ethical ideas as (i) tools for decision m a k i n g and as (ii) ways to depict, explain or
reflect the decisions we make independently o f theory. The other issue is the question o f
what exactly a theory o f ethics tells us about right and wrong.
49
50 PARTI FRAMEWORKS
The first o f these, then, is the contrast between theories o f business ethics as instruments
to help managers formulate decisions or as explanations o f the decisions managers make.
This leads to a systematic ambiguity i n the use o f ethical theories, an understanding o f which
is critical for establishing what such theories can do. One example o f this ambiguity is the
question whether ethical theory is intended to help us understand what ethics and moral
claims are and what they mean, as opposed to helping us want to be more ethical (i.e. helping
us see how ethically right choices are preferable over ethically wrong ones). As long ago as
1912 the philosopher David Pritchard tided a famous paper 'Does moral philosophy rest on
a mistake?'' i n which he outlined this ambiguity. One response to this might be to decide that
theories o f ethics i n future can only do one o f these tasks - that is either to understand what
ethics is, or to attempt to make ethics seem more desirable. However, one can argue against
the dichotomy that this position presents, because understanding certain things makes us
more or less disposed towards them: for example i f I understand the deeper implications of
a policy on equality i t is likely to affect m y feelings towards adopting this i n practice; simi-
larly i f I am strongly committed to a certain value then this is often manifest i n behaviour
such as trying to establish different ways it may be implemented. So the differentiation
between understanding ethics and wanting to be more ethical can at least be questioned.
Another version o f this ambiguity is the question o f how business people might use
ethical theories - are they tools to justify decisions, so that one can try now one, now an-
other, as seems appropriate to the situation? O r are they ways to illuminate our ethical in-
stincts and intuitions, helping us reflect on choices we make anyway - that is, independently
o f our knowledge o f theory - and see what is involved i n making them? M o r e recently,
Bruce MacFarlane has brought these questions into a wider debate, w i t h his discussion o f
the tension between the study o/business ethics as a phenomenon i n its own right, poten-
tially emancipatory or even 'subversive', and the study o f ethics for business, as a mechan-
ism for introducing business values into the management education curriculum.
This is not an empty issue - i n some way or another ethical theory should have an influ-
ence on how people act, otherwise i t w o u l d be a purely intellectual study w i t h no relevance
to business. H o w someone's choices and actions are informed by their access to ethical
theory is therefore crucial for understanding how the study o f ethics can impact upon busi-
ness decisions. I f someone regards these theories as tools then it suggests that they may
use them to try justifying choices they already have formulated, while i f they see theory
as a reflection o f their ethical instincts then they w i l l look to these to help them formulate
choices. So this ambiguity is reflected i n practical terms i n the way i n w h i c h ethical theor-
ies might be used by an individual - i n an exaggerated opposition we could think o f this
as ethical theory operating at an earlier (option-generating) phase o f decision making or at
a later (choice-justifying) phase.
The second issue, before looking at ethical theories, is that we should ask what such
theories are for? What is achieved by the formulation o f a theory o f ethics such as
consequentialism?- What do such theories tell us? There are at least three different things
that theorizing ethics might accomplish:
• A n analysis o f key ethical terms and concepts that informs a manager's future ethical
choices.
• A statement o f norms or standards that function as the grounding o f a manager's ethical
decisions.
• A fundamental ethical value that is the basic starting point for ethical decision making.
These represent a scale o f intensity. The weakest relationship w o u l d be where a man-

ager's decisions are i n some way structured or influenced by their knowledge o f a certain
CHAPTER
3
THEORIES O F ETHICS i
LEARNING OBJECTIVES
After studying this chapter, y o u should be able to:
• Assess the various roles o f theories and theorizing i n business ethics.

• Identify the key features o f a representative range o f theories o f ethics.
• Critically evaluate the application o f these theories i n a business context.
INTRODUCTION
In this chapter we look at some o f the most important theories o f ethics. The treatment is o f
necessity selective, given that ethics has a history stretching back over 2000 years. The theor-
ies that we discuss all reflect characteristic perceptions of, and responses to, business chal-
lenges on the part o f managers and other stakeholders o f an organization. Ethics, the study
of right and wrong, is not only the foundation o f business ethics but also underpins the key
arguments and concepts o f corporate social responsibility. The latter is concerned w i t h ,
among other things, how organizations act responsibly. Hence the arguments considered i n
this chapter reflect not only individual issues but also corporate policies and strategies.
THEORIZING ETHICS
There are two connected issues relating to the idea o f a theory o f ethics i n business that
need to be discussed before l o o k i n g at any theories proper. One o f these is the tension
between ethical ideas as (i) tools for decision m a k i n g and as (ii) ways to depict, explain or
reflect the decisions we make independently o f theory. The other issue is the question o f
what exactly a theory o f ethics tells us about right and wrong.
49
CHAPTERS T H E O R I E S OF E T H I C S 51
theory. A stronger link might be where a manager refers his or her choices back against a
theory as a sort o f test o f ethical soundness. Perhaps w i t h the strongest connection, a the-
ory provides a specific value or principle that acts as the first step i n any chain o f ethical
decision making. We see here again a manifestation o f the ambiguity discussed earlier -
the weakest link identified i n the list above reflects the idea that theories illuminate for us
the structure and nature o f ethical concepts and values, whereas the strongest provides a
foundation stone that purportedly is acceptable to any manager placed i n an ethical deci-
sion-making situation. There is no simple formula that w i l l necessarily l i n k one ethical
theory with one or other o f these kinds o f outcome. Rather, the reader should bear them i n
mind as we discuss the representative examples o f different types o f theory.
One final preliminary point about ethical theories. These are not sociological, i n the
sense of studying patterns and trends that are evident i n people's thinking and behaviour,
as measured for example by using observation, surveys or focus groups. Rather, they aim
towards the establishment, critique and evaluation o f ethical claims by argument, debate
and examples. The difference is crucial - a sociological study discovers what people hap-
pen to think about a subject such as ethics i n business, whereas this k i n d o f enquiry^ at-
tempts to establish how people must think about that subject. This difference w i l l be seen
in the use of examples to illustrate possibilities, rather than to indicate what may typically
occur, and in the use o f argument and the analysis o f concepts as the primary means o f
moving forward. Furthermore, on occasion such an argument is not so much analysing
what an ethical concept actually represents or means, as i t is proposing a particular mean-
ing: in other words sometimes the argument is not meant to show how we must think but
to suggest how we should think.
Turning to the theories themselves, there are several ways o f categorizing these. Many
texts classify theories into classical and modem, but this is not especially accurate (many
theories were originally suggested in ancient times but have been resurrected i n a more
precise form i n recent decades) and in any case only indicates the chronology o f their o r i -
gin. More illuminating is to relate them to the nature o f ethical choice, as below.
One can distinguish a range o f different elements i n an ethical decision or choice:
• The personality features that prompt an individual to make a certain choice.

