Quo Vadis Business Ethics?

Introduction

The received wisdom in business ethics seems to be that business is essentially an unethical activity, so business must fundamentally change to become ethical. The guest editors of this special issue have questioned this belief (Hühn, 2023; Meyer, 2015), and some of the contributors to this special issue share our sentiments. Business ethics as an academic discipline has boomed, and the industry has created many jobs, often also at the C-suite level, that are focused on ethics. Business ethics itself has become a big business. Yet, according to most business ethicists, this growth in business ethics has coincided with more serious and more frequent ethical lapses in businesses (Hühn, 2023, p. 868) such as Volkswagen’s dieselgate (Hühn et al., 2018), Theranos (Carreyrou, 2019) or Wells Fargo (Edmondson, 2018), to name a few of the most prominent.

This special issue, therefore, is an opportunity for the kind of soul-searching that professors of business ethics demand from practitioners and their students: is there something in business ethics mainstream theory that causes practitioners to be less rather than more ethical? We find it surprising that this hasn’t been done by major business ethics journals or at conferences because the opposite, theorizing that exposure to business theory causes more unethical practices, has been a research stream that many of us have happily engaged in. Business ethicists believe that business is extractive by nature and therefore unethical and that business ethics’ role is to counter-indoctrinate managers and students so that they have an ethical and not business mindset. Business ethics has become doctrinal: we assume all too often that we have the truth. Mark Blaug (1992), the doyen of the philosophy of science of economics, towards the end of his career, lost his faith that science is a self-correcting belief system precisely because more and more scientists firmly and fervently believe that they have the truth. Business ethics has become unabashedly ideological, a development that has been helped by the discipline moving away from being an applied ethic to become a subfield of politics (Hühn, 2022; Koehn, 2022).

To be sure, business ethics is merely part of a global trend towards insisting on knowing rather than wanting to learn. People who know neither listen nor question themselves. In other words, there is a general decline in the culture of discussion, that is, a decline in the entirety of measures that serve to maintain and promote discussions and conversations inside and outside academia. This inclination to assume that there are truths shared by everybody is, of course, accompanied by serious problems in finding new knowledge and solutions—both of which must always be put forward with the humility of the learner—in a wide variety of areas, including business and economics, as well as other scientific realms such as medicine, pharmacology or climatology. One of several reasons for this development is that many discussions today are started from an emotional base while, at the same time, denouncing disagreeing voices as ‘irrational’ or emotional. Connected, maybe even caused by the emotionality, is the insistence that everything must be decided and then executed very urgently. We can see this very well in many public political discussions in the media, as well as in businesses and people’s private lives. There are now several topics that many people (including at work, of course) no longer want to comment on because they are extremely emotionally charged. This development is depressing because we know from research (Argyris & Schön, 1996; Burgelman, 1983) that it is essential for companies to have employees who are not afraid to speak up: organizational/social learning depends on it.

So, again, academics do not follow their own advice and suppress dissenting voices. Perhaps the most absurd manifestation among business ethicists is that many scholars insist that Edward Freeman is the father of CSR (Wikipedia is representative), when he himself has pointed out many times that he thinks that CSR is a bad idea (Freeman & Lietdka, 1991). Therefore, this special issue is intended to not only give a diverse set of dissenting voices an opportunity to speak but also to give business ethicists a chance to listen to ideas that they may not come across in the traditional fora. The purpose of all academic endeavours is to start and maintain debates, not to end them. Perhaps many business ethicists are drawn into a business mindset, which is not based on academics but on execution. Good practice, however, as Gosling and Mintzberg (2003) point out, depends on action being constantly reflected.

Presentation and Summary of the Contributions

Despite the fact that the contributors to this special issue of the Journal of Human Values have very different takes as to the causes and possible solutions, there seems to be a broad agreement that there is considerable confusion among the producers of business ethics theory as to what the discipline is actually about, what theories there are, what separates them, where they come from and what their role is.

Domènec Melé, in a sweeping overview of the discipline, tackles these questions. In short, he argues that ‘the initial focus of the discipline was limited to evaluating the morality of controversial business issues and to solving ethical dilemmas on specific issues’ (Melé, 2024, p. 17). This was done from a deontological and consequentialist perspective. The second wave of business ethicists tackled the field from a virtue-ethical direction, as a response to Anscombe’s (1958) radical criticism of the mother discipline, moral philosophy. While the two Enlightenment theories at least agreed on approaching the topic from a collectivist viewpoint and with a focus on analysing individual decisions, virtue ethics focused on individuals and character. From this, theory after theory was added until the fragmentation was so great that even scholars with a thorough training in the field lost the overview.

