Corporate Social Responsibility

Topics: Ethics, Business ethics, Morality Pages: 26 (10147 words) Published: January 23, 2000
CORPORATE SOCIAL RESPONSIBILITY By Lori S. Mohr-Corrigan, For The Paper Store - © October 1999 VISIT www.paperwriters.com/aftersale.htm -- for more information on using this paper properly! Because society is fundamentally based upon performance and profit, it is not unusual to find that it is necessary to impart a sense of corporate social responsibility with regard to contemporary commerce. The ethical approaches of purpose, principle and consequence are integral components of business social performance; itemizing these contributions finds one incorporating the interests of ethics and morality within the corporate structure, essential concepts that are often absent from a managerial standpoint. Chapters two and three of Beauchamp and Bowie's Ethical Theory And Business address the very issues of corporate social responsibility that should rightly exist within every company's infrastructure; however, the authors' enlightening contentions enable the reader to realize that social integrity is not something that is often at the forefront of modern day business dealings. Ethics, business and society must work in tandem or there is no purpose for any of its existence. Unethical practices are what harbor ill will and create a climate of contempt and distrust, which is no way to run a business, be it personal or otherwise. "…It is a necessary and critical ingredient in the successful enterprise" (Ruin, 1997, p. PG). Beauchamp et al (1996) clearly imply that establishing such ethical fortitude is not a difficult objective if one maintains a moral and conscientious outlook. Ethical concerns run rampant among various entities, posing questions along the way as to whether a particular practice is deemed morally acceptable. "Ethics sometimes get in the way of resolving questions like: What is the ethical concern? Am I being true to myself? Why is this bothering me? Is it my problem? What do others think? Who else matters?" (Ruin, 1997, p. PG). According to the book's article on this matter, establishing proper ethical guidelines -- and therefore appropriate corporate social responsibility -- must come from a management perspective, which is the primary location where policy is derived. Utilizing the insightful perspectives of Beauchamp et al (1996), which include purpose, principle and consequence, there exist myriad ethical considerations in the daily world of business, with each one presenting yet another moral dilemma: Should the decision be made for company or personal gain? How many will reap the benefit of individualized attention at the expense of all others? Is there a time when an individual's interests supercede those of the masses? These are ethical questions posed each and everyday throughout the global business and social worlds; whether or not the right answers are acted upon is another matter entirely. "Ethical problems of personal and public decision making are not new. The need to undertake ethical reflection is part--indeed a central part--of what it means to be human" (Mitcham, 1996, p. 314). Ethical decision-making goes hand in hand with sound business judgment, yet this is not a concept always followed. The very purpose behind ethical behavior has some people stumped as to its true intention; while some believe it instills the foundation of good business, others contend that it brings out nothing more than "an absolutist, rigid set of constraints that violate one's sense of independent judgment" (Ruin, 1997, p. PG). In truth, ethics represent moral perspective, which, while having a universal theme, is still quite interpretational. In spite of the fact that each person reserves his or her own value determination with respect to ethical behavior -- which stands for "the character and values that determine the identity and goodness of an individual or group" (Ruin, 1997, p. PG) -- there still remains a significant void between what some consider to be morally acceptable and what others believe to be otherwise. "We...

Bibliography: Beauchamp, T., & Bowie, N. E. (1996). Ethical Theory And Business. (Englewood Cliffs, NJ: Prentice Hall). Lustig, B. Andrew (1992, October). The method of 'principlism ': a critique of the critique. The Journal of Medicine and Philosophy, vol. 17, pp. 487(14). Mitcham, Carl (1996, March). Technology and ethics: From expertise to public participation. The World & I, vol. 11, pp. 314. Ruin, Joseph Eby (1997, December). Importance of business ethics. New Straits Times, pp. PG. *PG denotes page number taken from an online electronic source. The Journal of Medicine and Philosophy, Oct 1992 v17 n5 p487(14) The method of 'principlism ': a critique of the critique. (Principles and Patients) B. Andrew Lustig. Author 's Abstract: COPYRIGHT Kluwer Academic Publishers 1992 Several scholars have recently criticized the dominant emphasis upon mid-level principles in bioethics best exemplified by Beauchamp and Childress 's Principles of Biomedical Ethics. In Part I of this essay, I assess the fairness and cogency of three broad criticisms raised against 'principlism ' as an approach: (1) that principlism, as an exercise in applied ethics, is insufficiently attentive to the dialectical relations between ethical theory and moral practice; (2) that principlism fails to offer a systematic account of the principles of non-maleficence, beneficence, respect for autonomy, and justice; and (3) that principlism, as a version of moral pluralism, is fatally flawed by its theoretical agnosticism. While acknowledging that Beauchamp and Childress 's reliance upon Ross 's version of intuitionism is problematic, I conclude that the critics of principlism have failed to make a compelling case against its theoretical or practical adequacy as an ethical approach. In Part II, I assess the moral theory developed by Bernard Gert in Morality: A New Justification of the Moral Rules, because Gert has recommended his approach as a systematic alternative to principlism. I judge Gert 's theory to be seriously incomplete and, in contrast to principlism, unable to generate coherent conclusions about cases of active euthanasia and paternalism. ***************** The Journal of Medicine and Philosophy, Oct 1992 v17 n5 p487(14) The method of 'principlism ': a critique of the critique. (Principles and Patients) B. Andrew Lustig. Author 's Abstract: COPYRIGHT Kluwer