Why Be Moral in Business - A Rawlsian Approach

Citation preview

WHY BE MORAL IN BUSINESS? A RAWLSIAN APPROACH TO MORAL MOTIVATION

Richard H. Toenjes

Abstract: This article puts forth the thesis that the contractualist account of moral justification affords a powerful reply in business contexts to the question why a business person should put ethics above immediate business interests. A brief survey of traditional theories of business ethics and their approaches to moral motivation is presented. These approaches are criticized. A contractualist conception of ethics in the business world is developed, based on the work of John Rawls and Thomas Scanlon. The desire to justify our choices in terms that others can be reasonably expected to accept, or at least in terms that others cannot reasonably reject, is identified and differentiated from other accounts of motivation. It is this desire that constitutes the core motive to be moral in business on the contractualist conception. Implications of this contractualist conception for the theory and practice of business ethics are then discussed.

/. Introduction

T

he issue of moral motivation—Why be moral in business?—spans both the empirical and the philosophical work in business ethics. This overlap might not appear obvious, for it is commonly assumed that matters of the requirements of morality fall in the area of normative philosophy, while questions of the motivation to do what is moral are addressed by empirical science.' This dichotomy does exist when the philosophical conception of morality in business follows the paradigms of stakeholder theory, or virtue theory, or the traditional paradigm of applying moral principles (utility, rights, justice) in business settings. The argument in this paper is that in a contractualist paradigm of business ethics, philosophic issues and motivational issues coalesce into one focal concern. This is the concern to justify actions to others in terms that all can accept. As we shall see, the desire to justify involves more than the psychological question of whether individuals who tend to think in terms of agreements and contracts will be less likely to act unethically (Dunfee 1995). The link between the contractualist conception of ethics and the motivational desire to justify is essential, not merely contingent. To situate the issue of motivation, 1 will begin with a brief survey of the variety of philosophic approaches to business ethics. © 2002. Business Ethics Quarterly. Volume 12, Issue 1. ISSN 1052-150X.

pp. 57-72

58

BUSINESS ETHICS QUARTERLY

We can distinguish two fundamentally different philosophic approaches in business ethics. The more traditional one involves the application of principles, rules, and maxims to cases. These principles might be utilitarian in nature, or they might be deontic principles of rights and justice. Commonly all three principles are used as standards applicable to cases for the sake of directing or criticizing conduct. Manuel Velasquez's Business Ethics: Concepts and Cases is an excellent example. The other approach seeks to demonstrate that the goals of business include or somehow coincide with the goals of ethics. There are several varieties of this approach. One (call it the Hobbesian variant) demonstrates the mutual advantages gained in cooperation defined by ethical principles. David Gauthier's Morals by Agreement works out the details of this Hobbesian variant. Another approach is formulated by LaRue Hosmer in terms of the trust, commitment, and effort companies need for long-term success (Hosmer 1994). Another variety examines the nature of community and the human good achieved as members of the community. This communitarian variant demonstrates how ethical business is good business when seen from the perspective of the whole, virtuous person and the whole community. Robert Solomon's Ethics and Excellence and The New World of Business and Edwin Hartman's Organizational Ethics and the Good Life illustrate this variant. There are obvious problems with either approach.^ The problem central to the concern of this paper is the question of motivation. Why should a person moved by business interests be moved also by considerations of utility, rights, or justice? Alternatively, on the mutual advantage or the communitarian models, why should decision makers take the perspective of long-term mutual advantage or the perspective of the whole good of persons as members of a community when immediate interests so apparently lie in a different direction? I believe the truly hard cases in business ethics are dilemmas of this kind, ones in which business interests and ethical interests do not coincide. In this paper I will argue that contemporary versions of social contract theory shed new light on the ancient question: Why be moral when one's interests appear to lie elsewhere? This ancient problem is presented in Plato's fable of Gyges Ring. Gyges finds a magic ring that allows him to become invisible and thus avoid suffering the legal or social consequences of his actions. Of course, as we know, Plato shows how Gyges would not in fact achieve happiness in this way, thus demonstrating that morally correct and virtuous action is after all in Gyges' best interests. Accordingly, Plato is advocating a version of the communitarian approach to ethics mentioned above. The contemporary social contract theories developed by John Rawls and Thomas Scanlon take a radically different approach to the motivational question. An examination of this contractualist alternative will shed new light on this ancient motivational question, one that still grips business persons and ethicists today.

WHY BE MORAL IN BUSINESS?

