In an earlier entry, I highlighted the on-going debate regarding the role of the market versus the state in defining ethics in business. ProfessorBainbridge.com offers an interesting perspective from the Catholic Social Tradition on this debate.
What Professor Bainbridge misses in this discussion is the role that culture plays in shaping ethics, values and ultimately virtue in a society. The role of faith in shaping culture, and culture in turn shaping ethics is a well-founded principle of Catholic Social Thought (see Pieper’s classic writing on this topic). The argument should not be constrained by whether and how religious institutions can influence the two forces of market and state, but rather how faith and religion shape culture, which then should serve as the foundational base guiding both corporations and state. Michael Naughton’s work is noteworthy, as he builds a practical model to integrate ethics and values into one’s work from this perspective.
Jeff,
I think that culture also affects religion, and some moral positions of the church can change over time (positions on drinking, sex, divorce, etc.) My understanding is that the early church was very communistic, sharing everything that they had, and did not value individual liberty the way American churches do today.
As for the lack or morality in business, I fault two things. First, the focus on profit maximization. Businesses should actually focus on their total economic performance, which would include externalities such as environmental and social consequences of their actions. A focus on profit alone (and usually short-term profit at that) is bad business, in my opinion.
Secondly, b-schools don’t teach enough underlying business philosophy. When I went through the MBA program at U of Kentucky in the late 90s, I had no ethics class, and no business philosophy of any kind. Hell, we never even read Peter Drucker. It was all economics, accounting, finance, marketing, etc. Even the management classes were more about project analysis than business theory.
I’m not religious at all, but having been influenced some by Ayn Rand (though I’m far from an objectivist) and Peter Drucker, I feel like capitalism is nearly a religion to me. I would never cheat in business because that isn’t real capitalism, and if I win market share or increase my stock price that way, then it doesn’t really mean I am a good manager. I don’t want to be like the lineman who can only stop a sack by holding his man, and just hope I don’t get a penalty flag. I want to win by playing by the rules, or else it is a hollow victory. At least that is how I feel.
I see things haven’t changed since I did my MBA at Kentucky in the late 1970’s….
Both of your points are right on, I believe. Success has become synonymous with profits, which is too bad because for most business leaders who I respect, success means so much more than that one measure.
I would argue that we need to teach more than just BUSINESS philosophy. We need to teach business students philosophy–period!!
Jeff
Exactly. Some people think, as I used to, that college should really just prepare you for a job and that a “well rounded” education is useless. But it isn’t, because I often find myself in debates/discussions with people where we agree on the facts but have different assumptions and thus arrive at different outcomes. People don’t like to discuss assumptions about the world, human nature, capitalism, social responsibility, etc., but we should do more of that.
By the way, I looked at your CV. Too bad you weren’t at UK a few years earlier, you could have celebrated that ’78 championship. I was there in ’96 and ’98 – what a good time.
Of course success has become synonymous with profits, especially in the corporate world. That’s what stock holders want and for years none of them cared how they got it. Think about the pressure that stock holders put on management. Dr. Cornwall even admits he would not want to work in that environment.
It has just been in the last few years that more stockholders are demanding good ethics and social responsibility. We have all seen ethics hit the news like a ton of bricks. Social responsibility is becoming very important many people as well. In fact there are mutual funds that only invest in socially responsible companies.