Academic Publishers 1992 Several scholars have recently criticized the dominant emphasis upon mid-level principles in bioethics best exemplified by Beauchamp and Childress 's Principles of Biomedical Ethics. In Part I of this essay, I assess the fairness and cogency of three broad criticisms raised against 'principlism ' as an approach: (1) that principlism, as an exercise in applied ethics, is insufficiently attentive to the dialectical relations between ethical theory and moral practice; (2) that principlism fails to offer a systematic account of the principles of non-maleficence, beneficence, respect for autonomy, and justice; and (3) that principlism, as a version of moral pluralism, is fatally flawed by its theoretical agnosticism. While acknowledging that Beauchamp and Childress 's reliance upon Ross 's version of intuitionism is problematic, I conclude that the critics of principlism have failed to make a compelling case against its theoretical or practical adequacy as an ethical approach. In Part II, I assess the moral theory developed by Bernard Gert in Morality: A New Justification of the Moral Rules, because Gert has recommended his approach as a systematic alternative to principlism. I judge Gert 's theory to be seriously incomplete and, in contrast to principlism, unable to generate coherent conclusions about cases of active euthanasia and paternalism. ************* Technology and ethics: From Expertise to Public Participation ( The World & I ) Carl Mitcham; 03-01-1996 Technologies appear in society accompanied by assumptions about their inherent beneficence. But shortly after their appearance questions often arise, stimulated by unintended consequences or unclear implications for established moral values. Consider, for example, the following three instances of technosocial problems. Each involves issues that cannot be resolved simply on the basis of scientific or technical reasoning, but call for reflection on and reference to moral principles and practice: * There are not enough organ donations for everyone who needs a liver transplant. How should a physician (or a patient) decide who gets a new liver and who does not--and dies as a result? Should it always be the Mickey Mantles of the world who get priority treatment? * Nuclear waste is accumulating at temporary storage facilities all across the United States. But every proposal for the construction of a permanent storage facility is challenged by some interest group (such as environmentalists) as reflecting the biases of another interest group (such as the nuclear power industry). How are such conflicts to be resolved? * The Fourth Amendment to the U.S. Constitution guarantees a "right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures." What is the meaning of this right in a world where papers and effects, not to mention persons and places, are increasingly transformed into digitalized information in cyberspace? Ethical problems of personal and public decision making are not new. The need to undertake ethical reflection is part--indeed a central part--of what it means to be human. But as these three cases indicate, ethical decision making is increasingly engaged with advances in modern technology. Even if technology does not create radically new ethical problems, as some philosophers have argued, it surely constitutes a new and important domain for old-fashioned moral struggles to resist temptation and to do the good. The importance of such struggles can scarcely be overemphasized, since technological change not only sets up hard problems for ethical reflection, but ethical decisions also influence how we use and live with our technologies. The problems of ethical technodecision making are compounded by the emergence of two cultures of expertise. One is that of the technical experts who create and manage our medical, energy, and information technologies. Another is that of those on ethics committees at hospitals, in regulatory agencies, and with professional organizations who articulate and reflect on the issues involved in these various areas of technoethical concern. Indeed, the last two decades have witnessed the development of a number of specialized fields of reflection on ethics and technology. Among these are biomedical ethics, environmental ethics, and computer ethics. In each case, however, discussions have remained largely restricted to professionals in these different fields of applied ethics. What scientist and novelist C.P. Snow in 1959 called the "two cultures" gap between literary and scientific intellectuals--which is related to what earlier in the century sociologist William Fielding Ogburn had identified as the "cultural lag" between science and society-- is further reflected today in a hiatus between technical experts and applied ethicists. Although one aim of the academic study of ethics and technology has been to bridge this two-cultures divide, applied ethics expertise sometimes creates a new version of the very difference it would overcome. The real promise of applied ethics will be realized only when such reflection both transforms technical decision making and enters the public realm. Science and technology have major influences on our lives today, so much so that they often seem to dominate. How many times have we heard about a need to invest in the most advanced science, and to adopt the most efficient technology, in order to be economically competitive- -even though economic competitiveness is not the highest value? Haven ' t we all experienced difficulties controlling the use of our technologies- -from limiting the TV our kids watch to not letting the hurried pace of high-tech transportation and communication engulf our lives? Although an ethical analysis of technodecision making has begun to emerge among specialized experts, it must be expanded to include all citizens in a high-science, high-technology society. Experts alone, whether scientists and engineers or philosophers, cannot solve our problems for us. Efforts must be made to open and involve the emerging specialized fields of techno-ethical analysis with a wider public. One reasonable way to begin is with a review of some recent developments in biomedical, environmental, and computer ethics- -relating them to real-world problems facing society. FROM MEDICAL TO BIOMEDICAL ETHICS >From its earliest history, medicine was associated with the acceptance of special moral obligations by those who attempted to assist