The One-Minute Ethicist

Despite its growing influence, business has a bad name. Daily newspapers and periodicals are replete with the latest escapades of our “business leaders.” Most recent in our minds are defense contractors’ exorbitant prices for screwdrivers and other small parts, and the insider trading scandal on Wall Street.

The atmosphere that permits such corruption has become pervasive, even among idealistic students. In a survey of 131 students majoring in business, researcher John Pearce discovered that students “judged the climate in American business to be essentially unethical by a ratio of 2 to 1.” Half the students accepted the idea that during their business careers they would engage in behavior that is less than ethical.

Studies by Pitney Bowes and Uniroyal bear out the students’ expectations. In a group of 800 managers surveyed anonymously, most felt pressure to compromise personal ethics for company goals. This was true of 59 percent for Pitney Bowes and 70 percent for Uniroyal. Prof. Archie B. Carroll of the University of Georgia surveyed a random sample of corporate managers throughout the United States in a similar study. His respondents revealed that 64 percent felt pressured to compromise personal ethics for company goals.

Business Ethics: An Academic Growth Industry

Corporate America is confused and searching for its ethical identity. The businessperson today is forced to ask a new set of questions: Is it ever right to use privileged information to advance one’s self-interest? Does a company have any obligation to help remedy social problems, such as poverty, pollution, and urban decay? Does a firm have a right to subject its employees to lie-detector, drug, or AIDS tests as a condition of employment? What, if anything, must business do to improve the work atmosphere? Is a personnel director ever justified in hiring or promoting someone on grounds other than competence? Is a manufacturer obliged to reveal product defects? Must business help fight racial and sexual discrimination in the workplace? What, if anything, does business owe the consumer?

The pragmatic business world has felt ill-equipped to deal with such a philosophical discussion. Their role, they would say, is to make a profit. The educational community, therefore, has created business-ethics education to equip the managers of the future.

In just 15 years, business ethics has achieved curriculum status in most schools of business. It is a growth industry, with new courses, books, and publications proliferating. A bibliography for 1976–80 listed over 2,000 published works on the subject. The 1981–85 edition lists nearly 5,000. Prior to 1978, a textbook on business ethics did not exist. Now, one may choose among dozens.

Discussions in academic circles accelerated when, in his 1977–78 annual report, Harvard University President Derek Bok asked “that the Harvard Business School curriculum be reviewed and redesigned to recognize the new social and ethical requirements for business leaders.” Bok noted that many executives spend up to half their time on government, regulatory, and community affairs. And yet most business curricula pay little attention to these issues and concern themselves primarily with matters of marketing, finance, production, and other more traditional problems of a firm.

Business-ethics courses are, in most cases, the study of values, not the teaching of values. Textbooks typically present the traditional philosophies and value systems, including biblical ones, that could be applied to business practice. Educator C. D. McQuillen argues that “… no attempt should be made to impose any one system of values, but to ensure that ethical and moral dimensions heretofore ignored in decision-making receive explicit recognition and consideration.” And in “How to Teach Ethics in a Basic Business Communications Class,” published in the Journal of Business Communication, the authors state, “The idea of a ‘universal ethic’ with accompanying guidelines that would be definite for all people at all times and in all places is a myth. The acceptance of what is right and good is determined by the culture in which the question arises.”

The business-ethics text Moral Issues in Business, by Vincent Barry, is one of the most thorough. It presents the major ethical problems and deals primarily with the relationship between business and society. Yet Barry himself believes most texts today have the effect of depersonalizing the subject. Readers may become aware of the broad range of social issues that involve business, but they remain ignorant of their own personal responsibilities. For example, a case study may look at a corporation’s struggle to develop fair hiring policies and the dilemmas it faces in the process. But it is up to the student to apply the problems in his own world, using his own standards of right and wrong.

Critics of current teaching methods are numerous. Harvard professor Pat Burr taught business ethics for years and concluded his students were no more moral for it. Mary Miller and Edward Miller argue in Business and Society Review that it is too late to teach ethics in college; values are already set. And Bok admits that “… in the strict sense, courses in ethics cannot realistically claim to make people morally better.” But he asserts that it is “plausible to suppose that students in these courses will become more aware of the reasons underlying moral principles, and more equipped to reason carefully in applying these principles to concrete cases.”

Ethicist Richard Konrad agrees, and adds that teaching ethics is important because the students will then perceive that the study of the subject is important.

However, research on the effectiveness of teaching business ethics suggests a decline in students’ ethical standards. Studies have shown that students with business majors are more accepting of questionable business practices than nonbusiness majors, and those with coursework in business ethics have shown a similar or greater tendency. It may be that business school graduates who have taken ethics courses simply become more sympathetic to those facing difficult ethical dilemmas.

