What’s Wrong With “Ethics”?

I study, teach, and write about Business Ethics — roughly the study of ethical issues that arise in commerce. It includes questions of good and bad outcomes, right and wrong behaviours, as well as questions of character.

I think “business ethics” is the best term for the topic. The way I use that term is consistent with expert usage of it, and consistent with the way we’ve used the term “ethics” for as long as it’s been a subject of study.

For whatever reasons, other people prefer other terms. But none of the others is adequate as an umbrella term to encompass all of the most important normative issues that arise in business. Some people, for example, like the term “Corporate Social Responsibility.” I think that term is problematic: rather than a topic or set of questions up for debate, CSR tends to be treated as presuming a set of answers. And besides, the notion of “responsibility” implicitly sets aside all kinds of interesting and important questions about things like rights, prohibitions, entitlements, and virtue.

Some are attracted instead by the language of “Corporate Citizenship,” though that language is rooted in political notions, some of which don’t readily apply to corporations, especially multinational ones. And don’t even get me started on the mess that is the so-called “Triple Bottom Line” — a term made up of 3 words, each of which is either false or misleading. There are other terms, all of which are either wrong-headed or at least incomplete.

So why do people rebel against simply using the good old-fashioned term “business ethics?” Partly, I think, it’s a matter of just not knowing what that term means, and the range of issues it encompasses. I speculate that there are 2 factors contributing to the confusion. One is the existence of so-called “ethics laws” and “ethics regulations”, which tend to be codified rules governing things like conflict of interest, gift-giving to public servants, political contributions, and so on. I worry that the term “ethics laws” implies (wrongly!) that ethics consists of only those sorts of issues.

The other possible factor is the fact that when the idea of ethics comes up in the media, it’s often associated with some scandal or another. This gives the impression that ethics is just the avoidance of certain kinds of wrongdoing — and to be sure, avoidance of wrongdoing is part of ethics, but it’s just a part.

I don’t know whether there’s hope for the term “business ethics”. I sometimes try to avoid using the term, in favour of just talking about specific issues. If the issue at hand is conflict of interest, let’s focus on that, and on why COI is ethically problematic, and what to do about it. It matters less whether we say that avoiding and managing COI is part of “business ethics” or “CSR” or whatever. But on those occasions where we do genuinely need a blanket term, my vote is to go for the one with sufficient breadth actually to encompass the full range of issues at hand. I’d rather work towards correcting misunderstandings of the term “business ethics,” instead of just capitulating to them.


Thanks to Andrew Newton for the email conversation that sparked this blog entry — but he’s not to blame for any faults in the paragraphs above.

14 comments so far

  1. Andrew Newton on

    Well done Chris. I stand with you on this. The public debate on business responsiblity has been losing sight of its basis in ethics, and I think that CSR is a linguistic flag of convenience by which business avoids the truly difficult ethical choices – those that involve profit sacrifice.

    Business ethics – and the effective management framework for embedding ethics – are the real goals.

    Andrew

  2. Kevin Goodman on

    I always thought of CSR as an approach towards ethics rather than an all encompassing study. For me Business ethics seems broader and encompasses the behavior of individuals – I think CSR doesn’t have enough emphasis on the individual. CSR is often advanced for its marketability and that may be why companies preference it.

    But ethics in general fall to the arena of philosophy – how about the philosophy of business? I for one wouldn’t want to call myself a philosopher but anybody rhetorically considering the proper way for businesses to behave seems to be following those footsteps?

  3. Chris MacDonald on

    Kevin:

    Thanks for your comment.

    I think you’re roughly right about CSR…but most CSR advocates seem to think it’s all-encompassing, I think.

    As for Philosophy of Business: it’s a topic in its own right, the includes in part Business Ethics. See this:
    http://en.wikipedia.org/wiki/Philosophy_of_business

    Regards,
    Chris.

  4. Kevin Goodman on

    Thanks for the resource, one thing I can say is that philosophy might be thoughtful but ethics are applicable.

    As for the name I kind of think the business world likes to brand its processes – CSR, Six Sigma, Project Management.

  5. David Coethica on

    Great post.

    I too agree with business ethics being the most appropriate description of the approach that should be taken, and that CSR is often misused by those who aim to avoid certain ethical issues.

    The word ethics itself creates horror and uncertainty in many boardrooms but by whatever name it must be applied for global markets to recover and thrive in the longer term.

    Maybe the currently accepted use of CSR (or CR) could be used as a vehicle like a wolf in sheep’s clothing to provide a potent ethics antedote to be delivered?

  6. Kevin Goodman on

    Every great scandal seems conditional of leadership. Enron, Peanut Corp. etc. –these places didn’t emphasize character but Enron did have something like a seventy five page ethics policy, Peanut Corp of America probably did too. CSR sounds nice but I always think fair trade, eco friendly, and well wider ‘social’ issues but ethical failure almost always goes back to the individual, to the leadership. Without principled leadership policy is out the window and so too is an ethically minded corporate culture.

