A Case for Corporate and Management Ethics

This paper was first written in response to a request from the American Can Corporation and as part of an ongoing consultation on the role of ethics in corporate business. The request, in the initial stage, was that a philosophical case be made for the importance of ethical considerations within the operations of the modern corporation. I am especially grateful to Mr. Judd H. Alexander, senior vice-president, Office of the Chairman, Mr. Sal J. Giudice, senior vice-president, Human Resources and Administration, Mr. C. Richard Pedersen, senior vice-president, general counsel, and secretary, and Mr. Robert Bell, general auditor for American Can, for the invitation to make “A Case for Corporate and Management Ethics.” I am also deeply indebted to my friend and colleague in this venture, Rev. Dr. John H. McCombe, whose valuable feedback made this “case” a much more cogent work than it would have been otherwise.

Committee for Economic Development, The Social Responsibilities of Business Corporations (477 Madison Avenue, NY, NY 10022: Committee for Economic Development, 1st printing, June 1971), p. 11.

For my comments on the history of the corporation I am largely indebted to the classic two-volume study of the premodern corporation by Davis John P. , Corporations: A Study of the Origin and Development of Great Business Combinations and of their Relation to the Authority of the State (New York: Capricorn Books, 1961). This work was originally published in 1897 and is an exhaustively thorough piece of scholarship. See especially chapters 4, 5 and 6 of Vol. 1, relating to feudalism, municipalities, and guilds.

Drucker Peter F. , Concept of the Corporation (New York: Mentor Book, New American Library, 1946, 1964, revised edition 1972); see especially chapter 1.

See Novak Michael , The American Vision: An Essay on the Future of Democratic Capitalism (Washington D.C.: American Enterprise Institute for Public Policy Research, 1978). For a more extended treatment of this thesis, see Bell Daniel , The Cultural Contradictions of Capitalism (New York: Basic Books, 1976).

Davis , op. cit., Vol. II, chapter 6.

Steiner George , “The Redefinition of Capitalism and Its Impact on Management Practice and Theory,” The Academy of Management Proceedings, the 32nd Annual Meeting (1973). See Table 1 of this article for a copy of the chart Steiner uses to compare the traditional manager to the “social manager.”

Time (14 April 1980), p. 87.

Purcell Theodore V. S.J., “Do Courses in Business Ethics Pay Off?” California Management Review, Vol. 19, No. 4 (Summer 1977), pp. 50–58. This study with a limited population is cited not so much for its scientific value as to provide a sampling of personal opinion by managers who have undergone training in ethics.

One could look upon the classical virtues as the means by which this self-regulating integrity is maintained through the exercise of four particular competencies (skills or virtues): Temperence, the self-control and restraint of one's personal passions so as to permit one to see and judge situations accurately; prudence, the intelligence and wisdom to discern and select those ends and means which maximize the good and minimize evil; fortitude, the courage to persevere in one's moral commitment despite external pressues to the contrary; and justice, the “market test” of one's moral competence—the establishment of right relations of equity and equal opportunity within one's environment as the consequence of one's actions.

Gerstacker Carl A. , “Creating a Management Environment for Socially Responsible Performance,” in Managing the Socially Responsible Corporation (New York: Macmillan, 1974), pp. 47–49. Colleagues have pointed out to me that Dow's ethical record in relation to the Vietnam War era may not make them a suitable company for citation here. But leaving the complex question of the morality of weapons manufacture aside, if the truth of ethical statements and advice depended on our always having adhered to our own standards there would be few if any such persons qualified to speak to ethical issues.

Ibid.

Wiener Norbert , The Human Use of Human Beings (New York: Avon Books, 1950, 1954), p. 23.

I am aware that the term “professional” is under some considerable attack these days by such critics as Ivan Illich (Toward a History of Needs, (New York: Pantheon Books, 1977)), who suggests that professional status is simply an excuse for monopolizing knowledge and therefore power. Nevertheless I believe it is still worth the effort to rescue this term by recovering the sense of service and responsibility to society that properly belong to the professional role.

Allen Fred , “The Case for Corporate Morality,” available from Pitney Bowes Corporation, Walnut and Pacific Streets, Stamford, Connecticut 06904.

Ibid., p. 4.

Ibid., p. 6

Ibid., p. 8ff.