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P H I L O S O P H Y F O R B U S I N E S S ISSN 2043-0736
http://klempner.freeshell.org/businesspathways/
Issue number 49
31st October 2008
CONTENTS
I. 'Coming to Grips With Consulting: the Confucian Ideal' by Tom C. Veblen
II. 'Modern Recruitment Personality Tests: an Ethical Dilemma' by Maximiliano
Korstanje
III. 'Corporate Governance and Ethics: an Aristotelian Perspective' by Alejo
Jose G. Sison, reviewed by Rachel Browne
IV. 'Ethical Dilemmas: a Pathways Program' by Wolfgang W. Osterhage
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EDITOR'S NOTE
The Halloween edition of P4B kicks off with an article by Tom Veblen on the
remarkable relevance of Confucian thought to management consulting. It seems
that business magnates have not a little in common with ancient Chinese
warlords. Confucius would have felt at home at the Boardroom table.
Maximiliano Korstanje offers some cautionary advice on our obsession with
personality testing as a recruitment tool, suggesting that it is not so far
distanced from the discredited pseudo-science of Eugenics.
The game of analogy continues with Alejo Sison's contention that modern
business firms can be likened to Ancient Greek city-states. Reviewer Rachel
Browne expresses a degree of scepticism about this claim from Sison's book
on corporate governance, as well as remarking that Sison's bullish views on
the virtues of self-regulation seem particularly ironic in the light of recent
events.
Pathways contributor Wolfgang Osterhage is one of a small group who volunteered
to be guinea pigs for a new Business Pathways program 'Ethical Dilemmas'. Here
he offers a useful summary of the program, as well as giving his personal
impressions.
I cannot neglect to remark in passing that the main theme of Osterhage's
article for issue 136 of P4B, 'Economic Growth as Part of a Semi-Chaotic
System', is that chaotic fluctuations are the consequence of the inherent
functioning of economic systems based on growth; which offers at least a grain
of comfort in the current pain.
Geoffrey Klempner
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I. 'COMING TO GRIPS WITH CONSULTING: THE CONFUCIAN IDEAL' BY TOM C. VEBLEN
The time had come to think hard about what specifically it would take to
succeed at consulting.
I needed to talk with persons of accomplishment, successful management
consultants who would share with me their insights and understanding; persons
of magnanimity who would speak truthfully and candidly.
No such luck. I couldn't find a single person of stature in the consulting
field who was willing to give me the time of day. Not that they weren't
justified. There are only so many hours in the day and given the quixotic
nature of my quest and the odds of my succeeding, why waste the time?
Plan B took me to the library to find out what had been written about the
field. And there, after some fumbling around, I found Confucius. 'Yikes,' I
thought, 'this long dead Chinese (2,400 year's dead) scholar's counsel is just
what I am looking for.' In fact, he came across to me as the inventor of
management consulting, and though we couldn't talk, he certainly had given his
acolytes an ear full of first class consulting instruction.
Confucius made his mark by mastering the intricacies of writing, the advanced
technology of his day. A precocious student, he chose early to focus his
efforts on linguistics and transcription. His powers of concentration were a
marvel. His unquenchable thirst for knowledge, his ready wit, and his
unassuming manner combined to mark him a scholar with great potential.
A company of master scribes, observing these attributes, invited Confucius to
join them as they journeyed from province to province, helping the warring
lords of China articulate their thoughts and sharpen their correspondence.
Confucius took readily to this itinerant life. The immediacy of warlord issues
was stimulating. The complexity of their management problems was a challenge to
both his scholarship and his common sense. And every one of them had problems
that were unique.
The years passed productively. Dutifully tidying up his revolving employers'
communications and deferentially accepting his mentors' editorial guidance,
Confucius became in the course of time a Master Scribe himself.
It is understandable that as time progressed, Confucius would begin thinking
about how his warlord patrons could improve their effectiveness. Idly at first
and then, with growing passion, he internalized the concerns and needs of his
clients. The more he traveled, listened, and pondered, the more taken he was
with the ambiguity of the warlord's role. 'What warlords really need,' he
mused, 'is objective counsel and advice on the management of their enterprise.'
