The Good Manager A Moral Manager?

Per Sundman

ABSTRACT. In this article two problems with the recently developed practice or virtue approach to business ethics are discussed. The first problem concerns an alleged harmony between common demands of morality (generally understood) and the internal goods of actual business practice. The claimed harmony is strong in essence since it holds that the role expectations a good manager has to live up to, do in fact coincide with what morality demands. The second problem is related to the first and concerns the alleged relevance of a virtue perspective for business ethics. According to the virtue perspective discussed in this article, moral reasoning should take actual practice, and only actual practice, as a point of departure. In so doing ethics is claimed to become insulated from e.g. putting irrelevant demands on practitioners. Such demands are understood as based on abstract principles alien to the practice in question. The thesis of this article is that neither of the above mentioned two claims are plausible. This is so basically because one needs to turn elsewhere than to actual business practice in order to detect a morally laden notion of managerial goodness.

Relevance versus critique According to the article Whats the matter with Business Ethics written by a professor in Management Andrew Stark, a general moral problem for a business manager is how to balance ethical demands and economic realities when they do in fact conflict.1 Seemingly in line with this, Stark argues that relevant business ethics accepts or at least takes for granted the organizational context of real managers.2 He writes: Far too many business ethicists have occupied a rarified moral high ground, removed from the real concerns and real-world problems of the vast majority of managers.3 I presume that

relevance here is seen as a consequence of taking seriously the managers own formulations of moral problems confronting her as manager. Now, remembering Starks words, let me offer one more quotation, this time from the opposite side of the business ethical spectrum namely from a professor in philosophy Richard L. Lippke. Lippke writes: Indeed, many conventional business ethicists simply assume the legitimacy of the institutions and practices of advanced capitalism and go from there. 4 And later: Additionally, by assuming the moral legitimacy of the basic structure of advanced capitalist societies, they both cut off a range of moral issues from further scrutiny.5 They both is referring to books representing what Lippke calls traditional business ethics.6 Lippke and Stark appear to be at odds with each other. In fact, Lippke seems to be lamenting the scarcity of the very kind of investigations which Stark claims exist in undesirable abundance. Of course, the empirical questions concerning the scarcity or abundance of particular kinds of business ethical investigations is not particularly interesting here. However, what is of interest is finding out whether the different approaches contain interesting differences as to how actual business practice is judged. Accepting Starks conception of and demand for relevance would put us on the horns of a dilemma. Either the ethicist would have to accept and affirm the economic and institutional contexts of practicing managers or she will be irrelevant by allowing herself to criticize fundamental moral and economical presuppositions. One, if I may say so, popular way of addressing this quandary is attempting to achieve relevance with the help of a practice oriented view of

Journal of Business Ethics 27: 247254, 2000. 2000 Kluwer Academic Publishers. Printed in the Netherlands.

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Per Sundman normative the way actual managers fulfill their roles as managers. This is necessarily so, since what would be the function of an ethicist if she would not be focusing on tensions between what is and what ought to be. However, embarking on finding sources of critical leverage includes both at least some clarification of the normative content put to use in criticizing current states of affairs and investigating the different ways this content is supported by reasons, i.e. justified.

ethics.7 This view holds as normative point of departure the various patterns of acting together we generally think of as our different social roles and their internal ideals.8 Several representatives of so called relevant business ethicists can without doing them any injustice be labeled neoAristotelian. They often explicitly refer to Aristotle in their attempts to reconstruct a contemporary virtue-ethic (they are also sometimes called communitarian). 9 Leaving labels aside, I attempt to show that as this position is construed by two well-known business ethicists, it rests on an idealistic notion of business practice. Either it offers no starting-point for radical criticism of existing business practice or it runs the risk of becoming irrelevant due to distance from actual practice (not that different from radical egalitarian (irrelevant) criticism). Let me continue by shortly introducing the representatives of the virtue-approach. I shall discuss primarily two books representing a practice oriented approach to business ethics, namely Robert C. Solomons book Ethics and Excellence. Cooperation and Integrity in Business, and Edwin M. Hartmans book Organizational Ethics and the Good Life. Both texts are discussed and therefore influential business ethical texts. However, Solomons book, perhaps partly due to age, seems to be more well known. For example in the essay Business Philosophy Peter Davies writes: Virtue business ethics is both a very new, and an important, addition to business ethics theory; and a pioneering text here is Robert Solomons Ethics and Excellence.10 In Sweden virtue business ethics has found its way into explicit textbooks, such as Tomas Bryttings book Business ethics (Fretagsetik).11 Since, the virtue approach takes the study of the actual organizational context of real managers (business practice) as a point of departure, representatives of this approach should satisfy Starks demand for relevance.12 The purpose simply to analyze texts is of course too general. My main question concerns where the moral/critical leverage comes from. I assume that very few, if any, business ethicists are in the affirmative towards all aspects of the actual business world or to speak with the practice perspective, they do not simply take as

