The Business Ethics Blog

What is the “purpose” of a manager? In particular, what is the purpose (or goal or objective) of a corporate manager (i.e., any manager, at any level, within a corporation)?

The preamble of the MBA Oath echoes one common sentiment when it says, “my purpose as a manager is to serve the greater good by bringing people and resources together to create value that no single individual can create alone.” [emphasis added]

Is that really the case? Is there a good argument for that point of view?

Let’s consider 3 possible answers to the question of what a manager’s purpose is (in the ethically-relevant sense of that word).

1. The purpose of a manager is to do whatever s/he was hired to do, which is probably (for standard business corporations) to do his/her best to help the corporation make a profit (and to implement whatever charitable / CSR-type plans the company’s bosses see as appropriate);
2. The purpose of a manager is to serve the greater good; and
3. The purpose of a manager is to pursue his/her own interests.

Which of these is right? Do we need to choose? Can they all be right at once? If and when they conflict, which should take priority?

Let’s try a thought experiment, a bit of fiction to stimulate our intuitions.

Imagine I own and operate a small but productive apple orchard, employing say a dozen people to help me harvest and ship the apples. But imagine that, at some point, I get offered an attractive job in the city, one that is inconsistent with continuing also to run an orchard. Imagine that, rather than sell the orchard, I decide to hire a manager to take care of it in my absence. So I leave the company in her hands, and move to the city. Once month or so, we talk by phone, so that she can tell me how things are going and so that she can ask what my wishes are about high-level strategy, etc. And at the end of the year, she sends me whatever money is made from the sale of apples, minus operating costs (including the cost of materials and equipment, her own salary and the wages of the other employees, etc.).

Now, ask yourself: what is this manager’s purpose? What objectives should she work towards?

Well, surely she has as one of her goals making a living. That, after all, would likely be why she took the job in the first place. So she has her own “purposes.” But those surely can’t be ethically overriding. For example, what should she do with the money derived from the crop of apples after she has taken her own salary and paid other expenses? Can she use that money for her own purposes? Surely not. (Preventing that sort of self-serving move is a big part of the point of the system of corporate governance that bigger, more complicated organizations need to put in place.) The most obvious answer (though not the only alternative) is that she should send that money to me. They are, after all, my apples, grown on my trees on my land, and I’m the one who hired her to manage the operation for me.

What about the notion of serving the greater good? In our story, I’ve now got a good job in the city. Surely there are others in the community in which the orchard is situated that could use the leftover money more than I could. In that sense, it would serve “the greater good” for the manager to give that money to them. Or she might instead be tempted to give a really big raise to my apple-pickers. (Let’s assume they already make a decent “living wage,” but a big raise would allow them something closer to the affluent middle-class lifestyle that I myself already enjoy.) But surely — given that they’re my apples to start with — my manager ought at least to ask me, first, before giving my money away? Doing anything other than sending the money to me would amount to embezzlement, or at very least misuse of funds. But how do we square that with the appealing notion that being a manager involves contributing to the greater good?

We can get closer to the answer by noting that there’s a complication in the statement about a “manager’s purpose” in the bit of the MBA Oath quoted above, a complication that I’ve ignored so far. The Oath says that “my purpose as a manager is to serve the greater good by bringing people and resources together to create value that no single individual can create alone.” In other words, the Oath also suggests the mechanism by which managers are to serve the greater good.

Working that provision into our story: the manager I employ can be seen as serving “the greater good” by doing a good job of managing my orchard. If she does that well, she’ll produce a valued food product, contributing to the well-being of everyone who likes apples. If she manages to keep the business going in a sustained manner, she’ll also help keep a dozen people gainfully employed. And also by doing so, she will hopefully generate a profit for me (out of which I may well contribute to various charities, or simply buy things, thereby contributing to keeping other people employed). If she can’t do that, I’m likely to replace her with someone who can, or shut down the orchard entirely. And who benefits from that?