Confucius bided his time, knowing the aversion warlords have for unsolicited
advice. Then one day a patron absent-mindedly posited a question on the
rightness of a thought he was trying to express. Persons dictating often ask
rhetorical questions to jog their wit and Confucius understood that such
questions do not require an answer. But this time, for reasons never explained,
Confucius used the question as a pretext to address the warlord's overarching
concerns.
'Look,' said Confucius, 'there is much more to this matter than your question
about this phrase would imply. Your rival is about to bring the wrath of the
gods down on your province. By mincing your words this fellow will be
encouraged to attack. You must be direct. Tell him to either back off or
prepare for battle. My sense of it is, if you take this tack, he will leave you
in peace.'
The warlord, taken aback by Confucius' uncharacteristic behavior, responded
much as you would expect: 'Well, now that you bring it up, that's exactly what
I had in mind all along.'
Thus it was that Confucius, seizing on fortuitous circumstance, invented
Management Consulting, becoming the world's first Management Consultant and
transforming his warlord customer into the world's first Consulting Client.
Repetitive exposure to a widening range of warlord enterprise issues enabled
Confucius to elaborate and enrich his management consulting process. Probing
the essential elements of statecraft, he penetrated to the very heart of his
clients' strengths and weaknesses. His style of presentation became more
pragmatic, authoritative, and convincing. His knowledge and sage counsel
spanned the entire universe of warlord concerns.
Confucius' bedrock advice to warlords is as relevant today as it was two
thousand four hundred years ago. 'Look,' he said, 'as a political leader you
are burdened with the most profound and difficult of management problems. In
crafting solutions to these no single perspective can guide you to a wise
course of action. To determine The Way you must wear five faces -- humaneness,
courage, forbearance, inscrutability, magnanimity.'
And wouldn't you know, Confucius' 'five faces' counsel significantly improved
the decision-making effectiveness of those who were clever enough to
internalize it. As for the others, 'buried in history.'
Were he with us today, Confucius would no doubt find much in American business
to remind him of Chinese war-lordism and would no doubt have sage counsel for
the American business practitioner. 'Look,' he would likely say, 'as a business
practitioner you are burdened with profoundly difficult problems. In creating
and wisely managing wealth no single perspective is sufficient. To find a way
you must bring at least five to your deliberations -- the entrepreneurial, the
scientific, the political, the philosophic, and the spiritual.'
There was, of course, much more to Confucius than his knack for consulting.
Long association with war lords brought him to the realization that, in order
to harmonize society, only those who possess moral and intellectual superiority
should be granted civic power. Further, it is education rather than admonition
by which this state of affairs can be achieved. And so it was that Confucius
turned his attention from the trials and tribulations of warlords to those of
all human kind, and from consulting to education and a life of contemplation.
The power of Confucius' insights into the human condition is with us still,
living on in his sayings as recorded by his acolytes in The Analects. The first
of these, in which he speaks to us all, regardless of our calling, is thought by
many to be one of his most transforming ideas:
To learn something and then to put it into practice at the
right time: is this not a joy? To have friends coming from
afar: is this not a delight? Not to be upset when one's
merits are ignored: is this not the mark of a gentleman?
And then, wouldn't you suppose, he speaks to each of us individually:
To the student:
Failure to cultivate moral power, failure to explore what I
have learned, incapacity to stand up for what I know to be
right, incapacity to reform what is not good -- these are
my worries.
To the teacher:
To store up knowledge in silence, to remain forever hungry
for learning, to teach others without tiring -- all this
comes naturally to me.
To the manager of enterprise:
Rectify the names. If the names are not correct, if they do
not match realities, language has no object. If language is
without an object, action becomes impossible -- and
therefore, all human affairs disintegrate and their
management becomes pointless and impossible. Hence, the
very first task of a true statesman is to rectify the names.