Educator Larry Churchill aptly points out that values are taught while teaching because of the nature of the teacher-student relationship. Values are more caught than taught, and, Churchill asks, What is education letting students catch? The environment of the classroom and the institution, and the off-the-record opinions of the professor become messages to the student that contribute to his or her formulation of personal values.

Do our educational institutions strengthen a sense of personal and public morality? The evidence suggests they do not.

Putting Theory To Work

While business schools slosh through relativistic ethics, the business community has opted for practical solutions. Nearly all our major corporations are making some efforts to improve their moral and ethical climate. The most common tools are training seminars and ethical codes. The most effective action, however, is much less institutional. The firms maintaining the highest ethical standards are those where individual responsibility and personal integrity are encouraged and supported from the top all the way down. The key is leadership.

In their study of the values of managers, Barry Posner and Warren Schmidt concluded, “Managers perceive that pressures to conform to organizational standards are strong (and very few see these pressures diminishing). And, accordingly, the vast majority of managers believe that unethical behavior is largely dependent on the organizational climate—especially the actions of one’s immediate boss and peers.”

“Codes of conduct” are designed to create a more positive climate. The vast majority of companies today have such a document outlining their creed. The codes generally express a recognition of responsibility to multiple groups (stockholders, employees, customers, etc.) and the conduct through which that responsibility will be fulfilled. Some go so far as to define the company’s role in society and specify that each member of the organization has the responsibility, equal with his position, to uphold this creed and stand liable for his conduct.

Many observers, however, categorize codes of conduct as hypocrisy. Gary Edwards, executive director of the Center of Ethics, Responsibilities and Values at the College of Saint Catherine in St. Paul, Minnesota, says, “Most of these documents came out of corporate legal departments and have very limited utility.” In a sense, then, they can be merely public-relations instruments to assuage growing criticism.

However, it would be grossly unfair to categorize all codes as useless. Many, such as Hewlett-Packard’s “What’s the HP Way?,” J. C. Penney’s “The Penney Idea,” and Johnson and Johnson’s “Our Credo,” are extremely powerful tools guiding every aspect of their businesses toward higher ideals and standards. James O’Toole, writing in Vanguard Management, says, “The bind comes in applying personal standards of behavior to organizational behavior. That requires real leadership.” It is all very well to publish codes that urge adherence to these standards, O’Toole says, but a leader in the organization must establish the ethical tone. “If he is beyond reproach, if she rewards right behavior in others, and if he is totally intolerant of wrongdoing, the chances are that nearly everyone in an organization will also behave ethically.”

In The Hard Problems of Management: Gaining the Ethics Edge, Mark Pastin writes that “in high-ethics firms, responsibility is individual rather than collective, with individuals assuming personal responsibility for actions of the firm. These firms’ ground rules mandate that individuals are responsible to themselves.”

Likewise, Donald Seibert, past chairman of J. C. Penney, says, “As we struggle to develop precise guidelines—as we write and rewrite codes of conduct at the national and company level—our ultimate control and our final hope rests with the individual. No set of rules can cover all the variables, nor anticipate all the possibilities for moral slippage.”

Business Ethics And Biblical Clarity

The corporation’s ethical crisis has been caused by the loss of a biblical world view, and by an exponential acceleration in social and technological change.

Schools have responded with the teaching of business ethics, couched in relativistic thinking that brings more confusion than clarity. Business itself recognizes the key element of leadership, but struggles to know how to proceed.

Christians therefore need to realize that in the present ethical upheaval they have a unique opportunity. Corporation presidents are calling for personal integrity and leadership. There is an unsettledness in the workplace about how things should be done and how people should be treated. Others will follow those willing to live out their personal convictions—and Christians need to lead.

But the Christian layperson needs a great deal of help. Clergy have failed to maintain effective dialogue with the laity about the realities of the workplace. As a result, they look elsewhere for guidance. For example, in one study several hundred corporate managers were asked whom they usually consult on ethical matters in their job. They listed clergy last (ninth), behind even “No one (work it out myself).”

Michael Novak, resident scholar in religion and public policy at the American Enterprise Institute, has called for a “theology of the corporation.” He points out the inadequacy of current Christian thinking to answer the difficult social questions being asked by businessmen and academicians. Just as necessary, however, is an apologetic for the layperson who sits in the pew on Sunday, but lives in the workplace Monday through Friday. He or she needs to be equipped with a practical Christian view of his or her role.

