BUSINESS, SOCIETY, & ETHICS

A JOHN WILEY & SONS, INC., PUBLICATION

CONTENTS IN BRIEF

1 Introduction 1

iii
CONTENTS

1 Introduction 1
1.1 What is Business Ethics? 1
1.2 Why Is Business Ethics Important? 2
1.2.1 Ethics and the Business Climate 3
1.2.2 Ethics and the Law 4
1.2.3 Ethics and the Bottom Line 5
1.2.4 The Best Reason to Care about Business Ethics 10
1.3 Money and Other Values 11
1.4 Business Ethics, Integrity, and Balance 12
1.5 Moral Psychology and Why Good People Sometimes Do Bad
Things 14
1.6 Solomon on Defective Metaphors about the Nature of Business 18
1.7 A Few Notes about Character 21

v
CHAPTER 1

INTRODUCTION

1.1 What is Business Ethics?

There are probably as many different ways to define “business ethics” as there are
business ethics professors. Heres one that I like:

Business ethics consists of the application of ethical values and standards to business
activities.

What are those ethical standards and values? Well, they are just the same ethical
standards and values that we use to determine right or wrong in any other context.
The results, when asked “What do you value?” are always the same. Almost ev-
eryone answers almost all of the questions the same way. What do we learn from
this? I think that its a pretty striking demonstration of the fact that, by and large, we
share the same basic values. This fact is easy to overlook because we often associate
“moral values” and ethics with disagreement. And certainly we do disagree about a
lot of issues in which values are relevant: abortion, euthanasia, and so on. Because
these sorts of moral controversies tend to stand out, it is easy to overlook the fact
that the vast majority of people in our society share the same basic set of moral and
Unpublished manuscript, draft. 1
By Copyright c 2018 John Wiley & Sons, Inc.
2 INTRODUCTION

ethical values. (By the way, in this course, “morality” and “ethics” are to be treated
as synonyms.) What sorts of ethical values are we talking about? Things like com-
passion, fairness, honesty, respect, and the special obligations like loyalty and our
duties to our families. Now I am certainly not pretending that we always live up to
our values. We dont. Even the best of us sometimes sells out. Answering questions
about whether youd sell out your values for money is easy when you are sitting at
your computer doing an ethics course. In real life, its not so easy to avoid temptation,
and even good people will sometimes give in. So I am not pretending that we always
live up to our own values. But the fact, by and large, we do share the same values
does give us something important. It gives us a way to reach consensus about what
is right and what is wrong. Not just in business, but in other areas of our common
life as well.
Much of the content of this course will involve learning what I call “generally
accepted ethical standards” in business. These arewellethical standards that are gen-
erally accepted. Accepted by whom? When I call something a generally accepted
ethical standard, I will mean that it is generally accepted by experts in business ethics.
Normally, they are also accepted by the business community itself. This does not
mean that everyone always follows a given generally accepted ethical standard. But
it does mean that if someone violates one, then others in the business community
will generally regard the person who violated it as having done something unethical.
As we will see in more detail in a bit, generally accepted ethical standards are also
very often embodied in the law. In fact, a good deal of business law can be seen as
the attempt to write into law our generally accepted ethical standards.

1.2 Why Is Business Ethics Important?

Why are you taking this course?

I hope that you want to take this course because you already do care about ethics
in the business world. But if you are pursuing a degree in business at a higher edu-
cation institution in the US, then you are required to take a course in ethics, whether
you are interested in it or not. In fact, most business colleges require their stu-
dents to take a class rather like the one you are getting ready to take. All accredited
business schools have some sort of ethics component. And business ethics is either
required or recommended for several other degree programs as well. Why should
that be? Shouldn’t business programs just worry about whether you know business?
Why should a course in ethics be a requirement for people heading into the business
world? In short, why should either you or the people who set the curriculum care
about business ethics?
There are at least four main reasons for caring about business ethics–and at least
four main reasons why those who set the standards for business education have de-
cided that all graduates of business programs should have some ethics training. First,
business ethics has a positive effect on the general social and political climate in
which business operates. (Or, to put it the other way around: Widespread unethical
behavior harms the business climate.) Second, unethical practices are often illegal.
 WHY IS BUSINESS ETHICS IMPORTANT? 3

Third, unethical business practices can have significant negative effects on the in-
dividual firm or the individual business person. And, finally, most people already
care about being ethical; business ethics simply involves taking that concern into the
workplace. This last reason is the best reason I can give you to take business ethics
seriously is that most of you already take ethics seriously. Most business people do
not want to be immoral. Indeed, most of them want to be successful and responsible
members of the wider community. Business ethics is just about taking ones moral
values and principles into the workplace. Let’s look at all four of these reasons in a
bit more detail.

1.2.1 Ethics and the Business Climate

Unethical business practices are bad for the climate in which business must operate.
There are at least two main ways the unethical business practices harms this climate.
First, unethical business practicesespecially when they become widespread and
begin to cause problems for or outrage by the publicis a favorite target for govern-
ment regulation. The period from the end of the 1800s through the 20th century saw
an explosion in government regulation of business, often in response to practices that
the public sees as immoral, corrupt, unfair, or against the public good. Sorbanes-
Oxley (the law that came into effect as a direct result of the Enron meltdown) is just
a recent example of a sadly familiar pattern. When the public becomes outraged at
widespread corrupt or unethical activity, the government responds with regulation.
Securities regulation, Anti-trust laws, Anti-discrimination laws, Environmental laws
and regulations, all these and many more were set up to address problems that would
not have existed if business had been acting more ethically on it its own. The willing-
ness of government to combat unethical practices through regulation has led much of
the business community to conclude that it is better for business persons to regulate
their own behavior than to wait for government to do so. I think that it is this trend is
one of the most important factors in explaining the rise of interest in business ethics,
and the addition of it to the curriculum in most business schools during the last 30
years or so.
Second, unethical business also undermines the social status of business. The pub-
lic tends to haveoften very unjustly, in my viewhave a fairly low opinion of lawyers
and used car salesmen. This is because many people believe that members of these
professions routinely act in unethical ways. For quite some time, business as a pro-
fession has been on the brink of having as bad a reputation as these other professions.
Scandals like Enron and WorldCom, and, more recently, revelations about some of
the unethical lending practices that have fueled the mortgage crisis, do not encourage
people to think well of the business profession. Thats bad for business, and, more
importantly, bad for the people who engage in it. No one wants to get a bad rap. No
one wants to spend their lives pursuing a career only to have people snicker about
how that particular profession is full of crooks and sleazy characters. Imagine going
to parties and family gatherings and explaining that you are a high official in Enron!
No one wants to see their profession demonized. Unfortunately, the profession of
4 INTRODUCTION

business suffers from the tarnish of scandals, even when most business persons are
honest and decent.
One way to combat this is to establish culture of integrity in the business world.
This is one reason why most accredited business programs require at least one course
in ethics. It may not be enough to prevent all future “bad apples” from harming the
reputation of the business professions, but at least it is a start.