To the consultant:
I am going to teach you what knowledge is. To take what you
know for what you know, and what you do not know for what
you do not know, that is knowledge indeed.
I came to management consulting in an experimental frame of mind, albeit a bit
intimidated by Confucius' admonitions. Reading him through, reflecting on his
instruction, about all I could think was 'Oh my god, what have I gotten myself
into?'
(c) Tom Veblen 2008
E-mail: SuperBizRT@aol.com
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II. 'MODERN RECRUITMENT PERSONALITY TESTS: AN ETHICAL DILEMMA' BY MAXIMILIANO
KORSTANJE
Introduction
Many companies today rely on psychological or psychometric tests in order that
human resources departments may have available the most effective mechanisms of
exclusion and discrimination in their selection processes. This is indeed one of
the notable features of modern capitalism.
Max Weber argued that the advent of capitalism would bring dehumanization and
exploitation whose maximal expression is the iron cage. The Protestant ethic is
founded on the basis on piety and holy grace, but at some point which Weber does
not identify precisely it is transformed into a process of accumulation wherein
rationality becomes the dominating spirit of capitalism (Weber, 1985) (Weber,
2004).
Other authors, such as Amitai Fanfani have argued that capitalism is a result
of the 'Conquest of America'. Capitalism originated in the Renaissance, as the
initial point from which economic individualism developed. In the 18th century,
this doctrine spread throughout Europe. From this point of view, capitalism was
initially characterized by a tendency to take full control in all aspects of
social life, emphasizing individualism and prizing invention, finally
privileging hedonism and materialism over other forms of production and
creativity (Fanfani, 1933: 36-45). According to W. Sombart, capitalism works
because of a specific logic based on calculation and rationality with the
purpose of control and the diversification of productive assembly.
Personnel Recruitment
In this context, researchers have promoted a multitude of methods to improve
the efficiency of the employer's recruitment procedures. However, the need to
contract the best resources for a company according to the skills of applicants
raises difficult questions. In fact, it is almost impossible to determine
whether the skills of the future worker we have in front of us will be
sufficient to carry through the appointment efficiently or whether they will be
able to handle increased responsibility (Querol, 2004) (Albajari and Mames,
2005) (Alles, 2003). The complexity of the problem of recruitment is show by
the many books and articles suggesting effective recommendations for overcoming
these problems successfully (Puchol Moreno, 2006).
In the future, the possibility could arise that the psychological profiles of
individuals might be manipulated (genetically or otherwise) in the light of a
corporate organization's specific needs. Today, many applicants are already
discriminated against and excluded from appointments only because of their
psychological profile.
An ethical issue which this kind of practice has not taken in consideration is
the potential increase in reasons and methods for psychological repression.
Sigmund Freud had already noted the function of psychological repression in
human life in social adaptation and education. Culture not only encourages
people to repress their more aggressive feelings but also sublimates natural
tendencies in acts like cooperation, innovation and creation (Freud, 1998). A
person who in the early socialization process is characterized by a neurotic or
psychotic (maniac, paranoiac, or depressive) profile will remain repressed and
occulted throughout their life.
One of ethical problems entailed by psychological recruitment techniques is
that the individual has no opportunity for change, but is excluded for no other
reason than a projected psychological profile. An accused criminal on trial is
presumed innocent. In the case of recruitment, the formula is inverted and
every person is assumed guilty prior to taking a psychometric test. If an
applicant is not selected due to the predicted possibility of psychological
problems arising in the future, popular wisdom does not consider to this a
course of action intended as discrimination or social exclusion but rather a
quest for excellence and efficiency. In Europe and United States many
psychologists are thus recruited by companies in order to refine their
selection processes. Only one word is possible for this: eugenics.
Historical origin of Eugenics
Eugenics is a term which arose with the development of Biology in the
nineteenth century. After Darwin's revolution, his nephew Sir Francis Galton
argued that the principle of evolution should be applied to human beings and
races. The belief was that some groups were more civilized than others because
of their greater intelligence. For Galton, human skills are genetically
inherited.
