Chapter 5: Business Ethics That Come Naturally

Chapter 5: Business Ethics That Come Naturally


Business ethics means a great deal more than obeying the civil law and not obeying the moral law. It means imagining and creating a new sort of world based on the principles of individual creativity, community, realism, and other virtues of enterprise.

michael novak, Business as a Calling[1 ]

Across the landscape of business education, from business schools to management training programs, essentially all moral concerns are handled under the rubric of “business ethics.” That phrase usually refers to the accepted codes and practices that we need to follow if we wish to stay out of trouble. I do not deny the importance of these codes and practices—they generally have a moral basis, they protect other people’s rights, and it behooves everyone to stay out of trouble—but I believe that the narrow and negative way that these “business ethics” are presented in the standard approach does a disservice to the real purposes of ethical commitments. What’s more, the way that ethics has been taught in many leading business education programs has done little to ensure actual moral conduct among the students who have taken the program. In fact, there is evidence that this standard approach may even decrease the chance that students will practice moral conduct in day-to-day business settings.[2]

The sociologist Amitai Etzioni has written that, in light of the corporate scandals of the early 2000s, “business schools—the training grounds for corporate tycoons—have been forced to face the fact that they have failed to produce honest brokers.”[3] Etzioni observed that business educators feel uncomfortable discussing fundamental moral issues in their classrooms. They wonder whether they may be putting their students at a disadvantage by urging them to adopt ethical restrictions on their competitive drives. When the Harvard Business School introduced a mandatory ethics requirement in the late 1980s, “reactions ranged from disgust to outright hostility.” Etzioni noted the following scene in a faculty meeting:

A member of the marketing department mused that if the latter policy [discussing ethics in all classes] were adopted, his department would have to close because much of what it was teaching constituted a form of dissembling: selling small items in large boxes, putting hot colors on packages because they encourage people to buy impulsively, and so forth.

A finance teacher was also concerned about its effects on his teaching. Students later told me that they learned in his course how you could make a profit by breaking implicit contracts.[4]

To paraphrase an old saw, with teachers like these, the subject of business ethics needs no enemies. It is no wonder that research has found that the typical ethics course has a deleterious impact on students’ business behavior. The problem is twofold: first, these programs begin with the cynical assumption that cheating and lying are tempting because they really do help people get ahead in business; and second, the programs compartmentalize ethics into a list of cautionary do’s and don’ts that have nothing to do with the aspirations that most strongly drive businesspeople.

With such a mind-set, this approach to business ethics is at best begrudging—or worse, either intentionally or unintentionally sabotaging. Some business educators who feel forced to teach ethics go through the motions without fully believing in what they are doing. The students, of course, notice this disdain and pick up the message that ethics is a matter for show only, to be brushed off as soon as you can get away with it. The whole exercise can become an unstated conspiracy between faculty and students to get through their ethics requirements without too much boat-rocking, ultimately sinking into a sea of self-deception.

For example, the catalog description of an Ethics of Corporate Management course at the University of Michigan says: “The module is not concerned with the personal moral issues of honesty and truthfulness; it is assumed that the students at this university have already formed their own standards on these issues.”[5] Yet there is no student body in the world that does not still wrestle with issues of honesty, in their own academic work as well as in their anticipation of the work that the unknown future has in store for them. If business ethics courses choose to avoid this most basic of moral problems, one wonders how these students will get any guidance at all in how to approach their careers with a clear ethical compass.

The often narrow and negative approach to ethics that is prevalent in business-school programs can carry over into the corporate world. For one thing, students bring with them to their jobs the cynical orientation that they have learned at school. Corporations sponsor ethical training programs that are taught in the same manner that shaped students’ attitudes back in business school. Thus many businesspeople receive a “re-inoculation” of the maladaptive worldview that distorted their orientation to ethics in the first place.

This maladaptive worldview contrasts sharply with the tack that I have taken in this book, because it takes people in directions that end up being self-defeating and harmful to the public interest (including the interests of the corporation). Throughout this book, in a variety of ways, I make the case that a moral perspective provides a decisive advantage rather than a handicap in business. I do not claim that this makes it impossible to fail if you are moral, or the obverse, that those who succeed materially are always moral: of course, it is possible to get rich through disreputable actions— people do it all the time. But in the long run, over the course of an entire career, commitment to a moral purpose and to honorable conduct will yield many rewards—materially, personally, and spiritually.

Strong morality, including honorable conduct, is immensely practical. It enables the moral imagination, a fertile source of creativity; it gives people the staying power to explore a risky avenue of promise; it makes it possible to build the trusting human relations needed for productive business transactions; and, as I show in this chapter, it helps people adopt the ethical course of conduct required for any enduring career without feeling constantly tempted to veer into murkier waters. Unfortunately, it is this view of morality as a valuable, practical instrument of success that has too often been missing from standard approaches to business ethics.[6]

The mistake that too many well-intentioned people in business make is thinking of ethics as an external demand, an unwelcome code that they must abide by for the sake of prudence. This reduces ethics to a set of bloodless restrictions. Naturally anyone with this view will always be seeking ways to get around such restrictions. The philosopher and theologian Michael Novak has pointed out that this paralyzing view of ethics has its roots in the Kantian tradition of defining morality as a duty, a string of “thou shalts” and “thou shalt nots.”[7] In contrast, writes Novak, the older Aristotelian tradition viewed ethics as an act of goodness, similar in some ways to a fine athletic performance. Aristotle’s metaphor for a good act was an archer hitting his mark. This far more positive perspective sets ethics in the context of the person’s natural desires to act in accord with an inspiring ideal. As a rule, people want to act right, just as people want to hit their marks in sports, in work, or in any other arena of life. And, as in any other facet of life, ethical “success” requires focus, perseverance, discipline, and commitment.

How do you develop such a commitment? To acquire an abiding commitment to ethical behavior, you must come to understand ethics as part of your total life mission. You cannot compartmentalize: the old “Church on Sunday, work on Monday” chestnut will not do. You must connect the demands of ethics with two things: the purpose that you are trying to accomplish in your work, and the kind of person that you wish to be. When you make that connection in your mind and in your heart, you will treasure, rather than resist, ethical demands, because you will understand that they are means to the ends that you most desire. Most prominent among these ends is becoming as much like your ideal self as you possibly can.

Drawing a connection between ethical behavior and the ideal self is yet another act of moral imagination. Novak writes: “To reflect on ethics, in Aristotle’s view, is to try to imagine what sort of person one wishes to be by the end of one’s life.”[8] Observing people whom you admire for character and integrity can facilitate this reflective process of self-definition. In this way, ethics becomes a key part of your dynamic quest to accomplish your most basic personal aspirations. This is a compelling, flesh-and-blood way to think about ethics, infinitely more motivating than the duty-bound notion of prudential prescriptions.

[1 ]M. Novak, Business as a Calling: Work and the Examined Life, New York: Free Press, 1996.

[2]Aspen Institute study, circa 2000.

[3]A. Etzioni, “When It Comes to Ethics, B-Schools Get an F,” Washington Post, August 4, 2002.



[6]One exception to this is Michael Novak’s fine book Business as a Calling, cited above. My comments on ethics in this chapter draw on Novak’s learned philosophy. To my knowledge, his book has received far too little attention on the business education circuit.


[8]Ibid., p. 107.