59

//. The Problem of Moral Motivation It will help fix ideas if we survey the accounts of moral motivation assumed in the traditional approaches in business ethics. The communitarian and the mutual advantage varieties see the goals of business as included in or somehow coinciding with the goals of ethics. Thus the answer to the question, why be moral in business, is essentially a demonstration that successful business is ethical business. Ethics in business is seen as a "win-win" proposition. A major weakness of this approach is that it begs the motivational question in just those circumstances where it is in most need of an answer. These are situations in which it appears that business interests and ethical interests conflict. Ford Motor's decisions regarding the Pinto's fuel tank or Nestle's marketing of infant formula in the third world are situations in which business interests obviously appeared to conflict with ethical interests. Insisting to Ford or Nestle that their long-term advantage or their flourishing as members of the community require putting ethics ahead of immediate profit is to assume that Ford or Nestle are ready to evaluate matters from the perspective of long-term advantage or the total community good. Furthermore, it is to assume that Ford or Nestle were simply mistaken in their calculation of their own interests or goals.^ And it assigns to empirical psychology the task of motivating people to consider the full range of the consequences of their actions. The question of moral motivation is more complex if we approach business ethics as the application of principles to cases. Utilitarian concerns are different from deontic concerns with rights or justice, and their accounts of moral motivation are also different. Utilitarianism identifies individual human well-being as the fundamental moral fact. In this way it shares a root assumption of the communitarian and mutual-advantage models, which also take human well-being as the fundamental moral fact. Utilitarianism can use the normal human sentiments of sympathetic identification with the good of others to explain why individuals are motivated by a concern for the good of other persons. But whatever psychological account of motivation it uses, utilitarianism as a moral principle aims at the total good, and hence there would have to be a motivation to favor increases in aggregate well-being, regardless of how well-being is distributed. This is a highly abstract and impartial empathetic identification, and very different from the normal sentiments of sympathy or empathy we feel toward others. In relying on an altruistic or impartial empathy with the well-being of all, utilitarianism begs the question of why be moral in business. This kind of impartial empathy is already a moral concern, and one that does not address the question of why be moral when business interests lie elsewhere. And as is the case with any consequentialist approach, it assigns to empirical psychology the task of instilling the empathy or sympathy required to motivate ethical behavior. Deontic concerns with rights or justice, when these do not reduce to the utilitarian concern with the good of all, see moral motivation differently. Deontic concerns see motivation as some kind of special intuition or perception. John

60

BUSINESS ETHICS QUARTERLY

Locke is a good example. In explaining basic natural rights he states that reason itself "teaches all mankind, who will but consult it, that being all equal and independent, no one ought to harm another in his life, health, liberty, or possessions."* Kant's notion of duty or obligation might also be seen as appealing to a kind of special intuition or apprehension of moral oughtness. This intuition is understood as containing an intrinsic or self-evident significance that constitutes its motivational force.^ The weakness with any such approach in business ethics is again tbat of begging the question. Why should a person moved by business interests also be moved by such deontic concerns? A different and in some ways a better answer to the question, why be moral, can be found in the contract theories developed by Rawls and Scanlon. Here we can isolate another kind of human interest, one different from the core utilitarian desire for human well-being, and one different from the desire to flourish as a member of a community or to pursue rational self-interest in mutual cooperation. It is a desire that does not presuppose the deontic concern with rights or justice. The contractualist desire is a desire to cooperate with other persons according to principles that all can accept. It is a desire to be able to justify our conduct and the principles governing our conduct. Further, it is a desire to justify conduct to others in terms that we can reasonably expect them to accept, or at least in terms that they cannot reasonably reject. The desire to justify is not defined in terms of human well-being at all; it derives from another aspect of moral personality.^ Accordingly, the contractualist approach to moral motivation is essentially different from the approaches just surveyed.

///. The Desire to Justify A. Initial Characterization The desire to justify is quite common and familiar. It is involved in attempts to make excuses ("Don't blame me, I was just...") and attempts to get others to cooperate ("Let's work together so we can...").^ In business the desire to justify appears in such expressions as "The market demands it," or "It's the way things are in the business world, the competition is doing it," or "It's legal and within our rights," and so on. Classically the desire to justify business conduct and institutions was seen in "What's good for General Motors is good for America," or "The social responsibility of business is to make a profit," or "In seeking his own gain, each is led as if by an invisible hand to enhance the good of all." The "trickle-down effect" is an attempt to justify disparities of income and wealth. The desire to justify is seen in the lengths to which people will go to avoid admitting the unjustifiability of their actions and institutions, including attempts to discredit or even dehumanize those who might reasonably reject the justification offered, as is often done in war, colonializing, and slavery. The function of exclusive clubs is not limited to "networking" with the influential, but includes the desire to justify our conduct, at least to some who we expect will agree.

WHY BE MORAL IN BUSINESS?

