Business Ethics Is Not an Oxymoron

By Kyle Scott Print this article Print

You owe it to your shareholders and your employees to earn a profit. But you also owe it to them—and to yourself—to act ethically.

Business ethics can be a tricky area because the point of business—to produce a profit—often conflicts with what might reasonably be considered ethical behavior. Ethicists rarely have a strong grasp of business, while executives rarely have enough spare time to read philosophers Aristotle, Socrates or Thomas Aquinas to help them decide whether a decision is ethical.

However, here are three easy questions you can ask yourself when you must decide whether a decision is ethical.

1. Would you accept this explanation from your children?

People may justify a decision that is unethical but increases competitive advantage by saying, “That’s the way the world works; if you want to compete, this is what you have to do.”

In reality, however, this is the adult equivalent of saying, “But all my friends are doing it.”

So, ask yourself: Is the decision I am about to make one that I would want my child to make? Is the justification for my decision one that I would accept from my child when he or she has done something that goes against my instructions?

As managers and executives, you have a hand in making the world the way it is. By working hard and progressing in your profession, you have earned the ability to make choices for yourself and for others.

Obviously, you owe it to your shareholders and your employees to earn a profit. But you also owe it to those people, as well as to yourself and your family, to act ethically on behalf of your organization. As a business leader, you have to decide which is more important at any one time: profit or ethics.

2. Will it make you happier?

To make a truly ethical decision, you must decide what will make you happy. According to Socrates, what makes us happy is what makes us better people.

You become a better person, and thus happier, when your higher desires (such as the desire for justice, moderation and courage) override base desires (such as hunger or sexual attraction).

No one can tell you what will make you happy, or when you are following your base desires instead of your higher desires. You have to figure that out for yourself.

3. Do you exert power?

If you have to manipulate or coerce someone into going along with your business plan, you should rethink your plan. If you can present your argument in a persuasive manner without robbing others of their ability to decide for themselves, then you have acted ethically.

The workplace is not a democracy most of the time, and subordinates must take directives from their managers. That’s not unethical coercion. Telling your head accountant that she must finish a project before she goes home or she’ll be fired because she’s already fallen behind is far different from telling that accountant to fudge the revenue numbers.

One of the things that separates humans from other animals is the ability to reason. When you strip someone of their ability to reason or to act on what they have determined to be the best choice, you have denied them their dignity and have acted unethically. Whether you are withholding information from stockholders or threatening punishment to employees if your will is not followed, you are denying someone or some group the capacity to make decisions for themselves.

It would be unethical to let your business fail because you don’t want to do what is necessary to keep a business going. However, you should not act unethically simply because it is easier than doing the right thing—or because blatant self-interest guides your decisions.

When you are making business decisions, the three questions I provided above can help you decide which path to follow. The intention is not to pass judgment or tell you how to act. It is simply to give you guidelines so you can be fully aware of the business and ethical implications of your management decisions.

Kyle Scott is a visiting assistant professor at Duke University, with a Ph.D. in Political Science: American Political Theory and Public Law. He has authored three books, including Federalism: Theory and Practice, which has just been published. Kyle has taught American Politics, Political Theory and Public Law at Miami University, the University of North Florida and the University of Houston.  

This article was originally published on 2011-12-07
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