Business as a practice According to Robert C. Solomon, Aristotle made an important distinction between household-trading (oecinomicus) and trade for profit (chrematiske).13 The former being necessary for survival and serving the common good (a good that people have in common to desire). Whereas the latter while being done only for money was considered of no real use/good for the community. Therefore householdtrading belonged to and was supposed to be perfectly compatible with virtue whereas the latter, commerce, was seen as in stark opposition to virtue.14 As I see it, the gist of Solomons argument rests on the validity of his claim that the contemporary practice of business is in fact more related to the good social function of householdtrading than to trade for profit.15 Given the validity of this claim we would have critical leverage against those business agents e.g. managers who only accept the optimizing of share-holders interest (profit) as explicit goal. However, it is far from obvious how the critical leverage of this business as a practice perspective should be understood. One can ask whether it offers ground for critique against certain types of psychological motivation for doing business e.g. motivation to maximize profit. Or one might ask if this approach would lend itself to criticism of certain types of managerial action. I shall leave the first question and turn directly to the tricky second one. The practice oriented view can hardly be critical toward any managerial action that increases the employing corporations profit. What if the profits would emanate from a managers decision to start manufacturing a new environmentally

The Good Manager A Moral Manager? friendly hybrid-fuel automobile? This can definitively be interpreted as serving the common good of many actual communities. Maybe an environmentally friendly car was the relatively best means to achieve the one and only goal of optimizing shareholders profits. What does this say about the moral quality of the managers action? Here, we have begun to touch the problem of relating a role-specific ideal of excellence to morality generally understood. This is so, since it seems as if the manager in my example might be blameworthy from the virtue perspectives point of view. He namely apparently understands and acts as if business is only about trade for profit. On the other hand, viewing business as being only a money making game seems, in this particular case, to be compatible with doing what many would consider to be the morally right thing, namely to manufacture an environmentally friendly product. However, in order to understand the critical potential of the virtue perspective one needs to take a closer look at what supposedly was meant by viewing business as a practice. According to the virtue-approach, business understood as a practice, i.e. viewed in contrast to business as a money making game like a mix of Chess and Monopoly is claimed to offer its participants the necessary conditions for true happiness.16 This is accomplished by cultivating the virtues necessary for happiness or in neoAristotelian terms human flourishing (eudaimonia in Aristotles words).17 Let us leave for now the question of what in the (pluralistic) world true happiness might be. A few words about the notion of virtue is necessary, though. In the neo-Aristotelian perspective, virtues are traits of individual character considered desirable within a certain context, e.g. particular social roles of a community.18 In the following, I take the liberty of explicating the virtue approach with the help of Alasdair MacIntyre. This is done both because the practice oriented business ethicists I discuss are more or less influenced by MacIntyre and because I believe some of his basic ideas help to explicate the points with a virtue perspective.19 Indeed there are few virtue ethicists who are not influenced by the way the notion of a virtue