nature in promoting health and overcoming illness. Because physicians brought specialized knowledge or expertise to bear on vulnerable patients, the Hippocratic tradition of medical ethics emphasized their responsibilities not just to avoid harm and to do good but also not to disclose confidences or to take sexual advantage. At the same time there was always an implicit responsibility on the part of patients to trust in or to do as their physicians recommended. The expert knowledge or skill of the physician and the ignorance or need of a patient was mediated by the ethics of medical authority on the one side and by traditional patient docility on the other. In the last hundred years, and especially since the 1960s, infusions of the advancing knowledge and power of biology and the life sciences have transformed medicine and increasingly called into question the adequacy of this Hippocratic tradition of medical ethics. Physicians are no longer concerned only with treatments that help patients to recover a natural state of health. Instead, expanding abilities to preserve physical life disconnected from psychological and spiritual experience, and to alter human experience by artificial instrumentations, raise fundamental questions about the end of medicine. Is it a proper aim of medicine to preserve the "life" of comatose patients who, prior to the development of artificial respirators, would experience a natural death? Is the only way to escape pain the technically assisted suicide of a Dr. Kevorkian? Should medical science and technology aspire to so chemically alter our immune systems as to make us receptive to organic, artificial, or transspecies organ implantations? And on what basis are scarce medical resources such as donated organs to be allocated- -especially when such decisions effectively determine who will live and who will die? The Karen Quinlan case of 1975 was among the first to bring such issues to public attention. In a persistent vegetative state after an accident, Karen was kept "alive" by means of an artificial respirator and naso- gastric feeding tube, in opposition to her parents ' request (based on counsel from their Catholic priest) that she be allowed to die. The parents were forced to go to court to secure a right to have the artificial respirator disconnected--that is, a right to refuse medical treatment--in the face of physician expertise and professional practice. The New Jersey Supreme Court decided that not just physicians, but also patients and their guardians, should participate in informed decision making about medical care--something that had not previously been included in the medical ethics tradition. Professional ethics and patient docility had combined with powerful new medical technologies to dehumanize treatment in ways that could be redressed only by limiting physician autonomy and encouraging informed decision making by patients. Although ethics specialists have argued over patient-rights for two decades, the situation has not changed materially, as evidenced by a Journal of the American Medical Association report in November 1995 on a four-year effort "to improve end-of-life decision making and reduce the frequency of a mechanically supported, painful, and prolonged process of dying."(1) Over and over again, in almost ten thousand cases, patients failed to be actively involved in decision making about their terminal care, resulting in an extended period of pain and prolonged high-tech death. For the physicians who did the study, it "casts a pall" over claims that the experts can reform themselves. Reflection on such cases in technoscientific medicine have transformed medical ethics into what is now called bioethics or biomedical ethics. With biomedical ethics there is an attempt to draw upon and educate physicians about the broader principles of ethics beyond those traditionally found in medical ethics and to adapt and apply these principles to the unique situations created by high-tech medicine. One general issue in biomedical ethics, for instance, is the problem of dehumanizing patient care. Hospitals no longer promote contact with the curative powers of nature (as was the case, for instance, with traditional sanatoriums). Patients are diagnosed by means of techniques that increasingly diminish direct physician-patient contact--from the thermometer and stethoscope to X-ray machines, electromagnetic resonance tomography, and expert computer diagnostic systems. Then they are treated with injection, drug, radiation, and surgical therapies as abstract and impersonal in their own way as electricity or statistics, on both of which they are fundamentally dependent. But issues go beyond the treatment of individual patients, especially when public expenditures are involved. How much public investment should be made in medical research--as opposed to preventive public- health measures? What kinds of medical research should be funded? Public debates about the relative governmental support for AIDS versus breast cancer research, for instance, have pointed out that although many fewer people die from AIDS than breast cancer, it is AIDS that has until recently been accorded a much higher funding priority. Is the problem one of unfair lobbying by a homosexual minority--or a failure of women to speak out on issues that affect them? Indeed, recent disclosures about tamoxifen trials that, in the name of breast cancer research, subjected thousands of women to greater risk than breast cancer itself led Dr. Charles Weijer, a fellow in research ethics at the Medical Research Council of Canada, to argue for a much wider, democratic involvement of potential victims in cancer research. "To negotiate the many agonizing choices ahead--treatment or prevention? aggressive treatment or minimal treatment? quantity of life or quality of life?--investigators need the input of the entire community affected by cancer."