Excerpts from It's Good Business: Ethics and Free Enterprise for the New Millennium (1997), by Robert C. Solomon

Robert C. Solomon argues for the immediate, practical relevance of ethics for our business lives. He debunks the idea that business is fundamentally amoral or immoral.

Business is not a blind scramble for profits and survival, but rather an established practice with firmly fixed rules and expectations, and people in business are professionals. Although unethical business, like crime, sometimes pays, there is no conflict between ethical business behavior and success. Solomon concludes with eight crucial rules for ethical thinking in business.


WHY ETHICS?

Seminars in business ethics ... almost always begin with and are periodically brought back around to such practical questions as "What does this have to do with my job?" or "Will understanding ethics help me do my job better?"

Such questions deserve and demand three immediate, practical answers.

 

1. Ethical errors end careers more quickly and more definitively than any other mistake in judgment or accounting. To err is human, perhaps, but to be caught lying, cheating, stealing, or reneging on contracts is not easily forgotten or forgiven in the business world. And for good reason: Such actions undermine the ethical foundation on which the business world thrives. Almost everyone can have compassion for someone caught in an ethical dilemma. No one can excuse immorality.

For every glaring case of known unethical conduct that goes unpunished, a dozen once-promising careers silently hit a dead end or quietly go down the tubes. On relatively rare occasions, an unhappy executive or employee is singled out and forced to pay public penance for conduct that everyone knows-he or she and the attorney will loudly protest-"goes on all the time." But much more often, unethical behavior, though unearthed, will go unannounced; indeed, the executive or employee in question will keep his or her job and may not even find out that he or she has been found out-may never even realize the unethical nature of his or her behavior. A career will just go nowhere. Responsibilities will remain routine, promotions elusive.

What makes such career calamities so pathetic is that they are not the product of greed or immorality or wickedness. They are the result of ethical naivete.

They happen because an employee unthinkingly "did what he was told to do" and became the scapegoat as well.

They happen because a casual public comment was ill-considered and had clearly unethical implications-though nothing of the kind may have been intended.

They happen because a middle manager, pressed from above for results, tragically believed the adolescent cliches that pervade the mid-regions of the business world, such as "In business, you do whatever you have to do to survive." (It is both revealing and instructive that although we often hear such sentiments expressed in seminars for middle managers, we virtually never hear them in similar seminars for upper-level executives.)

They happen because upper management wasn’t clear about standards, priorities, and limits, or wasn’t reasonable in its expectations, or wasn’t available for appeal at the critical moment.

They happen because an anonymous employee or middle manager hidden in the complexity of a large organization foolishly believed that such safe anonymity would continue, whatever his or her behavior.

They happen, most of all, because a person in business is typically trained and pressured to "think business," without regard for the larger context in which business decisions are made and legitimized.

Unethical thinking isn’t just "bad business"; it is an invitation to disaster in business, however rarely (it might sometimes seem) unethical behavior is actually found out and punished....

2. Ethics provides the broader framework within which business life must be understood. There may be a few people for whom business is all of life, for whom family and friendship are irrelevant, for whom money means only more investment potential and has nothing to do with respect or status or enjoying the good life. But most successful executives understand that business is part of life. Corporations are part of a society that consists of something more than a market. Executives and employees do not disappear into their jobs as if into a well, only to reappear in "real life" at the end of the business day.

Successful managers, we now all know, stay close to their subordinates-and not just as subordinates. The best corporations in their "search for excellence" begin and remain close to their customers, and not just in their narrowest role as consumers. Money may be a scorecard, a measure of status and accomplishment, but it is not the ultimate end. Business success, like happiness, often comes most readily to those who do not aim at it directly.

Executives are most effective and successful when they retain their "real life" view of themselves, their position, and the human world outside as well as inside the corporation. Business ethics, ultimately, is just business in its larger human context....

3. Nothing is more dangerous to a business or to business in general-than a tarnished public image. A few years ago, Business and Society Review reported the results of a Harris Poll-one among many-that showed that public confidence in the executives running major corporations had declined "drastically" from 55% in 1966 to 16% in 1976; 87% of the respondents in a parallel poll agreed that most businessmen were more interested in profits than in the public interest. Whether or not such suspicions seriously affect sales, they indisputably hurt the bottom line in a dozen other hurtful ways-not least among them the pressure for government regulation. The fact is that a tarnished image has direct consequences, for sales, for profits, for morale, for the day-to-day running of the business. Distrust of an industry ("big oil," "the insurance racket") can hurt every company, and distrust of an individual company can quickly drive it to bankruptcy...