Galton invented the term 'Eugenics' in 1883 and set down many of his
observations and conclusions in a book, Inquiries into human faculty and its
development. He believed that a scheme of 'marks' for family merit should be
defined, and early marriage between families of high rank be encouraged by
provision of monetary incentives. British scholars pointed out some of the
tendencies in society, such as the late marriages of eminent people, and the
paucity of their children, which he thought were dysgenic. Galton advocated
encouraging eugenic marriages by supplying able couples with incentives to have
children.
These findings were promulgated in 1925 by Lewis Terman who argued that mental
abilities could be evaluated in terms of scores using Stanford-Binet
Intelligence scales. Like animal species, humanity may, he believed, be
classified into a diversity of groups and races but some of them were better
adapted to environment than others because of their greater skills. For Galton,
people of Anglo-Saxon origin demonstrated evidently superior mental and
behavioral capacities than those of other ethnic groups. Eugenic theory
(ideology) shaped a new way of thinking and was inevitably applied as a form of
conquest in the process of colonialisation of Africa and Asia. Basically,
genetic predisposition was considered enough to determine the worth of people.
It is unfortunate that eugenesy gained great acceptance in the field of
psychology during 1910-1930 at moment of mass immigration into the United
State. As a result of this, many migrants were classified along with their
racial origin and valorized according to their capacities for work. American
society was founded in a pyramid of diverse human groups distinguished through
a seemingly rational logic. For example, well known exponents of psychology
such as McDougall and Ross argued that Saxon and Scandinavian migrants were
smarter than Jews and Mediterranean people (Hollander, 1968). Assimilation of
immigrants would be more or less difficult according to their ethnic group.
German National Socialism was of course heavily influenced by this ideology.
However, the ideology did not die with that sinister regime but lasted many
years in the United States and Europe right up until today.
Despite the fact that other scholars strongly protested against this
'scientific' theory such as O. Kleinberg, M. Jahoda and F. Boaz, arguing that
intelligence was not inherited but culturally determined, it appears not to
have been sufficient (Korstanje, 2008). Basically, Boaz was not mistaken in
affirming that cultural difference arises from the needs of adaption. In the
past century, Psychological tests placed Anglo-Saxons at the pinnacle of the
social pyramid, based on criteria defined by that very culture. In a similar
way, were Navajo or Chinese to conduct and replicate these experiments in
intelligence testing, they would find many reasons to claim that they are
smarter than westerners. Thus, cultural capacities are arguably only applicable
within the context of such a culture and may not be extrapolated and compared on
a scientific basis.
Conclusion
Even though a large number of studies and books emphasize the importance of
psychological tests in the recruitment process in order to improve the
efficiency of modern companies, less attention appears to have been given to
the fact that this practice not only is discriminative and exclusive but also
contradicts the notion of rights defined by Roman law. Because of this,
psychology will in the next few years face a serious ethical dilemma.
Long time ago, eugenic theory justified and legitimated the practices of
officers in their colonial posts, with anthropology playing a major historical
role. Today the same logic can be seen in company selection processes.
Hopefully, sociology and psychology are becoming emancipated from this kind of
prejudice but the point is that most of literature on this question still
highlights overtly an efficient company's need to make 'appropriate' selection
of human resources. History provides hard evidence that Science has sometimes
been and still is in the service economic interests.
Ethically, a better world is possible if we understand that human beings are
not machines and valorized only for their achievements. Humanism and ethical
philosophy likely have much more to say about this. That was the same concern
of Locke, Rousseau, Hobbes, Diderot and many others. A return to the basis of
humanism is also strongly suggested by recent developments in science.
References
Albajari, Veronic and Mames, Sergio. (2005). La evaluacion psicologica en
seleccion de personal: perfiles mas frecuentes y tecnicas mas utilizadas.
Buenos Aires: Paidos.
Alles, Martha A. (2003). Elija al mejor: como entrevistar por competencias.
Buenos Aires: editorial Granica.