(2) Physicians should not be left on their own to make such decisions, and patients should not simply accept physician recommendations. The case of the liver transplant for Mickey Mantle highlights another aspect of this public-policy debate. Transplantable organs are in short supply. Mantle needed a liver transplant because of his years of drinking, and he was able to get it quickly because he was rich and famous. According to Dr. Arthur Caplan, director of the Center for Bioethics at the University of Pennsylvania, "Spending $300,000 for a liver transplant for somebody who brought harm upon himself is not a prudent use of scarce money and scarce livers." Nevertheless, this issue cannot be left to individual physicians or individual patients to decide. In Caplan 's words, "If society wants to pass laws saying no transplants for alcoholics, no transplants for felons or for smokers or for people who drive too fast, then it should." But society "should not dump the issue of what to do about sin on those who work at the bedside; they 're not equipped to make judgements and it violates their professional ethics."(3) Clearly it is not just physicians who should pass such laws; it is the general public that should legislate, since it is the public that will be affected. Yet a democratic public must itself become informed by the reflective contribution of biomedical ethics if it is to avoid unintelligent or morally pernicious regulations. THE ENVIRONMENTAL EXPANSION OF ETHICS The rise of the environmental movement and the development of environmental ethics constitutes an even more general attempt to extend traditional ethics in the face of another challenge of technology--that is, environmental pollution by industrial technology. The Ten Commandments, for instance, contain two kinds of prescriptions: those concerned with human relations to God and those focused on relations between human beings. In neither tablet of the Decalogue are there guidelines on how humans should treat the natural environment. Originally no such guidelines were necessary, for two basic reasons. First, among premodern peoples respect for nature was a given. The very goal of life was commonly understood as a harmony with the natural world and its orders. Second, from hunter-gatherer tribes through the agricultural revolution to medieval societies human technological power was mostly so limited that only in exceptional circumstances did it have a major impact on nature. But with the rise of modern technoscientific, civilization not only does a kind of disdain for nature make a major appearance in culture, but human technological power also acquires the capacity to exercise major impacts on the natural environment at both the local and even the global level. Prior to the modern period, nature served as a fundamental touchstone for ethics. From Aristotle through Cicero to Thomas Aquinas, natural- law ethics presented the ultimate human good as harmony with the whole, of which the human is no more than a part. Similar ideas of a natural or transhuman order as the ultimate ground of all good can be found in Chinese theories of the Tao and in both Hindu and Buddhist teachings about the dharma. Modern ethical theory, by contrast, replaced natural by human value as the founding principle of moral reflection. For Immanuel Kant, the categorical imperative to act so that others are never treated as a means applies only to human beings. For John Stuart Mill, the utilitarian principle to maximize happiness aims to maximize only human happiness. However, as Roderick Nash has argued in The Rights of Nature (1989), a fundamental movement within modern ethics--from the Magna Carta of 1215 to the Endangered Species Act of 1973--has been to enlarge the realm of the morally considerable. And although for the first five hundred years of this movement the expansion remained within the strictly human realm--from kings to nobles, to white male property owners, to former slaves, and to women--the last century has witnessed provisional extensions beyond the anthropological. Modern biology, for instance, affirms strong interrelationships between humans and the natural world. And although nihilists might interpret this to mean that humans should be treated no differently from animals, environmental ethicists have more persuasively argued for the moral treatment of animals, plants, mountains, ecosystems, and the planet. The "World Charter for Nature," adopted by the United Nations in 1982 (a third of a century after adoption of its Universal Declaration of Human Rights) codifies this transformation. There are, however, two basic approaches to the ethical defense of nature: the anthropocentric and the biocentric. The founding book of the contemporary environmental movement, Rachel Carson 's Silent Spring (1962), was fundamentally ambiguous in this respect. When calling attention to the unwitting destruction of the environment by DDT and related petrochemicals, Carson as humanist pointed up the harmful effects these could have on people, and as naturalist she described the harm they impose on nature. The anthropocentric approach argues that moral analysis must be expanded to include nature because of the value nature has for human beings. Nature must be respected primarily as a means to human ends. This approach is fully compatible with the Kantian imperative and utilitarian calculations. Indeed, it is usually justified because of them. In the absence of any vision of another way, the only solution to the problems of modern technology is thought to be simply more, and more modern, technology. By contrast, the biocentric approach--which comes in many versions, from animal liberation to deep ecology--argues that nature, independent of any human utility function, has value and requires moral consideration. Human beings have a moral obligation to recognize that they are part of a larger reality and that, at least on occasion, they ought to sacrifice their individual or short-term collective interests to those of the whole. Often based on a new perception of nature as ecology, this in effect points toward a reformulation or recovery of premodern natural law theory. Such differences in fundamental theory are manifest in a host of environmental debates, from those about how to clean up the Exxon Valdez oil spill to the extent of economic sacrifice that should be made to preserve various endangered species. Anthropocentric environmental ethics tends to affirm an ultimate human primacy while respecting nature for its human benefits broadly construed. Whether nature can be truly respected on such strictly instrumental grounds is, however, open to question. Biocentric environmental ethics, by contrast, tends to grant an ultimate primacy to nonhuman nature and to argue for the sacrifice of human economic good in order, for instance, to preserve biodiversity. Yet recent discoveries in the fossil record of at least five major nonanthropogenic destructions of biodiversity pose a challenge to the