 

THE MYTH OF AMORAL BUSINESS

Business people have not always been their own best friends. John D. Rockefeller once boasted that he was quite willing to pay a man an annual salary of a million dollars, if the man had certain qualities:

[He] must know how to glide over every moral restraint with almost childlike disregard ... [and have], besides other positive qualities, no scruples whatsoever, and [be] ready to kill off thousands of victims-without a murmur. Robert Warshow, Jay Gould (1928)

Such talk is unusually ruthless, but it exemplifies horribly a myth that has often clouded business thinking-what University of Kansas business ethicist Richard De George calls the "myth of amoral business." According to the myth, business and ethics don’t mix. People in business are concerned with profits, with producing goods and services, with buying and selling. They may not be immoral, but they are amoral-that is, not concerned with morals. Moralizing is out of place in business. Indeed, even good acts are to be praised not in moral terms but only in the cost/benefit language of "good business." The myth of amoral business has a macho, mock heroic corollary that makes ethical paralysis almost inevitable. It is the dog-eat-dog rhetoric of the Darwinian jungle-"survival of the fittest." In fact, almost everybody and most companies manage to survive without being the "fittest." The anxiety of switching jobs, of not getting promotions, of losing an investment, or of going bankrupt, however upsetting, is rarely a "matter of life and death." In The Right Stuff, Tom Wolfe sympathetically quotes the wife of one of the Air Force test pilots. She mentions a friend’s complaint about her husband’s dog-eat-dog existence on Madison Avenue and reflects, "What if her husband went into a meeting with a one-in-four chance of survival?"

If the myth of amoral business and its Darwinian corollary were nothing but a way of talking on the way to the office, it would not be worth attention or criticism. But the fact is that it does enter into business thinking, and often at exactly the critical moment when an ethical decision is to be made. Worse, the amoral rhetoric of business quickly feeds public suspicion of business and easily becomes part of the condemnation of business. A handful of scandals and accidents that might otherwise be viewed as the unfortunate byproducts of any enterprise become "proof’ of what the businessmen themselves have been saying all along that there is no interest in ethics in business, only the pursuit of profits....

Business people who do not talk about ethics often complain a great deal about "regulation" without realizing that the two are intimately connected. Legal regulation is the natural response of both society and government to the practice of amorality, however nobly that practice is couched in the rhetoric of "free enterprise." If a business scandal or tragedy is quickly and convincingly chastized by business people, there is neither time nor pressure for regulation. But when scandal and tragedy are at the same time surrounded by ethical neglect or silence or, worse, yet another appeal to "the market" as the long-term corrective, government regulation becomes inevitable. In case anyone still wants to ask why ethics should be relevant to the bottom line, one might simply reply that regulation is the price business pays for bad ethical strategy...

 

THE THREE Cs OF BUSINESS ETHICS

... Business ethics is not an attack on business but rather its first line of defense. Adam Smith knew this well enough: Business has prospered because business has dramatically improved the quality of life for all of us. Moreover, the emphasis on freedom and individuality in a business society has done more than any conceivable socialist revolution to break down traditional inequities in power and wealth, even if it inevitably creates some inequities of its own. Business ethics begins with consumer demand and productivity, with the freedom to engage in business as one wishes, and with the hope-inconceivable in most parts of the world that one can better one’s life considerably through one’s own hard work and intelligence. These are the values of business ethics, and the whole point of business ethics is to define and defend the basic goals of prosperity, freedom, fairness, and individual dignity.

Many critics of business are trained in the rhetoric of ethics, but most business people are not. Those in business naturally prefer to stick with what they know and sidestep the ethical issues which is ruinous. it is one thing to know that product Z costs $0.14 to make and retails for $1.59, that raising the price to $1.79 would increase profits and not dampen demand, that cheaper materials or foreign labor could lower the cost of manufacturing to $0.09, although sales would eventually diminish as consumer expectations went unsatisfied. But it is something more to think about the quality of product Z, the contribution it makes to American life (even if only by way of amusement or novelty). Not incidentally, these ethical virtues may be essential to the bottom line as well.

