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P H I L O S O P H Y F O R B U S I N E S S ISSN 2043-0736
Issue number 32
9th September 2006
I. 'Promising, Causing Harm, and Professional Obligations' by John Alexander
II. 'BP's North Slope: De Facto Policy At Work' by Bart Mongoven
III. Review of Kenneth E. Goodpaster Conscience and Corporate Culture
by Rachel Browne
One important source of ethical dilemmas in the work place arises from the
clash between obligations which we undertake when we accept a contract of
employment, and our responsibilities outside this role, for example, our
responsibilities as parents or citizens. Following John Searle's analysis of
the act of making a promise and its institutional setting, John Alexander
offers an explanation of why promise keeping is important in the business and
professional worlds. This will not make the dilemmas go away, but we will at
least have a clearer idea why they arise in the first place.
Rachel Browne brought my attention to a recent article by Bart Mongoven which
originally appeared on the Strategic Forecasting web site http://www.stratfor.com.
Mongoven's article bears out my contention in 'Corporate Social Responsibility
and Ethical Dialogue' (Philosophy for Business Issue 19) that 'if it is
competition and displaying prowess which ultimately makes the business world go
round' then there is no reason why companies should not compete to be more
socially responsible. From the evidence supplied by Mongoven, this is indeed
beginning to happen now.
Rachel Browne has also contributed a review article on Kenneth Goodpaster's
Conscience and Corporate Culture which provides further evidence, if such
be needed, that rigid financial bottom line thinking is no longer acceptable in
the business arena. As Reviews Editor, Rachel Browne welcomes offers of books to
review, as well as reviewers willing to write book reviews. She can be contacted
I. 'PROMISING, CAUSING HARM, AND PROFESSIONAL OBLIGATIONS' BY JOHN ALEXANDER
We develop our sense of personal identity and self worth, in large part, by the
roles we play in our social lives. These roles define what is expected of us
through the establishment of norms, values, practices, processes, and
procedures that need to be actualized by us acting in those roles if we are to
fulfill the responsibilities that are associated with them. Sometimes these
roles conflict with one another resulting in a situation where we cannot
fulfill the responsibilities of one role without compromising, or violating,
the responsibilities associated with another role. For example, a parent's
responsibility to pick up his child from school at a certain time may conflict
with his responsibility as a manager to stay with his work crew until the job
is complete. In situations such as these we often refer to our private,
non-role related morality to help decide what we should do by determining which
responsibilities associated with which role should take precedence by
referencing some moral standard that is epistemically prior and foundational to
the various roles we play. We seek to determine which role best fits the moral
standard that guides our actions in situations where we experience role
It seems to be a fundamental component of ethical behavior that we ought to
keep our promises. This belief is derived from the intuition that we never
ought to do wrong by causing unnecessary and avoidable harm. This intuition can
serve as a basis for understanding our obligations to fulfill the
responsibilities associated with the roles we knowingly and freely assume.
This is particularly relevant when looking at our professional and
organizational obligations. As Manuel Velasquez points out, 'knowingly' means
that we are aware of the situation we are in and are aware of alternative
courses of action, along with their consequences, that we can choose from to
perform in that situation. 'Freely' means that we have at least two options
available to choose from and we are not being coerced, forced, or tricked by
external forces into performing one action as opposed to the other. My argument
is as follows:
A1. Person A knowingly and freely joins organization B.
A2. When A joins B he promises to do x for B
A3. Promising to do x creates an obligation for A to do x for B
A4. When A joins B, B promises A y for x
A5. Promising to do y for x creates an obligation for B to do y if x is
A6. Creating an obligation creates an expectation that what is promised will be
forthcoming under the conditions agreed upon.
A7. Creating an expectation derived from an obligation creates a right to that
which is expected.
A8. Therefore A has a right to y for x and B has a right to x for y.