1.2.2 Ethics and the Law

Unethical business practices are often against the spirit, if not the letter, of the law.
We’ll talk a lot about the law in this course. I’m going to digress just a bit to talk a
bit about the relationship between the two (then I’ll come back to the point I want
to make right now, which is just that the relationship between the two provides an
important incentive for caring about business ethics.)
The relationship between business ethics and business law is close but imperfect.
Most actions that are illegal are also immoral: murder, theft, many forms of lying,
for example. However, some immoral actions are not against the law. For example,
in the US, it is perfectly legal in most cases to fail to aid a stranger in distress (unless
you have some special role, such as that of a lifeguard, or some special relationship
to the stranger). Adultery in most states is not per se illegal (though it does have
legal consequences). In addition, some moral actions can actually be illegal. This is
because there is no guarantee that every law is automatically morally justified. To
take an extreme example, in an immoral society–such as Nazi Germany or the US
society in the pre-Civil War South, many laws are apt to be immoral; there is a moral
obligation to try to change such laws, but also in extreme cases to resist, defy, and
even break such laws.
Business is one area where a great number of laws exist to regulate behavior that
society has deemed morally problematic or harmful. While this is not a class in the
law, we will look at some of the laws relating to business. When we do, we will
be looking not only about what the law says, but at how and whether it is morally
justified. By and large, we will find that many laws relating to business do have clear
moral justifications. In such cases, we will use the law to help clarify what our moral
obligations are. In other cases, we will ask whether our moral obligations go farther
than our legal ones.
However, since the law and morality do not automatically coincide, we can always
ask of any given law (or even of the entire legal system or some aspect of it): Is this
law morally justified? Thus, we will not be assuming that the law is automatically
morally justified; nor will we assume that it is a substitute for moral.
Nevertheless, because the law usually coincides with (and is justified partly in
terms of) morality, following our moral duties will generally keep us on the right
side of the law. Many unethical actions are straightforwardly illegal. Many legal
problems arise because someone attempts to do something that they knew or should
have known was unethical. Had they not been trying to “get away with something”
they would not have fallen afoul of the law. Since moral obligations tend to me more
stringent than legal ones, they tend to give clear prohibitions against conduct that
 WHY IS BUSINESS ETHICS IMPORTANT? 5

may be in a grey area legally. That is, it is often the case that a person who follows
good ethical standards will tend to steer clear of legal gray areas.
One reason for this is the distinction between the “letter” and the “spirit” of the
law. Ethical standards often correspond with the spirit of the law, and if one conforms
to the spirit of the law, then one will usually also conform to the letter of the law as
well.
In addition, behavior that is “merely” unethical but which is not illegal can still
present an indirect legal risk through corrupting the individual character or the cor-
porate culture; such corruption begins a “slippery slope” that may lead to forms of
unethical behavior that are illegal. Corruption that is legal can lead to corruption that
is illegal. Thus, for example, a corporate culture that encourages “aggressive” ac-
counting practices that may be technically legal but ethically dubious can sometimes
lead to people pushing and eventually crossing the boundaries between legal but eth-
ically questionable creative accounting to illegal corporate fraud. The tendency to
act immorally tends to get stronger when it is acted on, and this tendency can often
corrupt the character of the individual or the culture of the corporation, so that more
and more immoral behavior becomes more and more likely. As the tendency to cut
moral corners grows, the tendency to cut legal corners is often close behind.1

1.2.3 Ethics and the Bottom Line

A third reason to take business ethics seriously is that it is often good business to
behave ethically. Ethics often pays off in purely business terms.
Does ethical business always pay off financially? This is a difficult question, and
one that I don’t think that anyone really knows the answer two. My own personal
opinion (and you may find it a bit surprising) is that ethics does not always pay off,
though is usually does.
Let’s look at the question in a bit of detail. Suppose that you face a decision, and it
is clear that one possible choice is more ethical than the other. (For example, maybe
it is a choice about providing free daycare or a generous benefits package to your
workers, or maybe it is a choice about exploiting loopholes in the environmental
regulations, or using some “aggressive” accounting to mislead investors about the
companys financial situation, or marketing a product that you know is not as good
or not as safe as it could be.) Is there any guarantee that the ethical choice will
be a better business move than the unethical one? Will the ethical choice be more
profitable in the long run than the unethical one? Or, in other words: How does ethics
affect the bottom line? Does ethics pay? Is ethical business good business?

1 IMPORTANT NOTE: Nothing in this course or the lectures or materials connected with it, written,
electronic, or otherwise, are to be construed as legal advice of any kind. While acting ethically will tend
to keep you on the right side of the law, the law is sufficiently complex that it is often necessary to consult
a lawyer to keep you out of all legal difficulties. My only legal advice to you is that when you are in any
doubt about the law says about your specific situation, consult a lawyer, and make sure you know who
s/he is working for.
6 INTRODUCTION

To answer this question, we must make sure that we have an accurate accounting
of the true economic costs and benefits of ethical business practices and unethical
ones. It is easy to see how it might look as though unethical practices could be more
profitable than ethical ones. Ethical practices often require a business to spend more
money “up front,” and unethical practices often seem to promise greater returns, at
least initially. However, there are hidden costs of unethical behavior, and there are
hidden benefits of ethical behavior.
First, there are actual and potential legal costs to consider. Since there is a close
relationship between law and ethics, unethical actions can have legal repercussions.
One reason why many companies foster an ethical corporate culture is to inculcate
behaviors that will not expose the firm to unnecessary legal exposure. Unethical
actions can, of course, lead to direct sanctions by the government (prosecutors, at-
torneys general, government agencies, etc.) because immoral behavior often directly
violates the law or government regulation.
Unethical behavior can also trigger lawsuits by individuals: Even when an activ-
ity does not violate any specific criminal law or government regulation, it can often
open one up to potential legal problems, e.g., lawsuits. (That is, it can be tortuous).
One reason for this is that people—employees, job candidates, customers, and mem-
bers of the public in general—become disgruntled when they are treated immorally.
Disgruntled people are more likely to try to sue, and if they have good reasons for
being disgruntled, they are more likely to find a lawyer to take the case. Since the
law tends to be on the side of morality and fairness, those who have been treated
unfairly or immorally will very often have a legal case. But even if the courts take
your side, it still costs your company money to go to court. One often hears that
anyone can sue anyone for anything. This is misleading at best, false at worst. Not
everything is legally actionable, and some suits are thrown out as frivolous. Whether
a lawsuit gets anywhereand in particular whether it can attract the attention of an at-
torney, esp. one willing to work on a contingencydepends on whether the person has
a decent case. In general, when you have a business relationship with someoneand
especially one that involves a contractif you treat that person unfairly, deceptively,
negligently, or otherwise unethically, there is a good chance that the person may have
a legitimate legal case against you. This is not always true, and even if they have a
legal case against you, they may not win it, but what is true as a general statement
is that treating those with whom you do business unethically exposes you to a much
greater degree of legal liability than treating them ethically. And remember that there
are costs to defending yourself against lawsuits even if you win. The more uneth-
ically you have acted, the more likely they are to have merit (and the more merit
they are likely to have), both because you are more likely to lose, and because even
if you win, it will generally take more and more careful (read: expensive) effort by
attorneys to win against someone with a good case against you.
Finally, there is what we might call the indirect legal risk of immoral behavior:
Behavior that is “merely” immoral but which does not directly increase ones legal
exposure can still present an indirect legal risk. It can do this by through corrupting
the individual character or the corporate culture; such corruption begins a “slippery
slope” that may lead to more legally problematic forms of immorality. It can also do
 WHY IS BUSINESS ETHICS IMPORTANT? 7