‘Facing this multiplicity of theories, some authors simply reject ethical theories’, Melé (2024, p. 19) states and adds that a school of thought holds that ‘business ethics must focus on norms, not the theories from which the norms derive’ (2024, p. 19). Thus, not only business theory became anti-philosophical (Hühn, 2015), but business ethics itself developed an auto-immune disease, ejecting moral philosophy. The situation devolved into what Melé calls ‘ethical pluralism’ and ‘ethical pragmatism’”, something, for example, the new field of Positive Organizational Scholarship (POS) and its leadership approach, Positive Leadership (PL), are typically accused of (Meyer, 2018; Meyer et al., 2018; Redín et al., 2023).

As a virtue ethicist, Melé essentially makes the ‘Anscombe Argument’ (Hühn, 2023, p. 874): ethics that denies the existence of eternal values is empty. He writes: ‘The use of “better” is very imprecise and requires some solid reference point. Ethical theories, or at least some of them, can provide an answer’ (2024, p. 20). Using the work of two virtue ethicists, Melé (2024, p. 22) writes,

Polo and MacIntyre suggest re-thinking ethics by going back to its original interpretation by the Socratic thinkers and, in this way, overcoming the diversity of theories. The proposal of interrelated virtues, rules or principles, and goods solves the problem of fragmentation on the focal point.

Jasinska (2024) agrees with Melé’s historical assessment and argues that the major issue is that the discipline of business ethics, a subfield of moral philosophy, has been taken over by non-philosophers. Jasinska claims that misleading premises are underlying management theories, which are, in addition, ‘unable to capture the logic of practice because they are developed within the framework of scientific rationality’ (Sandberg & Tsoukas, 2011, p. 338). Scientific rationality is the ancient concept of reason stripped of its sensitive, discursive and moral elements (Hühn & Mandray, 2023).

Thus, she argues that business ethics needs to go back and find its roots in philosophy, its foundational discipline, because philosophy supports the ethical development and decision-making of managers by enabling them to question their daily habits in a systematic and rigorous fashion. Jasinska states that philosophy must be a core dimension of any business ethics course and be part of any business school’s curriculum, and it should not be confined to teaching ethics; it must be undergirded instruction in the history of thought, because why ‘reinvent the wheel, if some of history’s top thinkers have already laid out the foundations for most ethical matters?’ Philosophy is the discipline that, according to Bernard Williams (2006, p. 1), derives its value not from answering, but from finding questions. And thus, Jasinska’s contribution speaks to that societal mega-trend of insisting on truths and how to tackle them in business education.

David Rönnegard (2024) gives a powerful first-person account of how, upon entering business ethics as a philosopher, he encountered what Hühn (2018) called the cuckoo’s egg in the business ethics nest: corporate/collective moral responsibility. ¹ He writes, ‘as I plunged into the corporate moral agency (CMA) literature (e.g., De George, 1981; Donaldson, 1982; French, 1979; Werhane, 1985), I was unconvinced by the arguments put forward’ (Rönnegard, 2024, p. 32). What saved him from simply following the mainstream’s narrative about CMA was his philosophical education. Since, as Jasinska (2024) told us, business ethics is empty of philosophers, most scholars unquestioningly accept that collectives or legal constructs can act and thus have responsibility. He also alludes to the fact that not accepting the mainstream’s truth is essentially a career ender, and when we invited individual scholars to contribute to this special issue, we got some negative responses because of what we interpreted as an ideological commitment to CMA. The mainstream refuses to ask Rönnegard’s (2024, p. 32) question: ‘if CMA is a fallacy, and thus also moral prescriptions for corporations, how do we salvage the field of business ethics?’