• The nature of the rationale or motive for the choice.
• The outcomes that result from the choice.
• The situation o f those affected by the choice.
Each of these has become a focus o f emphasis o f ethical theories, and w i l l f o r m the basis
of the next four sections. We w i l l not pretend that the discussion is exhaustive - instead we
shall cover as much as w i l l provide a good representation o f the particular k i n d o f theory
in each case. We w i l l also consider at the end o f this chapter how far such theoretical
ETHICS A N DY O U
ETHICAL T H E O R I E S - T O O L S O R EXPLANATIONS?
Consider how ethics is managed i n an organization that you are familiar w i t h . H o w far do managers i n that
organization use ethical theories as part o f the training and development o f staff? A n d how far is that use
based on theories as tools or as explanations?
52 PART I FRAMEWORKS
positions can be seen as providing 'the' truth about ethics as opposed to providing one
of perspective on the subject.
ETHICAL EGOISM AND SUBJECTIVISM
Before embarking on a detailed discussion o f the main theories that have influenced disj
cussions o f corporate social responsibility or business ethics, the majority o f which areii
some way or another concerned w i t h altruistic values, i t is important to note theories;
on the face o f it w o u l d operate against altruism and w o u l d rather favour self-interest.
Ethical egoism is the view that what is right is simply what is in one's o w n interests. Tliii
however, is ambiguous - it can often be taken to mean that what I perceive as i n my interesj
at any moment is what is right, as opposed to the idea that what is right is what is in my ion»|
term interest. What I think at a certain moment to be i n my interest could easily be wrong. (
course. I might think that it is in my interest to cheat a supplier at that moment that 1 cai
out the action o f cheating, but i f it turns out that the supplier successfully sues me, or decidi
in future not to supply me, or negotiates much harder terms i n the future, then arguably t
outcome that I sought for - namely an improvement i n m y o w n circumstances - has i
materialized. So a key issue is what difference is reflected in the meaning o f 'long term.'
A rational egoism is self-oriented, but may still lead to results that may be comparedt
more altruistic theories. Business is intrinsically social i n nature, and therefore the inter!
relationships between individuals are critical to success. Behaviour that severs someon:
from this social nexus, such as immediate short-term acquisitiveness at the expense t
others, is thus not i n their long-term interest, and so not rationally egoist.
This argument is particularly relevant for business, i n that the actions o f organizations]
rather than individuals, are often overtly self-oriented. The goal o f a company is to succed
in a competitive environment where other companies may be hostile. The legal respon;
ibility o f managers is to secure positive returns for their shareholders, not for those of othei]
companies. It w o u l d be going too far to draw the conclusion from this that companies;
intrinsically anti-altruistic, but i t is clear that this is a potential trend. However, the nee
secure cooperation from key stakeholders requires that organizations look beyond thei
most immediate narrow interests. I n line w i t h this, then, one key argument often advana
in support o f the need for corporate social responsibility is that i t represents the rationi
course i n the long term. Organizations may be egoist, but their rational interests require]
some degree o f social responsiveness.
A different version o f this style o f attitude was advanced by A y n Rand, who argued t
altruism is misplaced, and that the true moral value is to act for oneself." W h i l e this look!
very like an egoist view, her argument was based on different premises. Her view was thali
humans are rational beings, and thus the most logical source for their ethical choices mua|
be their o w n rationality. Self-interest implies a sense o f responsibility to oneself Ranr
argued that the pursuit o f self-interest w o u l d not necessarily lead to conflicts between|
individuals, as potentially human needs and productiveness can be harmonized.
Rand - a refugee from the Russian Revolution - has been very influential i n the Unitf
States, due mainly to the compatibility between her views and the development o f th(
liberal market orthodoxy i n American politics and economics. However, her confidence it'
the harmonizability o f human interests, and the consequent suggestion that interests need|
not conflict, looks more like an article o f faith than a practical claim.
Subjectivism is a more extreme view - the idea that there are no objective consideral
tions regarding morals, and that each individual's ethical position is not subject to rationall
ETHICS A N D Y O U
THE VALIDITY OF E G O I S M
In debates on ethics and responsibility i n business, one often encounters justifications for an egoist-like
position, based on comments such as 'The market requires people to act i n their o w n interest. I f y o u tried
to be socially minded i n a market context y o u w o u l d be out o f business i n no time.'
How valid is this as an argument, i n your view? H o w far does i t really support an egoist approach to
ethics? And would y o u try to counter this attitude i n a w o r k situation (and i f so, how)?
""ticism from others. This can take different forms: the idea that ethical statements are
ly expressions o f personal choice, or expressions o f emotion, or represent the choices
attitudes of groups o f individuals but without any c l a i m to be universal. On this view
re is no rational basis for argument or debate about ethics at a l l . However, i n practice
people consciously adopt this position - the mere fact that we w i l l feel resentment at
the behaviour of others is sufficient to indicate that most o f us regard ethical debate as a
vahd practice. This does not mean we are all altruistic all the time, or even often. B u t i t
shows that we do recognize altruism as a criterion by w h i c h we w i l l evaluate the acts o f
others. If we did not, then we w o u l d have no basis for resenting the actions o f others: i f
someone hurt us or caused us some loss, we might not like this, but we w o u l d have to
simply accept that everyone is selfish, all the time.
Subjectivism and egoism do not necessarily i m p l y that someone acts selfishly - they
may see their own interest as rooted i n the well-being o f others (egoism) or they may
simply feel a high degree o f sympathy for others and thus act unselfishly (subjectivism).
VIRTUE E T H I C S : E T H I C A L C H O I C E S A N D T H E
PERSONALITIES O F T H O S E W H O M A K E T H E M
Virtue ethics is often traced back to the writings o f the ancient philosophers - most notably
Aristotle' and other thinkers such as Confucius. The central feature o f the Greek-inspired
version of virtue ethics is the idea that the attempt to understand the rightness or wrongness
of an individual action is misplaced, and that i t makes more sense to look at the idea o f a
good life, considered overall. What makes someone's life a good one is best understood by
considering their character; that is, by looking at specific features o f their personality -
which is what leads them to live the good life. This is where the term 'virtue' comes i n .
By 'virtue' is generally meant a feature o f an individual that prompts them to act i n a
certain way: kindness is a virtue because it prompts people (i.e. makes them more l i k e l y )
to act in a kind manner i n the right situation. A virtue does not compel someone to act i n
a certain way - rather it makes them more likely to do so, for example by giving them a
certain perspective on issues. There have been many lists drawn up o f 'the' virtues, includ-
ing features such as honesty, integrity, kindness, fairness and prudence. We can extrapolate
from this the idea o f a good life i n business as being the k i n d o f management style evident
in the actions o f someone whose virtues are evident i n their work behaviour and choices.
Many of the virtues that have been traditionally associated w i t h this approach seem to have
a direct application to work: managerial integrity is perhaps the best known o f these,*
though the Unked idea o f honesty has also often been a source o f attention, and virti
such as prudence have also been discussed i n the context o f business.
One o f the key questions w i t h this approach is settling what features should figure'
list o f virtues.' Is courage always a virtue - or is i t sometimes recklessness (consider
Anglo-Saxon saying ' i t is better to fight and run away, and live to fight another da-
Equally, for those o f a religious persuasion, piety w o u l d likely be an important vi
while those w h o are atheistic w o u l d find this irrelevant. This is not a fatal flaw with
idea o f virtue ethics, however. One important distinction that needs to be made here
between a person being virtuous, and a person displaying specific virtues. Aristotle
particular made clear that ' v i r t u e ' and the idea o f a good life needed to be conceived n
simply i n terms o f specific acts that arise from specific motives. Rather he made clear;:,
being virtuous represented a particular way o f l i v i n g your life. A good life was one t'
was lived i n accordance w i t h the specific nature o f human beings - what he called fulfi
ing their particular k i n d o f 'excellence'. I n other words, Aristode claimed that being et'
cal was directiy related to a particular idea o f what i t is to be human. This i n turn, thou
implied that a person l i v i n g a good life avoided extremes - such a life represented mode
tion i n choices and motives. Virtue for Aristode was explicitly contrasted w i t h vice in t
respect: a virtuous person deals w i t h a certain issue (such as the management of dange
in a balanced manner, w h i l e an unbalanced approach - overly or inappropriately heed!
o f danger - w o u l d manifest the vice o f recklessness (and thus i n doing so would detrac
from the individual reaching their fulfilment or a state o f excellence). So w h i l e many writ
ers have i n recent times looked at specific lists o f virtues, the basic Aristotelian approacli
was to indicate that there was an underlying pattern to how a virtuous person deals witk
their life, one based on moderation, on finding the mean between extremes, which would
assist an individual to be truly fulfilled.
Put i n this manner this sounds deceptively simple - and i t probably is deceptive, for]
moderation itself could as easily be seen as at times appropriate and at other times inap
propriate. For example, i n the midst o f a business crisis, such as impending bankruptcy, ii
w o u l d be casual to the point o f negligence to be moderate i n one's response - a radical,
dynamic and possibly risky response is probably more suitable. B u t underlying this is the
idea that good business behaviour is not simply good because someone demonstrates a
range o f specific personal attributes in what they do, but because the personal qualities evi-
dent i n their behaviour reflect an overall approach to issues. Aristotle thought of this
overall approach as being one o f moderation i n all things, but i t is open to other possibil-
ities, such as maintaining a coherence between one's choices - taking integrity as the
overarching virtue. A n d there are doubtless other ways to conceive o f virtues as arising
from a specific conception o f human nature and human fulfilment. Whatever the specifics
here, common to these is a sense that the virtues are not just a discrete list o f qualities, but
that i n some way they reflect a certain k i n d o f unity w i t h i n an individual."
There are many advantages to considering someone's character when thinking o f ethics
in business. Business and organizational management is a dynamic environment i n which
not only are specific elements changing but where the very nature o f the field can change,
sometimes rapidly and fundamentally. A n individual equipped w i t h rules and principles
may find these become redundant. Equally some dilemmas may be too involved to easily
fall under a set o f principles. I n such circumstances, what matters w i l l surely be the basic
integrity and orientation to value that an individual professional may demonstrate - how
they act when the rules no longer determine the right response, and they have to make their
own m i n d up. This element to the theory is critical - for virtues, like any sources o f ethical
evaluation, can at times conflict, and therefore some basis is required on w h i c h to make a
decision i n such cases.
CHAPTERS T H E O R I E S OF E T H I C S
ETHICS IN P R A C T I C E
WHOSE VIRTUES?
Traditional European virtues in the main stem from Christianity, and include concepts such as honesty,
kindness, prudence, charity, mercy and humility. Traditional Chinese virtues are greatly influenced by
Confucius, and are based around concepts o f benevolence, honesty, loyalty, w i s d o m , integrity and propri-
ety. Arguably, when considered collectively, these appear very similar, but their interpretation can lead to
greatly varying practice.
How might you use these two conceptions o f virtue when w o r k i n g w i t h a team containing individuals
from both European and Chinese cultures?
Clear practical implications o f virtue ethics can be drawn out that can be applied dir-
ectly to business. I f character is what is important, then the development o f professionals
and managers in terms o f the kinds o f judgement they make, the kinds o f attitudes they
hold, becomes an important organizational goal. Equally, organizational cultures that re-
flect a virtue-ethical orientation are likely to focus less on blame (for actions) and more on
self-evaluation (for character). A n d finally, the implication o f the unity o f virtues should,
if taken to its logical conclusion, indicate a coherence between internal organizational
values and the values inherent i n the goods or services produced or delivered. A n organiza-
tion that produces chemical weapons, w h i c h are then sold to a government that is k n o w n
to use them to violate the human rights o f their citizens, w i l l find it difficult to set this
practice alongside a virtue-ethical approach to their business, not simply because their
business develops products that can be harmful to individuals, but because the possibility
of these products causing harm cannot be made consistent w i t h an underlying unity o f the
virtues. Whether in terms o f human flourishing, or i n terms o f moderation i n all things,
once a potentially harmful product has been sold on to a separate party that has malign
intentions, then the fact that the manufacturer can no longer guarantee that virtues such as
consideration or avoidance o f harm w i l l be upheld counts against them, i f not as seriously
as for the government using them, then at least as a w i l l i n g collaborator.
We see here a potential linkage between ethics and corporate social responsibility, as
explained in the two previous chapters. For here the strategic choices o f the firm are open
ETHICS A N D Y O U
LAW A N D E T H I C S
How far would you go in condoning actions o f your employer that may be legal but you feel are nevertheless
immoral? For example, how would you react to the following:
• Exploiting a weak workforce by paying them l o w wages?

• Selling goods that are accepted to be sub-standard and overpriced?
• Dealing w i t h suppliers who refuse to disclose the sources o f their materials?
• Supporting a government that represses political dissent?
56 PARTI FRAMEWORKS
T H I N K I N G C R I T I C A L L Y A B O U T E T H I C S
APPLYING V I R T U E E T H I C S
Suppose you start w o r k i n g as a manager i n a small marketing f i r m , specializing i n brand consultancy. Your
new boss says to y o u , T want this f i r m to become k n o w n as honest, considerate and responsible, and
I want to build our reputation for integrity. I expect all m y managers to start putting this into practice
forthwith.'
How w o u l d y o u try to put this into practice? H o w far is i t a realistic aspiration, and what are the
potential dangers or risks?
to evaluation directly i n terms o f consistency w i t h given virtues. The above discussion i

o f course, idealistic i n tone. This provides a strong clue as to the k i n d o f theory that virt
ethics is best considered to be: for this is neither a simple analysis o f key concepts, nor
step i n an ethical argument. Rather it is a reflection o f the kinds of judgement and the kin
of person we aspire to. This is less theory as a tool and more theory as a depiction -
attempt at explanation o f what we are like, rather than a model that we can directly use i
our day-to-day decisions. B u t over and above this, it is an aspirational theory, one that aims
not simply to indicate what our ethical attitudes are, but to change these i n a certain direc
tion. We shall come across this orientation to change i n a later section.
This, however, puts a finger on the main shortcoming o f virtue ethics. For while i t can
help people understand more about ethics and values i n their work, i t is not helpful once
we are faced directly w i t h a dilemma. I f I cannot already answer the question 'What is the
honest thing to do here?' when, say, offered a bribe, then I cannot easily answer the ques-
tion 'What w o u l d an honest person do here?' Indeed, one version o f a virtue ethic would
have i t that the virtuous person w o u l d simply not find a bribe tempting - arguing that t o the
extent that someone does find i t tempting they are not really virtuous at all. I t is as i f virtue
ethics is very useful for offline reflection, but less helpful when we go online and h a v e to
confront conflicts and temptations. I n the next sections we w i l l consider approaches that do
have a more immediate bearing on practical situations that may confront a manager.
To summarize this discussion, virtue ethics is an approach to right and wrong that
focuses on the character or personality o f the individual concerned. I t considers those
qualities o f an individual that can lead people to act i n certain ways (virtues), and i n more
sophisticated versions also considers what might be the underlying basis for such ranges
o f virtues. As a theory that aims at reflecting the attitudes we have (and to some extent that
aims to modify these) it is most valuable for developmental work, but is o f less help w h e n
an individual is confronted w i t h immediate, pressing dilemmas.
DEONTOLOGICAL THEORIES: THE ETHICS OE