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is outlined in MacIntyres After Virtue (although, of course many are critical on various points also). Following Alasdair MacIntyre we can assume that to have or possess this particular kind of desirable trait of character means that she who has this trait is motivated to act in accordance with goods internal to actual social roles. 20 Internal goods are defined both by being attainable only through participating in a certain practice and by only being understandable in terms of the settled activity defining the practice in question (this is most often contrasted with so called external goods which can be possessed and attained through many kinds of activities).21 In order to better explain what is meant by the notion of internal goods I choose to quote the long but instructive example MacIntyre offers as explanation to his distinction between internal and external goods. He writes:
Consider the example of a highly intelligent sevenyear-old child whom I wish to teach to play chess, although the child has no particular desire to learn the game. The child does however have a very strong desire for candy and little chance of obtaining it. I therefore tell the child that if the child will play chess with me once a week I will give the child 50 cents worth of candy; moreover I tell the child that I will always play in such a way that it will be difficult, but not impossible, for the child to win and that, if the child wins, the child will receive an extra 50 cents worth of candy. Thus motivated the child plays and plays to win. Notice however that, so long as it is the candy alone which provides the child with a good reason for playing chess, the child has no reason not to cheat and every reason to cheat, provided he or she can do so successfully. But, so we may hope, there will come a time when the child will find in those goods specific to chess, in the achievement of a certain highly particular kind of analytical skill, strategic imagination and competitive intensity, a new set of reasons, reasons now not just for winning on a particular occasion, but for trying to excel in whatever the game of chess of chess demands. Now if the child cheats, he or she will be defeating not me, but himself or herself. 22

In MacIntyres example/story, eventually the child discovers the internal good of playing chess, and this is something that cannot be enjoyed in

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Per Sundman excellent manager until we have knowledge about the consequences for society of that particular managerial activity. Thus one might think that in each case it remains to be established that a presumably excellent manager is also a moral manager. However, we have also seen that, according to this practice approach, realizing the internal good of business entails the provision of external goods for the society in which the corporation is situated.29 External goods are by definition desirable things which can in different ways be transferred between individuals. They are furthermore end products of one or several activities and not, like internal goods appear to be, synonymous with the pleasure the can be had while performing skilled activities. Common examples of external goods are, besides candy bars, cars, clothes, perfume, hi-fi equipment, boats, toothpaste, and so on. Failing in providing external goods thus means failing in business. Here, I believe we can see clearly how the above outlined understanding of business diverges from ordinary conceptions of successful business agents, e.g. managers. Let me explain by offering a few examples. Do we demand of a trust company manager that she must have provided society with something recognizable as external goods, i.e. products generally found desirable to have or enjoy, before we call her a successful manager?30 Would it not be common to call her successful without any certainty whatsoever about the impact of her role-performance on the supply of external goods? Think about managers who provide the share-holder with good interest on invested money by administrating the manufacturing and selling of things many hesitate to call external goods, e.g. arms. I would certainly not hesitate to judge these persons successful as managers in spite of insecurity about whether the manager in question participates in producing things which, all things considered, are desirable to have. The worry is that the successful manager in reality would not overlap with the virtuous manager of the practice approach. But, someone might object; You are basing your objection on a confusion. Being excellent is not to be confused with being successful or

any other way besides making use of his or her command of the rules and strategies of chess. According to the virtue-approach, the point of this for business ethics is that corporations allegedly are communities with given role settings.23 The role of being manager allegedly contains, just like playing chess does, an activity of managing in which one can excel, i.e. find internal goods.24 Furthermore, the internal good of the manager role is presumed to be not only making a profit (in monetary terms) but to do well (in a wide sense) by finding or creating and satisfying markets.25 If the role of a manager is performed with excellence then not only employees but citizens in general are provided with things that make ordinary life easier.26 I believe, there are two different things going on here. First there is a claim about the content of the internal good of business. It is supposed to be both other and perhaps also more important things than profit, namely the meaningful activity of providing the wider community (society) with what its members demand. Secondly there is a claim pertaining to the overall social purpose or function of business. By pursuing its internal good, business is supposed to help making ordinary life easier.27 Now, this answer to the question of purpose contains a possible justification of business practice since it specifies the purpose of business so that its realization would be found desirable by most people who sometime actually live an ordinary life.28 I think most persons would believe that if the institutions of business really executed the above mentioned purpose then business activity is a good activity. Some would even think that it would be moral to pursue this activity. The utilitarian might argue that doing business is indeed right if it is the best or least bad way to satisfy peoples preferences, and most people can be presumed to prefer an easier ordinary life. This might seem to lead us somewhat astray, should an article about the virtue approach to business ethics end in preference utilitarianism? Maybe yes, if it is the case that managers ought to pursue the internal good of business if and only if this internal good provides society with something generally preferred. Then, we would not know whether it is morally right to be an