61

The widespread appeal of "The Golden Rule" can be seen as an expression of the desire to justify our actions to others in terms they could not reasonably reject.^ We often criticize someone's treatment of ourselves or others with the complaint "But put yourself in my or their position." The suggestion is that it is not reasonable to expect me or them to go along, and that you would readily see the unreasonableness if you took another perspective. The rebuttal "If you look at it from my perspective" is suggesting it is not reasonable to reject my action. Simply put, the desire to justify is the desire to look others straight in the eyes and say, "It is reasonable for you to accept what I'm doing (or the scheme that justifies it), or at least it is not reasonable for you to reject it." Of course, it is also common to consider consequences for human well-being when putting ourselves in the places of others, or when otherwise justifying our actions. We might even suppose that there could be nothing other than the good for persons that could serve as the basis of justification. The unique character of the contractualist desire is that it does not reduce to rational concerns with wellbeing, but instead intends the reasonableness or fairness of an action or arrangement. B. Analysis of the Desire—The Reasonable and The Rational 1. The desire to justify can be phrased as the desire to give reasons that all can reasonably be expected to accept, or as the more limited desire to give reasons that none can reasonably reject. The two formulas are not identical. In a group that includes some altruistic persons motivated by concerns of the common good, we might expect all to accept an arrangement that disadvantages some (the altruists) for the sake of the greater good of all. But in that situation, it might still not be unreasonable for the disadvantaged to reject the arrangement (Scanlon, 1982, pp. 111-112). This difference need not detain us here because it will not substantially alter most conclusions we reach in applications to business ethics. 2. The desire to justify, to give reasons that all can reasonably be expected to accept, is further specified by the character of those reasons and the criteria of their acceptability (or their non-rejectability). The desire to justify one's actions is not a desire to manipulate others or to gain their acquiescence through any means whatsoever, or with any kind of reason whatsoever. Threats and promises might produce acceptance in the sense of acquiescence; but unless these appeal to persons as free, equal, rational, and reasonable, the acquiescence is not reasonable agreement. And not everything one might offer or take as a reason (e.g., one's self-interest or private religious beliefs, even false beliefs and illogical inferences) constitutes a reason that all can reasonably be expected to accept. When attempting to justify our actions in terms we can reasonably expect others to accept, we make appeal to impartial considerations, to factual and objective matters, and to a whole range of publicly accepted agreements about what constitutes justification, and what distinguishes justification from manipulation.

62

BUSINESS ETHICS QUARTERLY

coercion, or uninformed and irrational thinking. In a word, we assume and invoke the whole network of ideas and values operating in social arrangements where free persons reciprocally interact in ways they accept as rational, reasonable, and equal agents. Here is not the place to discuss fully the criteria of reasonable acceptability (or non-rejectability) of attempts to justify. We can and do, with some degree of clarity and confidence, make the distinction between reasonably acceptable justifications and other forms of gaining acquiescence. The basis of the distinction and the moral force of contractualist conception of motivation being developed here derives from the core idea of contractualism, the notion of reciprocal cooperation among persons who seek to treat one another as free, equal, reasonable, and rational.^ 3. In seeking to justify an action I say to others "It is not reasonable for you to reject it." This is not to say that others have no reason to reject it. Any interest to the contrary of what I propose is a reason to reject my action. Environmentalists have a reason to reject policies that allow harvesting timber. The timber industry has a reason to reject restrictive laws. The latest casualties of a corporate "down-sizing" have a reason to reject that plan. And the corporation has a reason to reject claims of wrongful dismissal, or claims that an alternative but perhaps less profitable plan should be implemented. In seeking to justify, we are not assuming there are no reasons on the contrary. But we are saying it is reasonable to accept, or not reasonable to reject, the action (policy, institution) in question. In other words, in seeking to justify we are not saying that those opposed are irrational. We are saying they are unreasonable if they reject the justification. (Of course, those opposed may be reasonable themselves, holding justifications for other decisions, or other justifications. There can be situations where more than one course of action is reasonable.) The distinction between reasonableness and rationality will be taken up below (III-7). But here it will be helpful to illustrate how the contractualist conception and the desire for reasonable justifications can motivate and direct business behavior. Any number of widely publicized cases illustrate the force of the contractualist conception of reasonableness and its suitability as an approach to the why be moral question. Nestle's practices of marketing infant formula in third-world countries have changed significantly in light of criticisms of the unreasonableness of their practices. Obviously it would not be reasonable to expect vulnerable mothers and their infants to agree with marketing practices that endangered their health for the sake of Nestle's profit. Under pressures from an international boycott of its products and from agencies such as the World Health Organization, Nestle has changed its practices to include information on the safe use of formula, the advantages of breast feeding over formula, maternal nutrition and preparation for safe breast feeding, and many others. Nestle set up an audit commission to monitor its own conduct. And while normal business practice is to increase marketing in growth markets such as the third world. Nestle is decreasing its efforts to sell formula in those markets.'o To be sure, there are many reasons and motives operational in Nestle's behavior. No doubt arguments about

WHY BE MORAL IN BUSINESS?