T H E A C T ITSELF A N D ITS R A T I O N A L M O T I V A T I O N
We have discussed how virtue ethics - the idea that ethics is best seen i n terms o f the char-
acter o f individuals making choices - helps us to understand patterns and trends in people's
behaviour, but i t does not furnish a tool to help people make decisions in an ethically accept-
able manner. One alternative approach, which arguably can help the making o f decisions, is
CHAPTERS T H E O R I E S OF E T H I C S
to consider whether features of actions themselves can function as a basis for deciding what
to do, by identifying duties and obligations arising from the nature o f an action. Hence the
ungainly term 'deontology' - derived from Greek terms for 'duty' and 'explanation'.
By far the best known example o f a deontological theory o f ethics is that o f the 18th
century German philosopher, Immanuel Kant. However, while we w i l l discuss his
approach in detail below, it should be noted that this is one o f several examples o f deontol-
ogy, not the sole version.** I n particular there is an element o f absolutism about Kant's
views, which is not a necessary aspect o f deontology: i t is quite possible to identify ethic-
ally relevant aspects o f actions and their motives that carry a degree o f relativity, depend-
ing on other factors such as an individual's personal circumstances. Kant, i n contrast
though, did attempt to outline a theory o f ethics that was absolute, and operated independ-
ently of particular circumstances.
Kant's approach to ethics is to focus on what humans can be fully responsible for, which
is essentially our motives and intentions: we cannot be responsible entirely for the conse-
quences of our actions because these may be affected by fortuitous circumstances. But
although in his later writings he did discuss an aspect o f character as a feature o f ethics
(specifically what he called people's overall disposition towards ethics) his most influential
arguments relate to the idea that some actions can be demonstrated to be intrinsically ethi-
cally worthwhile.'" Essentially, Kant argued that a pure ethical choice - an action done out
of a sense of duty - has a certain kind o f form. A n ethical choice is expressible i n universal-
iiable terms. B y this, Kant meant that i f I do something for a certain reason i t must be pos-
sible for anyone else to adopt the same reason. Take the idea o f lying; Kant argued that this
cannot be universalizable because i f everybody lied then the whole practice o f communica-
tion via statements o f what is intended to be true would break down. The wrongness o f l y i n g
is therefore that it cannot be adopted by all as a principle o f action. I n contrast, the keeping
of a promise is universalizable i n that it is perfectly possible for everyone to keep their
promises - the practice would be strengthened and reinforced by promise-keeping behav-
iour in exactly the opposite manner to which a practice o f l y i n g w o u l d be self-defeating.
Kant's best known expression o f his ethical approach lies i n what he called the categor-
ical imperative. B y this he meant an imperative that applied to a rational actor no matter
what the circumstances and no matter what that individual's particular desires and needs
(we see an element o f the absolutism referred to earlier). Kant contrasted hypothetical and
categorical imperatives - a hypothetical imperative w o u l d be o f the form ' i f y o u want to
achieve x , then do y ' , whereas the categorical imperative states 'do z'. I n other words it
applies no matter what your personal desires or wishes, but rather applies to any rational
actor in any circumstances.
Much is made by some writers o f three different formulations that Kant made o f the
categorical imperative, especially one version where he talked o f treating rational nature
as an end and never as a means. This could be construed as a theory o f how humans use
their rationality, and thus a theory o f what people can expect as a right i n respect o f their
rationality. But it is not a blueprint for human rights i n any detailed sense. Rather Kant was
trying to express the idea that i f an action was a duty for one rational individual, i t w o u l d
apply to any - and therefore we have to accept the rationality o f others as being o f equal
importance to our own, and not as something to be dismissed. I n effect what Kant was
suggesting is that since we - humans - are all rational, then we have the same rational ends
(though of course we may have many non-rational ends, based on desires, that we do not
share). So i f something is a duty for one person, i t w i l l be a duty for a l l .
One of the great merits o f Kant's approach is that, despite some o f his more abstract
reasoning, the theory contains a straightforward test o f whether something is ethically
acceptable or not, a test which i t would appear that any individual, i n professional or personal
PART 1 FRAMEWORKS
life, can easily apply. Faced w i t h a dilemma, such as whether or not to accept a bribe i n order
to w i n a contract that w i l l save jobs, a manager can quickly reflect on whether acceptance of
the bribe is a motive that could be applied by anyone i n any context. A n d they would find
that it cannot be consistently maintained: i f taking a bribe to w i n a contract were adopted by
all as an open principle o f action, then trust i n business w o u l d quickly break down, individual
purchasing managers could not be relied upon to get the best deal, and i n all transactions it
would be assumed that the negotiators were acting i n their personal interest (in offering or
accepting a bribe) and not in the interests o f the business. In which case it w o u l d not be pos-
sible to give them the task o f negotiating supplier contracts. A n d then business to business
trade w o u l d cease to be viable."
The organizational implications o f such an approach include a need to develop i n individu-
als sufficient self-knowledge that they can recognize their o w n intentions clearly, i n order to
be able to evaluate these on the universalizability test. But i n addition i t would require profes-
sionals and managers to care about what their duty is. While i n one sense this is virtually a
truism ( i f asked we would all want to do the right thing) in another i t is anything but - much
business decision making is founded on uncritical acceptance o f organizational goals, and on
aims defined by classical microeconomics, which do not incorporate any sense o f what one's
duty is, but rely instead on the universal pursuit o f self-interest. Even where managers query
organizational goals there is immense pressure on them to stifle their misgivings.
So there is a practical drawback to a deontological approach to managerial decision
making: to be really effective i t requires managers to have a keen sense o f rightness and
wrongness, one w h i c h is not often encouraged i n modern business practice.
There are other shortcomings o f deontology (at least i n Kant's version o f this approach).
For example, Kant makes assumptions about what counts as a consistent practice: i t would
seem logically open to someone simply to say 'So what i f everybody broke their promises?
I don't support the idea o f promising anyway so I w i l l simply profit from everyone else's
naivety at the moment.' Kant seems to suggest i n cases such as honesty and promising that
what underpins these is an acceptance o f a given practice, and that the collapse o f such a
practice w o u l d be self-defeating. W h i l e this might be a strong argument i f someone
adopted a principle o f breaking promises whenever i t benefited them, it w o u l d be less so
i f someone simply rejected the practice o f promising altogether.
E T H I C S I N P R A C T I C E
EQUALITY A N D T H E C A T E G O R I C A L IMPERATIVE
Perhaps the clearest example o f the categorical imperative being put into practice is provided by the
growth in processes and policies relating to equality o f opportunity. The principle behind these policies is
the treatment o f all individuals as being equal, not simply i n the sense o f being equally needy, but also as
being equally valuable to an organization.
The development o f diversity policies is a case i n point - diversity management is where an organiza-
tion tries to make the fullest use o f the demographic diversity o f its workforce, for example by making sure
that speakers o f minority languages are rewarded for their occasional value i n communicating w i t h a c l i -
ent or customer w h o spoke the language i n question. Where this goes beyond Kant's o w n views is that he
focused on people's rationality as the basis for treating them equally - he argued that i t is i n virtue o f our
ability to think logically that our reasons merit being taken seriously by others. Diversity suggests that our
capacity to make uniquely valuable contributions to society also marks each o f us out as o f equal merit.
THINKING C R I T I C A L L Y A B O U T E T H I C S
THE LIMITS T O H O N E S T Y
One of the clearest dilemmas arising from a Kantian approach is the conflict between what seems to be a
principle of duty, such as telling the truth, and a highly damaging prospective outcome, such as the reve-
lation of something embarrassing. Kant's absolutism suggests that one should tell the truth no matter what
the consequences, but i n practice most o f us tell ' w h i t e lies' - small untruths that are not especially seri-
ous. But where does one draw the line?
A related shortcoming o f the universalizability concept is the possibility of fanaticism:

superficially at least, one can imagine an individual who maintains a consistent principle,
even if this led to disproportionately harsh consequences, for the individual themselves as
much as for others. Suppose, for example, that a senior manager said, 'Anyone w h o
presents a false expenses c l a i m should be sacked', and when challenged about the possibil-
ity of honest error says, ' N o matter what the reason, false expenses claims are gross mis-
conduct and should be dealt w i t h accordingly.' This w o u l d be a consistent, but overly
stringent principle. Most people w o u l d want to temper such a principle w i t h some k i n d o f
qualification such as 'except when the falsity arises from a genuine error' or similar. B u t
on the Kantian approach the extreme principle is as ethically sound as a more lenient one,
if adopted and progressed consistently, on the basis that the individual saw i t as a principle
of duty. This runs counter to our instincts, where the gravity o f consequences is a key fac-
tor to be taken into account when deciding what to do. I n practice the stronger principle
would itself probably lead to some k i n d o f breakdown i n the practice o f m a k i n g expense
claims, but on Kant's view i t is as sound as a less demanding principle. I n the next section
we will look at a theory that focuses specifically on outcomes and consequences.
What kind o f theory is the deontological approach? A tool for decision making, or an
explanation of what a right decision should look like? I n its pure f o r m this is intended as
an explanation o f what it is for an act to be ethically right, though w i t h i n this there lies a
test of rightness that could be used as a tool for decision makers. However, this is not a take
it or leave it approach that can be ignored i f it does not yield the answer desired - i n that
respect it is less a tool and more a proposal as to how ethical decisions ought to be arrived
at, if we were more consistent i n our thinking.
To summarize: we have discussed Kant's view as the best k n o w n and most clear exam-
ple of a deontological approach; this provides a clear explanation o f what it is to act out o f
a sense of duty, and also gives us a clear test o f whether a principle is ethically acceptable
or not; however, the test does not eliminate extreme counter-examples.
CONSEQUENTL^LIST THEORIES: EVALUATING

CHOICES I N TERMS O F T H E O U T C O M E S T H E Y
BRING ABOUT
We move a step along the process o f action, to the view that the ethics o f an action is to be
evaluated in terms o f the consequences it carries. A s w i t h the other theories considered i n
this chapter, this stems from a natural instinct that we have - i n this case to l o o k at what
results from an act before j u d g i n g it. For example, at the time o f the Barings Bank col-
lapse, there may have been other financial traders w h o were doing similar things to Nick
Leeson. I f so, they were lucky, and have escaped the universal opprobrium that Leeson
experienced. But even i f they were now discovered, the actions that they performed, while
representing breaches o f trust and to a significant extent to be condemned, w o u l d still not
bear the vast responsibility that Leeson's acts do - for the simple reason that his led to the
collapse o f a bank and theirs d i d not. I n other words, one act is made much worse because
of its consequences.
This formulation o f the view pitches i t i n direct contrast w i t h deontology, where some
acts are wrong no matter what the consequences. W h i l e i t is true that the most well-known
versions o f consequentialism can indeed be presented i n opposition to deontological
ethics, i t is also true that the t w o approaches share many assumptions. For example, both
can be seen as an attempt to provide a mechanism for decision making, so that the indi-
vidual caught i n a dilemma as to what to do could (supposedly) use one o f these approaches
to help fix on a choice o f action that is ethically acceptable. A n d behind this is another
assumption - that there is a solution to every ethical problem, that an individual can always
find a choice that is the best (or at least, the least worse) available i n the circumstances.
Related to this is the idea that 'ought' implies 'can' - i n other words, that the right action
can actually be carried out. Furthermore, both approaches make the assumption that we
can act i n as full a knowledge o f the situation as is relevant - that everything that I need to
know, I can k n o w i n order to make a decision.
B y far the best k n o w n example o f consequentialism is utilitarianism, the view that an
action is right i f i t promotes the greatest good for the greatest number o f people. While
some echoes o f this were evident i n ancient times, i t was developed i n its modern forms
during the 17th to 19th centuries by a line o f British philosophers, including Locke, Hume,
Jeremy Bentham and, most influentially, John Stuart M i l l . ' ^ Essentially the position comes
down simply to the claim that i n any situation there is one right action, and that is the one
that w i l l bring the greatest benefits, this being defined as the greatest good o f the greatest
number. Different explanations have been given o f what 'good' here should mean. M i l l
tried to identify i t w i t h pleasure, though this has been argued against on the basis that it
fails to distinguish between so-called ' l o w e r ' pleasures, such as the satisfaction o f basic
appetites, and 'higher' ones such as the contemplation o f great art. W h i l e such a distinction
may be a little idealistic," there is certainly a burden to be placed on the idea o f what
'good' is i n this theory. Another idea that has been offered is that the good is happiness - so
the principle becomes the greatest happiness o f the greatest number. However, this is also
subject to criticism, being itself not a simple concept, and subject to serious variation
between different individual and social and cultural groups.
Be that as i t may, the idea behind consequentialism is that once one has identified what
is regarded as absolutely good - happiness, pleasure and perhaps one could add fulfilment
to this list - then actions are evaluated i n terms o f how far they contribute towards or de-
tract from achievement from this good. Utilitarianism is the specific version o f this view
that the k i n d o f achievement to be used as the criterion for evaluation o f actions is that of
a m a x i m u m across the whole population. B u t alternative forms o f distribution may be
considered - for example, actions could be evaluated i n terms o f whether they brought
about the highest results for each individual affected.
A recent" refinement o f utilitarianism i n particular, has been a distinction between
applying the 'greatest happiness' principle to individual acts, as opposed to particular rules.
The traditional, act-utilitarian view presented evaluation as being made o f a specific choice
made by an individual at a particular point. The rule-utilitarian approach, on the other hand,
states that evaluation should be made not o f individual actions but o f the rules that we
CONSEQUENTIALISM I N N O V E L SITUATIONS
Consequentialism assumes that we can collect sufficient relevant information to make a reasonable est-
imation of what the likely results o f our actions w i l l be. One drawback to this is that some situations are
novel to us, where we do not k n o w exactly what the key underlying aspects o f the situation are, because i t
is outside of our previous experience and knowledge. H o w w o u l d y o u evaluate the potential consequences
in such a situation?
follow. Blurring the difference between deontology and consequentialism, this approach
has been criticized on the basis that it does not tell us what to do i n any specific situation
(should one follow a justified rule even when i n this specific instance i t leads to undesirable
results?). Furthermore, it fails to acknowledge the issues o f when rules, justified i n them-
selves, conflict - one rule suggesting one course o f action and another a different one.
Consequentialist theories have a familiar ring to many professionals when they encoun-
ter theories of ethics, as they do bear a passing resemblance i n certain respects to some
models of decision making. For example, V r o o m and Yetton'^ posited that managers
should use a range o f decision strategies, each o f w h i c h is suited to specific combinations
of circumstances. The reasoning here is that i n a situation requiring the taking o f a decision
there are critical questions to be resolved (such as how m u c h information is needed to
make the decision, and whether a manager has enough to make i t autonomously or needs
others to be involved). According to V r o o m , i n each such combination the best results w i l l
follow from the adoption o f a certain k i n d o f strategy (such as taking the decision oneself
after gaining advice from staff). Even greater similarity w i t h consequentialism may be
seen in Vroom's account o f career motives, w h i c h has been elaborated to become the
original version o f the expectancy theory o f motivation i n general. V r o o m ' s version o f
expectancy presented a decision as a choice between alternatives, each o f w h i c h w o u l d be
evaluated in terms o f what outcomes i t led to and how far each o f those outcomes contrib-
uted to a specific property. So the decision w o u l d be made i n favour o f w h i c h option had
the greatest total amount o f that property when a l l its outcomes were summed together.
This similarity is striking, as i t almost repeats verbatim one f o r m o f utilitarianism.
However, it must be borne i n m i n d that this is a theory not o f ethics but o f motivation and
choice, one for which there is significant and substantial evidence collected f r o m field
research."" Having said this, i t puts a finger on a couple o f clear pragmatic advantages that
consequentialism has over other approaches to ethics, namely that managers can use i t
easily to choose between alternatives, and that i t is easily comprehended by someone w i t h
a basic business knowledge.
Problems with consequentialism