The Good Manager A Moral Manager? effective. Think about; one can be both cheating and successful when playing chess, but one cannot both cheat and be excellent. The kind of mastering of rules connoted by the word excellence simply presupposes that rules are followed. This is so, because by necessity (secretly) breaking the rules, as opposed to inter-subjectively changing them, makes the goal of winning superior vis--vis the pleasure of mastering a certain activity. Hence the contention that in this case success would be preferred before excellence. Put in other words, success cannot be taken as a reliable sign of excellence since many vices can be involved in the achievement of success.31 I believe this objection should be accepted. The worry concerning possible lack of overlap between the successful and the virtuous needs reformulating, at the least. Let me therefore ask whether there necessarily are managerial vices involved either in the manufacturing of things whose status as goods are uncertain or in managerial success that does not lead to production of any goods at all (besides interest on invested money i.e. profit)? If so, there would indeed be a clear link between being a good, i.e. excellent, manager and being moral in a certain sense of the word. I can think of a number of ways of cheating in business. For instance, the actions of bribing, breaking contracts, breaking promises, threatening, can all sometimes be seen as both blameworthy and effective instruments vis--vis a particular business goal. This sample can be supplemented by traits of character easily imaginable as managerial vices, such being authoritarian, a coward, and perhaps also being sexist and/or racist.32 Perhaps the list can go on. But even if all above mentioned candidates for managerial vices could be shown to in fact be just that, one would still be entitled to ask why the list of vices should include failure to produce (external) goods? I do not know where to look for sources confirming this particular morally laden notion of managerial excellence.33 Given that managers can be excellent at all, I simply do not find it strange to hold that managers within e.g. the commercial weapon industry can be excellent, as managers. I hold that the burden

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of proof falls on anyone who wants to argue, either that attack weapons should be seen as (external) goods, or that he who manages a corporation which manufactures e.g. such weapons cannot be an excellent manager. Since I cannot imagine how such arguments would look like I am prone to hold that there is no necessary link between being an excellent and a moral manager. Put in other words there appears to be standards for moral evaluation of managers which are external to managerial role ideals. The previous discussion of possible harmony between managerial role-ideals and morality (generally understood) assumed that the moral evaluation of managerial activity primarily means checking whether her activity can make a positive difference in an organization which as a whole provides society with (external) goods. Given this specific understanding of moral evaluation, my conclusion is; even if the agent is excellent as manager we might still be justified in questioning the moral rightness of her actions.

Perfectionism As we already have seen, in the practice approach the happiness offered by business activity is not synonymous with satisfaction of actual desires or preferences, but is a result of satisfying desires we ought to have (obviously quite different from most forms of utilitarianism).34 Furthermore, we should have a desire to be rational and to be free in the sense of being self-determinative. 35 Therefore, we should also desire cooperation and participation.36 And why should we desire this? I can find no other explanation than a presumed (essentialist) conception of human nature.37 We should desire these things because it would be true to our nature. Clearly, an additional way of challenging this version of the practice approach would be to challenge its anthropological assumptions. However, before I start to outline any critical argument I wish to clarify the essentialist position of this practice approach.38 I think it is fair to say that proponents of the practice approach would hold a qualified conception of why we

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Per Sundman appears to make the notion of perfectionism redundant. But we can also see that the solution very much involves a yet not elaborated notion of morality, just like the result in the previous section on the content of managerial excellence.

ought to be what we are. Since we supposedly are creatures with good potentialities, we ought to realize these potentialities, i.e. realize what we can become, and not just simply be as we for the moment happen to have become. We ought to be perfected. True happiness then, consists in the satisfaction of the desires we would have as perfected beings. There are basically two objections. First, what entitles us to go from a conception of what we could become to a conception of what we ought to become? Second, think about all those who most likely have an alternative view of perfection vis--vis the practice approach, on what basis could they be judged wrong? I shall start by discussing the first question and at least hint at how it is connected to the second one. Maybe ought implies can that is, claiming that someone ought to do something might only make sense if the thing is possible to do. But is it not very strange to claim that can implies ought? This would mean that agents without discrimination ought to do what they can do, which apparently is neither plausible nor presupposed by the practice approach. I can see at least two ways to solve the problem. The first holds that we ought to become the persons we were meant to be. A complicating conception of God as morally authoritative designer of nature is likely to be involved here. Although I admittedly do not have the time to pursue it, I must say that I find it hard to imagine arguments along this line of thought that do not complicate more than they explain. However, the second solution says that we ought to become the persons we morally ought to be. Here, an external institution of morality judges what out of everything we can become we also (morally) ought to become. Thus this could at least hypothetically be an answer to the second major problem with perfectionism (concerning the problem of establishing who is right about what we should become). Perfectionism appears to be redundant here, since it is an external institution of morality that does the normative job of explaining where the ought comes from. So what am I coming to? The first and the obvious is that the least bad of the considered solutions to the quandaries of perfectionism