this because behavior that is in the grey areas legally (but clearly immoral) make the
company targets for litigation, since one of the main way that the laws get clarified
is through litigation. Even if the company wins, the legal costs can be significant.
A second major category of costs associated with unethical business practices
have to do with the company’s reputation. In addition to physical plant, capital, tech-
nology, human resources, is one that is easily overlooked, but every bit as important
as all of the others (and arguably more important than many of them). That thing is
IMAGE. Having a bad image can affect a number of things central to the success of
a company. There are at least three main ways that damage to a companys reputation
can harm its long-term-profitability.

1. Customer loyalty: Ethical scandals and a bad reputation can turn off both actual
and potential customers. At the extreme, it might invite a boycott. Dont under-
estimate the financial effects of these. They may not drive the company out of
business, but they can still hurt it.2
2. Investor confidence: Reputation problems can affect investor confidence in at
least three distinct ways. First, the possibility that even some customers are
likely to bolt, that is going to hurt profitability, and that is reason enough for

2 Let me give two examples with which I am personally familiar. In the 1980s, when I was in college,
there was a strong consensus that the apartheid-based South African regime could not survive sustained
economic pressure. For that reason (and because many people also simply believed it to be immoral to do
business with a racist government), there was a strong movement to boycott any company doing business
in South Africa. Most US and international companies did stop doing business in South Africa, which
did eventually undergo a regime change. One company that did not pull out of South Africa was Shell
Oil. They were, however, subject to a fairly intense boycott effort. College students in those days (at
least where I went to school) were fairly well aware of this boycott, as were most labor-union members.
Did Shell go out of business? No. But its refusal to abandon what many people considered to be an
immoral policy did cost it money. How much? It is difficult to say. But for years and years after the fall
of the apartheid system in South Africa, I was still instinctively getting my gasoline from places other
than Shell. I’m sure I’m not the only one who, during the boycott, simply associated Shell’s corporate
logo with a place to avoid. Critics of the international practices of Shell’s parent company, Royal Dutch
Shell, especially in Nigeria, would contend that there is still reason to avoid Shell. But my point here is
simply that the effects of a boycott can go on longer than the boycott itself. Long after the formal boycott
has ended, the damage to the company’s customer loyalty can go on. In some cases, it may never be
completely restored, with some potential customers lost forever.
A second example is the movement to boycott Nike because of their activities in developing countries.
My own experience with this boycott came from a semester I spent teaching in the Pacific Northwest,
where the anti-Nike movement is quite strong. I had always bought Nike products, and was only dimly
aware of the boycott myself. However, I soon realized that the campus where I was teaching was virtually
a “Nike-free zone.” In many social circles on that campus, wearing Nike was about like wearing a leisure
suit. Here again, a significant segment of the shoe-buying potential customer base is being turned off to
the same Nike corporate logo that Nike is spending millions of dollars to promote.
Now I am not saying that these boycotts destroyed either Nike or Shell. Clearly they did not. But they
have cost Nike and Shell money. They may not have cost as much money as changing the practices that
inspired the boycotts, but it’s difficult to know for sure. My point is simply that from a purely financial
point of view, the practices of Shell and Nike that led to the boycott have cost those companies money.
These costs at least partly cancel out the financial benefits of the policies that inspired the boycotts in
the first place. (By the way, I am not advocating a purely financial approach to moral decision-making—
remember that this whole discussion has been in the context of a discussion of whether ethics pays off in
purely financial terms.)
8 INTRODUCTION

at least some investors to take their capital elsewhere. Second, and perhaps
more seriously, ethical scandalsespecially when they involve any kind of fraud
or other dishonestycan raise the question of whether an investor can TRUST
the people in charge of the company. After all, if the executives have shown
themselves to be dishonest, then do you really want to give them your money for
safekeeping? Notice that even a bit of a stock price drop in response to a definite
scandal can trigger panic selling that can have serious implications on the health
of the company. Take the example of Enron. These rapidly fell apart; no doubt
this is in part due to the specific nature of the ethical scandal. Notice, by the
way, that it is not yet clear whether laws were broken, though it is pretty clear
that the behavior of at least some people in both organizations was ethically
scandalous, and that the corporate culture in both companies was less ethically
sound that one would like to see. Third, there is a growing movement among
investors to screen for corporate social responsibility. This movement is perhaps
most prevalent among ordinary people and among certain kinds of institutional
investors such as universities, unions, etc. The movement first became big as a
movement to divest from holdings in South Africa during the days of apartheid.
3. Attractiveness to employees: A bad reputation can scare off potential employ-
ees, especially the most talented. Again, since an ethics scandaleven if it does
not erupt into a full-fledged legal firestorm, can hurt a company. The most tal-
ented potential employeesthe ones that make a successful company a success-
will exercise whatever ability they have to “shop around” for a company that
is sounder. This will tend to be the case if for no other reason than that, given
the choice, most people dont want to go to family dinners and high school re-
unions and say that they are now working as an Enron executive, for example.
Of course it would be an exaggeration to say that such a firm will not get any
employees. Some people will, in almost any economy, still take the job. But
those who have the most choice about which position to take are precisely the
ones you want.

A third major category of costs of unethical business practices concerns what

might be called morale (not “moral”–morale) effects. Employee morale can be af-
fected by the companys reputation. This is perhaps best seen as an indirect effect.
However, unethical behavior can have a more direct effect on employee morale.
Many forms of unethical behavior directly affects the employees. Indeed, some of
the companys most important ethical obligations are to its employees, and if a com-
pany flouts these obligations, there are likely to be problems with employee morale.
Morale problems can affect the bottom line in several ways, including:

1. Decreased productivity
2. Increased absenteeism and turnover
3. Increased pilferage
4. Decreased attention to quality
 WHY IS BUSINESS ETHICS IMPORTANT? 9

5. Increased conflicteither legal conflicts with specific employees or labor relations

problems with the whole workforce.