However, there are several weaknesses w i t h consequentialism. The main weakness o f this
approach is the failure to adequately explain what counts as the basic value against w h i c h
all actions are to be evaluated. We have seen that happiness and pleasure are difficult to
explain properly. No more straightforward is the concept o f satisfaction - one traditional
counter-argument to this (stemming from Plato) is the choice o f whether y o u w o u l d prefer
SACRIFICES F O R T H E G R E A T E R G O O D
One implication o f consequentialism already alluded to is the idea o f sacrificing one party's interests for
the sake o f the greater good. This happens often in business - laying o f f some staff so that a f i r m can stay
in business, for example. B u t how far can this go? A t what point does sacrifice become unacceptable?
to be a satisfied p i g or a dissatisfied p h i l o s o p h e r ? T h e ultimate degeneration o f the use

of satisfaction as the key value i n utilitarianism is in the classical possessive individualism
that states that whatever an individual desires or seeks is thereby a source o f satisfaction
and therefore relevant to the ethical evaluation o f actions. On this view, utilitarianism
w o u l d become no more than a calculation o f wants.
A second problem w i t h consequentialism is that, i n parallel w i t h deontology, it can have
its o w n fanatics, for this is the view that 'the end justifies the means'. I n other words, i f an
action w i l l lead to a justifiable end then i t is itself automadcally jusdfied, even i f i t has
undesirable consequences o f its own.'** So, for example, i f a business needs to resolves a
trade union dispute, and finds that the quickest way is to blame a certain manager and sack
them (perhaps even when they are i n fact innocent o f any wrongdoing) then this w i l l be
justified i f it succeeds, for the hardship o f the individual manager is more than offset by
the success o f the business and the securing o f wages by the workers returning to work.
Yet a third issue is a whole raft o f counter-examples over consequences and their dis-
tribudon. One example o f this is the gruesome idea that a medical firm could save many
lives by taking one healthy child and butchering it for spare parts - thus saving perhaps
many lives for the sake o f one sacrifice. Clearly no one could accept such a move, though
it w o u l d appear to be right under utilitarianism. Another type o f objection is that i n some
cases the arithmetical summation o f satisfaction may simply not w o r k - as Raimond Gaita
puts i t , how to diff"erentiate between a b o m b that kills one m i l l i o n people and a bomb that
kills seven m i l l i o n . " O f course the latter is worse than the former, but i n fact both are so
utterly dreadful that one could never simply say that one is 'better' than the other, as if
choosing the smaller bomb rather than the larger is morally O K .
To sum up, consequentialism, particularly i n its utilitarian version, is likely to be famil-
iar to many business people as i t has resonances w i t h models i n decision m a k i n g (as well
as economics). I t provides a superficially straightforward method for m a k i n g choices,
though underlying this are serious difficulties i n identifying what is valuable absolutely. In
addition, the approach encounters several kinds o f counter-example that suggest that ethic-
ally right acts have some degree o f egalitarianism i n the distribution o f outcomes.
JUSTICE A N D RIGHTS-BASED THEORIES:

EVALUATING C H O I C E S I N TERMS O F T H E I R
SOCLAL IMPACTS
It is somewhat artificial to put together approaches to ethics based on rights and on justice,
as these are really quite distinct approaches. However, they share certain features, i n par-
ticular both having a more politically focused perspective on ethical choices, as w e l l as the
CHAPTERS THEORIES O F ETHICS 63
related aspect that they both place emphasis on long-term, social outcomes o f choices
(rather than the calculation o f immediate results envisaged by many consequentialists).
The corollary of the second o f these points is that these theories move away from i n d i -
vidual actions towards wider policies and strategies - the emphasis being therefore less on
individual choices and more on broader trends i n decisions.
Rights
First, what might be meant by an 'ethics o f rights'? F r o m the outset i t must be recognized
that what is meant here are not legal or political rights, w h i c h are enshrined i n the constitu-
tions and systems of law i n each nation-state. N o r even is it meant to refer to moral rights,
for these are essentially an alternative formulation to duties that may be underpinned by
an\e of several different ethical theories. Rather the term here is intended to refer to a
much more evasive concept - the idea o f human rights. I n other words, the idea that there
are some rights that people have solely by virtue o f their being human.
Before we turn to what such rights might be, we need to consider a more basic question:
what does it mean to say that someone has a ' r i g h t ' to something? H o w does having a right
to a certain amenity such as freedom o f speech differ f r o m simply saying that it is right
that a l l people enjoy such freedom? What makes it a rightl
A parallel with political rights w o u l d suggest that i f someone has a human right to x
then t h e y are justified in taking specific steps to assert that right, for example by acting i n
a manner that assumes that this right exists, or by seeking to use decision processes such
as state legal apparatus to enforce their right. W h i l e this is a useful analogy, and while
indeed there have been many legal and quasi-legal attempts to make human rights more
Hke political rights,-" the fact remains that someone w o u l d have a human right to x even i f
no legal or social system i n the w o r l d acknowledged this. Indeed many o f the most acute
dilemmas in corporate ethics occur where a f i r m operates i n a country in w h i c h a funda-
mental human right is denied by the legal system o f that country (for example where a
country prevents one sector o f the population from participating freely i n political pro-
cesses, or suppresses a particular religion).
S h a w - ' identifies four useful properties o f human rights, as indicated i n the accom-
panying text box. However, these describe how the concept o f human rights works - they
do not define exactly what a right is. Perhaps the easiest way o f t h i n k i n g o f rights is to
go b a c k to the Aristotelian idea that a human being has a natural state o f excellence,
and therefore human rights are those amenities that enable someone to attain such
i a condition.
SHAW'S PROPERTIES OF HUMAN RIGHTS
• Universal application - everyone has the same human rights.

• Equality of application - everyone has the same human rights to the same
extent; there are no individuals w h o are 'more equal than others'.
• Non-destructibility of rights - y o u cannot sign away human rights, nor can any
other party negate them; we have such rights i n perpetuity.
• Independence of social or political institutions o r practices - we a l l have
human rights irrespective o f what any or all governments, organizations, political
parties or social institutions or traditions include or exclude.
In this discussion an important distinction to be drawn is that between negative and