Business ethics is nothing less than the full awareness of what one is doing, its consequences and complications. Thinking about ethics in business is no more than acknowledging that one has taken these into account and is willing to be responsible for them. It is being aware of

1. the need for compliance with the rules, including the laws of the land, the principles of morality, the customs and expectations of the community, the policies of the company, and such general concerns as fairness;

2. the contributions business can make to society, through the value and quality of one’s products or services, by way of the jobs one provides for workers and managers, through the prosperity and usefulness of one’s activities to the surrounding community;

3. The consequences of business activity, both inside and outside the company, both intended and unintended, including the reputation of one’s own company and industry ...

Part of the problem for business ethics is the image of business as "big" business, as a world of impersonal corporations in which the individual is submerged and ethics is inevitably sacrificed to bureaucratic objectives. To set the image straight, therefore, let us remind ourselves of a single vital statistic: Half of American business is family business; 50% of the GNP; 50% of the employees. Some of these family businesses are among the Fortune 500. Others are Mom and Pop groceries and Sally and Louie’s Restaurant. But it is essential to remember that however much our focus may be on corporations and corporate life, business in America is not a monolithic, inhuman enterprise. As the great French philosopher Rousseau once said of society, we might say of American business life that its origins are in the family, that its "natural" model is the family. Business is ultimately about relationships between people-our compliance with the rules we all form together, our contributions to the well-being of others as well as to our own, the consequences of our activities, for good and otherwise. There is nothing amoral or unethical about it....

 

BUSINESS SCUM

The most powerful argument for ethics in business is success. Ethical businesses are successful businesses; excellence is also ethical. But ethics is no guarantee of success. To say so on our part would be-unethical. The fact is that there are, as we all know, business scum-those shifty, snatch-a-buck operations that give business a bad name. And some of them, ethics be damned, are profitable.

Brake Breakers, Inc., is a small franchise in the Midwest that specializes in brake, suspension, and wheel repairs. Company policy includes hiring men with little education and working them long hours at a single semiskilled job. Wages are accordingly minimal, and employee turnover is more often a matter of burnout than of leaving for another job. (This saves a lot on fringe benefits and pensions; no one has ever collected on them.)

Foremost among the employees’ skills, however, is the delivery of a prepackaged sermon designed to convince all but the most cautious customer that the $149.25 brake-rebuilding special is far preferable to the mere replacement of the brake shoes, which is all that is usually required (and often all that is actually done).

Managers are rewarded on the basis of the success of these little speeches by their employees.

Their job is first and foremost to make sure that the minimum is never enough-not hard given the level of mechanical know-how of most of the customers. But even with the $149.25 special, extra costs are almost always included, sometimes for some other (unnecessary) part but more often than not because of the "unexpected difficulty" of this particular repair. When a customer insists on the minimum repair, it is up to the manager to see to it that more absolutely necessary work is "discovered" in the middle of the job. (This is called the "step method.") Few customers are in a position to do more than complain and curse for the moment, but no one ever expects them to come back anyway.

Managers are expected to keep actual costs down. Used parts are sold in place of new parts. (Sometimes, the car’s original part is cleaned or polished and simply reinstalled.) A few miles down the road, who can tell?

Within the company, employees are reminded daily, "There are fifty people waiting for your job." Everyone is hired with the promise "Within three years, you can work up to a managerial position." In fact, managers are always hired from outside typically friends of the boss. (it is understood that they will supplement their salaries by skimming within the shop.) Managerial turnover, accordingly, is low. Brake Breakers is not the sort of company that can afford to have a disgruntled manager quit in disgust, although any charges he might bring against the company could dependably be turned against him as well.

Brake Breakers, Inc., is everyone’s stereotypical image of unethical business in action. Its people sell a shoddy product to customers who don’t need it, and they don’t always sell what they say they are selling. Employees are treated like serfs, and accounting procedures at every level of the company are, to put it politely, suspect. The customer is virtually never satisfied, but it is the nature of the business that people who need brake repairs need them fast and do not know what has to be done or how much it should cost. They are ripe for the taking, and they are taken. The price is still low enough and the job near enough adequate that no one sues. The "lifetime guarantee" isn’t worth the paper it’s printed on, but it is a fact about brake jobs that there is only so much that can go wrong, and a disgruntled customer usually doesn’t bother coming back anyway. It’s a perfect setup. At least half of the profits, even on a modest system of objective ethical accounting, are obtained by cheating the customer and the employees.