6. Potential difficulties in hiring talented employees, as information about uneth-

ical treatment of employees spreads by word-of-mouth, the media, or other
means.3

Notice that all of these costs of unethical behavior—as well as the benefits of eth-
ical behavior—tend to be long-term and indirect, and to affect the firm via intangible
factors like reputation and employee morale. The costs of unethical actions are of-
ten difficult to see because they too are long-term, and also because they are often
risks rather than certainties. But notice that a true accounting of costs must take into
account heightened risks of costlyconsequences.
Now it is almost certainly true that not every unethical business decision ends up
imposing a net cost to the business or person making that decision. But it is also
true that unethical decisions impose a substantial risk of damage to the companys
long-term bottom line. Viewed in this way, we can say that ethical business practices
are a form of risk management. A blanket policy of ethical business is thus like
an insurance policyyou MIGHT be able to get by without it, but if you try, you are
taking a big risk. Since ethical practiceseven when they impose some cost (or even
just some opportunity cost relative to an unethical practice)generally cost less than
one would first think, the cost of this “insurance policy” may well be quite a lot less
than it appears.
Thus, business ethics is like an insurance policy that pays dividends that at least
partlyand maybe completelyoffset its cost. It offers protection against a number of
harms, ranging from the kind of catastrophic breakdown we saw in Enron, World-
Com, Global Crossing Arthur Andersen, etc., to less deadly but still significant harms
to the company due to legal costs, losses of customer goodwill and investor trust, and
declining employee morale, loyalty, and productivity.
If we keep in mind the true costs of unethical behavior and the true benefits of
ethical behavior, we will find that ethical business practices are often much better
for the bottom line than they first appear, and that unethical business practices are
often much worse for the bottom line than they first appear. Some researchers have
attempted to determine whether companies that are more ethical are more successful
in the long run. The data is sketchy, and the question is a difficult one to address
empirically; however, some evidence does suggest that many of the most ethical
companies are also the among the most successful in the long run. When we keep
in mind all of the costs and risks of unethical practices, and all of the benefits of
ethical practices, we are likely to find that even in those (perhaps rare) cases when an
unethical practice is financially advantageous, it is likely to be much less attractive
financially than it looks at first glance. Knowing the often hidden costs and risks of

3 Thislast category, of course, overlaps with what we said above; the point here is that unethical practices
can harm recruiting in more than one way; here the effect on recruiting occurs indirectly, because of a
more direct effect on employee morale.
10 INTRODUCTION

unethical practices will, we hope, help future business persons realize that unethical
practices are usually a lot less tempting than they appear at first.
At the end of the day, we each have to give our own answer to the question of
how much it is worth to us to act in an ethical manner even in those cases when
ethics may not quite pay for itself. And since we can never really be sure when an
unethical act will “blow up in our face” there is a case to be made for thinking of an
ethical approach to business as a form of risk management. Think of it as “scandal
insurance.” It may cost a bit more in the short term, but, like other forms of insurance,
it is well worth it. Some people put the question like this: “Can a businessperson
afford to be ethical?” I think that a better question is: “Can a business person afford
NOT to be ethical?” Can you afford to take that risk?
One of the main ways that unethical behavior is risky is that it tends to become
a habit. Actions and decisions are not isolated events. They have a cumulative
effect on the character of an individual and the culture of an organization. One
unethical action may have little effect on the company’s bottom line by itself. But
each unethical action makes the next unethical action just a bit easier. There is a kind
of psychological “slippery slope” involved here. Once we’ve taken the first step into
corruption, the second step becomes much easier. So the net effect of an individual
bad action also includes the fact that it makes future bad actions more likely. This is
another kind of risk that an ethical approach to business can help us to manage. And
that brings us to the fourth reason to take business ethics serious–namely that it is
the ethical thing to do.

1.2.4 The Best Reason to Care about Business Ethics

Most people already care about being ethical; business ethics simply involves taking
that concern into the workplace. This is the best reason to care about business ethics–
simply that it is the right thing to do.
Most people do care about beingor at least being seen asethical: Most people
would be offended at the suggestion that they are behaving immorally. Most people
would be upset by accusations that they were ungrateful or dishonest. Most people
take pride not only in being good at what they do, but in being at least fairly good
persons. Most people want to be able to look at themselves in the mirror and see
a good person. A successful person, of course, but a person who earns his or her
success honestly and honorably.
People care about being ethical for a wide variety of reasons: Some people care
about ethics for religious reasons. Some people care about ethics because that is
how they were raised, and they are happy to have the values that they were raised
with. Some care about ethics because they have made a fundamental commitment to
being a certain kind of person, they have, in effect, chosen to be on the side of good
rather than evil. Some care about ethics because they see an ethical life as being the
kind of life most likely to be a happy one, because they see ethics as something that
generally tends to pay off, either in this life or the next. Some people care about
ethics because they see at least minimally decent ethics as necessary for rewarding
social interaction. Some people care about ethics because they see ethics as being
 MONEY AND OTHER VALUES 11

necessary for healthy self-esteem (most accomplishments are less impressive if you
had to cheat to achieve them). Some people care about ethics because it frees them
from the need to figure out when to try to take advantage of others, and when doing
so will lead to problems. Most people, of course, care about ethics for a combination
of many, most, or all of these reasons.
The best reason to take business ethics seriously is simply that doing so is nec-
essary to being an ethical person, and this is something that most people care about
already. This does not mean that everyone is a saint, but most people do have values
(besides money) that they take seriously, and some of these values are ethical val-
ues. Ethics is really just about learning how to put ones values into action; business
ethics is about learning to integrate ones valuesincluding ethical valueswith life in
the business world.
I find that almost everyone taking my business ethics classes does care about
being a morally decent person. For those very few who do not, I can at least offer
the financial and legal incentives we have already talked about as reasons for caring
about business ethics. For the vast majority of you who do want to be ethically decent
people, business ethics is about learning how to do that in the business context–how
to live an ethically decent life as a business person.

1.3 Money and Other Values

Basically, the heart of business ethics is the old saying that money isn’t everything.
In the end, who you are is more important than what you have. For most of us, these
ideas seem so obvious that they hardly need to be said. Business ethics is about
putting them into practice.
Notice that the saying goes that money isn’t everything. It does not say that money
isn’t anything. Clearly we do care about money. Nothing in this course is going to
try to talk you out of caring about money. Money is an important resource. It has
value. Money means prosperity and the means to have and do the things that make
one happy, healthy, and secure. But it is equally clear that we care about other things
too. In fact, once we have a decent amount of money, quite a number of things
become more important to us than even fairly large amounts of additional money.
These other things are our non-financial goals and our personal, moral, and spiritual
values.
In fact, there is a large body of work in psychology that attempts to quantify
happiness and determine what sorts of things tend to make us happy. One of the
most striking findings of this body of researchcalled “positive psychology” is that,
once you have reached a “comfortable” standard of living, extra money is not likely
to make you very much happier. In fact, studies of lottery winners suggest that, after
the initial euphoria of becoming suddenly rich, their levels of happiness pretty much
go back to what they were before they won the money. (Some even end up less
happy.)
So if money is not the only thing that matters, what else does matter? If you’ve
been doing things in the proper order, you have finished the “What do you Value?”
12 INTRODUCTION

question. One point of the question is to get you to do some thinking—as a kind of
warm-up to the rest of the course—about values, ethical and otherwise. Unless you
are very much unlike most of the people who have taken this course, your answers
will have indicated that you do care about a great number of things besides just
money. Although the exact details of different people’s non-financial values vary
somewhat, there are a number of categories of values that almost everyone holds.
Most of us value family connections, even if we do not want to start families of our
own (and virtually everyone wants the freedom to make this decision for herself or
himself). Most of us value healthy communities. Most of us value the freedom to
make friends and join associations. Most of us value our freedom to choose a religion
(or no religion).
In addition to these social and personal values, most of us do hold ethical values
as well. Most of us want to be decent people, and almost everyone wants at least
to be regarded by others as being a decent person. Most of us have greater respect
for persons who keep their commitments, who help others, who respect the rights
and dignity of other people, and who live by the same principles they advocate for
others (who “practice what they preach”). And most of us prize self-respect as well.
This suggests that if we value traits like honesty, compassion, respect, and integrity
in others, we are more likely to respect ourselves if we have cultivated those same
traits in ourselves.

