Business Ethics Makes the Business

I recently finished reading Professor Francis J. Schweigert’s Business Ethics Education and the Pragmatic Pursuit of the Good (2016).  I commend this book to your attention.

The book is an argument “that business schools should incorporate education for justice into their business and management curriculum as the pragmatic pursuit of the good.  This argument is comprised of three central themes: that business ethics is part of business strategy, that business ethics education must include elements of both moral formation and preparation for public ethical leadership, and that this agenda for education is solidly founded on critical social facts and clear philosophical ideas.”

Schweigert believes that capitalism is accepted as our economic system because of its social welfare justification—the contributions it makes to the general welfare.  “The U.S. was not organized as a welfare state,” Schweigert writes, “because it was the role of business to provide for the general welfare.”  But evidence regarding unequal distributions of wealth, devastating collateral effects such as pollution and climate change, and other externalities indicates that capitalism is not currently creating a just economy.

As originally purposed, American business schools were to have ethics education as a central feature.  But over the years, Schweigert laments, the push for moral purpose was largely abandoned and “the notion of management as a profession withered and disappeared.” The duty to maximize shareholder value dominates in most business education today.  The percentage of students who believe that maximizing shareholder value is the primary responsibility of the corporation increases over the course of a business education.  Investment in teachers of business ethics and business law has dramatically shrunk in recent years.

While I do not agree with everything in Schweigert’s book, I agree with much of his central argument.  He writes, in part:

 

If we expect the marketplace to fulfill its role as a foundation for a free society and a means to the general welfare, we need a new vision for business ethics that is grounded in a fuller understanding of the duties of self-interest, with public accountability for business operations and outcomes as a matter of justice.  It is clear from the last three centuries that market economies are not guided by an invisible hand to create or sustain wealth equality, but rather they tend toward increasing disparities in wealth, dignity, and political membership that can threaten the freedom of the marketplace itself.  Nor can the pursuit of profits without regard for social purposes be corrected by government regulation alone….

Business ethics must be pulled out of its isolation from business as business, as though it provides a moral high ground to critique business according to eternal truths.  The business ethics needed must be to critique business according to eternal truths. The business ethics needed must be employed as part of business strategy in a “pragmatic pursuit of the good.” (emphasis added)

 

The pragmatic pursuit of the good requires that we engage in “reflective morality.”  We should not automatically accept either our own gut feelings nor the standards of the group.  Rather, rational examination and evaluation is required, making ethics a “shared enterprise: searching out the right course of action, not through introspection alone but through the investigation of the facts of the situation.”  In making ethical decisions, we should do so against a backdrop that explicitly recognizes that business organizations are institutional members of our society.  We should recognize the clear social purpose of business, Schweigert argues.

The point that business students should be taught the importance of running their organizations to broadly serve the economy and society rather than just to maximize profits is a proposition that cannot be emphasized enough.  A decade ago, Rakesh Kurana of the Harvard Business School made this point.  As did Duff McDonald in his recent critique and history of the Harvard Business School.

Our Ethics Unwrapped videos focus primarily–though not exclusively–on behavioral ethics.  Most of our videos focus on why there is often such a gap between the good conduct that we aspire to and the actual conduct we engage in.  Schweigert talks a bit about the self-serving bias, the conformity bias, rationalizations and other matters that our videos address.

But his main point goes beyond that:  “Rather than focusing on personal responsibility to remain true only to one’s own moral values and commitments, the leader also takes on a public responsibility for the work of justice as a rational enterprise.

 

 

 

Additional Resources:

 

Rakesh Kurana, From Higher Aims To Hired Hands: The Social Transformation Of American Business Schools And The Unfulfilled Promise Of Management As A Profession (2007).

 

Duff Mcdonald, The Golden Passport: Harvard Business School, The Limits Of Capitalism, And The Moral Failure Of The MBA Elite (2017).

 

Francis J. Schweigert, Business Ethics Education And The Pragmatic Pursuit Of The Good (2016).

 

Francis J. Schweigert, “The Pragmatic Pursuit Of The Good,” In Democracy & Education: Collected Perspectives (V. Byczkiewicz, Ed., 2014).

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