positive rights. Negative rights are those that release the individual from restrictions, such
as the right to be free o f religious persecution, or the right to be free to express one's polit-
ical beliefs publicly. Positive rights are those that indicate benefits that each individual can
expect from society and governments, such as rights to education or healthcare.^^ H o w far
these create obligations for governments, how far for c i v i l society organizations, and how
far for corporations is a substantial matter o f political theory. But what is clear is that an
ethics based on the concept o f human rights developed i n this way is not addressed simply
to corporations and their employees i n the manner that, say, deontology or consequential-
ism is. For the latter approaches to ethics apply in the same manner whether decisions are
taken by individuals, firms or regulatory bodies. W i t h the matter o f rights a decision made
by a corporation has to take account o f what actions are taken by relevant governments and
c i v i l society organizations. I n a country where healthcare is not provided or supported to
any great degree by government actions, then a corporate decision to offer free healthcare
to its employees is a major contribution towards the fulfilment o f their human rights. I n a
country where there is substantial free healthcare publicly available then the same corpor-
ate act has far less ethical significance.
This argument, however, applies more obviously w i t h positive rights than w i t h negative.
The latter, involving issues such as freedom from harassment, or freedom from intrusion
on private personal life, can be more straightforwardly applied to corporate action without
consideration o f the behaviour or policies o f governments. The obligation for corporations
to respect privacy, or to provide a reasonable degree o f personal safety i n the workplace,
for example, are more closely tied to the nature o f the transactions companies involve
themselves i n , w i t h employees, customers and other stakeholders, than positive rights,
w h i c h relate more closely w i t h national social policy.
It should be clear that attention to rights is a key plank o f much o f corporate social re-
sponsibility, especially i n the manner i n w h i c h corporations based i n affluent northern and
eastern developed countries operate i n poorer economies i n the south. I t is not clear, how-
ever, that an ethic based on rights, negative or positive, can fully encompass the range of
duties and obligations that are c o m m o n l y expected o f a corporation. For example, the
expectation that a corporation should provide w o r k that is developmental for employees,
avoids drudgery and contributes to an individual's personal fulfilment, does not seem to be
in any way a right. A n d while this is not universally accepted as an obligation, it is cer-
tainly accepted by some.^^ Given that it is at least arguable that this is not a human right,
then i t seems that there are some obligations for organizations and managers that are not
based on human rights. So human rights appears to be an important but incomplete basis
for the ethics o f business.
Despite this, it is equally clear that the acceptance o f certain potential benefits as human
rights does create some obligation for organizations, as already considered i n earlier chap-
ters on corporate social responsibility, and as w i l l be considered at further length i n later
chapters.
What this underlines again is the intimate linkage between business ethics and corpor-
ate social responsibility, conceived o f as distinct aspects o f management action and o f the
study o f business. W h i l e ethics at first sight, and as presented in the Introduction to the
book, is primarily concerned w i t h individual actions and choices, and corporate social
responsibility is correspondingly conceived o f i n terms o f the overall impact o f corporate
behaviour on social fabric, we continue to see connections between the more local deci-
sions made by managers (and w h i c h might be more properly regarded as ethical issues)
and broader policy and strategic issues that w o u l d naturally sit more comfortably within
corporate social responsibility.
CHAPTERS THEORIES O F ETHICS
In parallel with the discussions o f virtue ethics and consequentialism, there is naturally
a potential dispute about w h i c h specific benefits should be regarded as a human right, as
opposed to being simply desirable i n some weaker sense. The fact that there is likely to be
variation across cultures but also across political ideologies does not diminish the import-
ance of the concept o f human rights, but i t does underline the difficulties o f applying i t i n
concrete situations.
Similarly, there are also issues concerning conflicts o f rights: the right to free expres-
sion of political views is often cited as a human right, but what i f this conflicts w i t h , say,
the right to be free from discrimination on the grounds o f sexual orientation, as when one
employee in a workplace expresses critical views about gays and lesbians? Or what o f the
conflict between the right o f employees to enjoy personal privacy (e.g. when m a k i n g
personal communications by telephone or email) and the rights o f customers to expect
financial details used to make payments for goods or services to be kept secure. O f course
these are soluble i n different ways. B u t the point is that the resolution is not simply 'read
off' from a definition o f human rights, but represents an additional element to the
theory
One potential addition is the concept o f proportionality.^" This is the idea that i t c o u l d
be justifiable that human rights may be ethically violated, where there are cases o f con-
flict between them, i n proportion to the seriousness o f the issue under consideration.
Thus someone w o u l d be justified i n eavesdropping on employee's personal phone
calls if the damage done by not doing so were to seriously threaten the security o f
the business - say i f there were some apparent evidence that customers' bank details
were being leaked to t h i r d parties. The p r o p o r t i o n involved here m i g h t be that i t w o u l d
be reasonable to eavesdrop on individuals w h o had access to such data, and for a period
during which the suspicion remained that customers' rights m i g h t be violated. I t w o u l d
not, however, justify a blanket assertion o f the company's right to access a l l and any
personal communications.^'
Turning to the role o f justice as a theoretical basis for business ethics, we see again the
balance between organization-specific and society-wide issues, and the interplay between
corporations and governments i n terms o f their provision and responsibilities. The close
connections between justice and rights, as w e l l as the linkage between justice and the
operation of state legal processes, means that there is a strong l i n k w i t h political concepts.
On the other hand, i t is also clear that obligations based on justice apply to corporations
and other organizations at least as much as they might do to individuals.
Justice
lusdce has been debated since the time o f Socrates, w i t h many different interpretations
having been proposed, though i n m o d e m times i t tends to be equated w i t h the idea o f the
fair and equal application o f laws and moral codes and rules. However, too close an exam-
ination of this can suggest its o w n difficulties. 'Fair' seems to indicate that individuals
receive what they deserve, while 'equal' means that all get a comparable share o f social
benefits and goods. W h i l e this is only an apparent problem ( i n practice fairness is usually
explained as all members o f society receiving an equal opportunity to partake o f available
social benefits) i t points up that justice is not to be easily explained away i n terms o f more
basic concepts.
Concepts o f justice are often differentiated on the basis o f whether or not they refer to
processes or outcomes. The former (known unsurprisingly as procedural justice) points to
how laws and organizational rules operate, and how they ensure that all members o f a
given institution are treated equally (and thus w i t h equal degree o f fairness) by such rules.
JUSTICE A N D S E N I O R MANAGERS' R E M U N E R A T I O N
A common argument made i n favour o f senior managers being treated differently from other organizational
members is that they often have to devote a greater proportion o f their life to their j o b , can often run
substantial personal career risks depending on the kinds o f decision they make, and by their actions can
often add - or subtract - a huge amount o f value to (or from) the organization. Hence, many private comp-
anies w i l l pay their most senior executives percentage salary increases w e l l beyond those o f other staff,
while public sector organizations may allow senior staff access to m u c h more generous benefits than other
employees, including 'golden hello' and 'goodbye' starting and termination pay premiums, enhanced
pensions and privileged expense allowances.
H o w far is this compatible w i t h principles o f natural justice? H o w far can this be justified i n terms of
equality, fairness or deservingness? H o w w o u l d y o u present your position to a group o f chief executives
who have themselves benefited from such arrangements and practices?
The j u s t treatment o f employees, for example, requires that all are subject to the same set
of organizational regulations, and that exceptions are not made i n favour o f say, more
senior employees.
In contrast, justice focused on outcomes is often referred to as distributive justice (i.e.
the justice o f how social benefits are distributed to all). I t is impossible to discuss distribu-
tive justice i n any detail without venturing into substantial issues o f political theory, and
thus o f political ideology. This is often overlooked i n texts on business ethics and corporate
social responsibility, where issues are presented as i f i n a politics-free environment, as if
they w o u l d apply no matter what the dominant political ideology. Unfortunately this is a
serious oversimplification o f the basis o f distributive justice. O f the many versions o f this
concept, we shall very briefly consider three: a libertarian approach, an approach based on
the idea that society is a k i n d o f contract between its citizens, and a radical approach based
on the idea that there are distinct and opposing groups i n society.^'
The libertarian approach sees distributive justice as no more than the outcomes result-
ing from procedurally j u s t operations. The main m o d e m proponent o f this view, Robert
Nozick, takes lawful possession o f property as the primary feature o f human society, and
transactions are evaluated i n terms o f how lawful are the transfers o f property and value
between individuals. This is clearly a strongly free-market view o f human society, and
given that no nation currentiy operates i n this manner, i t is clear that there is as much as-
piration here as analysis o f what is right or w r o n g . W h i l e there is much that can be said in
favour o f this approach, i t is clear that societies exist w i t h quite differing ideas about what
counts as private property and what counts as public amenity. Consider j u s t t w o examples.
First, the collaborative project o f academic learning, dating back over 2000 years in
Europe and possibly longer i n parts o f Asia, relies on the idea that knowledge is a public
amenity, not owned by its originator or sponsor. Once knowledge is produced, i t is pre-
sented to the academic c o m m u n i t y - w h i c h has been global i n nature for more than lOOO
years, i n v o l v i n g scholars f r o m European, Arabic, Chinese and Indian traditions - where it
is critiqued, developed, extended and adapted as far as is intellectually valid, all o f which
is open to the public, and from w h i c h the public may develop technologies and systems of
social organization and production. I t w o u l d o f course be open for scholars to lay claim to
ownership o f the knowledge they produce - as, for example, some A m e r i c a n researchers
CHAPTER 3 THEORIES O F ETHICS 67
have attempted to 'copyright' genetic coding, by claiming the tests used to identify D N A
strings as intellectual property. B u t this is simply not how most academic knowledge has
worked for many centuries.
A second example is the varying approaches to land adopted by different pre-industrial
societies. There are as many traditions that see land as a c o m m o n amenity to be stewarded
by its current occupants" as there are those w h o regard land as property to be taken and
held for private benefit. O f course, the libertarian might write the former o f f as not being
just societies at all, but this w o u l d be a strange conclusion, given that i n these communities
land is made equally and freely available to all who are deemed citizens. So the libertarian
approach is not a true reflection o f what all different societies actually regard as just dis-
tribution, and arguably it can be seen as an expression o f a m o d e m capitalist ideology.
The social contract approach is best typified by the highly influential views o f John
Rawls. Summarizing brutally, Rawls suggested that we should try to imagine society as i f
it were today to arise from nothing; further, he suggests that we imagine that no one actu-
ally knows what position they w i l l occupy i n society, from the lowest to the highest - he
talked of each of us making the choice o f our social position under a ' v e i l o f ignorance'.
In such a situation, what w o u l d make society as fair (for Rawls this is virtually equated
with just) as possible? Rawls turns this question around, however, and actually asks - what
would each of us do to try to get as good a result for ourselves as possible, given that we do
not actually know what position we w i l l occupy i n this brave new world? Rawls talked o f
this as a 'veil o f ignorance' - a lack o f knowledge about one's specific position i n society.
Based on this question o f self-interest, each o f us, Rawls claims, w o u l d choose a society i n
which the fate o f the lowest was tolerable (for w h o knows w h i c h o f us w o u l d actually end
up having such a fate). A just society, then, for Rawls, is one where the worst position is
still morally acceptable. The other side to this is that i f a society exists where we regard
the fate of its lowest members as intolerable, then that alone makes i t unjust.
There are faint echoes o f Kantianism i n this argument, notably the idea that each o f us
will judge what is a just society on the same basis - reflecting Kant's view that a rational
end for one human being is a rational end for any. B u t there is also a reflection o f conse-
quentialism in the focus on the idea that what is right is measured i n terms o f society-wide
outcomes.
Criticisms o f Rawlsian social contract theory have focused on several areas. One is the
sheer implausibility o f the hypothesis - we do not live i n a primitive non-social situation
and therefore the idea o f a choice is deeply misleading. Rawls w o u l d counter this by argu-
ing that such a thought experiment helps us not to constmct a new society but to under-
stand what we mean when we say this society is fair or not. Perhaps a more difficult
argument is the objection that here, i n analogous fashion to Nozick, there are social as-
sumptions built i n to this approach, masquerading as analytic concepts. For the very idea
of what is a tolerable life, and whether we w o u l d choose it or not, is a presumption that is
ETHICS A N D Y O U
RAWLS I N PRACTICE
If faced w i t h the ' v e i l o f ignorance' test, what w o u l d be your bottom line? W h a t k i n d o f life w o u l d be the
minimum that you could regard as acceptable? H o w far do y o u think this w o u l d be shared by others?
What does this say about Rawls' argument?
PART 1 FRAMEWORKS
not demonstrated even i n developed economies: 'give me liberty or give me death' is an