Many roles, particularly professional/ organizational and socio/ economic
roles, can be assumed, or knowingly and freely joined, and this fact has
important consequences in our understanding our moral obligation to fulfill our
Each role is defined such that if we are acting within the ethical parameters
established by explicating the normative implications of the definition, then
we are acting as we should act. We are doing what we ought to do. An
interesting metamorphosis takes place when we accept a role. The role is
defined by certain norms, values, and practices that establish the expectations
of how someone in that role ought to act. We can describe what is entailed if a
person is to act according to the norms, values, and practices associated with
a specific role. By agreeing to conform to the expectations and
responsibilities of the role we agree to act according to what the expectations
and responsibilities that define that role dictate. We become that role for as
long as we decide to maintain the relationship and play the role. Through the
act of assuming a role we make a promise to fulfill the responsibilities of
that role. It is the act of promising to do what is entailed by the norms,
values, and practices that define the role, that explains and justifies what
ought to be the case relative to how a person acts in that role. (Austin, a, b;
There are key words in the description, definition of each role that denotes a
normative dimension. For example, if we try to define the role of manufacturing
manager, we might maintain that manufacturing managers have the 'role
responsibility' to 'create and maintain' a 'working environment' that is
designed to 'insure' ongoing organizational 'viability' and 'success' by
'competing successfully' in the marketplace. The single-quoted words and
phrases indicate words and phrases that have normative implications. The reason
why they have normative implications is that they establish a role-based ethic
with its normative requirements that define the role of manager. The
responsibility to fulfill the role-based ethical requirements becomes the
obligation of the manager as a result of promises (or contracts, or covenants)
they make when agreeing to accept their position that includes certain duties
and obligations relative to insuring that certain specified goals are achieved.
Promises are factual actions that create normative consequences. As long as a
person is actively engaged in developing and implementing processes,
procedures, and strategies that result in the organization competing
successfully in the marketplace within the constraint of not causing
unnecessary and avoidable harm, then she has fulfilled her role responsibility
as a manager and is doing what she ought to do. The argument is:
B1. Person A promises x to B
B2. Promising creates an obligation for A to deliver x to B.
B3. An obligation creates a corresponding expectation in B that B will receive
x from A.
B4. An expectation derived from an obligation that B will receive x creates a
right to x for B from A.
B5. Therefore B has a right to x
The act of promising is a factual state of affairs that brings into existence
some thing that did exist prior to the act of promising. Promising creates
obligations and rights. As J. L. Austin and John Searle argue, it is true that
A promises B x if and only if, A says the correct words, or phrases, in the
correct situation, to the correct persons. (Austin a, b; Searle) This factual
state of affairs can be determined if these three conditions are met. If they
are, then the promise actually took place and obligations and rights are
created. B2 Ð B4 denote normative results that are consequences of the factual
act of promising. They do not exist prior to the action of promising taking
place. It is through the action of promising taking place that the normative
consequences become binding upon the promiser. B cannot claim a right to x from
A prior to A promising x to B. For example, Bill cannot simply pull John off the
street and legitimately claim that John must buy him an automobile simply
because Bill wants an automobile and cannot afford one. Bill can only make this
claim if and only if John has actually promised to buy the car for Bill by
performing the necessary and jointly sufficient actions that indicate that a
promise to buy a car for Bill has actually been made. The practice of promising
plays an important role in the impermissibility of breaking promises justly
made. Breaking a promise causes harm by denying what someone has a moral right
to. It is this fundamental feature of our moral lives that serves as the
foundation for understanding our professional and organizational obligations.
1. Austin, J. L. (a), How To Do Things With Words, Cambridge, Harvard
University Press, 1969.
2. Austin, J. L. (b), 'Performative Utterances,' in Philosophical
Papers, edited by J. O. Urmson and G. J. Warnock, London, Oxford University
3. Austin, J. L. (c), 'A Plea for Excuses,' in Philosophical Papers,
edited by J. O. Urmson and G. J. Warnock, London, Oxford University Press, 1970.
4. Plato, Crito, in Five Dialogues, translated by G. M. A. Grube,
Indianapolis, Hackett Publishing, 1981.
5. Searle, J. 'How to Derive "Ought" from "Is"' Philosophical Review
Vol. 73, No. 1. Jan 1964 pp. 43-58.