First, the Christian layperson needs to learn confidence that, in the midst of growing ambiguity in the workplace, the Word of God and the guidance of the Holy Spirit together promise to direct us into truth. Granted there are no simple blueprints, no exhaustive lists of “do’s” and “don’ts” to follow. And yet Christianity offers a set of guiding principles resting on a foundation of bedrock. These principles give a Christian business manager a frame of reference that can help in choosing the best alternative in a given situation. In addition, these principles build in the Christian manager a deep-seated character of wisdom and discernment that goes beyond do’s and don’ts.

Furthermore, the Christian layperson needs the assurance that truth, and his or her faith in that truth, will win out. God promises to be the provider of all our needs in this life and our Rewarder in eternity. Job security (or rather insecurity) has probably never been a more potent force than it is today. Whether it reveals itself in the form of fear, intense loyalty, or insatiable ambition, it is a kind of idolatry that permeates American materialistic society. We can only walk with real integrity when we know that we are first and foremost under the authority of God and confident of his perfect love for our lives. Unless we believe that our actions have standing in eternity, our courage to choose the right course will be severely compromised.

The Christian layperson must learn that his or her job is not merely to earn a wage to provide for the family. The first reason we work is that God has ordained that we should. God intended that each Christian should use the unique, creative abilities God has given him or her for a God-given task.

Part of that divine assignment is to be an example on the job. “You are the salt of the earth; but if the salt has become tasteless, how will it be made salty again?… You are the light of the world … Let your light shine before men in such a way that they may see your good works, and glorify your Father who is in heaven” (Matt. 5:13–16). The salt is our personal integrity acted out in our work by the grace of God in our lives. The light is the truth about God expressed in myriad ways. We shed light when we share the simple gospel message with another employee, or when we defend a difficult business decision with a finely tuned, biblically based rationale.

Corporate Theology: Another Look At Stewardship

It is beyond the scope of this article to offer a practical theology for corporate managers. However, one line of inquiry that is essential in developing such a workaday theology concerns stewardship.

To many Christians, stewardship is limited to the idea of charitable giving and possibly to the management of time and talent. But in its widest sense, stewardship springs from the doctrine of Creation, wherein God created the heavens and earth, and instructed humankind to have dominion over the earth (Gen. 1:28). As Joseph McAuliffe has aptly pointed out, the Greek word for steward, oikonomos, is the same word from which we derive economics or economist.Titus 1:7a is an example of its use: “For the overseer must be above reproach as God’s steward.”

Church leaders were to be not only of high integrity, but economically minded in the allocation of God’s resources. The businessperson, similarly, is accountable to God for the way in which an enterprise is administered. A single accountability should govern both his striving for productivity and his sense of justice and fairness.

This concept of stewardship could provide a Christian response to the current call for more social responsibility on the part of business. It could also help Christian managers to weigh properly the impact of their decisions in a more comprehensive way than the profit motive now allows. The stewardship concept could help businessmen relate their responsibility to manage for maximum profits to a much higher authority.

How the business community resolves its ethical crisis will greatly affect every aspect of our society. Christians must not remain as observers. Instead, we must offer a reasoned defense—and application—of the biblical values we hold dear. We need boldness and leadership in the business community.

Why A Business Crisis Now?

There are two forces causing the decline in business morality today.

First, the biblical world view of the previous two centuries has been eroded by a more relativistic view of right and wrong. Irving Kristol, professor at New York University and member of the Wall Street Journal’s board of contributors, writes in Two Cheers for Capitalism that “institutions of our society have lost their vital connection with the values which are supposed to govern the private lives of our citizenry.” He says we must first clarify what constitutes a virtuous life and then shape our institutions accordingly. Without a set of moral convictions generally agreed upon and personally internalized, the profit motive quickly gets out of hand.

Overlaid on moral deterioration is this century’s rapid acceleration of technology. New, difficult moral choices and a whole new complexity of relationships have been created. New technologies, for instance, make nuclear energy and offshore oil drilling possible, but g their promise of economic progress must be weighed against their previously unknown threat of environmental destruction.

Microelectronic technology, for another example, increases the speed of communication, but also brings cultures into conflict. The ethical standards of business in Indonesia and California, once buffered by thousands of miles of ocean, now must be resolved by managers who can communicate across that ocean faster than turn-of-the-century managers could communicate across the street.

For such issues, the law is an inadequate guide. When the bribing of foreign government officials first came to light in the seventies, the practice was not illegal by American law, and it was the “common practice” of that foreign country. Nevertheless, moral outrage brought about adoption of an antibribery law.

By Daniel E. Maltby.

Daniel E. Maltby is vice-president of International Leadership Group, an organization committed to the development of value-driven leaders.

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