63

rights and justice, about long term profitability, public relations, etc. all were made. My claim is that the sheer unjustifiability of their practices offers a coherent account of Nestle's change. Those earlier practices fail the test of justifiability in terms that all can reasonably be expected to accept, or that none can reasonably reject. Persons on all sides easily understand how reasonable persons can reject Nestle's practices and its earlier attempts to defend them. In making changes, presumably Nestle itself came to see the unjustifiability of its earlier ways. Whatever might be said about public relations, long term profitability, etc.. Nestle now behaves in a more reasonable way; it either is or can coherently be understood as being moved by the contractualist desire to justify its actions in reasonable terms. Another example is the recent changes in Nike's use of cheap Asian labor and child labor in sweatshop conditions to produce its footwear. As in the case of Nestle, after public pressures brought in the press, including ridicule in the comic strip Doonesbury, Nike has had a change of heart. It now requires that its overseas producers meet U.S. health and safety standards, and it has agreed to provide outside inspectors access to its Asian factories, things it had previously resisted.'^ The decision reflects the need for public acceptance. And the acceptance involves more than public relations and image management. It involves the acceptability involved in the contractualist conception of business ethics being developed here. Prior to its change of heart, Nike quite apparently failed the basic test of the contract view; it was not reasonable to expect others to accept its practices and its rationalizations. When such unreasonable practices come to the light, public acceptance and even sales volume can decrease. The contractualist approach articulates and explains the dynamics of scenarios such as the Nike and the Nestle cases. 4. The desire to justify does not reduce to the basic utilitarian concern for human well-being. In seeking to give a reason I believe all can reasonably accept I am not essentially concerning myself with the well-being of others. This can be seen in Scanlon's example of a wealthy person who is moved by the horrible suffering of children in some impoverished third-world country (1982, p. 116). Concern with their suffering is, of course, concern with their well-being. But there is an additional fact. The wealthy person is also moved by the thought that the children could be helped at very little cost to the wealthy (assuming, obviously, that this might be true). This additional motive, "I could help at so little cost to me," is not aimed at the welfare of the children nor the aggregate wellbeing of all. This additional motive is more clearly evident in examples that include deontic considerations. For example, it is nearly impossible to see how any degree of economic advancement for an underdeveloped country could justify the imposition of "sweat shop" working conditions on children that damage their health and leave them as bad off as they were under less prosperous conditions. The sentiment that "there is no excuse, no justification" in these examples refers to the comparative inequalities of the situation and is not explainable on exclusively utilitarian grounds, on the balancing of outcomes or comparison of

64

BUSINESS ETHICS QUARTERLY

alternative aggregate goods. The source of this additional motive is the desire to justify my actions to them. (We might suppose the desire is actually aimed at avoiding potential criticism of our insensitivity or selfishness. While that might be the immediate occasion of the desire, its object like the grounds of the potential criticism itself is the comparative inequalities of the situation.) 5. The desire to justify is not limited to cases where the appeal is to mutual advantage (to "win-win" situations). This is seen in the fact that the desire does not cease when some have no bargaining advantage, as in the case of the suffering children just mentioned. It is also seen, for example, in the desire to justify a corporate down-sizing to persons being laid off who, by definition, have nothing more to offer the firm. We might suspect in such a case there remains a mutual advantage in concluding the matter amicably and without embarrassing scenes. This would be a mistake. For those being terminated might be docile and unassertive persons who will leave quietly and without resentment upon simply being told without explanation to do so. The manager might expect such persons to accept the termination decision without explanation. But we cannot say that those being laid off cannot reasonably reject the absence of a justification. And if it were possible to give a justification at very little cost, this comparative fact would ordinarily strengthen the motivation to do so. The desire involved in this additional motivation is not aimed at the well-being of others and not limited to their bargaining advantage. It is a different desire. It seems clear that we do have a desire to justify a decision to someone with "nothing to offer," with no bargaining advantage, not even a threat advantage of making a scene or expressing resentment. In the example of employees being laid off, a common form of justification would be to invoke the doctrine of "employment at will." Just as employees can leave at will, so too employers can terminate at will. Such an attempt illustrates the desire to justify, of course. But perhaps the desire is thought to come from some recognition of other's rights or empathy with other's feelings. No doubt often it does; but it need not. For we do not need to be concerned with others' rights or well-being when we are moved by the thought that a justification could be given (if it could) at very little cost to us. Or it might be supposed that the desire to justify comes from a recognition that even where there is no bargaining advantage in the particular scheme of cooperation (e.g., a corporate downsizing), there remains a larger social scheme in which bargaining advantages still exist. This would be a mistake. For the objections being made within the confines of the schemes of mutual advantage just considered can be raised at the level of those larger schemes as well. 6. The desire to justify does not reduce to the desire to live and flourish as a member of a community (unless the community is essentially defined in terms of principles that all can reasonably accept).'^ This is because the general basic desire to belong is not limited to or necessarily governed by the idea that the community form is one that all can reasonably accept, A communitarian scheme recognizes persons as rational, as having a good that they can see is achieved within the community. The community is defined by its ends, the flourishing of

WHY BE MORAL IN BUSINESS?