6. Velasquez, Manual, Business Ethics: Concepts and Cases, Englewood
Cliffs, N. J., Prentice Hall, 1992.
1. I am going to assume that the reader agrees with Socrates' argument in Crito
that 1) We ought not to do wrong, 2) Causing harm is to do wrong, and 3)
therefore we ought not to cause harm. (Plato) It will be remembered that
Socrates never argues for 1 and 2, he simply gets Crito to agree that they are
true. This is a legitimate strategy in argumentation; if we agree that
something is true then it simply becomes a matter of explicating the
entailments of what is accepted. It should be noted that Socrates, when
speaking for the Laws, will bring in the idea that breaking agreements 'justly
made' (promises knowingly and freely made) causes harm, therefore we ought to
keep our agreements justly made. This is the argument that I am restating in
this paper where I am simply applying this general argument to professional
life. The formal argument is:
i. We ought not to do wrong
ii. Causing unnecessary and avoidable harm is to do wrong.
iii. Breaking agreements (promises) knowingly and freely made causes harm
iv. Therefore, we ought not to break our agreements (promises) knowingly and
Those familiar with Plato will recognize that premise 2 includes conditions
that are not in Socrates' original argument. We need to make this modification
because we face situations that require us to choose between bad and bad
consequences. Socrates formulation seems to imply that the choices are only
between good and bad.
(c) John Alexander 2006
John K. Alexander, Adjunct
Grand Rapids Community College
Grand Rapids MI, USA
II. 'BP'S NORTH SLOPE: DE FACTO POLICY AT WORK' BY BART MONGOVEN
The revelation on Aug. 7 that BP was shutting down most of its North Slope
operations in Alaska caught most of the oil industry by surprise -- so much so,
in fact, that oil prices shot up by $2 a barrel and there were short-lived
discussions about whether the U.S. Strategic Petroleum Reserve should be
tapped. The decision may have been unexpected, but from a business perspective,
the move to close some North Slope facilities makes perfect sense; the pipelines
were found to be weak, one already had broken and new breaks were deemed likely.
At another level, however, the decision was quite remarkable. There were no
regulators or environmental activist groups clamoring for BP to test, let alone
fix, the pipelines -- and strategically speaking, it was not an optimal time for
4 percent of U.S. domestic production to be taken offline.
BP's voluntary shutdown of much of its troubled North Slope facilities speaks
to the power and scope of a new regulatory environment -- one that BP helped to
create and define -- that extends far beyond the reach of government. In this
environment, policy increasingly responds less to activist groups, and ever
more to consumer perceptions and widely held social values. It perhaps would be
easy to argue that the difficulties the company is experiencing are the work of
its own hand, since the current regulatory atmosphere was born partly of
self-laudatory ad campaigns BP launched in 2000, touting its environmental
values. But the reality is more complex. The public relations offensive that BP
undertook was -- like the broader shift toward corporations celebrating their
corporate responsibility -- a highly strategic affair, and was seen by some in
BP as a matter of life and death for the company (nor was the corporation alone
in such thinking).
We long have argued that globalization is helping to shape a new framework for
corporate decision-making: Brand protection and brand promotion are becoming
even more important than regulators in dictating corporate policies. BP, with
its Beyond Petroleum campaign, launched in 1999, was among the first to
anticipate that globalization would move this sphere of public policy (what we
have called the de facto sphere) forward. For the oil majors, the goal
was maintaining their ability to drill in new and potentially sensitive
environments -- yet without alienating employees and recruits, upsetting
consumers, reinforcing industry stereotypes or actually harming communities
near the operations. BP Chairman Sir John Browne described this effort in 1999
as maintaining a 'social license to operate.'
The notion that business needs a social license to operate -- distinct from
government sanction -- is still seeping into the corporate cultures of many
businesses. But it has already changed public policymaking at the global level,
and it looks to be a permanent feature of the business landscape.