How does Brake Breakers, Inc., stack up according to our three Cs of business ethics? Not very well. Compliance: Minimal; just enough to avoid legal penalties and major lawsuits but far below the level of concern for ethics that we all expect of every business.

Contributions: Well, they do fix brakes, even if some of them aren’t broken. But a dozen more dependable businesses-both national franchises and local service stations-would do a better job with less flimflam. To provide a service is not in itself a contribution. We also want to know if it is a service that would otherwise be performed as well and as cheaply by other firms.

Consequences: Disgruntled customers, hesitation among motorists to have their brakes checked when they ought to, occasional accidents, a notoriously bad reputation for car-repair shops in general (hurting those that do good, honest work), and an exemplary case of unethical business to turn consumers and congressional investigators against business in general.

It is too often supposed that the business of business ethics is to prove to the management of such unethical enterprises as Brake Breakers, Inc., that crime does not pay. That is too much to ask for.

Show them, perhaps that they are setting themselves up for lawsuits. In fact, it just hasn’t happened.

Show them, then, that they are losing customers. In fact, it is a business with a regular supply of customers, no repeat customers in any case and little dependence on word of mouth. (In fact, they depend on the absence of word of mouth, since people are often too ashamed at having been "taken" to tell their friends about it.)

Show them how well Midas and Menace have been doing because of their reputation for dependability. But, the manager at Brake Breakers tells us with a laugh, "We ain’t Midas."

Argue, then, that unethical business practices cannot possibly pay off in the long run. "In the long run," the amused manager tells us, unknowingly echoing the economist John Maynard Keynes, "we’re all dead."

The fact-sad, perhaps-is that unethical business, like crime, sometimes pays. In any system based on trust, a few deceivers will prosper. There is no guarantee that ethics is good for the bottom line. There is no guarantee that those who do wrong will get caught or feel guilty. There is no guarantee-in business or elsewhere-that the wicked will suffer and the virtuous will be rewarded (at least, not in this life). But, that said, we can nonetheless insist without apology that good ethics is good business. Where immorality is so easily identified, we can be sure that morality is the general rule, not merely an accessory or an exception. The point of doing business is to do well by providing the best service or product at a reasonable cost. Those businesses that exploit the possibility of getting away with less are merely parasitic on the overwhelming number of businesses that are doing what they are supposed to.

 

PRACTICES MAKE PERFECT: A BETTER WAY TO LOOK AT BUSINESS

A practice is any association of definitely patterned human behavior wherein the description and meaning of kinds of behavior involved and the kinds of expectations involved are dependent upon those rules which define the practice.

- John Rawls (professor of philosophy, Harvard University)

Business is not a scramble for profits and survival. It is a way of life, an established and proven practice whose prosperity and survival depend on the participation of its practitioners. Business ethics is not ethics applied to business. It is the foundation of business. Business life thrives on competition, but it survives on the basis of its ethics.

Business is first of all a cooperative enterprise with firmly fixed rules and expectations. A view from a visitor’s gallery down to the floor of the New York Stock Exchange may not look very much like a cooperative enterprise with fixed rules and expectations, but beneath the apparent chaos is a carefully orchestrated set of agreements and rituals without which the Exchange could not operate at all. There can be no bogus orders, and bid ranges are carefully controlled. The use of information is restricted, but traders trade information as well as securities. The rules of the Exchange, contrary to superficial appearances, are uncompromising. Break them and you’re off the floor for good. Right there at the busy heart of capitalism, there is no question that business is a practice, and people in business are professionals.

In business ethics, it is often profitable to compare business with a game. Games are also practices. Baseball, for instance, is a practice. It has its own language, its own gestures with their own meanings, its own way of giving significance to activities that, apart from the game, might very well mean nothing at all. (Imagine a person who suddenly runs and slides into a canvas bag filled with sand on the sidewalk, declaring himself "safe" as be does so.) The practice is defined by certain sorts of behavior-"pitching" the ball in a certain way (if, that is, the practice designates you as the 11 pitcher"), trying to hit the ball with a certain well-defined implement (the "bat"), running a certain sequence of "bases" in a certain order subject to certain complex restrictions (one of which is that one not be "tagged" by another person holding the ball). Anyone who has tried to explain what is happening in a baseball game to a visitor from another country with a different "national pastime" can attest to the complexity of these rules and definitions, though most Americans feel quite familiar with them and can focus their attention-as players or as spectators-on such simple-sounding concerns as "Who’s up?" and -Who’s on first?"

