• Business Ethics: Apples or Oranges

    Almost every day there is another ethical scandal in the news. Many of them involve business practices in the United States as well as the rest of the world. The difference in how people make ethical choices at work versus outside of the enterprise, as well as attempting to understand the process by which they reach a decision regarding an ethical issue, has driven both my research and teaching  during my entire academic career.

    In my teaching, I try to have my students think about their decisions and actions. That sounds trite, but many of the executives recently in the news regarding unethical behavior say they didn’t really think about what they were doing, it just happened. Many scholars in the field of ethics and corporate social responsibility also suggest that thoughtful consideration and decision making is a key element of ethical behavior.

    Last semester, in my MBA Business Ethics class, we were discussing the reasons why some of the more recent (and highly publicized) business scandals had occurred (Enron, Tyco, Merck, Yahoo!, ADM, etc.). My students suggested that business people, in the United States in particular, are just plain greedy or unwilling to step up to a responsibility that could damage their personal situation (financially or otherwise).

    This led to a discussion about why we should bother to teach or research business ethics or ethical decision making, at all. If the character of business people is flawed (assuming we would want ethical people in business), why bother to try to change either the decision-making processes or the systems in which business activities take place?

    My initial reaction to this conversation was that I had failed.

    My goal for the course was to have the students take a broader perspective for business decisions than their own self-interest, as well as think critically about the decisions they were making at work that affected themselves as well as others. They heard me say again and again there is more to business than maximizing shareholder wealth, because we must live in our communities and institutions as human beings. I was dismayed I hadn’t had any impact if this was their understanding of being ethical in business.

    Then, one of my students asked me why I came to work each day and taught this course if business people (and perhaps people in general) are greedy and only selfinterested. Before I could respond, another student said, "I think this experience has made a huge difference. Before we took this class and had to think hard about some of these issues, we were just along for the ride – especially at work. Now we are a whole group of business people who know better and we have some of the tools to help us think and make better decisions about ethical issues." I turned to the student who had asked the initial question and said, "That’s why I come to work each day."

    The other reason I come to work each day is because I have had the privilege of working with colleagues and business people who do the right thing as a matter of course. This is one of the reasons my research has been focused on finding out how people recognize and make ethical decisions. This research assumes that people are generally good and want to be both self-interested and ethical in their choices. Are there a few "bad apples" who make the whole bushel smell? There may be, but there also are organizations and systems in place that shape our behavior. It is no small influence that the enterprise has on its employees, nor is it a small influence of the market-based economy of the United States versus another political economic system.

    I call this the theory of oranges, because it directly contrasts the "bad apples" perspective regarding unethical choices in business.

    The theory of oranges suggests that the choices people make cannot be separated from the context in which they make them. This is why choices at work are different from choices outside, because the business context has an impact on the thinking of the people who comprise the firm. For example, business organizations have different cultures (contexts) that support certain types of decisions and behaviors. We might expect that the decision process and outcomes regarding ethical issues would differ across companies, industries and even business versus nonbusiness settings. So, one of my major research projects is to find out if that is true, and also what the decision process might be.

    The research involves generation of a theory of ethical decision making from data collected through interviewing managers in business organizations. The process is time-consuming and costly but provides a rich source of information to help form a coherent understanding of the process. Analysis of this data should help us be able to provide a more comprehensive comparison of apples and oranges in the ethical decision-making process in business.

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