Public Image and the Roots of Change
Of all major corporations, BP is among those most strongly identified with the
rapid uptake of the de facto regulatory regime -- that is, the set of
regulations imposed on business by social expectations, which are more strict
than the regulatory structure imposed by law. In the late 1990s, BP, then known
as British Petroleum, began to differentiate itself from most other oil majors
by acknowledging the negative aspects (and in some cases reinforcing
stereotypes) of the petroleum industry -- and by implying, essentially, that it
was terribly sorry to be an oil company.
In addition to changing the tone of its public communications, BP also made a
number of policy changes that were viewed as radical at the time. The company
brought new concepts to bear in working with communities near its operations,
particularly through increased levels of dialogue with elected and unelected
leaders. It endorsed the theory that humans are causing climate change, and
concluded that oil was a major source of the carbon in the atmosphere that
causes climate change. BP also endorsed new policies in the human rights arena,
such as the Publish What You Pay initiative -- in which oil, timber and mining
companies declare for public scrutiny the payments they make to the governments
of developing countries. (Of course, without universal adherence to Publish What
You Pay, some governments found that not awarding grants to BP was the surest
way to avoid being held publicly accountable.)
BP did not do these things out of cynical motives, nor did it do them out of
altruism. Rather, the changes resulted from a significant convergence of
several market, social and geological forces.
The most significant catalyst for the changes BP and its competitors made was
the Nigerian government's execution of political activist Ken Saro-Wiwa in
1996. Royal Dutch/ Shell became a tremendous target for human rights activists
who saw the company as bearing partial responsibility for Saro-Wiwa's death.
Campaigners from around the globe began to take shots at the company. The Brent
Spar incident, staged by Greenpeace activists following Saro-Wiwa's death, was
the largest of many campaigns and protests against Shell. BP, Shell and most
other larger multinational corporations that saw this trend unfolding emerged
from this period as changed companies.
The human rights issue was not the only catalyst for the change, however. A
number of issues came together during the late 1990s to hit the oil industry
especially hard, but the same challenges visibly affected a number of other
industries as well. For one thing, the first generation of workers who were
brought up and educated during the modern environmental era began entering the
job market during the 1990s. From their youth, these workers -- especially in
Europe -- had learned environmental principles in ways their elders had not.
The predominant style of environmentalism during that period is important to
note: It evoked pictures of environmentalist 'good guys' (typified by
Greenpeace activists in zodiac boats) pitted against big corporate 'bad guys'
(typified by oil platforms and whaling ships). For another thing, the graduates
of the 1990s also were making decisions about future courses of study and
careers at a time that the high technology industry and a growing belief in a
'new paradigm' were coming to dominate the economic markets. Added to this was
the fact that the college graduates of the 1990s represented the smallest birth
cohort in 40 years. The sum of this labor equation was, in short, a recruiting
nightmare, particularly for companies that needed to keep 23-year-olds excited
about the prospects of jobs related to drilling platforms.
One Shell executive described that period with these words: 'It was pressure
from within, in the form of a highly anxious and demoralized workforce that
also sounded the alarm. [...] For the first time in our history, Shell had
problems attracting good people to work for the company, and the employees that
were there were extremely anxious about being immersed in a dysfunctional work
culture.' Similarly, another Shell executive told a Scottish newspaper that
'staff morale at Shell after Brent Spar was rock bottom, but introducing [new
social responsibility guidelines] turned it around.'
Though retention is not a problem for most players in the industry, the
recruiting problem was (and remains) acute not only in oil, but also in mining,
chemicals and other businesses that are often thought of as 'old industry,' but
which also depend heavily on science and scientists. The continued perception
of these industries as 'dinosaurs' at times can threaten the very life of the
companies that lead them. Thus, something that on the surface appears to be
'just' a public relations problem actually can represent a strategic threat to
In the 1990s, Shell became the public face of this trend. However, as events
unfolded, some large businesses pounced particularly strongly on two ideas.
First, globalization and new technology -- which resulted in pictures of Ken
Saro-Wiwa and the Brent Spar being transmitted instantly around the world --
changed the way campaigners viewed environmental and human rights issues. And
second, the new technologies also increased campaigners' ability to have an
impact on key issues: The challenges of sending alerts to thousands of people
in a short time had been overcome, and issues activists were able to start
forming borderless communities. So long as industry continued to play by the
old rules -- which encompassed a belief that what happens in far-off places
stays in far-off places -- Shell's experience would be an inevitability for
other major multinational corporations.