  7. paul (iii) on

    As Niklas Luhmann has put it: Business ethics has a secret comparable to the secret of the English cuisine. This secret must hide that it does not exist.

  8. Matthew on

    Thank you Chris, Nice article.

    Having served on the Ethics committee for the International Coach Federation for the past six years, my respect for, grasp of, and passion for the subject has permeated all of my work in sustainability and corporate responsibility (CSR & CSR 2.0). I see business ethics as an essential component of the CSR discussion and strategic thinking of the modern day corporation. Ethics along with CSR must create the backbone of the organization.

    The challenge and the glory of ethics is first that it calls upon us as business managers to be conscious about our decisions and the ramifications of our actions. Second, ethics is rarely black and white and full of nuance, wisdom, experience, and consideration.

    Tom Morris over at Huffington Post captured this notion in his summary of business ethics when talking about the new MBA Oath.:

    Ultimately, business ethics is all about:
    Responsibility: to the greater good and the big picture of human life.
    Transparency: in our decision-making and actions.
    Honesty: in what we say, show, and do.
    Accountability: with respect to what we’ve caused or contributed to in our actions.

    The core commitments of business ethics aren’t complicated in principle. But their application in the real world demands nuance, sophistication, hard thought, wisdom, skill, and consistency.

    Matthew Rochte
    Sustainability / CSR Consultant
    Opportunity Sustainability
    http://www.OpportunitySustainability.com

  9. Chris MacDonald on

    Matthew:

    Thanks for your comment.

    But there really is no justification for thinking of ethics as a component of CSR. That’s backwards, in fact. After all, social responsibilities make up just a small subset of the many ethical issues relevant to the world of commerce.

    Chris

  10. Chris MacDonald on

    Paul:

    If Luhmann actually said that, then he either hadn’t thought about the issue very carefully or was perhaps using words in a non-standard way. Ethics is pervasive in business; commerce itself is simply impossible without it. People who think otherwise are too easily swayed by headlines.

    Chris

  11. Matthew on

    Hello Chris,

    I beg to differ. Ethics and CR are intimately linked. To say that “there really is no justification for thinking of ethics as a component of CSR” misses the fundamental role ethics plays in trust. Without trust the corporation can not operate. Trust is a social responsibility and crucial for the sustainability of a company. Trust is a combination of history, sincerity, and ability. Ethics is interwoven in each of these. Therefore those “social responsibilities” are intimately linked to ethics.

    CSR speaks to recognition of the social contract that corporations have with the community they operate and the right to operate.

    Despite marketing perversion of CSR – CSR is not philanthropy nor PR. It is about a fundamental strategy, mode of operation and code of ethics for a company to follow. Business ethics is a subset of CSR, CR, and Corporate Sustainability & Responsibility (CSR 2.0) – not the other way around.

    Matthew Rochte
    Sustainability / CSR Consultant
    Opportunity Sustainability
    http://www.OpportunitySustainability.com

  12. Chris MacDonald on

    Matthew:

    You’ve misunderstood my comment. I was likely unclear.

    I never said the two weren’t linked. I’m just pointing out that the field of ethics is not a sub-component of the field of CSR. CSR is, if anything, a branch of business ethics. Ethics is a broader topic, encompassing much more than the set of (admittedly ethical) issues that CSR is concerned with.

    Regards,
    Chris.

  13. Hsiaoshuang on

    Ethics is ethics whether in business, personal relationship or anywhere else. To isolate it in the business setting implies that when out of the workplace, I don’t have to be ethical in my dealings (with other humans, with animals, with the environment). Students in business schools should learn ethics as applicable to their entire life, and not just in the workplace.

    We often read of successful businessmen whose behaviour towards their wives, their friends and others, are questionable. An individual who is not ethical in his behaviour outside the workplace, is unlikely to be so in the workplace.

    Finally, although I’m not cynical I think it is a hard task to “teach” someone to be ethical. This is not just my view; see Jeremiah 13:23.

  14. Chris MacDonald on

    Hsiaoshuang:

    Thanks for your comment, but I have to disagree:

    Ethics is indeed universal in that all persons are subject to the same rules, but ethics does in fact vary according to situation or social role.

    That’s why, for example, we expect doctors and lawyers to adhere to different ethical rules (in their professional lives) than we do other people. The same is true of business. Ethical rules do apply, but they’re often different than in everyday life. Notice just that business is a competitive domain. Life at home with your family is not. You need different rules for different kinds of games.

    Note also that there are ethical issues that arise in business that simply do not arise in personal life.

    Finally, note that your final point assumes that the goal of courses in business ethics is to change people’s character. That is generally false. See my blog entry, here:
    Can Ethics Be Taught in Business Schools?”.


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