Business is like baseball in that it is a practice. A day at the stock exchange makes it quite clear just how many rituals, rules, and restrictions are involved in every buy-and-sell transaction.... The business world is far more open to extra "players" and to alternative courses of action than is baseball, but within the institutions that make up the practice of business, roles and alternatives are clearly specified-as "jobs" and "positions," as obligations and options. Strategic ethics begins by emphasizing business as a practice with strict rules and expectations that acceptable players honor implicitly-or they are out of the game. To throw out players who cheat is as important to a healthy enterprise as is the inevitable exit of players who can’t play well. Bad business is much more damaging to business than are badly run businesses.

Business, like baseball, is defined by its rules. Some of these have to do with the nature of contracts. Many have to do with fairness in dealing with employees, customers, and government agents (hence the existence of such policing bodies as the IRS, the SEC, the FDA, etc., etc.). Indeed, the notion of fairness in exchanges is more central to business than to any other practice-whether in terms of work and salary, price and product, or public services and subsidies. Without fairness as the central expectation, there are few people who would enter into the market at all. (Consider the chill on the market following dramatic "insider trading" cases.) Without the recognition of fair play, the phrase "free enterprise" would be something of a joke. The rules of business, accordingly, have mainly to do with fairness. Some of these rules ensure that the market will remain open to everyone. Some of the rules protect those who are not players in the practice but whose health, jobs, or careers are affected by it. Some of the rules have to do with serving the needs or wishes of the community (the law of supply and demand can be interpreted not only as an economic mechanism but as an ethical imperative). Some have to do with "impact--the effects of a business on its surrounding communities and environment. If business had no effects on the surrounding community but was rather a self-enclosed game, there would be no more public cry for business ethics than for "hopscotch ethics" (which is not to say that there is no ethics to hopscotch).

It is within this description of a practice that we can also define the terms "virtue" and "vice" in business ethics. Some virtues and vices go far beyond the bounds of business, of course; they are matters of morality (honesty, for instance). But in business ethics there are virtues and vices that are particular to business and to certain business roles. Close accounting and "watching every penny" are virtues in a shipping clerk but not in someone who is entertaining a client. Keeping a polite distance is a virtue in a stockholder but not in a general manager. Tenaciousness may be a virtue in a salesman but not in a consultant. Outspokenness may be a virtue in a board member but not in the assistant to the president. Being tough-minded is a virtue in some managerial roles but not in others.

In general, we can say this: A virtue sustains and improves a practice. A virtue in business is an ethical trait that makes business in general possible, and this necessarily includes such virtues as respect for contracts as well as concern for product quality, consumer satisfaction, and the bottom line. A vice, on the other hand, degrades and undermines the practice. Shady dealing and reneging on contracts are vices and unethical not because of an absolute moral law but because they undermine the very practice that makes doing business possible.

Thinking about business as a practice and business people as professionals gives us a set of persuasive responses to the Brake Breakers case:

1. Business in general depends on the acceptance of rules and expectations, on mutual trust and a sense of fairness, even if-as in any such practice-a few unscrupulous participants can take advantage of that trust and betray that concern for fairness.

2. Brake Breakers, Inc., can continue to prosper in their scummy ways only so long as they remain relatively insignificant, with a small enough market share not to bring down the wrath of major competitors and sufficiently little publicity not to inspire a class-action suit. Unethical behavior may bring profits, but only limited profits.

3. It is clearly in the interest of business in general and other firms in that particular industry to warn consumers about Brake Breakers, even to put them out of business. The success and strength of profession and its independence from externally imposed regulations depends on the internal ‘policing" of unethical behavior. Doctors have never doubted this; lawyers are learning. But so long as business thinks of itself as unregulated competition where "anything goes" rather than as a profession to be protected from abuse, this vital policing for survival will go unattended, or it will be attended to by the government.