Other factors made this series of events of critical importance to BP. Two of
the company's most significant regions for operations -- the North Sea and
Alaska's North Slope -- were mature fields (oil-speak for 'old and drying up').
Industry leaders recognized that the future of oil exploration and production
increasingly would involve difficult-to-get-to places that had not yet been
explored. A number of locations -- most of them synonymous with politically
difficult issues -- came to the fore in the late 1990s: western China, Angola,
Ecuador, Colombia, Sakhalin Island and the deep offshore of the Gulf of Mexico.
Operations in any of these places could entail a host of political difficulties
-- both on the ground and at home -- and ample risk that a company would run
afoul of campaigning groups.
From this thinking emerged the concept of the 'social license to operate.'
The Next Phase of the Cycle
Having spent almost a decade in efforts to change its image and maintaining its
'social license,' BP could hardly afford to have its work destroyed -- which
another occupational health or environmental disaster could have done. But what
BP's decision on Alaska's North Slope demonstrates, however, goes to a deeper
issue: The new regime of voluntary regulation by corporations is one that
governments will not be able to affect or alter greatly, because the social
license to operate is not issued by governments.
There is a temptation for activists on both sides of issues (and neutral
observers as well) to see the growing number of policy changes that are driven
by corporate voluntary agreements as short-term reactions to deregulatory
political currents -- whether in the United States, or globally through the
World Trade Organization. It is further tempting to speculate, as issues play
out in the private sphere, how they will be translated into new de jure public
policies -- that is, enshrined in legislation.
On many issues, this is not going to happen. We are approaching, or perhaps
have entered, a period of globalization that can be defined as a 'race to the
top.' Corporations and industries are approaching issues of social significance
by trying to differentiate themselves from their competition and to improve
their image (and that of their industry) in the public eye. On an almost weekly
basis, for example, Wal-Mart announces a new voluntary initiative designed to
show its leadership and is pulling attention to the company -- rather than the
Chinese, Thai or U.S. governments -- as the key determiner of a product's
safety and reliability. Dell Computer Corp. and HP, meanwhile, are locked in a
battle to prove which company's computers are more easily recycled. Car
companies and appliance manufacturers battle over energy-efficiency supremacy.
No government action can supersede such battles, because regulatory compliance
is not being contested. The companies will remain locked in battle with each
other to prove which is better; the groups pressing on the corporations for
improvements in labor conditions, environmental performance or energy
efficiency will seldom be satisfied that the companies are doing enough.
The stakes in this phase of the public policy cycle run highest for BP and
other companies in what are viewed as 'traditional' industries. In these
industries, where wealth and market share were established decades ago,
negative perceptions have had scores of years to build up. Thus, in order to
recruit new employees and to win the trust of communities where these companies
want to do business, there will be a continuing need to exceed regulatory
requirements and play to public sentiment.
(c) Bart Mongoven 2006
[This article originally appeared at Strategic Forecasting, Inc. at
III. REVIEW OF KENNETH E. GOODPASTER CONSCIENCE AND CORPORATE CULTURE
BY RACHEL BROWNE
Conscience and Corporate Culture
By Kenneth E. Goodpaster
Blackwell Publishing, available 2007
This book is part of a series by Blackwells on applied ethics. The author of
this title, Professor Kenneth Goodpaster, is a philosophical ethicist at the
University of St Thomas, USA. He has worked closely with the business world to
obtain case studies which enables him to teach from both an ethical
philosophical point of view as well as a practical one. Goodpaster sees a need
for dialogue between the world of philosophy and the business world and directs
his book at both. For this reason, this book should be of special interest to
readers of Philosophy for Business. Goodpaster doesn't claim that he has
solved anything, but hopes his book will be a 'platform for communication'.
Contrary to his claims for himself, he seems to have solved quite a lot. The
book is in two parts. The second part, largely case studies, provides a good
deal of practical advice on setting up a mission statement and following it
through. Goodpaster provides practical solutions to the problems of adhering to
the corporate ethical code.