65

the members, and of the association itself. Therefore, persons who reject the community form or the duties and privilege associated with their roles within it are, on the communitarian view, irrational. I think we would all be uneasy with such a view. For it amounts to saying to any who reject a decision either "You are irrational" or "You are not a member of the community at all." Consider, for example, textile workers whose jobs are being eliminated or moved to a thirdworld country. Can we say with a straight face that they are irrational if they disagree? That they somehow fail to understand their own good or the good of the global textile community? Alternatively, must we say that they are no longer a member of the community? That their good is not bound up with the community to which the former employer still belongs? The desire to justify persists even where the limits of communitarian thinking have been reached. 7. At the most general level of description, the desire to justify is not limited to considerations of the rationality of the parties involved. The desire does not appeal to others as rationally self-interested individuals (the mutual advantage model). It does not appeal to others as seeking the good of community membership (the community model). Nor does the desire to justify appeal to the altruistic concern with human well-being (the utilitarian model). Indeed the desire to justify persists in circumstances where persons have reasons to reject an action, in circumstances where there are reasons to the contrary. In fact, it is exactly such circumstances that constitute the tough cases in business ethics. These are situations where there are reasons on all sides of the issue. We might think that there must be some basic flaw in the account of the desire to justify being developed here. For we might think that somehow rationality must be at the root of the desire. What else but human reason could possibly account for attempts to justify our actions and our arrangements? The history of ethical theory just is, we might suppose, the history of attempts to derive principles to govern ourselves from the concept of reason itself. From Plato through Aristotelian eudaimonistic conceptions, to Hobbesian and game-theoretic accounts of mutual advantage, and to utilitarian accounts of human well-being, the principles that govern our actions are derived from some conception of the human good known to reason. In all such theories the powers of rationality are associated with individuals' conceptions of their good. Even deontic theories based on a special intuition of rights and justice can be seen as attempts to derive morality from reason itself. The powers of rationality involve the ability to have a good, to know it, or to construct it. Rationality also involves the powers of judgment and deliberation in seeking one's own interests and ends. Rationality applies to how these ends are given priority and to the choice of means toward those ends. The Rawls-Scanlon account of the desire to justify being developed here stands in sharp opposition to such attempts. The contractualist notion guiding the present account does not derive the reasonable from the rational. Reasonableness is a different capacity. As reasonable, persons seek to cooperate with others on terms that all can accept, or at least on terms that none can reasonably

66

BUSINESS ETHICS QUARTERLY

reject. It is a desire to propose and to honor principles and standards specifying terms of cooperation.'^ By way of contrast, irrational persons are ones who do not know their own good or who somehow fail to have a coherent notion of the priorities of their final ends. Or perhaps they are irrational in failing to pursue effective means to their ends, or in choosing less probable means over more probable ones. Unreasonable persons, on the other hand, are ones who engage in (or find themselves in) cooperative schemes but are unwilling to honor or even to propose standards for specifying terms of cooperation. While they may pretend to be reasonable, they stand ready to violate the terms of cooperation if circumstances permit (as circumstances do permit in the case of Gyges). Unreasonable persons may indeed be rational. Free-riders and hypocrites may indeed be rational in their pursuit of their interests and ends. Persons who lack any desire to justify their actions to others may indeed be rational. Only if it is necessary to derive the reasonable from the rational must we conclude that all rejections or pretences of justification are necessarily irrational. But such rejections or pretences are necessarily unreasonable. The fact is that we cannot expect that conscientious and rational persons will ultimately agree on the same conclusion. And the desire to justify does not depend on such an idealistic assumption. The real world of business is not that neatly rational, but it does contain within it the desire to justify. It is unrealistic to suppose that all of our differences are rooted in ignorance and perversity, or else in unrestrained rivalries for power, status, and economic gain.'''And such a supposition is not necessary, if the present account of the desire to justify is correct. Furthermore, the assumption that our differences are rooted in ignorance and perversity is a main source of the mutual suspicion and hostility we sometimes see in ethical disagreements in business. In the truly tough cases, it is unreasonable to expect all rational persons to agree, and to dismiss disagreement as irrationality.'^ It is quite common to confront a situation where we know the parties will never agree, where sincere and rational persons will disagree. In such situations, however, the desire to justify persists. It is the desire to seek a solution that none can reasonably reject, even if as sincere rational agents their understanding of their own good (mutual advantage), the community good, the good of all (utilitarianism), or their deontic intuition does not result in a single

IV. Implications and Applications I argued in section III that the desire to justify exists and that it is distinct from the basic motivational desire envisioned by utilitarian, communitarian, and mutual advantage models of ethics as applied to business. Here I turn to the question of what difference the desire makes, how the contractualist view applies to business ethic, and what advantages it offers.