4. The practice of business is a small world. Fly-by-Night Enterprises Ltd. and Brake Breakers, Inc., may succeed for a while, but, in general, people catch on-fast. Irate customers tell their friends-and their lawyers. They also get even. They sue, for triple damages. They write the newspapers, or "60 Minutes." They drop a note to the IRS, or they call the Better Business Bureau. The banker’s kid who was cheated on the job complains to his father the month before the lease has to be renewed. Or the victim happens to be a litigious lawyer with time on his hands. But the effects of unethical business practices are not always so obvious as a dip in the bottom line or a subpoena waiting at the office. They are often slow and insidious, the bottom of a career eaten out from under, or a company that is doing "OK" but could and should be doing much better. There are no guarantees that unethical behavior will be punished, but the odds are pretty impressive.

5. In any profession, it’s hard to get clean again. Suppliers tighten their terms; priority status disappears. The hardheaded businessman is supposed to say ‘Who cares?’ But if so, there are few hardheaded businessmen, only a small number of bottom-line minded sociopath. Character is who you are, the thing you are trying to prove by making money in the first place. One of the classic movie lines is "My money’s as good as anyone else’s." Perhaps. But are you as good? That isn’t just a matter of money.

Why should Brake Breakers, Inc., get ethical? Let’s ask another question: How would you feel about yourself if you spent your working days as a manager of Brake Breakers? What would you tell your kids? ...

 

THINKING ETHICS: THE RULES OF THE GAME

Ethics is, first of all, a way of thinking.

Being ethical is also-of course--doing the right thing, but what one does is hardly separable from how one thinks. Most people in business who do wrong do so not because they are wicked but because they think they are trapped and do not even consider the ethical significance or implications of their actions.

What is thinking ethically? it is thinking in terms of compliance with the rules, implicit as well as explicit, thinking in terms of the contributions one can make as well as one’s own possible gains, thinking in terms of avoiding harmful consequences to others as well as to oneself. Accordingly, [here are] eight crucial rules for ethical thinking in business.

 

Rule No. 1: Consider other people’s well-being, including the well-being of non-participants. In virtually every major religion this is the golden rule: "Do unto others as you would have them do unto you"; or, negatively, "Do not do unto others as you would not have them do unto you." ideally, this might mean that one should try to maximize everyone’s interests, but this is unreasonable. First of all, no one really expects that a businessman (or anyone else) would or should sacrifice his own interests for everyone else’s. Second, it is impossible to take everyone into account; indeed, for any major transaction, the number of people who will be affected-some unpredictably-may run into the tens or hundreds of thousands. But we can readily accept a minimum version of this rule, which is to make a contribution where it is reasonable to do so and to avoid consequences that are harmful to others. There is nothing in the golden rule that demands that one deny one’s own interests or make sacrifices to the public good. It says only that one must take into account human effects beyond one’s own bottom line and weigh one’s own gain against the losses of others.

Rule No. 2: Think as a member of the business community and not as an isolated individual. Business has its own rules of propriety and fairness. These are not just matters of courtesy and protocol; they are the conditions that make business possible. Respect for contracts, paying one’s debts, and selling decent products at a reasonable price are not only to one’s own advantage; they are necessary for the very existence of the business community.

Rule No. 3: Obey, but do not depend solely on, the law. It goes without saying, as a matter of prudence if not of morality, that businesses and business people ought to obey the law-the most obvious meaning of compliance. But what needs to be added is that ethical thinking is not limited to legal obedience. There is much unethical behavior that is not illegal, and the question of what is right is not always defined by the law. The fact is that many things that are not immoral or illegal are repulsive, disgusting, unfair, and unethical-belching aloud in elevators, throwing a disappointing dish at one’s host at dinner, paying debts only after the "final notice" and the threat of a lawsuit arrives, fleecing the feebleminded, taking advantage of trust and good faith, selling faulty if not dangerous merchandise under the rubric "Buyer beware." Check the law-but don’t stop there.