The first part of the book is theoretical business ethics. This is the most
interesting part of the book from a philosophical point of view. Goodpaster
starts from the point of view that morality and business goals are apparently
inconsistent. Whereas a business must maximise value for shareholders there is
a cultural ethical call for business not to pursue such a goal to the exclusion
of moral values and precepts. A requirement that we try to dissolve this
inconsistency, Goodpaster believes, follows upon scandals such as Enron, and
through identifying the corporation with the individual he shows what he thinks
is wrong with the idea of profit maximisation. Concentration of the goal of
maximising profit is a 'sickness' and therefore should not be held as an
alternative to business goals which properly incorporate human moral values.
To describe this sickness, Goodpaster introduces the term 'teleopathy'.
Teleopathy is not a temperate pursuit of a goal but is fixation and detachment
from moral thinking where the latter is rooted in conscience. Goodpaster
believes that if you adopt strongly the goal of profit maximisation you give up
the claims of conscience. You become alienated and detached from moral concerns.
In order to show that the behaviours of corporations are similar to that of
individuals, and so we can judge them morally in the same way, Goodpaster looks
at the cases of the individuals Martin Siegel (of the Boesky scandal), Andrew
Fastow (of Enron) and the organisational decision-maker NASA and finds the
sickness of teleopathy is common to all three scandals. It is questionable
whether Fastow's case is that of an individual, since not only did he
act with the knowledge of other senior officers, but also the auditors,
Andersen, implicated in the scandal. As financial officer, Fastow seemed to
have quite a free hand and at one point overrode the company's code of ethics
with no objections from other senior officers. However, Goodpaster's point
that we morally judge corporations is persuasive, if not undeniable, and is
backed by the thesis that a corporation, like an individual does not simply
behave, as a machine does, but acts in accordance with values.
The problem with teleopathic values is that they are 'risk-averse at a very
deep level' and so much so that the individual/ corporation refuses to even
look at goals other than the profit making goals of the corporation. The
emotionally detached and fixated mind-set of the teleopath is not dedicated to
the truth, but to its pre-determined goal and is therefore unable to change its
values in accordance with ideals and realities.
While this might be so of Siegel and NASA (the latter forged ahead with it's
mission, blocking out thought of safety issues which should have given rise to
the recognition that in reality the consequence of this would be many deaths --
as there were -- and the ideal or value that human life is precious), it isn't
necessarily true for Fastow.
This same rigidity of value cannot be so clearly applied to the case of Fastow
in since in 1996 he 'begins committing crimes'. That is, he changed his
values from enriching the company to the value of enriching himself. So, closer
scrutiny of Goodpaster's examples raises a doubt about his theory of teleopathy
in terms of its general applicability.
But furthermore, apart from fixation and detachment, there is a third feature
of teleopathy which is that instead of attending to reality in a healthy way,
the teleopath 'rationalises'. Goodpaster notes that are 'differences between
and among the stories of Siegel, Fastow and NASA', but does not seem to
recognise that rationalising is one of them. Yet rationalising is one of three
features that he claims identify the teleopath. While Goodpaster is persuasive,
under scrutiny his psychological generalisations and typifying become doubtful.
Siegel apparently rationalised his actions by seeing the money he received from
Boesky not as money received from illegal insider dealing but as a consultation
fee. He rationalised and ignored the facts, but his beliefs about what he was
doing made it acceptable to him. The book isn't clear on how Fastow
rationalised but the history of the scandal makes it pretty clear that he was
consciously aware of the facts of his fraud and by trying to cover it up he
implicated many others. There is no indication whatsoever that he was unaware
of the facts; things actually point in the opposite direction. Kurt Eichenwald
has written a book detailing the scandal and is said to make 'a strong case
that it was primarily plain old fashioned greed that drove Fastow'.