WHY BE MORAL IN BUSINESS?

67

1. Contractualism is more realistic. The hard cases in business ethics are dilemmas in which business interests are in tension with ethical interests. A good business decision is not necessarily good for all, not necessarily "winwin" all the way around. Utilitarian, mutual advantage, and communitarian conceptions of ethics deny that such hard cases actually exist, explaining them as failures of reason, relegating them to matters of ignorance or insincerity. The contractualist conception, on the contrary, is compatible with the existence of such hard cases. It allows business interests (and all other individual and communal goods) to function in decision-making along with the interest to justify decisions to others. On the contractualist conception, the desire to justify persists even when sincere rational persons disagree about what is good for themselves or their associations. 2. Because it does not presuppose that sincere and rational agents must agree, the contractualist conception does not automatically lead to distrust and suspicion in cases of disagreement. The contractualist conception separates the reasonable from the rational. It allows rational agents to disagree, while emphasizing a separate capacity, reasonableness. The goal of agreement is linked not to the rational good but to the reasonableness of decisions. In seeking such agreement we are not automatically forced to view others (or ourselves) as ignorant or insincere when we disagree. We can view them instead as persons who in full rationality have a good that is not entirely consistent with our own or other rational conceptions of the good. 3. The contractualist conception specifies and de-mystifies the common experience of the tension between business interests and ethical interests. This tension is experienced when decision makers arrive at what they feel is the correct business decision, and still wonder "But is it the right thing?" The idea of "the right choice" has a place in business decisions, and its meaning is distinct from and can be opposed to the idea of "the correct business decision." This tension, which we often experience and express in language, remains unspecified and somewhat mysterious. For some it refers to their nonbusiness commitments to religious or other moral codes. For others it refers to an inner voice of conscience or certain personal sensibilities. Or the notion of "the right thing to do," while operative in business discussion, remains unspecified as to its reference or meaning. The contractualist conception specifies that the notion of the right thing is connected with the desire to justify decisions in terms that all can accept, or at least in terms that none can reasonably reject. As a separate desire it naturally operates distinct from business interests and can easily run opposed to those interests. But as a desire that business persons have, it operates within the business world, not from some personal source outside the business context.'^ 4. The contractualist desire to justify explains another ordinary feature of ethical reasoning. It is commonly assumed that in evaluating a decision we must pay particular attention to those who will be losers in the transaction (those put out of work, for example). A decision that appears justifiable only to those who

68

BUSINESS ETHICS QUARTERLY

come out ahead (appealing to their interests or rational good) will ordinarily be met with suspicion and distrust. And we will not consider such responses unreasonable, especially when it comes from those who lose. Up to this point I have not stated specific criteria of an acceptable justification, beyond the general constraints imposed by the contractualist conception itself. But one criterion certainly is that the justification must not automatically exclude any who lose in the decision being justified. The contractualist conception captures this common element of fairness, that justifications must include the less advantaged and probably in a special way. This is because it is they who can be expected to reasonably reject the decision, if anyone can. 5. The contractualist conception expands the horizon of factors that can be used in justification. In mutual advantage, communitarian, and utilitarian conceptions the only kind of justification possible is in terms of what is good for persons. But human nature is not so limited. Ideals such as fairness, reciprocity, honor, duty, and so on can enter our minds and move us to action. At the heart of the contractualist conception is a notion of reciprocal cooperation as free, reasonable, and rational persons. We are capable not only of having a rational good, but also of regulating and justifying our actions according to reasonable principles, ones that all can accept or at least not reasonably reject. The desire to justify is largely, if not wholly, learned in a liberal democratic society. By way of contrast, the desire to pursue one's rational good in communal or mutually advantageous settings may have both learned and natural elements. The important thing is not the psychological etiology of the desire to justify, but the fact that it is a desire that we have and that we cultivate. Furthermore, it is a desire that is not limited by conceptions of the rational. Rather it is what Rawls terms an idea-based desire, one whose explanation must make use of the idea of reciprocal cooperation among reasonable persons (1993, pp. 81-86). This expansion of the horizon of factors we can use in justification of actions is perhaps the most attractive feature of the contractualist conception. It makes sense of our widespread (liberal democratic) understanding of ourselves as free and autonomous, rational and reasonable persons. 6. One effect of the contractualist conception is that it shows the limits of justifications ordinarily offered in defense of business decisions. Often we hear that "the market" justifies a particular decision (and a suggestion that those who disagree are ignorant or insincere). Behind the idea of the market may be a utilitarian conception of efficiency such as that envisioned by Adam Smith. Or "the market" might be shorthand for the notion of rights to freedom and property as envisioned by Locke and other liberal theorists. The contractualist conception does not assign primacy to such appeals to the utilitarian good or to certain rights confined within a particular conception of rationality. Instead, the contractualist conception allows disagreement in conceptions of the rational good while insisting that justification must still be formulated such that no one can reasonably disagree. It may or may not be irrational to reject market efficiency or some particular decision made in its name or in the name of property rights.