Fanfani, Amitai. (1933). Le Origini dello Spirito Capitalistico In Italia.
Milan: Editorial Vita e Pensiero
Freud, Sigmund S. (1998). El Malestar de la cultura. Madrid: Editorial Alianza.
Galton, Francis. (1883). Inquiries into human faculty and its development. New
York: AMS Press.
Hollander, Edwin. (1968). Principios y Metodos de Psicologia Social. Buenos
Aires: Amorrortu Editores.
Korstanje, Maximiliano. (2008). 'Metodologias Cuestionadas: un enfoque critico
sobre la forma de estudiar el prejuicio encubierto'. Entelequia. Spring. Vol. 6
(1).
Puchol Moreno, Luis. (2006). El Libro de la entrevista de trabajo. Madrid:
Ediciones Diaz de Santos.
Querol, Silvia. (2004). Evaluacion Psicologica en Educacion. Buenos Aires:
Editorial Lugar.
Sombart, Werner. (2005). El Burgues: contribucion a la historia espiritual del
hombre economico moderno. Madrid: Alianza Editorial.
Weber, Max. (1985). Ensayos de Sociologia Contemporanea II. Buenos Aires:
Ediciones Planeta-Agostini.
Weber, Max. (2004). Etica Protestante. Buenos Aires: Ediciones Libertador.
(c) Maximiliano Korstanje 2008
E-mail: maxikorstanje@hotmail.com
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III. 'CORPORATE GOVERNANCE AND ETHICS: AN ARISTOTELIAN PERSPECTIVE' BY ALEJO
JOSE G. SISON, REVIEWED BY RACHEL BROWNE
Corporate Governance and Ethics
An Aristotelian Perspective
By Alejo Jose G Sison
Publisher: Edward Elgar, 2008
This is a book in a series called 'New Horizons in Leadership Studies'.
Leadership studies is a new and developing area so I was surprised, on starting
to read this book, to realise that scandals which have been central to business
ethics are now dated. In light of recent global financial events, corporate
scandals such as Enron seem minor and hardly worth discussion. Following the
more recent collapse of Lehman Brothers in the US, with the consequence of
global lack of confidence in financial sectors, it is obvious that there is
something fundamentally wrong, economically and politically -- as well as
ethically -- which dwarfs a mere 'scandal'.
Statements like 'over the past two decades, the US economy and stock-market
have performed well both on an absolute basis as well as relative to... Great
Britain' (p.32) and 'markets themselves do a better job at self-correcting
abuses and restoring investor confidence... than regulation' (page p.30) hit
you in the pit of the stomach, making you think that the whole canon of
corporate governance needs to be rewritten. Books which quote the wonders of
the free market and the dominance of the US economy suddenly seem only of
historical importance.
The claim that a free market is self-regulating and does not need government
intervention now seems to be naive and has actually been shown to be false, as
governments around the world quickly recognised. Although Sison points out
'corporate finance is one of the most heavily regulated areas in modern
American society' (p.20), it appears not to have been heavily regulated enough.
Sison recognises that regulations are insufficient, but his position is that
company directors need to be educated in ethics of virtue to make them work.
The Aristotelian perspective of this book means that it preaches the need for
the particular virtues of integrity and prudence. I write this on the day that
four top executives of UK banks have resigned, presumably under pressure from
the British government although perhaps from a sense of personal
responsibility. Of course I did not know these corporate leaders, but from what
I have learned of them they were leaders of enormous integrity who would never
countenance breaking corporate governance guidelines. Given the Sison/
Aristotle position that corporate guidelines are insufficient without education
in the virtues, perhaps these executives simply lacked prudence, but that
wouldn't make them unethical on its own.
The simple requirement for corporate governance guidelines alone is a modern
idea and Sison quotes Sumantra Ghoshal of the London Business School saying
that 'nothing is as dangerous as a bad theory... bad management theories are,
at present, destroying good management practices' (page 19).