Rule No. 4: Think of yourself-and your company-as part of society. Business people and businesses are citizens in society. They share the fabric of feelings that make up society and, in fact, contribute much of that feeling themselves. Business is not a closed community. It exists and thrives because it serves and does not barm society. It is sometimes suggested that business has its own ethical rules and that they are decidedly different from those of the larger society. Several years ago business writer Albert Carr raised a major storm in the Harvard Business Review by arguing that business, like poker, bad its own rules and that these were not to be confused with the moral rules of the larger society. The comparison with poker has its own problems, but, leaving those aside for now, we can see how such a view not only invites but demands the most rigorous regulation of business. Business is subject to the same ethical rules as everyone else because businessmen do not think of themselves as separate from society. A few years ago, the then chairman of the Ford Foundation put it bluntly: "Either we have a social fabric that embraces us all, or we’re in real trouble." So too with ethics.

Rule No. 5: Obey moral rules. This is the most obvious and unavoidable rule of ethical thinking and the most important single sense of compliance. There may be room for debate about whether a moral rule applies. There may be questions of interpretation. But there can be no excuse of ignorance ("Oh, I didn’t know that one isn’t supposed to lie and cheat"), and there can be no unexcused exceptions ("Well, it would be all right to steal in this case"). The German philosopher Immanuel Kant called moral rules "categorical imperatives," meaning that they are absolute and unqualified commands for everyone, in every walk of life, without exception, not even for harried executives. This is, perhaps, too extreme to be practical, but moral rules are the heart of ethics, and there can be no ethics-and no business-without them.

Rule No. 6: Think objectively. Ethics is not a science, but it does have one feature in common with science: The rules apply equally to everyone, and being able to be "disinterested-that is, to think for a moment from other people’s perspectives-is essential. Whether an action is right is a matter quite distinct from whether or not it is in your interest. For that matter, it is quite independent of your personal opinions as well.

Rule No. 7: Ask the question "What sort of person would do such a thing?" Our word "ethics" comes from the Greek word ethos, meaning "character." Accordingly, ethics is not just obedience to rules so much as it is the concern for your personal (and company) character-your reputation and 11 good name--and, more important, how you feel about yourself. Peter Drunker summarizes the whole of business ethics as "being able to look at your face in the mirror in the morning."

Rule No. 8: Respect the customs of others, but not at the expense of your own ethics. The most difficult kind of ethical thinking that people in business have to do concerns not a conflict between ethics and profits but rather the conflict between two ethical systems. In general, it is an apt rule of thumb that one should follow the customs and ethics of the community. But suppose there is a conflict not only of mores but of morals, as in the apartheid policies of South Africa. Then the rule to obey (and support) one’s own moral principles takes priority. What is even more difficult is what one should do when the moral issue is not clear and moral categories vary from culture to culture. A much debated example is the question of giving money to expedite a transaction in many third-world countries. It is "bribery" in our system, 11 supporting public servants" in theirs. Bribery is illegal and unethical here because it contradicts our notion of a free and open market. But does the same apply in the third world, where business (and social life) have very different presuppositions? ...

 

Ethical thinking is ultimately no more than considering oneself and one’s company as citizens of the business community and of the larger society, with some concern for the well-being of others and-the mirror image of this-respect for oneself and one’s character. Nothing in ethics excludes financially sound thinking, and there is nothing about ethics that requires sacrificing the bottom line. In both the long and the short run, ethical thinking is essential to strategic planning. There is nothing unethical about making money, but money is not the currency of ethical thinking in business.

 

 

 

Review and Discussion Questions

1. Solomon describes the view that business and ethics don’t mix as the "myth of amoral business." Why does he think it is a myth? Do you agree?

2. Do most businesspeople, respect the "Three Cs"? In your experience, how much unethical behavior is there in business today? What happens to companies like Brake Breakers? Can they be successful?

3. Does the existence of "business scum" undermine Solomon’s claim that businesspeople, are professionals and that business is a practice with definite rules?

4. What are the "rules of the game" in business today? Should those rules be changed in any way?

5. Assess Solomon’s claim that "there is nothing about ethics that requires sacrificing the bottom line" (p. 43). Is it compatible with his statement that "there is no guarantee that ethics is good for the bottom line" (p. 39)?

 

This passage is excerpted from Moral Issues in Business, 8th ed., by William H. Shaw and Vincent Barry. Copyright 2001, Wadsworth, Thomson Learning,Inc. In that text, this passage is reprinted by permission from The New World of Business by Robert C. Solomon. Copyright 1994 by Rowman and Littlefield Publishers, Inc.