WHY BE MORAL IN BUSINESS?

69

But justification seeks a different kind of agreement, one that cannot be reasonably rejected. For example, it might be both rational and reasonable to close a plant to cut costs in order to preserve the whole company. Presumably all can reasonably be expected to agree, when evidence supports the decision, and the value of preserving the company is accepted. It might be quite rational given some conceptions of good business and given some conceptions of property, for the GEO to close a plant to cut costs in order to redecorate the executive offices with expensive imports. But it would not be unreasonable for displaced workers to reject the GEO's justification if it is based on nothing but property rights or the CEO's particular conception of good business. Similarly, it might be reasonable to expect agreement with a decision to move a production facility off shore, for the sake of lower cost and hence more competitive products that can enhance well-being on all sides, even in areas where labor is redistributed to different and perhaps better industries. But the same decision to move production off shore could meet reasonable rejection if the move is justified by lowered production costs achieved by environmentally destructive and unsafe manufacturing methods. In other words, people offering "the market" as justification will recognize that in some circumstances it might reasonably be rejected. Those offering "the market" as justification will have to look beyond their own particular conceptions of property and efficiency for the common grounds of cooperation, the terms of which none can reasonably reject the course of action. 7. The contractualist conception forces decision makers to seek common ground on which to provide justifications. At the same time it expands the scope of that common ground, because it is not limited to utilitarian, communitarian, or mutually advantageous notions (as explained in no. 5 above). The contractualist conception directs our concern to persons understood not just as rational agents seeking their good but also as reasonable persons capable of engaging in fair cooperation as such, and capable of doing so on terms that others can reasonably be expected to endorse. It directs our attention to the ways in which people actually do cooperate in the expectation that others will abide by the terms of the arrangements (not just cooperation designed to achieve some rational good). In contractualism we look at persons as members of numerous overlapping groups (including nations, business associations, and many other less formal arrangements within and across societies), and we look to the forms of justification operative within those groups. In contractualism, justification is not limited to individual good, but also can include commitments honored in fair cooperation. V^ Conclusion Beyond the implications just discussed, I cannot tell what differences recognizing the desire to justify will make in business practice. But the change in mind-set or business philosophy is definable nonetheless. Contractualism based on the idea of fair cooperation suggests a business philosophy quite distinct from communitarian or competitive models, and distinct from utilitarian social

70

BUSINESS ETHICS QUARTERLY

well-being models. The contractualism involved in this analysis characterizes contemporary liberal democratic societies. Therefore, the argument in this paper would support a variety of policies advocated in the names of corporate democracy, employee rights and participation, and so forth. Neither the authority of superiors nor the rights of subordinates would be absolute. All decisions must be reasonable, capable of being stated publicly so that all can see the decisions are ones which all can accept, or at least that they are decisions which cannot reasonably be rejected.

Notes The author wishes to thank the anonymous referees of BEQ for their very helpful ideas and comments, •A double special issue of Business Ethics Quarterly 8, no, 3 (July 1998) is devoted to topics relating empirical work in psychology with theoretical work in normative philosophy, ^Indeterminacy is one problem. Exactly what decision is indicated by the particular principle or approach taken? Indeterminacy in business ethics is one reason philosophers have begun to speculate that business ethics is a post-modern, non-foundational, and historicist enterprise. A recent special edition of Business Ethics Quarterly 3, no, 3 (July 1993) is devoted to this theme, 'Johnson & Johnson's decision to take all Tylenol off the shelves to prevent risk of poisoning from tainted product is often heralded as a paradigm case in which ethical interests and business interests coincided. Perhaps so. But J & J's decision was motivated by concern with safety, not ultimately the bottom line. At the time, no one could know the decision that would advance business interests the most, ^Locke, John, Two Treatises of Government, rev, ed,, Peter Laslett, ed (New York: Cambridge University Press, 1963), 309, 311, as quoted in Velasquez, 1982, 143, 'It can be argued that Kant does not hold such an intuitionist view. It can be argued that Kant grounds morality on a conception of rational human nature and membership in an intelligible order of existence. Viewed this way, Kant is close to the contractualist view being developed here. Indeed, Rawls argues that there is a Kantian interpretation of his theory of justice as fairness, where the root ideas of the Rawls-Scanlon contractualism are first articulated (Rawls, 1970, 251-257), This clarification was offered to me by the anonymous reviewers for BEQ. ^The distinction between the interest in human well-being (the good) and the desire to justify is rooted in Rawls' conception of moral personality. For Rawls, moral personality is characterized by two capacities: one for forming a conception of the good, the other the capacity for a sense of justice. This point is developed more fully in section III, B, 7, ''The fact that these often reduce to self-interest and manipulation, especially in children, is not an objection. For justification cannot be reduced to manipulation in all cases, unless we simply assume there is no such thing as justification distinct from manipulation, 8The golden rule in some version appears in many religions and philosophies. It can be explained on most moral theories, including those 1 am rejecting as inadequate to answer the why be moral question in business. But that doesn't mean it doesn't exhibit the desire to justify. If I'm right, it means that the desire to justify is exhibited in those religions and philosophies.