Conclusion Finally, I have in this article, if not finally established, at least offered reasons for believing that the practice approach toward manager ethics presupposes a quite idealistic conception of business practice. It is idealistic due to lack of foundation or ground in actual practice. This is most damaging for this approach since it undermines both of its claims, namely both its alleged special relevance as an example of so called applied ethics and its claimed ability to establish harmony between particular role expectations and the demands of morality. Indeed both of these claims presupposes that the demands of morality are internal to actual business practice. Notes
Stark, Andrew, Whats the Matter with Business Ethics, Harvard Business Review (MayJune, 1993), p. 43. 2 Ibid. 3 Stark, Andrew, Whats the Matter with Business Ethics, p. 38. 4 Lippke, Richard L., Radical Business Ethics (Lanham: Rowman & Littlefield Publishers, Inc., 1995), p. 11. 5 Lippke, Richard L., Radical Business Ethics, p. 15. 6 Ibid. 7 Cf. Davies, Peter W. F., Business Philosophy. Searching for an authentic role, in Peter W. F. Davies (ed.), Current Issues in Business Ethics (London: Routledge, 1997), p. 22 f. 8 Solomon, Robert C., Ethics and Excellence. Cooperation and Integrity in Business (Oxford: Oxford University Press, 1993), p. 7 ff. 9 Hartman, Edwin, Organizational Ethics and the Good Life (Oxford: Oxford University Press, 1996), pp. 5, 10. Solomon, Robert C., Ethics and Excellence, p. 105. 10 Cf. Davies, Peter W. F., Business Philosophy, p. 23. 11 Brytting, Tomas, Fretagsetik (Malm: Liber, 1998),
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pp. 4648. Robert C. Solomons book Ethics and Excellence is here taken as an interesting example of a contemporary way of arguing for the harmony between virtues such as honesty and the effectivity of a contemporary business organization. 12 Stark, Andrew, Whats the Matter with Business Ethics, p. 43. 13 Solomon, Robert C., Ethics and Excellence, p. 101. 14 Solomon, Robert C., Ethics and Excellence, p. 101. 15 Solomon, Robert C., Ethics and Excellence, p. 104. Solomon writes: That is why the idea of business as a practice is absolutely central to this approach: it views business as a human institution in service to humans and not as a marvelous machine or in terms of the mysterious magic of the market. (My italics). I believe that business seen as having an emphasis on the service to humans does not fit a limited notion of trade for profit which (among others) Aristotle presumably saw as devoid of virtue. 16 Solomon, Robert C., Ethics and Excellence, p. 107. 17 Ibid. 18 Hartman, Edwin, Organizational Ethics, pp. 160 f. Solomon, Robert C., Ethics and Excellence, p. 107. 19 Hartman, Edwin, Organizational Ethics, pp. 161 f. Solomon, Robert C., Ethics and Excellence, pp. 115 f, 155. Solomon, Robert C., The New World of Business Ethics and Free Enterprise in the Global 1990s (Lanham: Rowman & Littlefield Publishers, Inc., 1994), pp. 3840. I believe that the congeniality of using MacIntyre for explicating the virtue approach of business ethics is made explicit by Robert C. Solomon on these pages. Just like MacIntyre he illustrates what a practice is with the help of a game. However, as I intend to show, I believe MacIntyre makes more out of this since he relates his illustration to the distinction between internal and external goods (otherwise turning to MacIntyre would, of course, not have been a justified move). Solomon writes: In business ethics, it is often profitable to compare business with a game. Games are also practices. Baseball, for instance, is a practice. And on page 39; Business, like baseball, is defined by its rules. 20 MacIntyre, Alasdair, After Virtue a Study in Moral Theory, second edition, (London: Duckworth, 1985), p. 191. MacIntyre writes: A virtue is an acquired human quality the possession and exercise of which tends to enable us to achieve those goods which are internal to practices and the lack of which effectively prevents us from achieving any such goods. 21 Cf. MacIntyre, Alasdair, After Virtue, pp. 188 f. See also Sundman, Per, Human Rights, Justification, and Christian Ethics, (in Acta Universitatis Upsaliensis, Uppsala Studies in Social Ethics 18, Uppsala: Almqvist