Goodpaster gives us no reason to think that Fastow wasn't fully aware of his
greed, any more than of the facts. And, of course, being driven by greed is an
alternative way of describing Fastow's behaviour. To be compelled by a drive is
not the same as behaving as a result of the elements of teleopathy. A drive such
as greed can grow and expand and need not be fixated on a particular object of
desire and is not necessarily rationalised.
Sadly, much of Goodpaster's persuasiveness on teleopathy might well come from
its repetitiveness. He does make good use of theory to back up his claims but
you begin to feel that just because a renowned psychiatrist says something,
does that mean it is right? We would like to think that there is an explanation
for corrupt behaviour so that we can correct it but surely, on Goodpaster's very
own theory, what we want to think should not be a guide to what we should think.
Yet Goodpaster's own moral compass is based in what he wants to think and is
what he grounds the book on. The spiritual is mentioned three times in the
preface. Given that, the use of the loaded words 'preach' in the
introduction and 'mission', before you have even got to the full text,
tell you all you need to know about where he is coming from.
Goodpaster is a philosopher, however, and takes on board the objection raised
by some to spirituality. It doesn't matter whether we want to call something
spiritual or ethical. The Golden Rule -- basically, treat others as you
yourself would be treated -- has both religious formulations and the Kantian
formulation, the latter being based on the premiss of human rationality. We
also share a pre-theoretical language of the ethical as involving conscience as
moral awareness where this is not just subjective, but involves rationality and
respect as is required by cultural norms.
Awareness is important because the flexibility of being able to increase moral
awareness and to be develop one's conscience is in direct opposition to
That Falstow wasn't obviously a teleopath is a problem that might arise in part
from Goodpaster's introduction of this new concept that he defines himself,
which isn't part of common thought, but issues from technical psychology. That
the answer is that Falstow lacked a conscience and moral awareness is more
easily acceptable. However, for all we know Falstow might have had a conscience
and been racked with guilt. But for sure, he wasn't following the Golden Rule in
any sense that he would be likely to universalise his behaviour in the Kantian
sense, as that which he would agree anyone should do.
Having identified teleopathy, the middle section of Part 1 focuses on the
nature of morality as ethical reflection and rather confusingly brings together
our moral concepts, Kantianism, spirituality and utilitarianism so that we are
faced with diverse theoretical approaches to the consideration of ethics all
rolled into one. Goodpaster does display a good sense of the ethical though,
which he brings to bear on disparate theories by mentioning only those parts
which will resonate with us, bringing us to realise how we share values.
However, not only are we faced with this confluence of approaches to ethics,
Goodpaster gives as much space to the psychologist Piaget and his research on
the developmental stages of ethics in the child, which he finds comparable to
the ethical developmental stages of a company. The first, pre-ethical,
ego-centric stage of childhood, for instance, is taken as mapping the success
and goal fixation of a company. Having gone on repetitively and at length in
the first section about the nature of teleopathy, we are now faced with simply
too much theoretical information.
The psychological comparison amounts to the claim that a corporation is the
same sort of moral entity as an individual. That ethics is a matter of
conscience and awareness, which are subjective human capacities, makes this
look questionable. You might identify a company with it's leaders, but
Goodpaster has argued that a company is distinct from the individuals who run
it, because if this were not so you would not have the same company throughout
changes of personnel. Furthermore there is a causal relationship between
individuals and the corporation. Individuals can shape the ethos of a company
and the ethos of a company can determine the decisions of an individual.
The book claims that a corporation has a conscience and the structure of this
conscience is laid out in terms of a mind-set which incorporates distinct moral
ways of thinking which can sometimes come into conflict. It isn't clear to me
how an entity such as a corporation could be in possession of the sort of
conscience which, with deepened awareness, could have a moral-insight which
would enable it to resolve the conflict. Goodpaster devotes a whole chapter to
addressing objections to the idea of corporate conscience but, unfortunately,
not that the very idea is questionable and that his argument doesn't work. His
claim, using Piaget's work, that 'Conscience in a corporate culture can be seen
developmentally (as it can in children)' shows only that an analogy can be
made but this isn't sufficient to support the claim that a corporation
actually has a conscience. We might try to understand this loosely in a
metaphorical sense if we take possession of a conscience to be manifest in a
company's policies. The analogy doesn't work because we precisely do not
mean of a human that conscience is that which is simply manifest in behaviour as
Goodpaster has recognised in his point that a corporation is not machine,
mentioned above. That a corporation is not a machine does not mean that it has
a conscience. If conscience is separated from internal feelings of guilt,
remorse and internal struggle known only to the subject, we completely lose the
idea of conscience.