WHY BE MORAL IN BUSINESS?

71

'The questions about the nature and adequacy of justification in morals, while basic, is not the central concern of this paper. The present analysis of the desire to justify actions presumes the general correctness or acceptability of the work of Rawls, Scanlon, and others. On the specific notion of public reason, see Rawls "The Idea of Public Reason" (1993, 212-254). "Th • e treatment of the Nestle case comes from a case written by Eugene Buchholz, Loyola University of New Orleans, reprinted from Business Environnment and Public Policy, in Beauchamp and Bowie (1997, 606-607). "The treatment of the Nike case comes from Shaw and Barry (2001, 228-231). '^If justifiability is the limiting concept and not the end of individual or community flourishing, then what we have is not recognizably a community at all. It is not formed by a common conception of the good known to reason. It is instead a society, as understood on the contractualist notion guiding the view being developed here. "The distinction between the reasonable and the rational is so basic and pervasive in Rawls' thought, its roots are traceable to the conception of moral personality itself (what for Rawls functions as a foundation in human nature). Moral persons are characterized by two moral powers and two corresponding highest-order interests in realizing and exercising these powers. The first is the capacity for a sense of justice, the basis of the reasonable. The second is the capacity for a conception of the good, the basis of the rational. This characterization of moral personality appears early in A Theory of Justice on p. 9. It is referred to periodically through the years between 1971 and 1993 {Political Liberalism). See for example "Kantian Constructivism in Moral Theory: Rational and Full Autonomy," The Journal of Philosophy 11, no. 9 (September 1980), 515-535. '"Rawls makes this point regarding philosophical and religious differences (1993, 58). "Ronald Duska (1993) takes this as a reason to deconstruct the idea of truth, in his discussion of Aristotle as post-modern. ' • I cannot take up the obviously crucial question of priority and weighting of business and ethical interests. One thing is clear, however. Someone who says "The heck with justification, I'm going after the business" exhibits nothing of the desire to justify.

Bibliography Beauchamp, T. L. and Bowie, N. E. 1997. Ethical Theory and Business (5th ed.). Upper Saddle River, New Jersey: Simon & Schuster. Dunfee, T. W. and Donaldson, T. 1995. "Contractarian Business Ethics: Current Status and Next Steps." Business Ethics Quarterly. 5, no 2: 173-186. Duska, R. 1993. "Aristotle: A Pre-Modern Post-Modern? Implications for Business Ethics." Business Ethics Quarterly 3, no 3: 227-250. Gautier, D. 1986. Morals by Agreement. New York: Oxford. Hartman, E. M. 1996. Organizational Ethics and the Good Life. New York: Oxford University Press. Hosmer, L. T. 1994. "Why Be Moral? A Different Rationale for Managers." Business Ethics Quarterly. 4, no. 2: 191-204. Rawls, J. 1970. A Theory of Justice. Cambridge Mass.: Harvard University Press. . 1993. Political Liberalism. New York: Columbia University Press. Scanlon, T. M. 1982. "Contractualism and Utilitarianism." In Utilitarianism and Beyond, ed. A. Sen and B. Williams. Cambridge: Cambridge University Press, 103-128.

72

BUSINESS ETHICS QUARTERLY

Shaw, W. H. and Barry, V. 2001. Moral Issues in Business (8th ed.). Belmont, Calif.: Wads worth. Solomon, R. C. 1973. Ethics and Excellence. New York: Oxford University Press. 1994. The New World of Business. Latham, Md.: Littlefield Adams Quality Paperbacks. Velasquez, M. G. 1992. Business Ethics: Concepts and Cases (3rd ed.). New York: Prentice Hall.