biocentric claim that contemporary human practices constitute an unprecedented threat to nature. Consider, too, the current debate about nuclear waste disposal. Once again anthropocentric environmentalists tend to think in terms of trade-offs between environmental preservation and economic costs, whereas biocentric environmentalists present opposition to nuclear waste as a kind of categorical imperative. But since all economic costs will ultimately be borne by society, and even categorical imperatives must be acknowledged by social consensus, a case can be made that here, too, the issue must not be left in the hands of either an ethicist elite or the environmental activists. Just as the technical community cannot by itself make the final decision about the disposal of nuclear waste without appeal to some moral justification, so must any moral justification finally reflect the development of a technically and ethically informed public consensus. COMPUTER ETHICS FOR PROFESSIONALS AND PUBLIC Just as much as environmental ethics, computer ethics constitutes a new dimension of ethical reflection. When electronic computers came on the scene in the 1950s, they did so with a burst of enthusiasm for their ability to do massive number crunching and to perform intensive data-management operations. Only at the margins of these technical advances did questions surface about human-computer relationships. Yet while the 1950s and '60s witnessed some discussion of the social challenges of automation and computer depersonalization, the much more intense intellectual debate concerned whether computers could think. For a hundred years Darwinian evolutionary theory had stimulated debate about whether humans had evolved from apes, and how closely we might still resemble the higher simians. Now a basic question of philosophical anthropology became: To what extent does "artificial intelligence, " or AI, which has evolved from humans, resemble its makers. Although the AI debate had obvious practical ethical implications, it was discussed almost solely as a theoretical or metaphysical and epistemological issue. One of the first people to place ethical issues in the forefront of reflection on AI was Joseph Weizenbaum, a computer scientist at MIT. In the mid-1970s Weizenbaum discovered that one of his exercises in the computer mimicry of certain conversational strategies had been used to create a program called DOCTOR, which was being taken seriously as a tool for psychotherapy. "I was startled," wrote Weizenbaum, " to see how quickly and how very deeply people conversing with DOCTOR became emotionally involved with the computer and how unequivocally they anthropomorphized it."(4) According to Weizenbaum, this was just one area in which people were turning "the processing of information on which decisions must be based over to enormously complex computer systems" that limit the kinds of questions and "data" that can be utilized. Moreover, because of their complexity--anything more than two thousand lines of computer code cannot be fully debugged in advance of its use--such systems are not able to be completely understood by those who rely on them. As a result, any such "computing system has effectively closed many doors that were open before it was installed." (5) Computers, like other fundamental technologies, offer certain opportunities while blocking others, thus altering the course of history in a manner not unlike the way political change can open a new path in social development at the same time it closes off many alternatives. The difference is that while brute force is admitted to play a major role in the political realm, so that politics is regularly subjected to criticism in order to identify its irrationalities, changes brought about by science and technology are ostensibly the products of reason. Therefore, they are much less commonly questioned concerning the consequences. Indeed, the shift from theoretical to ethical and political discussions about computers did not take hold until large-scale, relatively isolated mainframe machines were augmented by small-scale, much more widely available personal computers. Time magazine, reflecting public recognition of the importance of this augmentation, designated the personal computer "Machine of the Year" in January 1983. And during the remainder of the 1980s computer ethics became a theme for discussion and education, especially among professions within the computer community--a discussion that has become ever more pronounced with the expansion of computer communications on the Internet. Here one of the central issues has been that of corporate security and its flip side, personal privacy. Although extensive bureaucratic record keeping is no new activity, computerized information is vulnerable to electronic invasion and manipulation by hackers and program viruses in ways that hard-copy records never were. Additionally, much more information is being collected than ever before, and in forms that allow the linking of medical, financial, and legal records to create integrated profiles of use to commercial as well as law-enforcement interests. To what extent such virtual "papers and effects" should be protected from criminal trespass as well as against "unreasonable searches and seizures" by the government, and how such protection might best be institutionalized, is an issue subject to considerable debate within the technical community and its ethics experts. Reflecting public concern especially about threats to privacy, computer professionals have formulated codes of conduct to limit opportunities for unwarranted appropriation by individuals, corporations, or the government. The code of ethics of the Association for Computing Machinery (ACM), the largest computer-professional organization, prescribes that "an ACM member, whenever dealing with data concerning individuals, shall always consider the principle of the individual 's privacy and seek the following: " "To minimize the data collected. To limit authorized access to the data. To provide proper security for the data. To determine the required retention period of the data. To ensure proper disposal of the data. " Such professional efforts to take into account ethical concerns about the right to privacy clearly constitute efforts not only to reevaluate the application of established ethical values but also to work toward a broader consensus about the role of computers in society. Advocacy efforts of