oft-quoted phrase that undermines the idea o f what is tolerable i n material terms by sug-
gesting that some aspects o f life are beyond measurement. I n general, political opposition
to repressive regimes often involves individuals sacrificing far more than they, as individu-
als, w o u l d gain f r o m the political freedoms they seek. So 'a tolerable l i f e ' is not easily
measurable. Further, w h y should we use self-interest as the basis for defining a society,
when i t is clear that i t is not the universal basis for choices and decisions? Indeed, a latter-
day Kantian, Thomas Nagel, has argued that all decision m a k i n g that deserves to be called
rational is necessarily altruistic in nature.^*
The final version o f distributive justice to be mentioned, rather more briefly, is that of
K a r l M a r x . M a r x i s m is based on an elaborate model o f society comprising opposed social
groups or classes, economies that gradually become ever more unstable over the decades,
social ideas and philosophies that build up as a reflection o f the material relationships
between the various classes, especially on w h i c h class is dominant at any one time. It is
also notorious as having been used - some w o u l d say misused - as the basis for communist
regimes in eastern Europe i n the 20th century, now discredited and replaced w i t h market
systems. However, w i t h i n M a r x i s m is also a vision o f a certain k i n d o f distributive justice,
expressed i n the dictum 'from each according to their abilities and to each according to
their needs'. W h i l e currently this view is not much seen i n its pure form, it underpins (as
w e l l as classical communism) mixed economdcs, the idea that market economies need also
to incorporate some degree o f welfare i n order to ensure that the least w e l l - o f f still enjoy
a m o d i c u m o f social support adequate to enable them to participate i n the economy (by the
sale o f their labour power in employment) so that they can generate income to acquire at
least some o f the benefits o f m o d e m economic production.
But while this finds some reflection i n national social policies, i t is a far cry from the
idea o f justice to be found i n organizations. True, some corporates have H R policies that
take account o f specific needs o f certain groups such as some categories o f disabled work-
ers (indeed in the E U this is required by l a w ) . B u t these tend to be exceptions to the rale,
w h i c h is that needs and abilities are elements that are traded on the labour market (not
exactly a free market given that on one side the individual needs to w o r k to live) and there-
fore subject to market conditions and forces, especially availability, demand and price.
M a y b e M a r x w o u l d simply say that this is another manifestation o f the unjust nature of a
market or mixed economy, but for us, l i v i n g i n such economies, the more pragmatic
answer is that his approach to justice is not a model for our times, however useful some
aspects o f it may be.
This discussion o f rights and justice has been at greater length than earlier theories,
partially because i t incorporates several contrasting elaborations, and partially because it
continues to demonstrate the integration between the ethics o f individual choice and the
obligations o f corporations to act responsibly. What we have seen here is that w h i l e rights
RAWLS APPLIED T O O R G A N I Z A T I O N S
To what extent can we apply Rawls' theory to organizations, and treat them as an analogue o f societies as
a whole? A n d i f we d i d do this, how far could this go: w o u l d or should senior managers modify their pack-
age o f rewards so that even the worst j o b i n the firm w o u l d be acceptable to all?
CHAPTERS THEORIES OF ETHICS 69
theories and theories o f justice focus on important fragments o f the way we think about
ethics in business, they represent neither effective tools for decision making (being too
broadly focused on society), nor do they accurately reflect or describe the way we do actu-
ally think about the morality o f business.
CULTURAL RELATIVISM
have already seen allusions to cultural variations on ethical concepts i n earlier sections,
owever, this has also been developed into a full-scale theory o f ethics i n itself. Put i n its
ost pointed terms, cultural relativism is the idea that the values embodied i n different
itures can only be understood i n their o w n terms. This indicates that all ethical positions
eed to be understood as arising out o f dominant cultural assumptions and styles o f think-
ing and acting. Therefore, no practice specific to a culture can be validly critiqued from
the point of view o f any other culture. The importance o f this view for managers is that the
Towth of the global dimensions o f many businesses has led to many hitherto 'local' busi-
ness practices now acquiring a global dimension.
hi a discussion o f culture and management, one has to bear i n m i n d the dual nature o f
this term: as indicating the dominant set o f customs, perceptions and practices or a defin-
able national or ethnic group i n society, or as referring to the internal idiosyncratic style
of 21 particular business ('the way we do things round here'). I n general, discussions o f
cultural relativism begin from a presumption that each identifiable national or ethnic social
unit has some right to follow its own set o f practices and customs.^' However, no such right
is generally seen as attaching to organizational cultures, even though these can often oper-
ate almost as a microcosm o f the wider society. What this suggests is that cultural relativ-
ism is a political concept at root, rather than an organizational one: i t rests on an acceptance
of the rights of cultures to determine their o w n ways o f l i v i n g , while not accepting that
organizations have quite the same k i n d o f right.
Taken to its extreme, cultural relativism w o u l d appear to suggest that any defined ethnic
or national group can rebut any critical ethical assessment made by an 'outside' party.
While this is rarely encountered, the real question is how far such a view may be taken?
What are its limits? Many writers'" distinguish cultural variations i n practice from varia-
tions in principle. Different customs between national cultures are impossible to ignore
and can affect almost every aspect o f life: eating, clothing, social rituals, how personal
reladonships develop, approaches to authority, conduct o f family life and many other
examples. However, it is not a simple matter to separate out customs that are 'merely'
practice from those that betoken a deeper issue o f values. The value element may be o b v i -
ous in matters such as the treatment o f death or the conduct o f family life. B u t it is not easy
to identify other features o f social customs that carry no element o f value w i t h them. Few
social phenomena are as simple as the decision whether to drive on the right or the left-
hand side of the road. Clothing, for example, expresses assumptions about the value placed
on a range of demographic elements by a society, including age, gender differences and
professional standing.
National customs reflect social assumptions. So, to take another example, a tradition o f
hospitality to visitors from abroad may demonstrate a value for supporting and helping
strangers, for instance. Customs, therefore, such as giving presents to a distant acquaint-
ance on their visit to one's country, or inviting them to your home, or offering to accom-
pany them on social events while they are visiting the country, all reflect this sense
of value.'' This is more than simply a matter o f recognizing that for some important
phenomena there are different views - i t may be a question o f what people actually count
as valuable or not. I t is not possible to separate out the value-neutral aspects o f the different
customs relating to hospitality i n different national cultures, from the value-dependent
aspects. This can mean that what matters and has significance for one culture may seem to
be trivial to another.
Yet a further issue is that i n some national cultures there are aspects that cannot even
be properly represented i n others. The contrast between European and Japanese concepts
relating to respect for others is often expressed i n the English language as the avoidance
of 'losing face'. However, the Japanese concept is richer than this, and connects w i t h val-
ues such as respect between generations and acceptance o f social unitarism, w h i c h are not
implicated i n the 'western' idea. So i t is misleading even to talk about western and
Japanese concepts o f 'losing face', for the latter is not the same thing, even though i t over-
laps w i t h the concept o f 'face' substantially. This should provide a major note o f caution
in the interpretation o f the w e l l - k n o w n models o f dimensions o f national culture developed
by Hofstede'^ and others: arguably, these are measures o f how far non-European cultures
compare w i t h European ones, not independent culturally neutral methods o f analysing
cultures.
A l l this emphasizes that there are differences between national cultures. B u t it does not
help us decide when i t is legitimate to question values o f individuals from other cultures,
and when this is inappropriate. The theoretical extreme - pure cultural relativism - would
have it that no evaluation is possible, and that no matter what an individual or an organiza-
tion based i n another culture does, we are not justified i n criticizing them. However, what-
ever the theoretical arguments may be, i t is clear that people do actually evaluate the acts
of those from other cultures, so i n some sense we do regard the ethics o f different cultures
as comparable, to a degree at least.
M o r e importantly, the theoretical extreme takes a narrow view o f a 'culture' as being a
fixed terrain that has clear boundaries that separate i t from other cultures, so that someone
is unequivocally ' i n ' one national culture to the exclusion o f others. A s A m a r t y a Sen has
argued forcefully," human beings are members o f a w i d e range o f different kinds o f social
groupings, each w i t h their own allegiance, and each o f w h i c h , therefore, may be regarded
as a legitimate part o f their identity, and therefore have a good claim to be reflected i n their
values and ethical attitudes. A n individual may be b o m i n one country, w i t h parents from
another country, they are male or female, they have a certain position on religion, they may
be members o f a certain profession, and so on. Each o f these demographic features o f the
individual w i l l have some bearing on their values. So they cannot be simply seen as ' i n '
one culture to the exclusion o f others.
One can take this further and point to the phenomenon often characterized as 'accul-
turation' - the tendency o f individuals to modify attitudes drawn from their original culture
when i n foreign environments. Put simply, we often change our attitudes when placed in
novel situations. Further, whole national cultures also gradually change as their members
mingle w i t h others: for example, the polarized approaches to the roles o f w o m e n i n society
represented w i t h i n European (primarily secular) cultures as opposed to those o f some
M u s l i m cultures evident i n the second half o f the 20th century have begun to slowly erode,
so that i n many o f the more economically developed M u s l i m countries there is a growing
flexibility i n attitude towards women that encompasses some professional and personal
independence from husband or father, while i n Europe there is a corresponding growth in
recognition that different w o m e n may choose their o w n lifestyle, even ones that may in-
volve apparently less liberation than the feminist writers o f the 1960s and 1970s envisaged.
Then, o f course, there are the directly exported cultures o f migrant populations: so that a
great deal o f modification and combination o f cultural elements has occurred w i t h the
CHAPTERS THEORIES OF ETHICS 71
THICS A N D Y O U
LTURE AND T O L E R A N C E
agine you are the training officer for a large global business. You have been asked to run a development
gramme intended to build strong team relationships as a part o f a major new change initiative for wider
= global expansion of the business. However, y o u find that the group y o u are training comprises a wide
grange of different ethnicities, and many have very strong attitudes, w h i c h , while not exactly racist, i m p l y
isubstantial intolerance towards the norms and values o f people from other ethnic groups. The company
code of ethics states clearly ' . . . we should show respect for all our colleagues, regardless o f race, nation-
ality, religion, gender, ability, orientation or other major demographic or biographical features.'
How far are you justified i n attempting to modify the values o f these members o f staff, and how far
uld you aim solely to restrain the more explicit expressions o f intolerance?
substantial expatriate communities o f the w o r l d - the Chinese i n Malaysia, for example,

the Hispanic populations o f the United States, or the 'Britishtanis' (Pakistanis w h o have
moved t o the U K and become integrated into British society).
As a principle o f caution i n how we debate the values o f others, cultural relativism is a
useful tool. As an overall theory o f ethics, however, i t is not defensible. The simplest
counter-argument echoes one advanced earlier w i t h respect to egoism; i f cultural relativ-
ism \e true then we would never be justified i n expressing any kind o f critical comment
on the values o f those whom we perceive as being from another culture. The sheer fact that
« e can express such evaluations o f the values o f others demonstrates that, even though
there may be substantial cultural aspects o f values that require greater understanding, the
values o f others are open to us to discuss, debate and even ultimately to share.
POSTMODERNITYAND CRITICALITY
IN ETHICAL T H E O R Y
The classical theories discussed i n the previous sections have been presented as arising out
of different points o f emphasis i n the process o f making a decision, be this the character
of the individual making the decision (virtue ethics), the k i n d o f motive prompting the
decision (deontology), the outcomes o f the decision (consequentialism), or the social i m -
pact of the decision (justice and rights). I n contrast to classical theories there is a growing
body of thought that looks less at an aspect o f the decision-making process and more at
the social context w i t h i n which a theory itself has been developed. This k i n d o f approach
arose during the 20th century, and is often associated w i t h the movement i n social studies
icnown as 'critical theory'. D o not be misled by the label for this approach: all theories that
are of any value w i l l inevitably include some element o f critical evaluation. B y the use o f
the term 'critical' is intended the idea that a theory is self-critical about its social origin.
So such approaches do not just focus on and provide some k i n d o f analysis - i n our case,
about what is right or wrong when taking business decisions. They also take account o f
how our present society allowed such a theory to come about and be sustained by discus-
sion and analysis. I n other words, this approach looks as theories as social phenomena
needing an explanation o f their social existence as much as a justification o f their key

