Business Ethics as a Science

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Business Ethics as a Science

Maxim Storchevoy (2018)

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PREFACE

What is the methodological status of business ethics? It looks like a well-established discipline in the global academic community: several peer reviewed journals, popular world-wide conferences, and so on. However, as Christopher Cowton noticed in 2008, it is more of a “field” than a “discipline” and it is more a “developing field” (Cowton 2008, p. 12). It seems that ten years after this observation we can confirm it. So, the question remains but slightly changes its modality—what kind of discipline (or field) do we want business ethics to become? In this book we will try to review the current state of affairs in business ethics methodology and suggest some steps in clarification and improvements. Before considering business ethics, it is necessary to make some comments about general normative ethics. I think it would be reasonable if normative ethics were developed as a science. The main purpose of this strategy is twofold: (1) to achieve better progress in the development of ethics through moving from extensive unproductive diversity to efficient competition of ideas according to agreed criteria of scientific method; and (2) to secure greater respect from society for a moral philosophy, which is crucially important in persuading people to change their behavior. The scientific approach to ethics is based on four criteria of science: (1) accurate terminology; (2) correct logic; (3) empirical verification; and (4) accuracy of empirical measurement. We start with the definition of good as the most important term and define it as “something that should exist by one’s opinion”, i.e. this is a subjective judgment about the external world. This is an accurate definition, which may be checked by logical analysis or empirical verification. Logical analysis means the derivation of the attitude of this person to something on the basis of our knowledge about one’s nature (e.g. it is logical to assume that a normal person would decide that safety is good because a normal person wants to live and avoid any kind of suffering). Empirical verification means asking this person if he or she really agrees that something is good. If this person agrees with our proposition, then we can say that it was empirically verified, i.e. it is true. An important condition of the accuracy of empirical verification is that this person should have all available, relevant information and keep control over emotions to render a really true judgment about goodness of something. Therefore, the elementary propositions of ethical science are individual, subjective value judgments about the goodness of various things, i.e. meaningful propositions that essentially represent “facts” about individual “values”. The next question of the scientific approach to ethics is about the existence of universal moral norms which all people should obey (otherwise their behavior would be counted as unethical). This question is resolved in the same way—we should ask individual persons if they agree that there should be universal moral norms and how these norms should be established. Our hypothesis is that every normal person would agree with the following propositions: (1) there should be at least some universal moral norms; (2) universal moral norms should be established by people; (3) all people should participate in the establishing universal moral norms, except those who have some mental problems and may act irrationally; (4) universal moral norms should be accepted unanimously; and (5) universal moral norms should be chosen under a veil of ignorance. All these propositions are meaningful and máy bế logically proved and empirically verified, i.e. the method of generating ethical judgments in itself represents an object of scientific proof. In this book we apply this approach to business ethics. I have been teaching business ethics for nine years. One of the main problems of this discipline is an insufficient level of intellectual rigor, which leads to a skeptical attitude from students as well as business people. This book tries to view business ethics as a scientific discipline, to offer some ideas about its organization, and to provide a historical discussion of various theories and perspectives in business ethics from that point of view. However, we start not with business ethics, but with economics. There are two reasons for this. First, business ethics needs positive economic theory, because it is impossible to render normative judgments about some action or norm if we do not understand its economic consequences. Second, economics tried to develop its normative economic theory, which should evaluate the actions of any actors in the economy: firms, consumers, workers, trade unions, govern of this person to something on the basis of our knowledge about one’s nature (e.g. it is logical to assume that a normal person would decide that safety is good because a normal person wants to live and avoid any kind of suffering). Empirical verification means asking this person if he or she really agrees that something is good. If this person agrees with our proposition, then we can say that it was empirically verified, i.e. it is true. An important condition of the accuracy of empirical verification is that this person should have all available, relevant information and keep control over emotions to render a really true judgment about goodness of something. Therefore, the elementary propositions of ethical science are individual, subjective value judgments about the goodness of various things, i.e. meaningful propositions that essentially represent “facts” about individual “values”. The next question of the scientific approach to ethics is about the existence of universal moral norms which all people should obey (otherwise their behavior would be counted as unethical). This question is resolved in the same way—we should ask individual persons if they agree that there should be universal moral norms and how these norms should be established. Our hypothesis is that every normal person would agree with the following propositions: (1) there should be at least some universal moral norms; (2) universal moral norms should be established by people; (3) all people should participate in the establishing universal moral norms, except those who have some mental problems and may act irrationally; (4) universal moral norms should be accepted unanimously; and (5) universal moral norms should be chosen under a veil of ignorance. All these propositions are meaningful and máy bế logically proved and empirically verified, i.e. the method of generating ethical judgments in itself represents an object of scientific proof. In this book we apply this approach to business ethics. I have been teaching business ethics for nine years. One of the main problems of this discipline is an insufficient level of intellectual rigor, which leads to a skeptical attitude from students as well as business people. This book tries to view business ethics as a scientific discipline, to offer some ideas about its organization, and to provide a historical discussion of various theories and perspectives in business ethics from that point of view. However, we start not with business ethics, but with economics. There are two reasons for this. First, business ethics needs positive economic theory, because it is impossible to render normative judgments about some action or norm if we do not understand its economic consequences. Second, economics tried to develop its normative economic theory, which should evaluate the actions of any actors in the economy: firms, consumers, workers, trade unions, govern ments, and so on. Logically, business ethics should be a part of normative economic theory because it focuses on the evaluation of a particular type of actors—firms and their managers. However, is that so? Does economic theory really have a normative branch and what does it study? Can we say that business ethics should be a branch of it? This is another interesting methodological question, which is not discussed well in the contemporary literature. Therefore, we shaped the next structure of the book as follows. The first two chapters are devoted to economics. In Chap. 1, we examine the development of a specific economic approach to normative evaluation in economics which was developed from 1900 to the 1950s and known as welfare economics. In Chap. 2, we provide a survey of methodological discussions about the interaction of economic theory and ethics which were conducted inside contemporary economic theory between 1980 and 2015. Then we turn to business ethics and provide a survey of its methodological evolution. In Chap. 3, we examine how the structure of the discipline was changing from 1970 to 2015. We survey all discussions of normative-descriptive and compare the change of composition of academic papers in the main business ethics journals. We check if business ethics followed a clear distinction made between normative, positive, and practical branches, and find that sometimes the distinction between normative and positive was confused and practical business ethics was not shaped as a separate branch of  business ethics at all (which seems to be a mistake). In Chap. 4, we study the development of normative business ethics and try to evaluate its original concepts and their scientific nature (stakeholder theory, separation thesis, integral social contract theory, corporate social responsibility (CSR) theories, virtue ethics, etc.). As we will see, the disregard of a scientific foundation of business ethics analysis may lead to poorly justified concepts and frameworks. In Chap. 5, we continue efforts in making business ethics a more systematic and efficient discipline and try to develop more accurate definitions of moral issues and moral dilemmas and to build a typology of moral issues and dilemmas in business ethics, which may be used to make normative, positive, and practical business ethics more productive.

CONTENTS

1 Welfare Economics                                                                                1
2 Economics and Ethics after the 1950s                                                 35
3 Business Ethics: Normative, Positive, and Practical                           71
4 Business Ethics: Normative Approaches                                             97
5 Business Ethics: Moral Issues and Dilemmas                                    125
Index                                                                                                      151

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