He eloquently argues for the dismissal of the mainstream’s favourite concept: corporate moral agency: the idea that organisations do have, similar to human beings, intentions, the possibility to restrain themselves, or even something like a consciousness. He holds against these claims that corporate structures (or what some call ‘organisational character’) do not have a free will and do not have an awareness of anything. They cannot be morally responsible for anything; only people can. In short, for moral responsibility to be invoked, we need a free person to act. Collectives and legal constructs cannot act; only persons can act and have responsibility. How can we get business ethics out of this rabbit hole? We need to replace the concept of corporate moral agency with what Rönnegard (2024) calls ‘business accountability’: the notion that corporations are mere legal agents and that we need legal mechanisms to hold them accountable. In this sense, what Rönnegard puts forward means to shift the field of business ethics from corporate moral accountability towards political philosophy. He concludes:

If corporations cannot be morally responsible, and managers cannot be expected to self-restrain, then we are left with legal mechanisms for corporate accountability. This implies a shift in the field of business ethics away from ethics towards political philosophy so that corporations are held accountable through the rule of law in our democracies. (Rönnegard, 2024, p. 36)

On the surface, this will be an entirely unacceptable proposal, as it seems to call for business ethics to be replaced by business law. However, Rönnegard is only arguing that one research programme that makes up business ethics, albeit the most influential, be given up. That would free scholars to direct their interest in other areas of business ethics, the areas that are actually rooted in moral philosophy.

Daryl Koehn (2024) highlights two criticisms when it comes to the long-term health of business ethics. On the one hand, she is concerned about some troubling trends regarding the field’s research methodologies. On the other hand, she believes that business ethicists and management scholars are too far away from business practice. Regarding the former, Koehn follows a similar line as Dierksmeier (2024) by arguing for a more interpretive, practically wise approach to research typical for humanists. Incidentally, ‘humanist’ is a label that all contributors to this special issue are happy to have applied to themselves. The Aristotelian Koehn is worried about the increasing dominance of the social scientific approach to research in the field and argues for a symbiotic relationship:

The former is seen as emphasizing a search for and an ability to find correlations, correlations that constitute objective knowledge and that can serve as the basis for justified predictions. The humanists, by contrast, would have us look for meaning. Instead of testing thinly or parsimoniously described relationships, we should draw upon thickly described case studies and narratives to uncover how human beings live out their values in better or worse ways and how they interpret their existence in light of narratives they tell themselves. (Koehn, 2024, p. 39)

Koehn also points out that, compared to medical and legal ethicists, business ethicists typically do not have the same access to practitioners and, thus, have fewer opportunities to work on topics of direct practical importance. One could add that the social scientific model, with its positivist focus on mathematics and statistics, has made practice an unwanted complication rather than the object of research (Huehn, 2016; Hühn, 2005). Thus, she finishes her article by drawing up some examples of business ethicists that got in touch with ‘street practice’ and giving some advice on how to engage more with practitioners’ and companies’ everyday activities.

Claus Dierksmeier (2024), focusing on business ethics education, on the surface seems to be starting from the conventionalist notion that business and ethics simply do not go together, and thus, we need to dump business altogether. However, he takes the Smithian view (Hühn, 2019; Hühn & Dierksmeier, 2016) of business:

Another way to carve up the issue is to view morals as necessarily an integral part of the fabric of corporate life (Dierksmeier, 2016a, 2016b). Business is, after all, but humans exchanging goods and services with humans, and no human interaction is ever free of moral expectations (whether they be met or frustrated). (Dierksmeier, 2024, p. 53)

He further advocates for a ‘humanistic business education’ where values drive the creation of products, strategies and organizations, and students, who will become managers, are made aware of the values inherent in any exchange relationship. Like Jasinska (2024), Dierksmeier (2024, p. 56) sees a need for philosophical education:

Only students well-versed in economic philosophy and the history of economic ideas can make an autonomous use of the analytical lenses—mechanistic, biologistic, humanistic and so forth—proffered by economists and thereafter select them as needed, with a clear understanding of their respective merits and demerits.

Yet, there are roadblocks to a humanistic management education. How many students learn that markets are shaped by five quasi-physical forces, as opposed to learning that markets are created by humans, not by naturally occurring forces? But there is ample reason for optimism, says the Kantian philosopher Dierksmeier, for we enter this world

preinstalled with a basic tendency for favouring fairness and decency (Colander et al., 2009). Morals need not be introjected into the human species from the outside. What they require for their fruition is rather cultivation and habitualisation in practice as well as their critical reflection with a view to providing guardrails against both relativism and dogmatism (Dierksmeier, 2016a). (Dierksmeier, 2024, p. 55)

Thus, he goes back to Aristotle, who held that humans, if in the right environment, will work towards the noble rather than be part of the ugly and evil (Hühn & Meyer, 2023).