The nature of the corporate conscience doesn't become much clearer in Part 2.
Here Goodpaster describes Piaget's work as the 'anchor for the idea of
'corporate conscience' which needs to be 'cast in operational terms' if it
is to be useful to leaders. Through a series of case studies Goodpaster shows
how a dynamic between a leader and employees in setting a direction or mission
statement of a company can create a common culture in a corporation allowing
the leader to talk of 'we'. In setting up a mission statement the corporation
should, when identifying it's ethical strengths, listen to the what employees
think which will lead to common commitment. While his account of setting up a
mission statement which will incorporate the values of a company is clear and
looks extremely useful, it is still not clear what exactly a corporate
conscience is. Considering that the book is entitled Conscience and
Corporate Culture one would expect more clarity on this matter. We are now
told ('values or the conscience of an organisation') that conscience
just is the set of values directed into a mission statement. We don't
whether the phrase in brackets is a disjunction or whether the title means a
conjunction and which we should take to be the thesis. If the latter is the
case then the conscience IS the values. But if that is the case, how can you
already have ethical strengths that you can come to identify? The so-called
ethical strengths are facts not values. If facts are set up as values because
they are written a mission statement that means that they are not values. If
they have to been written and enforced by means of education they are not
It is the central problem of business ethics that to profess to a set of
values, or to produce a written mission statement, is not the same as to
actually act in accordance with these values. If a company wants to assess
whether or not it is acting on its values it can follow a Self-Assessment and
Improvement Process. Of course, if a company actually really did have a
conscience it would know whether it was acting in accordance with its values
because that is what the function of a conscience is, and would not need the
SAIP. If you have a conscience you will feel guilt and that is because you know
that you haven't behaved in the way you morally feel to be right.
Goodpaster's answer to the problem of adherence to values is that the values
set out in the mission statement need to be 'institutionalised' and 'sustained'
which can be done through example of non-hypocritical leadership as well as
education in the form of exercises, seminars, symbols, ceremonies and
celebrations. Throughout Part 2, in a series of case studies which serve as
'parables' we learn that a lot of successful educational work has been done.
In amongst the parables, Goodpaster returns to the idea of conscience as a
mind-set, illustrating it figuratively by reproducing Escher's illustration,
Fishes and Scales, and he quotes from Anthony DeMello's Zen poems, tells us
the story of Beowulf, quotes a Taoist poem and finally ends with a verse from
TS Eliot, all of which can enlighten the corporate mind.
So what has Goodpaster solved? He might not have solved the problem of the
nature of corporate conscience, but perhaps he shouldn't have introduced this
concept in the first place. However the large number of case studies in Part 2
illustrates vividly that business ethics is both possible and desirable.
He shows us not only that there is a need for solid education in business
ethics if this is to succeed, but that we can reflect in a much wider sense
than the teleopath, with his fixation on profit maximisation, could ever
imagine. Goodpaster brings to bear wider concerns to humanity than profit
maximisation. He is not afraid to draw our attention to art, religion and
poetry. This book challenges narrow-mindedness and not just that of the
teleopath in the business world. The book challenged my prejudices as a reader.
1. This includes, Ethics in Finance, Accounting Ethics, Ethics of Information
Technology and Business, Employment and Employment Rights, Management Ethics,
and Business Ethics and the Natural Environment.
2. Page 9
3. What Went Wrong at Enron by Peter C Fusaro and Ross M Miller
4. page 41
6. page 19
7. See http://en.wikipedia.org/wiki/Conspiracy_of_Fools
8. page 6
9. From the preface again, p. xxi
10. page 86
11. page 115
12. page 135
13. page 138
14. page 161
15. page 191
(c) Rachel Browne 2006