1.4 Business Ethics, Integrity, and Balance

In short, then, as much as we may need, want, and value financial success and eco-
nomic prosperity, we also value (and, I would suggest, want and need) other things
as well. One of the major tasks of business ethics involves helping us to strike a
sensible, responsible balance between the goals of business (profit/prosperity) and
the other goals and values that we (either as individuals or as a society) care about.
At the personal level, this may mean helping business persons to balance their duties
to the firm with values of family life, moral integrity, and so on. At the social level, it
involves balancing the economic values of profit and economic growth and develop-
ment with such values as social justice, a healthy environment, and a the preservation
of important cultural heritages.
In other words, a major part of business ethics is concerned with the implications
of the fact that while profit and prosperity are important values, they are not the only
values. Other values are also important. These other values include ethical or moral
values, as well as social values such as strong communities, a healthy environment,
fair and efficient social institutions (good schools, etc.), and a free and open society.
These are values that we, as a society, hold. In addition, most of us have our own
personal goals and values as well. These may include the values of family life, values
associated with our religious affiliation, and values that come from our individual
cultural heritage. These are values that we hold as individuals rather than as a society.
Many of us share them, but they are not necessarily a pervasive part of our society.
 BUSINESS ETHICS, INTEGRITY, AND BALANCE 13

This does not mean, however, that they are unimportant. Many of them are the most
important values that many of us have.
Much of business ethics is about finding ways to integrate the goals and value
of business (profit and prosperity) with other goals and values, ethical, social, and
personal. This kind of integration, in which we remain true to all of our values, is
called INTEGRITY.
At its most basic, the term “integrity” means “wholeness.” The sense of this idea
of wholeness that we will use in this class is the sense of being a whole person, that
is, a person who is not JUST a BUSINESS person, a person who has more than just
business goals and values. In this sense of the word (which is the sense in which I
will be using it), a person has integrity when she recognizes and cares about other
values besides those that pertain to business.
Integrity also meansboth in common use and in the technical sense we are devel-
oping herenot selling out. It means being true to all of ones values and goals, and not
just to one’s financial or business goals. It means not leaving your other values at the
door to the office, even if your main job there is to pursue business values. In other
words, integrity means living and acting in a way that remains true to all of your
values, not just the values of profit and prosperity, even on the job. Someone who
claims to have ethical values off the job but who disregards them and acts unethi-
cally at work lacks integrity, for s/he acts not as a whole person, but as a fragmented
person, a kind of Jekyll and Hyde.
In order to avoid selling out these other values as soon as you enter the business
world, integrity requires finding ways to do well at business while remaining true to
ethical, social, and personal values. Since these values sometimes come into conflict
with one another, integrity requires seeking balancing between business values and
social, personal, and ethical values.
Ultimately, each person will decide for him or herself how much integrity is
worth. One goal of this course is to show you that while maintaining integrity does
sometimes involve a financial cost, it usually costs less than you think. And this is
only one reason why selling it for mere financial gain is very often a very bad bargain
indeed. My suggestion is that instead of asking whether we can afford to act with
integrity, we should ask whether we can afford NOT to. Integrity is a pretty valuable
thing, and it is a shame to sell it out for mere money.
Because the person with integrity must try to balance and harmonize different
and often conflicting goals, s/he will often need to engage in moral reasoning and
problem-solving. Sometimes this will involve simply discerning right from wrong.
Other times, however, it will involve more complex questions of right versus right
and wrong versus wrong. Such situations will require balancing of competing goods,
goals, and values. In many such cases, we may not find a single definitive right
answer. Integrity requires seeking solutions that reflect our ethical values as well as
our business goals. There may not always be just one right way to do this.
By the way, this does not mean that every way is automatically correct. Think
about building a house. Is there a single right way to build a house? Of course not.
But does that mean that there are not better and worse ways to build a house? Of
course not. Saying that there may be more than one acceptable answer to a complex
14 INTRODUCTION

problem is not the same as saying that every answer is correct. Though we should
be careful not to fall into the trap of thinking that there can only be one answer to
a complex question, we must also not fall into the opposite trap of thinking that
“anything goes.” Recognizing that complex problems may have multiple solutions
does NOT imply an acceptance of any sort of moral relativism.
Many of the ethical (as well as legal) standards relevant to business are the results
of a collective social and political process in which the community has developed
guidelines about how to balance and harmonize business and non-business goals and
values. They help to harmonize the goals and values of the business enterprise with
other goals and values, such as ethical, social, and personal values. The main goal
of business, of course, is profit. The task of business is to determine how best to
promote that value, for example, by determining how to balance long-term growth
with shorter-term return on investment, and so on. A main task of business ethics is
concerned with the implications of the fact that while profit is an important valueand
the key value promoted by business enterprises—it is not the only value that there
is. The goal of this facet of business ethics is to balance the value of profit with
other values. At the personal level, this may mean helping business persons to value
the duties to the firm with values of family life, personal integrity, and so on. At the
social level, it involves balancing the economic values of profit and economic growth
and development with such values as social justice, a healthy environment, and the
preservation of strong communities and healthy families.