Caleb Bernacchio (2024) proposes a new take on a not-much-debated yet influential theory in business ethics, the Market Failure Approach (MFA), which is part of the central narrative in business ethics that to be ethical is to be selfless, while business is based on selfishness. Bernacchio (2024, p. 60) writes,

the MFA highlights a set of ‘efficiency imperatives’ (Heath, 2014b), or norms, taken to be latent within the practices constitutive of a market society and implied by the social function of markets, which is taken to be Pareto efficiency, seen as ‘a general prohibition on waste’. (Heath, 2014a, p. 10)

The MFA presupposes that employees make the efficiency norm the value that guides their behaviour. Bernacchio thinks that this assumption is wrong. He replaces the efficiency norm with freedom:

I explain how markets institutionalize a distinctive mode of freedom as self-authorship and how this notion of freedom provides a self-conscious basis for moral agency within a market context. In doing this, I highlight the absence of an adequate account of moral motivation within the MFA and spell out the link between the notion of freedom as self-authorship and a conception of responsibility in market transactions tied with the notion of mutual benefit. (Bernacchio, 2024, p. 60)

He further addresses a major objection of the MFA, namely that it currently has no sound explanation for the moral motivation of market actors. In this sense, he posits that in his reconception of the MFA,

to pursue freedom in this way, claiming a right to independence from paternalistic social structures, one must be able to justify one’s actions in terms of both their benefits to society and one’s avoidance of harm to third parties, appealing here to one’s conscientious observance of norms that ensure something like Pareto efficiency. (Bernacchio, 2024, p. 71)

Finally, he notes that his proposal would make the MFA compatible with research streams (neo-Kantianism, virtue ethics) that are currently incommensurable with it.

The last contribution to this special issue by Christopher Gohl (2024) suggests that by using John Dewey’s ‘biosociocultural understanding’ of ethos, we can make use of the identified four different meanings of the concept and reinvigorate business ethics. Like many in business ethics, Gohl wants the discipline to be more situated in practice, and he argues that ‘from a perspective of applied ethics, different ethoi provide the empirical context, and exemplary result of past ethical practice, and hence, we would get ethics in or ethics as practice.’ The article gives a careful categorization and analysis of the different versions of ‘ethos’ used in the business literature before proceeding to explain how the suggested ‘unified conception’ would benefit business ethics. His conception is ‘ethos as a suite of valued modes of embedded, embodied, and associational conduct’ (Gohl, 2024, p. 84). Like other contributors, Gohl suggests that business ethics stops being the odd man out and is integrated into every facet of business theory. And it might give new life to Nitin Nohria and Kevin Kurana’s abandoned project of educating future managers who have an ethos (Hühn, 2023).

This special issue was based on the assessment that not all is well in business ethics and that the ideas that business ethicists have produced have not led to better business practices, or that maybe one can even make a case that there is an inverse relationship between the growth of the discipline and the ethicality of managers. As Adam Smith pointed out, commerce is based on people sympathizing with each other. It should be obvious that any business does well because it does good. We do not buy Apple products because we want Apple to make a profit, but because we value their contributions to our lives. But it is not obvious anymore; in fact, many business ethicists, business professors and managers believe the opposite: the purpose of a business is to extract value, not offer value. Business and ethics are like oil and water. We need business professors to be more conversant in (moral) philosophy and business ethics professors to be more embedded in real businesses. For Smith, business was an applied ethic. As of now, business schools do not dedicate enough space to philosophy. On the contrary, many business ethics classes are about pushing political answers instead of encouraging students to ask questions about values. Students will become managers, and if those managers value new questions more than old answers, businesses will be transformed. Still, even though asking questions is vital for organizations and also for society, it is similarly fundamental that the other side listens. This seems banal at first glance. But it is not rare that managers do not listen to or promote their employees’ ideas (Sherf et al., 2019). Only if all organizational members have the opportunity to learn with and from each other (i.e., they have a healthy culture of discussion) can a company develop (practical) wisdom (Meyer & Hühn, 2020; Meyer & Rego, 2020; Meyer & Sison, 2020). If, then, this approach further includes the community/market, a company starts to contribute to the common good, and that should be the goal of business ethicists.