The Ethical Leadership in Business Speaker Series opens with the first of six sessions

Can there be a funny side to business ethics? As most people usually look at this topic only after disaster strikes, they might disagree. Surely, if we take the time to examine business ethics, we are recognizing that humans are flawed and will always make self-serving choices, especially when in pursuit of profit in business.

For most people, the jokes, if any, are intended to be wry. “Business ethics: that’s an oxymoron, right?” “A verbal contract isn’t worth the paper it’s written on.” And, to quote another well-known oxymoron: “the budget was unlimited, but I exceeded it.” 

In fact, it is not uncommon for businesspeople to believe that the pursuit of profit precludes ethical behaviour. To succeed in business, you must compromise your ethics, or fail. This position is examined in business ethics literature with the Separation Thesis. The Separation Thesis examines the descriptive claim that there is no way to be ethical in business by comparing it to the real world: if the claim matches what is actually occurring, then it must be true. On the other hand, if there is anything to disprove the claim, it must be false.

Aha, you say. It must be true, as there are myriad instances of businesses pursuing profit regardless of damage, and everyone knows the worst of them so well you only have to give the company name. Enron. Exxon Valdez. Deepwater Horizon. Bhopal. But if you take the time to look there is obvious proof of the other side of the argument.

Dr. Dick and the philosophic proofs

To test the descriptive interpretation of the Separation thesis, Dr. Dick presented a simple experiment: go online to your favourite e-store and attempt to buy something society has outlawed, such as an illegal drug. It won’t be there. Perhaps the e-store would sell the drug if they were left to their own devices, but the backlash would be too big. Therefore, either the morals held by the e-store, or by the clients of the e-store, are driving the decision not to sell this drug. It is something that the e-store will not do regardless of the profit available.

Given that there are things the e-store won’t do, and that the clients won’t do, then the descriptive version of the Separation Theory is false. It may be easy to miss because we focus on the scandals – and remember, click-bait is more fun! – but there are ethical values driving actions all the time.

Moving on to the normative version the Separation thesis, Dr. Dick provided the following explanation and test. The normative interpretation doesn’t tell you how the world is, it tells you how the world ought to be. Therefore, if you want to be successful in business, you can’t be concerned with ethics, you have to focus just on the economic realities. You must capture hard data in spreadsheets and databases and use that information to make decisions, regardless of moral values. You must ignore the likely response of your shareholders and clientele and pursue profit.

Or, to put it more directly, businesspeople shouldn’t do what they should do. In philosophy, this is called a refutation. In this newsletter, this is called an absurdity.

The takeaway lesson: ACT vs. ACTION

Dr Dick hoped his audience would take away at least one idea to help each person recognize the complexity of the moral choices they will face, which was this: they need to understand the difference between two terms, act, and action.

To act is a simple description of what you do. Action, on the other hand, both includes the act, but also includes the morally relevant context around it. This includes the reason to act, as well as the consequences of the act.

It is a common mistake to equate morality only to the act. This may be a result of our society’s lack of formal ethical teaching beyond early childhood. As toddlers, we are taught correct acts (brush your teeth!) and incorrect acts (don’t hit your brother!). Once we reach adulthood, however, the acts we choose are not so simple and both the reasons for doing them, and their consequences, are often quite tangled. It is this distinction that is examined in different moral theories, though surprisingly it was not stated in this fashion until 2009.¹

To illustrate his point, Dr. Dick quickly reviewed a number of moral theories and explained how each defined a good action. These included consequentialist utilitarianism, rule utilitarianism, and Kantian ethics. Each theory puts the emphasis on a separate interpretation of a good action: is the action judged by its immediate real-world consequences, by rules defined by your society, or by what you as the actor expected to happen?

After this review, philosophy might seem a tangled web indeed. However, with his light-hearted humour and self-deprecating wit, Dr. Dick easily tied up the loose ends for the audience. Business ethics are intended to help provide you with the tools and the framework to understand what is going on, both in upcoming global events and in individual situations you will encounter in class and in life. Remember, business ethics are not just an oxymoron: they are a roadmap. Use them well!

At time of publication, the Canadian Centre for Advanced Leadership in Business will be presenting four more business ethics speaker sessions for Master of Management, and third- and fourth- year Bachelor of Commerce students to learn more about the practical application of business ethics.

For more information, contact leadership@haskayne.ucalgary.ca or visit our website.

 

¹ Self-Constitution: Agency, Identity, and Integrity, Dr. Christine Korsgaard, Oxford University Press, 2009.