1.5 Moral Psychology and Why Good People Sometimes Do Bad Things

Of course some people do bad things because they are bad people. In this class,
however, we will assume that we are talking about reasonably decent people. It is an
interesting and important question why some people are bad, but not one that we will
address in this class. Unless a person has been raised to be some kind of monster,
this is essentially an issue about motivation. We noted earlier that most people do
hold the same moral valuesthings like compassion, fairness, honesty, respect, etc. If
you dont hold those values, then nothing in this course is going to convince you that
you should. Instead, I am going to assume that you are like 99% of the rest of us in
already holding those basic ethical values.
However, as we noted earlier, holding an ethical value does not automatically
mean that you will always act on it. In other words, there is no guarantee that a
person who is good in the sense that he or she has ethical values will always do the
right thing. Sometimes good people do bad things. Now, given that you are a good
person, you need to take this fact to heart. Even though you are a good person with a
strong sense of values, that is no guarantee that you wont do something wrong. Many
very bad things have been done byor with the cooperation ofgood people with strong
values. In fact, most large-scale human-made tragedies were caused not only by a
few evil people at the top, but also with the aid or at least the complicity of many
other people—people who may well have been otherwise decent people—as well.
The Holocaust, for example, was driven by evil men at the top of the Nazi regime,
 MORAL PSYCHOLOGY AND WHY GOOD PEOPLE SOMETIMES DO BAD THINGS 15

but the nuts and bolts details of this horrific process were carried out with the help
or at least complicity of a vast number of ordinary German citizens, at least many of
whom knew that they were participating in something very bad, even if they were not
always aware of all of the details. The Holocaust is, of course, an extreme example,
but the general point applies to less extreme evils as well. The larger the scale of
the evil—or just the wrongdoing—the more people are generally involved in it. An
organization is seldom able to pursue an ethically corrupt activity without this being
known by many people within the organization. Unless everyone in the organization
is evil—which is a fairly unusual situation—some of the people involved in or at
least with knowledge of the corrupt activity will be morally decent. And yet, very
often, most of them do not try to put a stop to it. (Sometimes, of course, they do, and
we will talk about some of them as we go through the course.) Why is this? Why do
decent people do or at least go along with bad activities?
The question is also important because, as reasonably good people yourselves,
you should be aware of the thought processes, temptations, and other situational and
psychological traps that can lead decent people like you to participate in unethical
activities. In this section of the course, we will examine a number of these traps.
These traps can entice even good people to do things that they know to be wrong.
To understand them, we will have to delve a bit deeper into what is called moral
psychology.
Moral psychology, roughly speaking, is the study of the psychological basis for
moral and immoral behavior. While we wont do formal psychological theory, careful
observation and introspection can yield a reasonably good armchair (“folk psycho-
logical”) explanation of the psychological factors that lead reasonably good people
to do things that they would ordinarily reject as unethical.
Let’s begin with a parable—Bowen McCoy’s “Parable of the Sadhu,” to be spe-
cific. This remarkable article is one of the most often-read selections in business
ethics courses all over the country. McCoy draws two main lessons from his expe-
rience on the mountain. The first has to do with organizational culture and its im-
portance to moral action. The culture of an organization (what in business is called
“corporate culture”) can have a powerful impact on whether members are able to act
collectively on their moral values. McCoy notes that on the mountain, there was no
strong organization, no strong leader, and thus no way to articulate and motivate the
group to act on a shared sense of moral value. The organization, in other words, had
no moral vision, and thus no basis for making a moral decision about how to deal
with the situation presented by the Sadhu.
The second lesson—and the one that I will emphasize much more in this course—
has to do with something I will call moral tunnel vision. Question: Was McCoys
goalthe trek across the pass–in itself, immoral? Hardly anyone would maintain
that there is anything inherently immoral about McCoy’s goal of trying to climb
the mountain. Indeed, since it involves such things as personal accomplishment
and growth, it seems even to be a morally good goal. Question: What, then, was
the problem with McCoys actions? The problem—as McCoy himself later came to
realize—was that this goal came into tension with another important goal, namely
16 INTRODUCTION

the sanctity of human life. So was McCoy a bad person for not doing more to help
the Sadhu?
This is a complicated question, and one worth taking a bit of time to sort out.
Did McCoy have a moral obligation to do more to help the Sadhu? When I ask this
question in my classes, I generally find that opinion is about evenly split. However,
when I ask students whether their own personal values would support doing more
than McCoy did, or whether they would have had more respect for McCoy had he
done more, then most students say yes. A more pertinent question for our present
purposes is whether McCoy thought he should have done more. It seems clear from
what he says—and from the way he tells his story (more as a confession than as a
report)—that he does regret not having done more. McCoy certainly seems like a
decent person–maybe even a good person. So why did he not do more to help the
Sadhu, especially given his own value system which, it seems safe to say, puts a high
value on human life?
To answer this question, we have to think about McCoy’s state of mind while he
was on the mountain. Notice that McCoy says that he did not even realize that he was
in a moral dilemma: It is not that he does not value human life (if that were the case,
he would not feel remorse at having done what he did). Rather, he was so caught
up in what he was doing that he lost track of what was important. Quite literally,
he forgot to notice that there was another vitally important goal at stake, namely the
value of this humans life.
His intense focus on a (morally legitimate) goal gave him a kind of tunnel vision,
crowding out everything else. With this tunnel vision in place, in the heat of the
moment, he simply never noticed that he really was making a decision in a moral
dilemma that pitted the morally legitimate goal of climbing over the pass with the
presumably far greater moral value of saving a human life.
Notice that McCoy says that he did not even realize that he was in a moral
dilemma: It is not that he does not value human life (if that were the case, he would
not feel remorse at having done what he did). Rather, he was so caught up in what
he was doing that he lost track of what was important. Quite literally, he forgot to
notice that there was another vitally important goal at stake, namely the value of this
humans life.
Moral tunnel vision can be temporary, as in McCoy’s case. However, it can also
become more permanent. One way for this to happen is through what psychologists
sometimes call “compartmentalization.” This occurs when a person adopts tunnel
vision focused on just one goal or value in one context (typically at work), while
continuing to hold and pursue other values and goals in other contexts (for example
on the weekends). Now of course a certain amount of compartmentalization may
be necessary to keep one’s profession and personal responsibilities and concerns
separate. However, if we take this kind of compartmentalization too far, we risk
“splitting” into a work-self and a non-work self, with the former forgetting the values
of the latter. The work-self, then, may become detached from the other moral, social,
and personal values that the person otherwise holds. Such a “Dr. Jekyll/Mr. Hyde”
situation is very dangerous morally, since it poses the risk that the person may act in
 MORAL PSYCHOLOGY AND WHY GOOD PEOPLE SOMETIMES DO BAD THINGS 17

ways that violate her/his moral, social, or personal values while in his/her work-self
persona.
Another way for moral tunnel vision to become semi-permanent is by the more or
less permanent crowding out of other values, not just at work, but all the time. This
situation has been aptly described as “abstract greed” in Robert Solomon’s book A
Better Way to Think about Business: How Personal Integrity Leads to Corporate
Success.4 Solomon, one of the most original writers on business ethics around, sees
the Parable of the Sadhu as a warning about how we should not see business, as well
as about how good people can be drawn into practices that they later regret.
Noting the famous “greed is good” speech in the film Wall Street5 , Solomon writes
that the glorification of greed for its own sake is a
[V]ulgarization of Adam Smiths model of free enterprise, in which itself-interest
had a carefully contained and nuanced meaning, had long been familiar. . . But,
what is greed? Why has it been considered a vice and a sin throughout most of
human history?. . . Plato referred to pleonexia, a serious vice that might best be
understood as grasping. Grasping has a sense of desperation about it, something
unseemly, the unmistakable suggestion of ‘too much. Let us see it for what it is,
an extreme form of selfishness, and oblivion to all virtues, and neglect or contempt
for any good but ones own.6