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& Wiksell International, 1996), pp. 1822, for further discussion of the notion of a practice and internal values and/or goods. 22 MacIntyre, Alasdair, After Virtue, p. 188. 23 Solomon, Robert C., Ethics and Excellence, p. 81. 24 Solomon, Robert C., Ethics and Excellence, pp. 121, 123. 25 Ibid. 26 Solomon, Robert C., Ethics and Excellence, p. 123. 27 Cf. Davies, Peter W. F., Business Philosophy, p. 23. 28 Cf. Hartman, Edwin, Organizational Ethics, p. 160. Hartmans text seems coherent with the mentioned way of justifying business activity. He writes: Whether it is good to play a role is, as Aristotle suggests, a function of the goodness of the institution of which the role is a part. 29 Solomon, Robert C., Ethics and Excellence, p. 124. Solomon writes: Productivity and serving the public and taking care of ones own employees are neither mere means or an afterthought of business but rather its very essence. 30 See MacIntyre, Alasdair, After Virtue, p. 139, for a discussion of how the notion of success once was connected to virtues. 31 Cf. MacIntyre Alasdair, Whose Justice? Which Rationality? (London: Duckworth, 1988), pp. 74, 107 ff. 32 Cf. Solomon, Robert C., The New World of Business, p. 40. 33 See Barnard, Chester I., The Functions of the Executive (Cambridge, Massachusetts: Harvard University Press, 1958), p. 217, for a comprehensive discussion of the functions of the executive which, according to my judgment, is relevant for discussions of what we can expect from good managers. Bernards ideas are definitively at odds with the practice approach! 34 Hartman, Edwin, Organizational Ethics, p. 166. Hartman writes: The difficult thing is to decide what counts as an unwarped value, what is true as opposed to false happiness, which desires are good and which not. That in turn, requires making some sense of the notion of the kind of well-being that is appropriate to an autonomous person. (my italics) Solomon, Robert C., Ethics and Excellence, p. 107. 35 Hartman, Edwin, Organizational Ethics, p. 168. 36 Ibid. 37 Hartman, Edwin, Organizational Ethics, p. 167. In outlining the Aristotelian conception of happiness, which Hartman also introduces as his own, he writes: . . . Aristotle suggests that we can understand true happiness in large part by asking ourselves what

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would pride be if not misdirected desires? MacIntyre writes about desires we ought not to have as beings without sin, i.e. perfected beings. I therefor think that I am justified in assuming a coherence between an example of MacIntyres later writings and perfectionism. Thus, on the point of perfectionism it is quite possible to interpret the practice approach as not diverging from its perhaps most important inspirational source.

characterizes a good community that is, one that creates the conditions for a life that is appropriate to human nature (italics mine). 38 Cf. MacIntyre, Alasdair, Three Rival Versions of Moral Enquiry Encyclopaedia, Genealogy, and Tradition (Notre Dame, Indiana: University of Notre Dame Press, 1990), p. 147. MacIntyre writes (about the Thomist which he himself claims represents the relatively speaking most superior philosophical position): Where Nietzsche saw the individual as a fiction, as part of a mistaken psychology which conceals from view the will to power, the Thomist can elaborate out of materials provided in the Summa an account of the will to power as an intellectual fiction disguising the corruption of the will. The activity of unmasking is itself to be understood from the Thomist standpoint as a mask for pride. My simple question is, what

Uppsala Universitet, Teologiska Institutionen, Box 1604, 751 46 Uppsala, Sweden, E-mail: per.sundman@teol.uu.se