A Business Ethics Syllabus

Here is a reading list that is typical of the one I use for my 1-term undergraduate Business Ethics courses. In some cases, there are hyperlinks directly to the work in question. In other cases, unfortunately, the link just leads to an abstract. Note that for the last decade, most of my teaching has been in a Philosophy department, and so this list includes more philosophical readings, and fewer case studies, than would be the case for a course at a business school.

Section 1: The Market

In order to say anything sensible about ethics in the marketplace, you need first to understand at least a bit about the marketplace itself, and the basic underlying mechanisms. So…

But a lot of people misunderstand Smith, especially his view on the role of self-interest in the marketplace. So I recommend reading these two Nobel-prizewinning economists, both of whom believe that Smith is far too important to get wrong:

  • Ronald Coase, “Adam Smith’s View of Man” (Coase explores Smith’s moral psychology, and points out that Smith neither thought people are entirely selfish, nor thought they should be).
  • Amartya Sen, “Does Business Ethics Make Economic Sense?” (Sen points out that, on Smith’s account, self interest merely explains what motivates people to engage in exchange. That’s important, but it leaves lots to be explained. And, Sen argues, much of what remains to be explained requires a richer set of values than the popular, cartoonish version of Smith usually includes.)

Section 2: For Whose Benefit?

In this section, we read about “stakeholder theory,” along with modifications of, and objections to, that idea.

  • R. Edward Freeman, et al., “Stakeholder Capitalism” (In this and many other papers published over the last quarter century, Freeman defends the idea that corporate managers have strong, positive obligations not just to corporate shareholders, but to a wide range of stakeholders.)
  • Kenneth Goodpaster, “Business Ethics and Stakeholder Analysis” (Goodpaster offers a friendly amendment to Freeman’s theory. He says we should understand stakeholder theory as implying that managers have strong fiduciary duties to shareholders, and regular non-fiduciary duties to other stakeholders — such as the duty not to lie, not to steal, etc.)
  • John Boatright, “What’s Wrong—and What’s Right—with Stakeholder Management” (Boatright says that the stakeholder idea can play a legitimate role in the corporation, but only as a motivator, giving corporate insiders a sense of mission. He says that the stakeholder idea is unlikely to serve as a good principle for corporate governance.)
  • Alexei M. Marcoux, “A Fiduciary Argument against Stakeholder Theory” (Marcoux argues that the relationship between corporate managers and their shareholders is in important ways very similar to that between doctors and their patients or lawyers and their clients. As a result, he says, shareholders — and shareholders alone — have a strong claim to managers’ loyalty as fiduciaries.)
  • Joseph Heath, “Business Ethics Without Stakeholders” (Heath argues that shareholder-driven and stakeholder-driven theories of business ethics both have virtues, but that both also have fatal flaws. He argues for an alternative, which he calls the Market Failure theory, according to which the ethical compass of a corporation should be to avoid behaviours that tend rob the market of its promise as a mechanism for mutual benefit.)

Section 3: Decision-Making

The last section of the course deals with individual decision-making, and barriers to making good decisions.

  • Aviva Geva, “A Typology of Moral Problems in Business” (Geva argues that not all problems in business ethica are of a single kind. She presents a framework for categorizing such problems, and argues that diagnosis is the first step towards effective resolution.)
  • Caroline Whitbeck, “Ethics as Design: Doing Justice to Moral Problems” (Whitbeck says that ethics classes too often treat ethical dilemmas as if they were multiple-choice problems, in which the decision-maker merely needs to choose from the available alternatives. Instead, Whitbeck suggests that we think of ethics in a more active way as a design process, involving seeking a best available solution given a set of objectives and a range of constraints.)
  • Joseph Heath, “Business Ethics and Moral Motivation: A Criminological Perspective” (Heath says that the “folk” theories regarding why people do bad things are generally deeply flawed, rejected long ago by thorough criminological studies. He says the key to wrongdoing is the process of rationalization or “neutralization,” according to which the wrongdoer finds ways of redescribing their own behaviour in order to soothe their own conscience.)
  • Nina Mazar, On Amir, and Dan Ariely, “The Dishonesty of Honest People: A Theory of Self-Concept Maintenance” (Ariely and colleagues ask why it is that so many honest people engage in dishonesty. They propose a theory according to which people frequently find ways to be just a bit dishonest, but not so dishonest as to stop them from thinking of themselves as decent people.)

Here are a few other items I have sometimes included:

It’s important to note what this list leaves out. Absent are direct discussion of workplace health and safety, honesty in advertising, product safety, environmental issues, and so on (though the readings above do of course draw examples from those sorts of topics). A different sort of course would deal with those, one by one, in some depth. The hope in my course is to provide students with the philosophical grounding to think about those sorts of practical issues in a well-informed way.

12 comments so far

  1. Jonathan Breslin on

    This is great Chris, thanks.

  2. Paul Chippendale on

    Very useful, thanks I posted al link to it at our Facebook Page: https://www.facebook.com/Minessence.Group

  3. jpbauer on

    Thank you for sharing Chris.
    What do you see as the most difficult concept in ethics for an undergraduate student to comprehend? Does a person’s country of origin make a difference.

  4. Linda Locke on

    Thanks much for this. In your mind, what should distinguish MBA vs undergrad curricula if both are new to the subject? Case studies, certainly, but anything else?

    • Chris MacDonald on

      That’s a big topic, but I think one key difference is probably the fact that MBA students are aiming at careers as managers. And managers are responsible not just for their own ethical decision making, but also for fostering institutional & team settings that foster good ethical decision-making. So MBA students need to be taught to think about ethics from a design point of view.

      Here is a roundup of a series of postings I did last year on ethics education for MBA’s:

  5. Donna Okell on

    Thank you for this very useful list Chris. I am about to write a blog for my website on the importance of trust and ethics, thinking particularly about the current banking crisis. I shall post a link to your blog.

  6. K Emery on

    What happened the Milton Friedman piece?

    • Chris MacDonald on

      The Friedman piece is useful, but flawed. The key points are made better by some of the readings above. It’s certainly a popular reading, but definitely not essential.

  7. K Emery on

    Maybe it’s time for me to update my digital bookshelf. Which of those readings, or others, would you suggest as better alternatives to the Friedman piece? I always thought of it as one extreme – or purist – pole of the great debate about the role of ethics in business managerial decision making. Though I recognize that its fallen out of favour amongst people who discuss these things in Canadian institutions, at least by my experience.

    • Chris MacDonald on

      I’m still a fan of that Friedman article. I just think its best points get lost on a lot of people. Heath (Business Ethics Without Stakeholders) is perhaps the most important reading in the list above, and does a good job of outlining the argument for the shareholder view that Friedman wants to put forward.

  8. K Emery on

    I agree that its best points get lost on many people (probably having to do with the identity of the author), and I’ll definitely read the Heath piece you suggested. Thanks.

  9. Brian on

    I’m presently writing a business ethics syllabus and this is very useful (especially with included links to the relevant papers), thank you!

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