This (as well as the fact that he is an Aristotelian scholar) leads Sison to go
back to a classic by Aristotle; Politics. Could an Ancient Greek really have
good advice for us today? Well, Aristotle's book is still in print and shows an
endurability which is obviously not going to hold for many business ethics books
and there has surely been a lack of integrity and prudence in recent years.
The more modern neo-classical teaching on economics which underlies most ideas
of corporate governance is that human beings are economic agents, operating as
individuals and that the firm is a sum of individuals each working to maximise
shareholder value rather than the wider common good (page 34). This form of
individualism is taken to contrast with state control. At present unfettered
individualism seems to be flying out of the window in favour of a measure of
state control and global regulation. Individualism has led to greed and excess,
which is very un-Aristotelian. Aristotle was big on temperance and moderation.
(Hence prudence should never err on the side of caution).
Aristotle claims there is 'natural wealth' which has fixed boundaries. There is
a level beyond which the accumulation of material things is a burden, and this
is 'non-natural' wealth, which works on the basis that 'more is better'. Donald
Trump and Richard Branson don't seem to be burdened at all, as individuals, but
the American led idea that more is better seems to have undermined the world
economy, apart from leading to a massive obesity problem in the Western world.
So there seems something quite healthy about a return to Aristotelianism. Sison
claims that 'Aristotle's Politics is generally recognized as an obligatory
reference for the study of government' and believes that it can teach us about
other forms of governance, such as corporate governance. If this is to be the
case, Sison says there must be some further analogy between Greek city-states
and modern business firms. The drawing out of the analogy actually exposes near
total disanalogy, but Sison isn't deterred by this. He continues through the
book using Aristotelian political concepts, such as tyranny, monarchy,
aristocracy, oligarchy, democracy and polity in terms of which he describes and
assesses six corporations.
The failure of the Greek state/ business firm analogy seems massive.
Aristotle's basic idea is that the state is natural and stems out of family
groupings. Where family cannot provide all their own needs for a good life --
which, according to Aristotle, includes food, arts, arms, revenue and religion
-- intermediate or subsidiary bodies grow up under the state. These are
businesses, churches, educational facilities etc.
In contrast to the naturalness of the state, business firms are 'artificial',
or so Sison claims Aristotle would think, and they are also 'subsidiary' to the
state whereas the state could not be subsidiary to itself. There is further
disanalogy in Sison's claim that the end of the state is to provide the good
life, whereas the proper, though narrow, end of the business firm is to produce
a profit.
Sison is undoubtedly right in his claim that states and businesses are social
institutions, but that is just a truism.
Sison briefly mentions the multi-national and claims that this has led to
states and nations having no care for the good life. This isn't obvious. At
least in the West, we have plentiful food, arts, arms etc. The conclusion to
this chapter 'An Aristotelian Perspective' is that we are very far from the
Ancient idea of the Greek state. Since Aristotle never specifically mentioned
business firms in Politics, Sison's book seems rather bizarre. Although since
he mentions that Brook Manville and Josia Ober in 'A company of Citizens'
(2003) 'tried to derive management lessons from classical Athenian democracy'
(p.84) this might not be so.
Nearly as surprising is that Sison holds the 'Chair of Professional Ethics in
the School of Engineering and Academic Director of the Institute for Enterprise
for Humanism at the University of Navarra, Spain'. If Spain has an ethics
department in its Engineering school, it certainly is ahead of the rest of the
world in its ethical education. There might be an error in translation here.
As a Spaniard, Sison is outspokenly pro-European and anti-American
individualism, which endears him to me, though perhaps not to Americans.
However, his Aristotelianism is a bit wearing. Aristotle was big on
categorising things and making distinctions, to the extent that he sometimes
seems banal. He has actually said that if a shoe is used to wear this is a
proper use, but if it used for exchange this is an improper use. (p.54). The
revered Aristotle said this?
When Sison is not talking about Aristotle, he provides a very interesting
history of corporate social responsibility -- both it's growth and and analysis
of the elements which make it up. I will not describe this as it is one reason
to buy the book. He also provides an excellent summary of stakeholder theory
and an in-depth discussion of citizenship and ownership of companies.