the Electronic Frontier Foundation (EFF), a nonprofit organization cofounded by Lotus 1-2-3 developer Mitchell Kapor and Wyoming libertarian Republican John Perry Barlow, also deserve mention in this regard. For EFF, efforts to protect privacy must be complemented by openness in technical-design principles and a public-policy defense of electronic civil liberties. The public-policy aspect of such a position depends to some extent on the technical possibilities--and even more on ethical understandings of those possibilities. It would nevertheless be contrary to democratic principles for the technical community alone to attempt to implement these commitments independent of public involvement and respect for concerns about the electronic availability of pornography and other morally questionable forms of information. But even when the creation of personal data is limited and protected, and civil liberties are properly protected in cyberspace, such enormous quantities of information are being produced by digital means as to constitute what has been called a problem of "information overload." Added daily to the staggering amounts of scientific data being electronically produced and collected by satellites; atmospheric, geological, and oceanographic monitors; telescopes; and laboratories throughout the world are digitalized versions of documents, texts, audio recordings, videos, maps, photographs, paintings, and so forth, all of which are gushing onto the Internet. As one commentator recently noted, the Internet resembles "an enormous used book store with volumes stacked on shelves and tables and overflowing onto the floor, and a continuous stream of new books being added helter-skelter to the piles."(6) Efforts to manage this information explosion have led to the creation of computer programs to scan and sort such material. "Smart instruments" that analyze data even as it is being created are complemented by "search engines," "knowbots" (i.e., knowledge robots), and "intelligent agents"; and these virtual users are becoming the scouts of the information frontier. Right behind such electronic scouts, however, the new information frontier is being peopled with virtual settlers. When such virtual settlers use the Internet as a combination postal system and asychronous telephone network, it creates what author and editor Howard Rheingold in 1993 called "the virtual community." But what kind of community is it when people use cyberspace to log on as electronic fictions, projections of themselves in interactive multiuser domains, or MUDs? In these cybernetic stages for role play and reversal, men represent themselves as women and women men; the shy come on as aggressive; the unattractive describe themselves as beautiful. What is the ethics of the masquerade ball, when the party can continue indefinitely? Does such utilization of cyberspace constitute a new learning process, or is it an escape from reality? Surely these, too, are questions to be adjudicated off line as well as on, by the public as well as the cyber-citizen. >From mainframe through personal computer to Internet, the electronic computer has transformed information and human communication in unanticipated ways that are giving birth to what has been variously termed cyberspace, virtual reality, or hyperreality. To live in this new milieu, however, requires not virtual but real ethics, grounded in practical and public reflection on the new technolife world. BEYOND SPECIALIZED DOMAINS It is not necessary to argue that the ethical problems of technology are unique to admit they are crucial. Because even if they are not sui generis, modern technologies--whether medical, those that affect the environment, or computers--multiply, extend, and intensify the consequences of human action. By enlarging technological power to the point where it can destroy whole cities and by shrinking engineering design to levels of genetic and atomic structures, modern technology extends the spatial sweep and temporal reach of the human making and using of artifacts in ways that transmute the traditional meaning of such activities. No longer is technology simply used by human beings who remain outside it; today technology encompasses and carries humanity into new realms of experience. But it does not carry them beyond the realm of ethics. We do not live in order to make and use technologies; we make and use technologies in order to live--that is, to live one way rather than another. Given our medical, industrial, and computer technologies, we can seek to assess their benefits and risks and to submit them to the principles of justice, or leave them in the hands of amoral market forces. We can allow ourselves to become consumers governed by no more than material needs or income and the attraction of entertainment, or we can struggle to lead disciplined lives in the face of numerous technological temptations. We can reject nature and the traditional virtues as any guide to what is proper in human behavior, or we can seek to recover the nature that remains amid our enhanced artificiality. There is a sense, however, in which we cannot avoid being ethical in the ways we decide to use our technologies. To claim that we are turning over decisions about what technologies to have and how to use them to Adam Smith 's "invisible guiding hand" is itself to make an ethical decision. No matter how we design and use our medical technologies, no matter how we decide to treat the environment, no matter what we decide to do with our computers, it will have an ethical, not just a technical, impact on our lives. Although many technical professionals and some professional ethicists have recognized this truth, it is a truth that requires the kind of wider appreciation that would support public participation in the discussions to which more specialized reflection has given rise. Decisions about how to practice medicine, protect the environment, and construct the information superhighway can be made in one of three ways: 1.We can assume that the problems are so complex that they must be left to the experts, that is, to scientists, engineers, and their ethics counselors. 2.We can insist that these problems must be handled by the public, even though the public often lacks adequate technical knowledge or sufficient reflection on the ethical issues involved, because this is what our established values require. 