Solomon goes on to write about the tendency to see money as a kind of scorecard,
which, if we are not careful, we can come to desire not because of what it can provide,
but just because we have come to desire it for its own sake. Solomon calls this
phenomenon “abstract greed,” and says that it is “greed without desire, greed learned
but not comprehended, the brainwashed sense that this is what one ought to want.”
(29)
Abstract greed, then, is the desire for money to the exclusion of other things, and
without any real idea of what we want the money for. Of course there is (as Solomon
is quick to note) nothing wrong with pursuing profits and seeking financial success.
Thus, there is a legitimate place for the so-called profit motive. But, writes Solomon,
“Profits are a means to an endfor a corporation, survival, for an individual, money
to spend. Profits get distributed and reinvested. Profits are a means to building
the business and rewarding employees, executives, and investors.” (Solomon, 30f.)
Abstract greed, on the other hand, is the desire for profit just to have it.
Putting all of this together, we can say that what Solomon calls abstract greed,
and what the ancient Greeks would call pleonexia, is the perversion of the profit
motive so that it crowds out all other values and goals, including the very goals and

4 Oxford University Press, 1999; A main theme in this book—which I will quote from time to time and
which I highly recommend—is the idea that business can and should be an honorable profession rather
than a shady way to make a living. Solomon believes that most business persons are good people who
want their profession to be one that is honorable and helpful to society. His book offers us a VISIONa
better way to think about businessthat he thinks will help business persons see business life for what it
is, a way of life that is necessary for society, and one that can be lived in such a way as to make it an
honorable calling.
5 I highly recommend it.
6 Solomon, 27ff.
18 INTRODUCTION

values that can be promoted through the attaining of profit. The desire to make a
profit is, in itself, not immoral; indeed, since profits mean prosperity, jobs, return on
investors investments, and other good things, profit is good, and a morally legitimate
object to seek. However, abstract greed or pleonexia sets in when the desire for profit
crowds out all other values and goals, including the very goals and values that can be
promoted through the attaining of profit. What is left is a desire for money and only
money, not because of what it can provide, but simply to have it.
The BOTTOM LINE message that Solomon offers is this: Profit is not badit rep-
resents prosperity, jobs, economic activity, etc. BUT, a single-minded focus on it
tempts us to neglect other important values. So what Solomon calls abstract greed is
just a stable form of moral tunnel vision that is focused on money (and not even the
good things that money can be used for).

1.6 Solomon on Defective Metaphors about the Nature of Business

In addition to developing the notion of abstract greed as at least a partial answer to

the question of why decent business people sometimes do bad things, he goes on to
offer at least one other potential insight into this question. Solomon spends much
of A Better Way to Think About Business examining some of the metaphors we use
to describe business as indicators of how we think of it. These metaphors, Solomon
argues, distort our thinking about business, and make it easier for decent people to
behave badly.
So what are some of the common metaphors we use to describe business? One
set of metaphors commonly used to describe business involves the “law of the jun-
gle” and the struggle for survival. “It’s a jungle out there,” we sometimes hear. But,
according to Solomon, this common way of thinking about business is simply inac-
curate. He writes:
Business life, unlike life in the mythological jungle, is fundamentally cooperative.
However competitive a particular industry may be, it always rests on a foundation
of shared interest and mutually agreed-upon rules of conduct. Competition takes
place not in a jungle but in a well-ordered society that it both serves and depends
upon. Contrary to the “every man for himself” metaphor, business almost always
involves large cooperative and mutually trusting groups that include networks of
suppliers, service people, customers, investors.7
He continues,
Indeed, what is central to the jungle metaphor is the image of a scenario in early
unconstrained, of animals and plants in a constant battle for survival, against the
environment, with one another. But business is one of the most constrained of all
human activities.8
A second popular metaphor for business links it to battle and warfare and links
business persons to warriors and military leaders. This image is strengthened by

7 13
8 14
 SOLOMON ON DEFECTIVE METAPHORS ABOUT THE NATURE OF BUSINESS 19

a number of popular management books that purport to deliver the “management

secrets” of military geniuses such as Attila the Hun and the like. Solomon notes
that this is one of the most common metaphors used to describe business. But, says
Solomon,
War is perhaps the worst of the dehumanizing images that we impose on ourselves
in business. The militaristic notion of protecting your turf, for example, is a par-
ticularly bad way of talking about your customers. When you protect your turf
instead of look[ing] after the customer, you lose precisely what you are obsessed
to retain. All too often, a company wages war against its competitors only to find
that it has grown unresponsive to the market or that the market has moved else-
where. The bitterest battles in business typically end as lose-lose scenarios. The
greatest success stories are not war stories at all.9
Of course Solomon doesnt deny the importance of competition in business. His
point is just that we should not take competition to extremes. Competition, he be-
lieves, is a value, but that value is not absolute; it must be balanced with other values.
He writes that
Competition is extremely valuable and often necessary in business, but it is not the
sole purpose or goal of business life. Businesses that look only at the competition
and think in terms of winning rather than achieving and satisfying their customers
are simply looking in the wrong direction. There is healthy competition, and there
is sick, debilitating, depraved competition. There is constructive, positive, even
inspiring competition [think of Lance Armstrong or Venus and Serena Williams],
and there is mutually destructive, negative, inhibiting competition [think of Tonya
Harding “taking out” Nancy Kerrigan]. War and jungle metaphors give us the lat-
ter. . . [in which] the point is to punch out your opponent, debilitate the competition,
and win at his expense. Business competition, by contrast, offers us the best ex-
ample of the former, in which competition serves as a spur to ones own excellence
and productivity. It provides incentives to improve, creating new heroes, ideals,
and possibilities.10
A third popular metaphor suggests that business is some kind of game. Solomon
notes that this common metaphor is not as pernicious as the other two, but he argues
that thinking of business as a game, can nevertheless lead us astray. Solomon writes
that
[T]he sports and team of a imagery of much recent business talk is akin in some
sense to military metaphors but without the violence and with more awareness of
underlying mutual interests and rules of fair play. . . The rather benign imagery of
winning the game has readily gained purchase in our sports-loving society. To be
sure, business is not just a game, but, on reflection, business competition looks a
lot like some familiar games and lends itself readily to sports analogies.11
So the game metaphor, Solomon suggests, is less harmful than the more violent
metaphors that link business to jungles and to war. However, Solomon notes that