The notion of citizenship involves reference yet again to Aristotle, but Sison
is quite funny on ownership: 'Contrary to the general opinion... shareholders
do not 'own' the company. They just cannot walk into the company premises and
occupy a room or start selling the furniture' (p.87). Of course, this is not a
definition of ownership but does seem to be a relevant feature.
In his first two case studies of ownership -- a tyranny and a monarchy -- Sison
is gripping. On reading the great historical detail about the tyrannical dynasty
of the Agnelli family in Italy who owned Fiat, I had a sudden wish that there
could be photos.
Following this, we get another in-depth description, but this time of a
monarchical governance of a company -- which is a bit more like an ideal
Ancient Greek State. The example is of Li Ka Shing and Hutchison Whampoa
Limited. Li Ka Sing combined Chinese thinking with Western management science,
and through this he became concerned with gaining a good reputation and the
common good and was highly philanthropic. In contrast to this, Agnelli was just
concerned with keeping his company within his family.
Unfortunately Li Ka Sing was convicted of insider dealing. Although not loaded
with integrity and prudence, he was at least good for his philanthropy, in
Sison's view.
Sison concludes that 'In theory, the concentration of power in the hands of a
single individual by itself should not discredit governance' (p.142). What was
lacking in both cases was excellence of character.
Since Sison gives examples of only one company corresponding to a tyranny and
one to a monarchy, you would expect a wealth of counter-examples. In this way,
the book is highly thought-provoking. Not knowing corporations in detail I
can't think of any myself, but this might be a fun thing to do on a wet
afternoon.
The examples move on to aristocratic and oligarchical regimes where more than
one person rules. In aristocracies the rulers are in charge because they are
rich, whereas in oligarchies the rulers hold office due to merit. After
outlining the mere two case studies corresponding to these political regimes,
the Sison/ Aristotle conclusion is that both regimes are 'bound to experience a
strong temptation towards avarice and graspingness' (p.174) -- this is despite
the example of the aristocratically governed business, Banco Popular, which was
run by two brothers who used 'moderation and restraint in their compensation and
lifestyles' (p.175).
As examples of democracies and polities we are given United Airlines and IDOM
Engineering Consultancy respectively. United Airlines, the democracy, begins to
look more Aristotelian because an employee buy-out meant that the governed were
involved in governance. This seems to be another criterion for the Aristotelian
state. Sadly, the employees -- pilots, mechanics, air-flight staff etc. -- each
had their own group interests at heart and eventually the company had to file
for bankruptcy.
IDOM, the polity, faired better. Again we see 'participation of associates in
ownership and management' and also there was a desire 'to seek the corporate
common good' (page 206). This is finally more analogous to an Aristotelian
state, although strangely 'Aristotle had little to say about polities in
contrast to democracies' (page 209).
We leap forward to the summary to find more stress on Aristotle's requirement
for virtue in governance (it is found that it is not actually essential that
the governed are involved in governance now). Most important is that those who
govern are schooled in virtues of moderation and temperance, loyalty,
excellence, and a sense of justice -- basically integrity and prudence.
This ethical requirement is a bit of a tall order in the real world of
corporations. While it might be true that rules alone don't work and ethically
aware people are needed to make sure that they are enforced, ordinarily
ethically aware people are not as ideal as Aristotle wants them to be. Perhaps
this is just an ideal to aspire to.
It seems unlikely any newly appointed director will have the full set of
virtues, so perhaps corporations will have to become like an ethical education
establishment. This isn't a bad idea and is one way that philosophers of
dialogue can enter the business realm, which has already started to happen.
(c) Rachel Browne 2008
E-mail: RachelEBrowne@aol.com
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IV. 'ETHICAL DILEMMAS: A PATHWAYS PROGRAM' BY WOLFGANG W. OSTERHAGE
1. Introduction
In October last year Geoffrey Klempner launched a Pathways study program called
'Ethical Dilemmas'. This course lasted until August this year and covered 10
distinct units. Over time this course developed its own dynamics since Geoffrey
built the respective feedbacks of his students in after each unit. Of the course
I can only write about my own personal experience.