3.We can strive to create an informed public that works with technical professionals and their ethics counselors to reach an informed consensus. The first option is intelligent but undemocratic. The second is democratic but unintelligent. What we must do is strive for the third way, an intelligent democracy that integrates cultures of expertise into a self-reflective public. Only this can set the stage for realizing the full promise of the applied ethics of technology. Carl Mitcham is professor of philosophy and director of the Science, Technology, and Society Program at Penn State University. His most recent book is Thinking Through Technology: The Path between Engineering and Philosophy (University of Chicago Press, 1994). In spring 1996 he is serving as the Hennebach Visiting Professor of Humanities at the Colorado School of Mines. Footnotes: 1."A Controlled Trial to Improve Care for Seriously Ill Hospital Patients, " Journal of the American Medical Association 274:20 (22--29 Nov. 1995): 1,591--98. 2.Charles Weijer, "Our Bodies, Our Science," The Sciences 35:3 (May- -June 1995): 42. 3.Caplan is quoted from Gina Kolata, "Transplants, Morality and Mickey, " New York Times, 11 June 1995, E5. 4.Joseph Weizenbaum, Computer Power and Human Reason (San Francisco: Freeman, 1976), 6. 5.Weizenbaum, Computer Power, 38. 6.Robert Pool, "Turning an Info-Glut into a Library," Science 266:5182 (7 Oct. 1994): 20. Copyright © 1996 News World Communications, Inc. Carl Mitcham, Technology and ethics: From Expertise to Public Participation. Vol. 11, The World & I, 03-01-1996, pp 314. ************ An agent morality view of business policy. ( Academy of Management Review ) Quinn, Dennis P.; Jones, Thomas M.; 01-01-1995 Two normative views are common in the business policy and management literature about what principles ought to guide management decision making. Proponents of the first view hold that, because executive- level managers are agents for shareholders, maximizing the present value of the firm is the appropriate motivating principle for management. Proponents of the second view (e.g., normative stakeholder theory) hold that principled moral reasoning ought to motivate management decisions. These views were once regarded as antagonistic in that the policies each view recommended to managers frequently diverged: shareholder interest and ethics often led to opposing policies. In the current "ethicized" U.S. consumer market, however, no such policy divergence need occur. (See Business Roundtable, 1992; Sethi, 1981.) Indeed, the supporters of the wealth maximization view now usually amend their advice to take overtly into account legal, ethical, and social concerns. Scholars and business journalists now urge managers to employ ethics as a management tool when "strategic ethics" increases the present value of the firm.(1) More generally, managers are being told that "good ethics" is "good business" and is, therefore, in the best interest of the firm and its shareholders (see, e.g., Blanchard & Peale, 1988; Kotter & Heskett, 1992). We call this first view of ethics and business policy instrumental ethics. Its advocates employ the language of ethics to serve the goal of firm value maximization. Instrumentally ethical managers might do what is morally proper, but they do so to increase shareholder wealth. The second view of the firm is necessarily agnostic about whether good ethics is good business. The "principled moral reasoning" view of business policy assumes morality is intrinsically, not instrumentally, good. That is, morality is an end in itself and cannot be justified with reference to the gain of a firm or its shareholders alone. Wealth considerations are not precluded from the analysis, but they cannot trump moral principle when wealth and principle conflict. We call this view noninstrumental ethics. We argue that both normative business policy models are problematic in current U.S. business settings, though for different reasons. Instrumental ethics is logically problematic; in consequence, instrumental ethics is not, and cannot be made, morally binding on managers. It is also difficult to carry out organizationally. The noninstrumental morality approach to business policy produces policy recommendations that are morally binding on managers. The broad and open-ended duties generated by principled moral reasoning, however, appear vague and poorly focused compared with the sharp image of the manager as the wealth-maximizing agent of shareholders. Noninstrumental ethics, therefore, has been less persuasive to managers than the rigor of the analyses warrants. We offer an agent morality view of business policy, a view that extends the logic of managerial agency. We show that the moral logic of market competition and the principal-agent model of the firm require managers to recognize at least four moral principles as a higher priority than firm profits. These principles are elements of ordinary morality, but we argue that they have special force in economic and principal- agent relationships. Managers as agents are especially bound by them: therefore, the term agent morality. Although we ground our arguments in an analysis of the moral foundations of economics and business, the principles that we show to be binding on managers are already commonly understood and agreed to by many U.S. citizens. This view might therefore prove to be persuasive in the U.S. business context. SHOULD MANAGERS MAXIMIZE SHAREHOLDER WEALTH? The Principal-Agent Model of the Firm Business academicians and writers in the business press routinely advise senior managers of publicly owned U.S. corporations to follow a principle that ought to guide management actions: carry out only those policies that increase the net present value (NPV) of the firm (see, e.g., Drucker, 1984; Jensen, 1991). These advisors assume that managers of firms are agents of shareholders, who create firms (or invest in them) so as to increase their wealth relative to that provided by other available investment opportunities: Why otherwise would shareholders bother to invest money in firms? Creation or investment for the end of wealth implies that owners expect those who are hired to run firms will work toward achieving the end - almost always wealth - for which firms are established. From the expectation of owners of firms comes the obligation of employees and senior managers. (See Arnold, 1987, for a functionalist desert theory of profits.) The duty of an individual to honor his or her agreements provides a