9 16f.
10 23
11 Ibid., 20
20 INTRODUCTION

[T]he game metaphor is not entirely benign, and it, too, has serious drawbacks.
The main problem is that the game metaphor makes business to self-enclosed and
merely coincidentally connected with productivity, service, and prosperity. To say
the obvious, most people in business dont see it as a game at all but rather as a way
of making living, a way of taking their place in society, of making a contribution.
There is too much at stake for too many people to think of business as merely a
game. Some of the most disastrous corporate policies in recent years can be blamed
on the game mentality that wholly focuses executives on winning and blinds them
to the impact they have on others outside the game, or, for that matter, even in
the game and supposedly on the same side. Executives in the early 1990s who
fired faithful employees for the sake of a temporary spike in the stock price were
playing such a game. Had they instead paid attention to the suffering caused by
their decisions, they certainly would not have thought of it as a game and would
have followed a very different course of action.12
Now we might be tempted to think that these metaphors are just ways to “spice
up” one’s discussion of business and that Solomon is taking them too seriously. One
might think that this emphasis on metaphors is misplaced because such metaphors
are merely “figures of speech” that do no real harm. Solomon responds to this line
of thought:
Metaphors are not just, as one of our more popular publications puts it, ‘more
picturesque speech. They define the way we live, the way we think. They are
definitive of the world in which we project ourselves. . . [H]ow a person thinks
about business—as the ruthless competition for profits or as a cooperative enter-
prise whose aims are the prosperity of the community—pre-shapes much of his
or her behavior and attitudes toward fellow employees or executives, competitors,
customers, and the surrounding community. . . How we talk reflects how we think,
and how we think reflects how we act and the nature of the organizations and insti-
tutions we create for ourselves. If we talk like brutes and we think like brutes, will
act like brutes and build organizations suitable only for brutes. To be sure, even
in such organizations, some people will prosper, but life for most of them will be
nasty, brutish, and short.13
According to Solomon, these metaphors are not simply harmless ways to achieve
“more picturesque speech.” They constitute an insidious invitation to adopt a mind-
set that makes immoral behavior seem justified. After all, “all’s fair in love and war,”
and even if there are some moral norms that apply (or should apply) even in war, it is
certainly true that many things that are clearly immoral during peace seem far more
justified during war. To think of business as a violent life-and-death struggle is to be
tempted to think that the ordinary moral rules do not apply. But business is not war,
and the ordinary moral rules DO apply to it. While the metaphor of business as war
over-dramatizes business, in some ways the metaphor of business as a game under-
dramatizes it. Business is not war, but it does have profound effects on the people in
and around it. To think of it as a mere game is to run the risk of forgetting just how
real its effects can be on the employees, customers, and the society as a whole.

12 Ibid., 21f.
13 p. 4, 11f.
 A FEW NOTES ABOUT CHARACTER 21

So both kinds of metaphors tempt us to forget that business does have profound—
and potentially harmful—effects on real people, and that we have no moral justifica-
tion for ignoring those effects.
Tunnel vision and the misleading ideology of business created by misleading
metaphors are two phenomena that help to explain how even a morally decent person–
someone who may not be a saint, but who has a good set of moral values–can end up
doing something bad. Later in the course, we will look at a couple of other psycho-
logical factors that can corrupt nice people (like most of us!).

1.7 A Few Notes about Character

We can define character as a set of behavioral dispositions. That is, character consists
of tendencies to act in certain ways. Tendencies or dispositions to act in good ways
are often called virtues. Tendencies or dispositions to act in bad ways are often
called vices. For example, the virtue of honesty is a tendency or disposition to tell
the truth, while the vice of cruelty is a tendency or disposition to act in ways that
harm others. A good moral character expresses ethical values. A morally good
person has “internalized” ethical values such as benevolence, compassion, respect,
loyalty, honesty, etc., by incorporating them into her character. (Notice that a value
and a virtue often go by the same name: benevolence is both the name for the ethical
value of helping others, and the name for the virtue or character trait that a person
has when she has a strong tendency or disposition to help others.)
Character makes certain choices more likely. However, it does not force you
to choose one way or the other. It is always possible—though often difficult—to
rise above or sink below one’s character. An honest person can still choose to lie;
a cruel person can still choose to act in a compassionate way. However, making
choices that “go against” one’s character often feels unnatural, even uncomfortable.
In fact, according to many theories of character, including that of Aristotle, you
know that a given virtue is part of your character when the corresponding actions
seem comfortable, natural, or pleasant. Thus, one way to think of character is that it
determines what actions it will seem natural for you to make. You do have the power
to choose other actions, actions that are, as we often say, out of character.

Some Key Ideas from Aristotle’s Theory of Character Development Aristotle

believed that character was developed through a process that is now called “habitu-
ation.” In fact, he saw character as being very similar to a collection of habits. Just
like your other habits, character influences your choices, though it does not com-
pletely determine them. Although it is easier and more natural (and, Aristotle would
add, more pleasant) to act in accordance with your habits, it is possible to go against
them, though this will often require strength of will.
So Aristotle believed that character influences actions. But, just as important, he
believed that actions create character. Aristotle was fond of saying things like: “The
virtuous person gets to be virtuous by performing virtuous actions.” For example, a
person develops the virtue (habit) of generosity by performing generous actions. The
more of them she performs, the stronger the virtue (habit) becomes, and the more it
becomes ingrained into her character. As you might expect, Aristotle also believed
the converse: Vices (morally bad habits) develop as a result of the person performing
unethical actions.
This theory of character helps to explain why a single unethical choice can be
the start of a slippery slope. Performing one unethical action today makes a person
more likely to perform another unethical action tomorrow. And as unethical actions
“pile up,” they become habits—or what we would call bad character traits or vices.
Aristotle’s way of looking at character encourages us to avoid seeing moral choices
as isolated events, and cautions us that our choices make us who we are by forming
our character.

A Few More Observations about the Slippery Slope Once a person has “crossed
the line” into “unethical territory,” there is a natural psychological tendency for
him/her to rationalize what s/he has done—that is, to view it as not being so bad
after all. To the extent that a person is successful in this rationalization, s/he has, in
effect, changed her/his perception of where the boundary between ethical and uneth-
ical actions is, so that what might have seemed clearly unethical earlier no longer
seems like a big deal. This means that when the opportunity to perform a similarly
unethical action, s/he will be less likely to see it as unethical, since doing so would
require admitting that the earlier action was also unethical. In this way, the attempt
to rationalize one unethical action leaves us more ready to see similar unethical ac-
tions as acceptable. And, of course, as we have changed our perception of where
the line is between ethical and unethical, if we cross this new line, we will be doing
something even more unethical.
There are, of course, external factors that can make the slope from minor unethical
conduct into seriously immoral—even criminal—behavior very slippery. Sometimes
a person who has committed one unethical action then needs to perform others in
order to cover up the first one. (We see this in the Martha Stewart scandal, to take just
one of many examples.) Sometimes one can be blackmailed into performing more

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unethical actions by someone who knows about the first unethical action. Organized
crime families are alleged to operate in this way, for example.

REFERENCES

Robert N. Covington and Kurt H. Decker, Individual Employee Rights in a Nut-

shell, WestGroup, 1995
Mack A. Player, Federal Law of Employment Discrimination in a Nutshell,
WestGroup, 1999.

Tibor Machan and James Cheser, A Primer on Business Ethics, Roman and
Littlefield, 2002.
Joseph DesJardins, An Introduction to Business Ethics, McGraw-Hill, 2003.