How to be ethical in Business: advice from Adela Cortina

I have long believed that an interdisciplinary approach to study, including business, favors innovation and provides new and productive research ideas. True innovation often lies at the nexus of different disciplines. Among the most recent opportunities in this regard are the combination of biology and philosophy, technology and law and business and psychology, which is why we should celebrate the decision of a philosopher originally oriented toward metaphysics to enter the field of business ethics.??

Adela Cortina , a Spanish philosopher, explains how business and ethics have traditionally run in parallel. Indeed, most people still think that business decisions are amoral, that is, they are neither good nor bad from an ethical point of view. Instead, Cortina suggests practical and moral arguments for exploring the development of an ethics of business. Practical, because -like it or not- companies are subject to public opinion and the decisions their managers take are evaluated not only from a legal perspective, but a moral one also.

In addition, business has lost much social legitimacy due to recent management scandals and the financial crisis of the last decade.?

From a moral and ethical perspective, Cortina argues that companies, as social organizations, contribute to forming what she calls the civic ethics shared by the wider community.???

From a personal perspective, I would also add that behind any relevant management decision there is always a set of values: management is philosophy in action.

Cortina’s background in metaphysics comes to the fore in her first work on business ethics, where she states: “The goal of business activity is the?satisfaction of human needs?through the implementation of a capital, of which an essential part is human capital.”

Establishing a definition that satisfies all stakeholders in a company is not easy, but I’m unsure if Cortina's would satisfy many business leaders.

Meeting human needs is the goal of many other social institutions, including the state; while the chief reasons entrepreneurs set up companies include a desire to make money, break new ground, change the world or satisfy personal ambitions.

Taking a more constructivist approach, Cortina proposes that a company's ethics are rooted in the “quality of products and management, honesty in service, mutual respect in the internal and external relations of the company, the cooperation through which we jointly aspire to quality and solidarity, which consist in fully exploiting our abilities so that everybody can benefit from them, creativity, initiative, the spirit of risk.”

Cortina shares US academic and marketing expert Gene Brown 's view on moral philosophy: its purpose is not to make people better, but to make morally justifiable decisions. To provide a better framework for moral decision-making in business, Cortina uses Max Weber ’s distinction between the ethics of conviction and the ethics of responsibility, originally applied to politics and the arguments governments use to justify their actions.

The ethics of conviction argues that one must always act in accordance with some principle or norm, regardless of the results, a view that echoes deontological positions. But Weber doesn’t believe politicians should behave like cosmic-ethical rationalists with no concern for the consequences of their decisions.?Furthermore, the ethics of conviction sometimes clash with what are known as antinomies of action: good acts can result in bad outcomes and vice versa.

Moral dilemmas present precisely these types of antinomies in situations such as supposedly just wars or assassinating tyrants, not to mention many other situations in daily life when we have to choose the lesser of two or more evils. There are many cases in management reflecting those dilemmas, such as downsizing a company or accepting the idea of being less profitable; choosing between short-term and long-term impact initiatives; or releasing full or partial information when the company is in crisis.?

Some of these cases bring to mind a principle that is easy to say, but difficult to apply:?fiat iustitia et pereat mundus?(let justice be done and let the world perish). In business, this would mean apply ethical principles absolutely, even if it meant a company going under, the loss of jobs and other damages. But we know that on occasion, it is preferable to look for a compromise solution and avoid “letting the world perish”, rather than accept the consequences of an action generating systemic or generalized damage. For example, when the federal reserve injected liquidity into the financial system in 2007 to avoid further damage, rather than letting the banks go under, even though we knew that many of them had indulged in unprofessional behavior.??

Therefore, Weber argues, we need an ethic of responsibility to address the consequences of our actions and to what extent, under certain circumstances, questionable means can be used to try to achieve certain positive outcomes. The key lies in the balance between both types of ethics, convictions and responsibility.?

Cortina relates this approach to K.O. Apel ’s theory of communicative rationality: in essence, cases where our convictions conflict with responsibility and the consequences of our actions. The key is to be able to justify a decision using reasonable arguments that can be explained openly. The morally correct decision, according to this approach, is one can be argued in an open discussion and that most, if not all, people will understand. Warren Buffet ’s remark about what decisions made by managers are ethical serves as an example: those that can be published in a newspaper the next day and do not question their leadership.

From my experiences in management education I can verify the validity of this approach. For example, when discussing business ethics in multicultural groups such as corruption or bribery, I have seen how the debate leads to a convergence of analyses and decisions, regardless of diversity, contradicting??Aristotle ’s assertion that "fire burns both in Hellas and Persia, but ideas about good and evil change from one place to another."

From a moral perspective, conceptualizing ethical dilemmas, discussing them in public, for example through the case method and dealing with specific assumptions, should lead to better decision-making.??