In the following I shall sum up the contents of the program as a whole after
completion. Thereafter I shall mention something about the study process and
how the course unfolded. Before my personal assessment concerning my own
benefits I will try to consolidate the overall results.
2. Summary
The program started out with the basics: the nature of ethics and its relative
position and relevance in the business arena. The really interesting questions,
however, arise, when looking at the fringes of accepted behaviour. There one can
find the ethical dilemmas -- situations in business requiring decisions, which
in any case would lead to undesired results and thus provoke a seemingly
unsolvable moral conflict for the decision maker. Ethical dilemmas became the
basis for further elaborations as the course evolved.
The business world is not different from the rest in that it is full of
examples, where people fail morally. And failure quite often is the result of
ones own making. This was outlined through the example of lying or deceiving
others or oneself. In the business context this can only be surpassed by the
bribe. These considerations ultimately lead to the question of principles, in
terms of strategy and tactics for ethical decision making.
Another aspect is the role of bluffing, and what distinguishes a justified
bluff from a lie. Underlying everything is, however, the constant consideration
of gain and profit as distinguishing principles of business itself. But by
weighing these latter criteria in to the ethics argument itself, the
fundamental dilemma of ethics in business begins to shine through.
To find a way out of this, one could imagine a certain classification of lies,
a taxonomy, leading eventually to the permissible lie. Practical examples can
be found in the advertising world.
The next best thing after lying and bribing is outright theft. However, apart
from stealing office supplies, important acts of theft are shrouded in
euphemisms that carry such nomenclatures as ownership, the handling of property
etc. This leads us to the whole questions about the distribution of wealth and
profit. How much is enough? What can still be regarded as 'fair profit'?
In the end a business person will be reminded that he has a social
responsibility -- not only as a private subject, but especially in his business
role. He -- together with his peers -- has to exercise, what is called
'corporate social responsibility', even though this term has come under
increasing criticism. This brings us to the limits of business ethics. Business
itself cannot be abandoned just for the sake of ethics. But there may be virtues
and ethical skills that can be cultivated -- and in the end even provide even
more success, if handled carefully enough.
3. The Process
The interesting aspect of the whole program was its dynamics. There was
initially no fixed agenda with the exception that a certain number of written
contributions had to be produced, and that unit no. 1 was preconceived. The
rest followed in a give and take fashion between the participants and the
lecturer. After each unit comments were asked for and fed back. These comments
were treated in two ways:
- answered directly and commented on in turn
- absorbed partly into the subject of the succeeding unit.
In this way the course developed its own dynamics. As it turned out, there was
always a tendency towards ethics in general rather than focussing on a never
ending sequence of well thought out dilemmas to be taken case by case. In the
end the basic question of whether ethics and business had anything in common
had to be addressed again.
4. Results
In the end the course did not:
- provide recipes, how to get out of ethical dilemmas in a clean cut fashion
- provide a general theory of business ethics,
but rather touched upon the various aspects of the problem in a multi-faceted
way. What became obvious is the fact that the human condition -- be it in
business or elsewhere in everyday life -- quite often leads to an intricate
situation, where standards and rules break down. These situations can sometimes
only be escaped from by accepting some kind of loss: as a consequence of the
choices available with a bad conscience remaining whatever choice was taken.
5. Assessment
This pathways program initiated a lot of reflexion on a difficult subject.
These reflexions did not remain on the level of theory. Neither were they
directed at creating a self-contained system. We were constantly aware of the
limits of rationalisation, when going down to the basics of human or -- in this
case -- business relations. The format itself was the precondition for the
fruitfulness of the enterprise. It is to be recommended for other subjects in
philosophy, since it has proven its superiority over the classical lecture.
(c) Wolfgang Osterhage 2008
E-mail: wwost@web.de
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