statements.
Critical theory is associated w i t h a number o f writers, and i t w o u l d be a great oversim-
plification to try to isolate a single source o f the idea. I t is often associated w i t h a political
ideology whereby understanding the social origins o f theories helps emancipate individu-
als by showing them how even quite pure categories o f thought (such as ethics) may be
influenced by social traditions and power structures.
There are many manifestations o f this trend o f thought, including ones that look at the
impact o f social inequalities on theory,'" and others that look at particular ways for indi-
viduals to achieve freedom.'^ We shall look very briefly at t w o o f these - feminist ethics
and postmodern ethics.
Feminist ethics is, as the name suggests, based on the idea that ethics i n general has
been developed w i t h i n a male-dominated society, and reflects male-oriented perceptions,
stereotypes and i m p l i c i t beliefs that elevate certain aspects (such as autonomous choice)
over others (such as interpersonal sensitivity). Annette Baier has underlined this argu-
ment, by pointing out that the transactional approach behind most theories o f moral
choice only works by m a k i n g unrealistic assumptions that all relevant parties are in an
equal position w i t h respect to choice, i n terms o f knowledge, opportunity and power"
This critique leads to what Carol G i l l i g a n has called the ethics o f care," where the key
concerns o f ethics are modelled i n terms o f care for others, relationships, collaboration
and shared responsibility, as opposed to the (male-oriented) approach that sees the key
ethical problem as being about how a free, potent i n d i v i d u a l can arrive at the right, inde-
pendent choice w h i c h they can put into practice and for w h i c h they can take personal
responsibility.
One way o f looking at this is that what we have here is a development out o f virtue eth-
ics, one which takes some o f the traditional virtues - such as kindness and consideration -
and draws out the fullness o f their implications for ethics. L i k e virtue ethics as a whole, this
focuses less on the phenomenon o f ethical choice and more on the nature o f those who
choose. However, unlike virtue ethics, this is a distinctively critical theory (in the sense
outiined above) i n that the approach demonstrates one set o f traditional social frameworks
w i t h i n which ethical theories are constructed, as well as indicating how a greater under-
standing o f the idea o f an ethics o f care helps individuals to recognize how far their thinking
may be dominated by stereotypes encouraged by those social frameworks.
There are several ways i n w h i c h this approach may be applied to ethical issues i n busi-
ness. I t is not a question o f the numerical fact that most senior managers i n organizations
tend to be male, but rather that organizational concepts themselves are framed in male
terms (and often i n militaristic language - for example 'strategy', 'campaigns' and 'chains
o f command' - all derived from military leadership).'* Furthermore, the economics of
business encourages a transactional approach to many aspects o f w o r k - for example, the
idea o f employment as a contract where one free individual offers the use o f their labour
power i n return for financial and other benefits is often a gross fictionalization o f realities
where opportunities to change from one employer to another may be highly limited.
I t is probably misplaced to discuss this approach i n terms o f arguments for or against,
still less to try to come to a summary evaluation o f benefits and drawbacks. Having said
that, i t is not clear how far this is intended as a complete theory o f ethics (whether i n busi-
ness or i n life generally) as opposed to being a critical balance to the dominant ideological
perspective on ethics. Indeed, a feminist position w o u l d probably suggest avoidance of a
direct p r o - c o n orientation to ethical theories. Nevertheless, i t is not out o f place to note
that some contexts i n business - such as whistle-blowing - are less easy to present i n terms
o f the ethics o f care, and rather easier to explain i n terms o f choice.
The other approach to mention i n this context is the less clear but influential perspective
of postmodemism. This view has impacted on a wide range o f different disciplines, includ-
ing sociology, philosophy, and management theory." The essence o f postmodemism is that
the concept against which it reacts - modernism - attempts to solve problems and issues by
rahonality, though in fact this latter concept is itself blind to its role w i t h i n social stmctures.
One writer sometimes seen as postmodem, M i c h e l Foucault, argued that each historical
period h a d dominant ways o f thinking, which he called epistemes, that conditioned what
would b e accepted as valid argument."" Postmodernists w o u l d therefore see the present era
as dominated by an episteme based on the belief that rational processes can answer each
quesdon, and that the application o f these processes can generate as much knowledge and
understanding as is necessary to function successfully. The flaw i n this, they w o u l d argue,
is that reality often resists the simplification required by rational modelling. A s a leading
postmodem ethicist, Zygmunt Bauman, puts it, ' H u m a n reality is messy and ambiguous -
and so moral decisions, unlike abstract ethical principles, are ambivalent.'"'
T h i s approach is less easy to apply i n any simple manner to business. M o s t business
activity is indeed based on at least a modified idea o f rationality - as being the best tool
around for solving business problems, even i f it is not perfect i n all cases. M o s t technolo-
gical innovation (upon which modern societies depend so very heavily) has been generally
explained in terms of the application o f rational methods o f research and development. So
the postmodern argument is an argument against the current social conditions o f production
of goods and services. Perhaps many postmodemists w o u l d welcome this; however, i t is a
barrier t o the use of postmodem ideas i n establishing what it is right to do i n business.
Related loosely to feminist ethics and to critical theory is the idea o f an approach called
the 'ethics of discourse'."^ This term refers to the creation o f an environment in w h i c h
values and different positions can be expressed and examined collaboratively rather than
in an adversarial manner. Such an approach requires something rather like what i n Europe"'
would be described as a liberal political ideology: acceptance o f the supremacy o f rational
processes as the basis for decision making, encouragement o f openness, tolerance o f
dissent and respect for diversity. This is however not really a theory o f ethics i t s e l f so
much as a view of what k i n d o f context is most conducive to good ethical practice. A s such
we will reserve discussion o f this to later chapters on the organizational context.
So, are these tools to help us make ethical decisions or explanations o f what we do
hen w e make decisions? B y and large they are not especially useful as tools. Feminism
d its related approaches such as race theory or queer theory do present alternative
THINKING C R I T I C A L L Y A B O U T E T H I C S
ORGANIZATIONS A N D E T H I C A L POSITIONS
Critical theory states that ethical theories need to be understood as social phenomena, and that dominant
intellectual positions reflect the general dominance o f certain social groups. Organizations often identify
themselves with certain theoretical approaches, as a part o f their culture. So, many financial institutions
will self-consciously adopt a transactional approach to management i n general and ethics i n particular. In
contrast, in a state social care provider, such as a housing project for people w i t h disabilities, workers may
quite deliberately focus on issues such as rights.
How far is the ethical position o f an organization a part o f its business, and to what extent can or should
it be open to modification?
74 PART 1 FRAMEWORKS
options i n a very broad sense, but they do not help us address specific concrete cases.
Postmodemism is even further away from particular decisions, being a general critique of
the dominance o f rationality i n ethical discussions.
M A K I N G SENSE O F T H E O R Y
Having looked at a range o f theories now, i t makes sense to consider what we have gained
from them. I t is clear that some (such as deontology) can be used as tools to help specific
choices, and i t is equally clear that others (such as virtue ethics or postmodernism) can less
do so. But, as we indicated earlier i n this chapter, i t w o u l d be oversimplifying to the
extreme to isolate particular kinds o f issue and say that one approach w i l l work for one
k i n d o f issue and another approach w i l l help w i t h something else.
On the other hand, business is about making decisions, and therefore theories are only
helpful when they contribute in some way or another to decision making. A theory, however,
can make such a contribution in a way other than simply providing a step i n ethical reasoning:
it may, for example, focus someone on long-term policies and practices, without necessarily
helping with an immediate problem; or it might lead someone to reflect on their behaviour
and integrity, again even when there is no direct immediate action-guiding outcome.
As we suggested early on in this chapter, one way to categorize ethical theories is to
consider their position i n the process o f decision making. Despite its distance from deci-
sion making, it is still possible to relate critical theory to this, i n that i t claims to include
the entire process. Table 3.1 summarizes this.
The value o f considering ethical theories i n this way is that it indicates a potential for
integration o f the different approaches. They are often presented by philosophers as i f they
are i n mutual competition - as i f one o f these is 'the' most fundamental concept and the
others are to be derived from i t . Our position is that while some o f these theories overiap
in some places, they are complementary, and therefore to some extent one can and should
take account o f all o f them. This does not lead to a list o f questions for each o f which one
of these theories is appropriate to provide an answer, so much as a range o f features of
ethical choice and action, w h i c h raise their o w n questions. The bad news for managers is
that any o f these theories could present a challenge when one needs to make an ethical
decision. The good news is that they do not f o r m a mechanical whole that forces one to go
through a pre-defined series o f steps. Rather like strategic models, the skill is in exercising
one's judgement as to w h i c h questions to pay more attention to and w h i c h can safely
receive less. I n the next chapter we look i n more detail at how ethical reasoning works in
specific contexts, taking these theories as given.
T A B L E 3.1 How theories of ethics link together
The character of someone taking an Virtue ethics

ethical decision
The kind of ethical action taken Deontology
The outcomes of an ethical decision Consequentialism
The social impact of a decision Rights theory, theories of justice
The social context that sustains these Postmodernity, critical theory, cultural
theories relativism
SUMMARY
• Ethical theories may be categorized i t i terms o f their focus on particular aspects o f the
process of decision making.
• Virtue ethics focuses o f the character o f individuals and how this may influence action.
• Kantian deontology focuses on the idea o f a duty being rationally based, and thus such
a decision applying equally for all actors.
• Consequentialist theories such as utilitarianism attempt to measure the rightness o f
actions in terms o f the total outcomes they bring about.
• Rights and justice theories look at the social impact o f ethical policies in the long term.
• Cultural relativism asserts that values can only be understood by those w i t h i n the spe-
cific culture from which these emanate.
• Critical theory takes a view on ethical theories as products o f their social context, w i t h
the intention o f liberating actors.
• These theories are best regarded as complementary, raising questions i n their o w n right
but not integrated i n a mechanistic way.
QUICK REVIEW QUESTIONS:
1 What is the principle o f the greatest happiness o f the greatest number?

2 How does feminism critique current business ethics theories?
3 What does Rawls mean by the ' v e i l o f ignorance'?
4 What does the categorical imperative state?
5 How does Aristotle try to integrate the different virtues?
CASE S T U D Y : M I T S U B I S H I A N D F O R C E D L A B O U R
The Mitsubishi Group consists o f over 500 compan- Mitsubishi also holds one o f the best k n o w n
ies employing close to 54,000 people around the Japanese brands at home and abroad.
worid. It is one o f the largest Japanese keiretsus, a In 2003, Mitsubishi Material Corp., a member
cluster o f interlinked companies backed up by o f the Mitsubishi Group, was sued for using forced
cross-holdings o f shares. The first Mitsubishi com- labour i n its coal mines during the Second W o r l d
pany was a shipping firm established i n 1870, but i t War. Similar lawsuits have been brought against
soon diversified into coal mining to ensure access other Japanese companies for forcing civilians and
to fuel that was used i n its ships. Since then, the prisoners o f war to w o r k long hours i n harsh condi-
group has played a central role i n the Japanese tions without compensation or sufficient nutrition.
economy as its businesses have expanded into Mistreatment and lack o f attention on health and
numerous industries including banking, insurance, safety resulted i n a high number o f injuries, acci-
real estate, o i l , paper and car manufacturing. dents and fatalities. The poor w o r k i n g conditions
PART I FRAMEWORKS
were encouraged by the government 'GuideHnes Reparation payments have been a controver-
for Controlhng Imported Chinese Labourers' i n sial issue for Japan. Some companies made cash
which companies were told to give foreign labour- payments to Chinese w o r k unit leaders when
ers inferior clothing, limited medical care, and Japan surrendered, but the leaders d i d not always
primiuve sleeping aM Ssamlavy facilities. The share the money w i t h t h e k team members.
instructions were aimed at curtailing the security Companies also gave out payment vouchers that
risk provided by the presence o f young enemy could be redeemed i n China, but many workers
males on Japanese territory. had difficulties i n cashing the vouchers in the
Japanese companies employed involuntary context o f post-war disorder. Some compensation
labour mainly from China and Korea, though they payments were also made immediately after the
also forced allied prisoners o f war to w o r k i n war as a result o f the Tokyo trials, but only a few
plants and infrastructure projects. I n the lawsuit companies were prosecuted as the focus was on
against Mitsubishi Materials, the Chinese plain- rebuilding the economy. Japanese governments
tiffs accused the company o f operating t w o coal have i n general argued against reparation pay-
mines that forcibly employed a total o f 2709 ments i n reference to the peace treaties negotiated
Chinese labourers. The workers were abducted or after the war. The Japanese interpretation of the
conscripted under false premises i n China and treaties has received support from the US State
brought to Japan where they were forced to w o r k Department. For example, the State Department
i n harsh conditions without pay. According to a has argued that the San Francisco Peace Treaty
government report compiled after the war, the precludes i n d i v i d u a l claims against Japanese
death rate for Chinese workers in one o f the mines companies. However, as an exception to the
was 25 per cent. One o f the plaintiffs i n the case stance o f the Japanese government, the Asian
alleged that he worked 12-hour shifts and was Women's Fund was set up i n 1995 to compensate
beaten for resting, while a rice ball filled w i t h for military sexual slavery o f Korean women dur-
vegetables formed the daily diet. ing the war.
To date, M i t s u b i s h i has not paid compensation D u r i n g the war, the wages o f the forced labour-
to the alleged victims o f forced labour. I n gener- ers were directed to special accounts and later
al, companies i n Japan and Europe have evaded moved to government accounts. They are still held
compensation claims by arguing that they were by various state agencies including the Bank of
compelled by their respective governments to use Japan and regional customs offices. According to
involuntary labour. German companies accepted the Japanese government, poor records make it
responsibility for the use o f forced labour only i n difficult to match the deposits w i t h individuals or
2000 when a foundation aimed at restituting v i c - their heirs. The lack o f records is a result of the
tims o f the N a z i regime and their families was order given by the government after the war to
established by a law enacted by the national par- b u m documentation held on forced labourers.
liament. The German government and more than M i t s u b i s h i has t y p i c a l l y based its defence
6000 German companies consequently provided against compensation claims on the provisions of
funds for the foundation that paid financial c o m - peace treaties and time limits for making repar-
pensation to more than 1.7 m i l l i o n v i c t i m s l i v i n g ation claims. I t has also argued that i t was not in a
i n almost 100 countries. The companies that position to resist a policy applied by the Japanese
donated money for the fund received protection govemment. M o r e recently, i t has denied that any
from further legal action even though the pay- forced labour took place i n its mines on the basis
ments made to the victims were regarded as o f its o w n site reports from 1946.
symbolic rather than reparatory ( € 2 5 0 0 - 7 5 0 0 ) . The relations between China and Japan have
Nevertheless, the law on w h i c h the foundation been negatively affected by the Chinese percep-
was based acknowledges the suffering o f the v i c - t i o n that Japan has not taken sufficient action to
tims and can therefore be seen as a step towards acknowledge and atone w a r t i m e atrocities. Even
reconciliation. though several Japanese governments have apol-
CHAPTERS THEORIES O FETHICS 77
ogized for the treatment o f foreign workers STUDY QUESTIONS

during t h e war, public and private behaviour o f
state o f f i c i a l s has been seen to negate the apolo- 1 A p p l y one theory o f ethics to assess whether
gies. F o r example, annual visits by the former Mitsubishi's position can be regarded as ethical.
Japanese Prime Minister, Junichiro K o i z u m i , to 2 What problems occurred when applying the
the Y a s u k u n i shrine that honours Japanese nation- theory o f ethics to the case? D o these relate to
als i n c l u d i n g 14 convicted war criminals were the criticism presented on the theory?
perceived by the Chinese as symbols o f Japanese 3 Given the position o f the Japanese govemment,
p a t r i o t i s m and militarism. As a result, the Chinese
what should Mitsubishi do to behave ethically?
refused to hold meetings w i t h K o i z u m i . The rela-
tions have improved since K o i z u m i stepped
SOURCES
down to the extent that the Chinese Prime
M i n i s t e r hailed the progress i n December 2007: B B C News 2007. China P M seeks war reconcih-
Prime Minister Fukuda said the spring has come ation, 12 A p r i l . Available from http://www.bbc.
in o u r relations, and after two-and-a-half hours co.uk, accessed 25 M a r c h 2008.
of talks, I truly feel that the spring o f C h i n a - BBC News 2007. China and Japan PMs hail
Japan relations has arrived.' Nevertheless, six progress, 28 December. Available from http://
months e a r l i e r the Chinese head o f state called www.bbc.co.uk, accessed 25 M a r c h 2008.
for Japan to match its apologies for wartime
B B C News 2006. Japan's controversial shrine, 15
atrocities by concrete actions. The feeling is m i r -
August. Available f r o m http://www.bbc.co.uk,
rored i n other Asian countries that were occupied
accessed 25 M a r c h 2008.
by Japan during the Second W o r l d War.
Reuters AlertNet 2007. Germany ends war chapter
Any action by the Japanese govemment and
w i t h 'slave fund' closure, 12 June. Available from
industry, including Mitsubishi, w i l l arrive late for
http://www.alertnet.org, accessed 25 M a r c h 2008.
many of the victims as only about 10 per cent o f
them a r e still alive. Calls for retribution have Schmidt, P. 2000. Japan's wartime compensation:
therefore included plans for foundations that Forced labour. Asia-Pacific Journal on Human
w o u l d grant funds for the descendants o f the vic- Rights and the Law, Vol. 2, 1-54.
tims. Other means o f compensation have also been Underwood, W . 2006. Mitsubishi, historical revi-
discussed. For example, part o f the money from sionism and Japanese corporate resistance to
the German foundation was used to launch social Chinese forced labour redress, Znet, 11 Febraary
programmes among the conmiunities that had suf- 2006. A v a i l a b l e f r o m h t t p : / / w w w . z m a g . o r g ,
fered from forced labour. accessed 20 M a r c h 2008.
NOTES
1. Pritchard (1912).
2. The view that actions are ethically evaluated i n terms of their consequences; a position considered
later in this chapter.
3. Essentially philosophical in tone.
4. Rand (1964).
5. Primarily in his book of lectures on ethics, which is today called the Nicfiomacean Etiiics (Aristotle).
6. See for example Connock & Johns (1995).
7. With one of the liveliest contributions i n this respect coming from Alistair Macintyre (1985), who
suggests that virtues need to be understood, not simply in respect of one conception of 'the good life'
but in relation to the community within which a certain kind of life may be regarded as good.
8. A point brought out by Chryssides and Kaler (1993) pp. 140 ff.
9. For example, an alternative may be found in the views of W. D . Ross (1930).

10. The discussion below is drawn primarily from Paton (1976), to which the reader is referred for further
explanation of Kant's best known ethical views.
11. It is important to recognize that this is not an argument stating that people cannot violate principles of
trust - clearly they do, and sadly quite often. Rather, the argument is that one cannot make a universal
principle that such trust be violated - this is what would break down.
12. Whose extended essay 'Utilitarianism' is still regarded as the clearest introduction to the view - Mill
(1863).
13. A n d potentially highly parochial, i f not even elitist.
14. Mainly in the 20th century - cf. Brandt (1992) - though there were hints o f this approach in some 19th
century treatments.
15. A convenient source for this and Vroom's formulation o f expectancy theory discussed a little later is
Handy (1998), though other standard textbooks on organizational behaviour w i l l also cover these
theories.
16. Though not unequivocal in all respects - see Mitchell (1974).
17. Just in case anyone is in doubt, the presumption is that the life of the philosopher, even when dissatis-
fied, is preferable to living a satisfied pig's life. But maybe one could even argue over t h i s . . .
18. W i t h the important proviso that the means are not so wrong as to outweigh the value o f the end.
19. See Gaita (1982).
20. Two of the best known and most influential, which have been mentioned already and w i l l be discussed
again in later chapters, are the United Nations 1948 Charter o f Human Rights and the European
Union's 2000 Charter of Fundamental Human Rights.
21. Shaw (2005), p. 66.
22. It should be emphasized that the existence o f such rights does not automatically imply a certain kind
of social system - for example i t does not necessarily mean that governments should provide
education or healthcare via public service delivery, supported by taxation. Rather it means that govern-
ments, corporations and other organizations should ensure that such rights are fulfilled in some way
or another. This is quite compatible with a right-wing free-market agenda where rights to equal access
to employment create sufficient opportunity for individuals to accrue personal wealth to purchase
healthcare or education from private providers.
23. A n d , indeed, elements o f this are enshrined i n some legislative systems, such as in The Netherlands,
where explicit protections for employees are built i n to avoid excessive exposure to repetitive opera-
tions at work.
24. Which has been incorporated into certain legislative codifications o f human rights, such as the UK's
Human Rights A c t of 1999.
25. This example relates to issues o f privacy. It assumes that there are not other concerns about staff per-
sonal communications, such as wasting time when work should be done.
26. Origins of the libertarian approach may be found i n Nozick (1974), o f the social contract approach in
Rawls (1971) and the radical approach in Marx (1848).
27. For example, this was observed i n Celtic pre-industrial communities, among some native American
tribes, in several African areas and in the attitude towards land held by native Australians.
28. Nagel (1970).
29. Though there are some intractable differences, such as the difficulty of Europeans, w i t h traditions of
equality and growing uniformity of expectation between the sexes, accepting some Asian traditions
where the two genders have distinct and separately defined roles.
30. For example, see Chryssides & Kaler (1993), p. 8 1 .
31. Crucially, of course, all these impact substantially on business relationships in the modern globalized
economy.
32. Hofstede (2003).
33. Sen (2005).
34. Including certain kinds of feminist studies, race theory which looks at the way in which theories may
reflect racial stereotypes, and so-called 'queer theory' looking at the way in which heterosexualism
influences intellectual thought, to name but a few.
35. Including at the individual level psychoanalysis, and at the macro level ' w o r l d systems' theory
(which tries to move beyond theories that may reflect assumptions closely related to particular
countries or nations to a theoretical basis that is nation-neutral) and some versions o f ecological
philosophy.
36. And, one might add, in terms o f personal commitment to others, both at work and away from work.
Baier (1994).
37. Gilligan (1982).
38. See Simpson & Lewis (2007) for further illustrations of the lack of gender neutrality i n organiza-
tions.
39. Where it is often associated with the critical management studies movement.
40. Foucault (1970).
41. Bauman (1993).
42. Cf Habermas(1990).
43. But not in the United States, where the term has different connotations; and note also that this is
political liberalism, a centre left approach, not economic liberalism, which is right wing i n nature.
REFERENCES
Baier, A. 1994. Moral Prejudices. Cambridge, M A : Harvard University Press.

Bauman, Z., 1993. Postmodern Ethics. Oxford: Blackwell.
Brandt, R, B, 1992, Morality, Utilitarianism, and Rights. Cambridge: Cambridge University Press.
Chryssides, G. and Kaler, J. 1993. An Introduction to Business Ethics. London: Chapman and H a l l .
Connock, S. and Johns, T. 1995. Ethical Leadership. London: I P D .
Foucault, M . 1970. The Order of Things. U K translation: Pantheon Books.
Gaita, R. 1982, Better one than ten. Philosophical Investigations, Vol. 5, No. 2, 87-105.
Gilligan, C. 1982. In a Different Voice. Cambridge, M A : Harvard University Press.
Habermas, J. 1990. Moral Consciousness and Communicative Action. Cambridge, M A : M I T Press.
Handy, C, 1998, Understanding Organisations, Fifth edition. Harmondsworth; Penguin.
Hofstede, G. 2003. Culture's Consequences. London: Sage.
Macintyre, A. 1985. After Virtue. London: Duckworth.
Marx, K. 1848 (original publication). The Communist Manifesto.
Mill, J. S. 1863 (original publication). Utilitarianism.
Mitchell, T 1974. Expectancy models of job satisfaction. Psychological Bulletin,Vo\. 81, No. 12, 1053-1077.
Nagel, T. 1970. The Possibility of Altruism. Oxford: Oxford University Press.
Nozick, R. 1974. Anarchy State and Utopia. New York: Basic Books.
Paton, H. J. 1976. The Moral Law. A n edited commentary including the text of Kant's Groundwork o f the
metaphysic of morals. London; Routledge.
Pritchard, H. A. 1912. Does moral philosophy rest on a mistake? Mind, Vol. 2 1 , 21-37.
Rand, A, 1964. The Virtue of Selfishness. New American Library.
Rawls, J. 1971. A Theory of Justice. Cambridge, M A : Harvard University Press.
Ross, W. D. 1930. The Right and the Good. Oxford: Clarendon Press.
Sen, A, 2005. Identity and Violence. Harmondsworth: Penguin.
Shaw, W. 2005, Business Ethics. Belmont: Thompson Wadsworth,
Simpson, R, and Lewis, P, 2007, Voice, Visibility and the Gendering of Organizations. London: Palgrave,

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THEORIES O F E T H I C S

After studying tliis chapter, y o u should be able to:

• Assess the various roles o f theories and theorizing i n business ethics.

These represent a scale o f intensity. The weakest relationship w o u l d be where a man-

After studying this chapter, y o u should be able to:

• Assess the various roles o f theories and theorizing i n business ethics.

• The personality features that prompt an individual to make a certain choice.

ETHICAL EGOISM AND SUBJECTIVISM

• Exploiting a weak workforce by paying them l o w wages?

to evaluation directly i n terms o f consistency w i t h given virtues. The above discussion i

DEONTOLOGICAL THEORIES: THE ETHICS OE

A related shortcoming o f the universalizability concept is the possibility of fanaticism:

CONSEQUENTL^LIST THEORIES: EVALUATING

Problems with consequentialism

to be a satisfied p i g or a dissatisfied p h i l o s o p h e r ? T h e ultimate degeneration o f the use

JUSTICE A N D RIGHTS-BASED THEORIES:

SHAW'S PROPERTIES OF HUMAN RIGHTS

• Universal application - everyone has the same human rights.

In this discussion an important distinction to be drawn is that between negative and

not demonstrated even i n developed economies: 'give me liberty or give me death' is an

substantial expatriate communities o f the w o r l d - the Chinese i n Malaysia, for example,

needing an explanation o f their social existence as much as a justification o f their key

T A B L E 3.1 How theories of ethics link together

The character of someone taking an Virtue ethics

QUICK REVIEW QUESTIONS:

1 What is the principle o f the greatest happiness o f the greatest number?

ogized for the treatment o f foreign workers STUDY QUESTIONS

9. For example, an alternative may be found in the views of W. D . Ross (1930).

Baier, A. 1994. Moral Prejudices. Cambridge, M A : Harvard University Press.

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