justification, therefore, for the moral obligation of a manager to his or her shareholders. This normative view of senior managers of firms as economic agents of the shareholders is commonly called the principal-agent model of the firm. It is a normative business policy model in that it offers a principle that managers should follow. The principal-agent model does not necessarily describe the principles most managers of most firms follow: This is not a positive model. Advocates of management buyouts of publicly held companies believe that managers of publicly owned companies rarely put owners ' interests above their own (e.g., G. Donaldson, 1984; Jensen, 1989). Managers, as do all humans, have many duties. Why should managers ' obligation to shareholders to increase their wealth trump other moral duties when managers establish and carry out business policies? According to the principal-agent model of the firm, the moral primacy of shareholder wealth compared with other obligations is derived from a consequentialist moral view of the world. The argument is as follows (we adapt Sen, 1985): the morally better world is one where the best consequences pertain; best consequences comprise a condition - Pareto optimality, and Pareto optimality occurs under efficient market conditions. The analysis to this point indicates nothing about firms per se or their role. Firms are not ends in themselves but are wealth-producing agents for their owners; as noted previously, owners would make different investment or consumption decisions if this were not true (Coase, 1937). When a manager does other than optimally increase the stock price of the firm, a distortion occurs in the investment market. Under efficient markets, then, the best allocation of social resources occurs when a manager of a firm maximizes that firm 's stock price. All things being equal, the best allocation of resources is morally desirable, so the managers of firms ought to maximize the NPV of the firm. (See Drucker, 1984; Jensen, 1991, for examples of this type of argument.) The justification for NPV as the motivating goal is, therefore, for the effect that targeting NPV has in a broader system of efficient markets, not by itself. In Sen 's words, the moral defense of net present value is for its "instrumental moral relevance" (Sen, 1985: 10). Instrumental Ethics Instrumental ethics enters the picture as an addendum to the rule of wealth maximization for the manager-agent to follow. Firm profit opportunities apart from the efficient markets framework can arise from negative externalities, information asymmetries, and coordination in production problems. These problems are loosely termed market imperfections (in the first two cases) or agency problems (in the third). The profit opportunities realized from acting on negative externalities, and so forth, reduce society 's wealth. Under these circumstances, the moral defense of NPV outlined previously does not hold. Various theorists have proposed market-based mechanisms as ways of overcoming market imperfection problems. Arrow (1973) reviewed regulation, taxation, and civil liability as solutions to negative externalities and information asymmetries. Coleman (1990) and Williamson (1975) reviewed optimal contracting and other monitoring-as-policing mechanisms as solutions to a firm 's coordination problems. Most radical of all is Jensen 's (1989) argument that ending agency problems occasionally requires a management buyout of the corporation itself (cf. Demsetz & Lehn, 1985). (See Mitnick, 1980, for a review of agency theory.) The common element to these mechanisms is that they change the economic incentives facing managers so that the interests of shareholders, managers, and society are aligned. According to this view, if owners or regulators give managers proper incentives, optimizing the present value of the share price of the firm again will coincide with society ' s welfare. Another common element, however, is that these solutions are very expensive. The expenses of civil liability suits, government regulations, and so on, are well known. The costs of overcoming agency problems also are quite high (Coleman, 1990). Economists and business theorists recognize that voluntary moral restraint is another (cheaper) way of overcoming externalities and other market imperfections (Arrow, 1973; Hardin. 1968). (For a review, see Hausman & McPherson, 1993.) That is, if we all practice moral restraint regarding externalities or agency problems, welfare gains to society will follow. Society and firms will avoid the deadweight losses of both welfare- reducing activities and the mechanisms used to prevent them. Morality, its obvious advantages aside, is often rejected in this framework. Hardin (1968) and Arrow (1973) pointed out that, absent law or other control devices, moral agents will find themselves in a prisoner 's dilemma setting when profit opportunities from exploiting market imperfections or agency problems are present. If they select morality, they pay a morality tax. Moral individuals and firms will lose over time to immoral individuals and firms. In Hardin 's famous example of the cowherders and their commons, the ineluctable logic of economic competition leads each herder to contribute to the destruction of community property. This microeconomic argument against moral restraint applies most clearly to markets that are contestable (in Baumol 's language) or which lack a strong connection between social values and markets. Baumol quipped that "perfect market forms impose vice rather than virtue" (1991: 3). Studies in socioeconomics, however, show that social values and market outcomes are frequently connected (see Axelrod, 1984; Bowie, 1991; Coleman, 1990; Etzioni, 1988; Frank, 1992; Sethi, In press). These scholars have raised two pertinent points. First, cultural values bound the very structure of market competition (Granovetter, 1985). Indeed, market competition is dependent on some social values. Absent trust between and among potential market participants, how could very many market transactions take place (Hare, 1992; Hausman & McPherson, 1993)? Second, cultural values that are strongly held by market participants will inevitably be reflected in market competition (Etzioni, 1988). Using Hardin 's example, I will not add another cow to the common land if my neighbors ' disapproval translates into their refusing to purchase my milk or beef or to look after my cows when I am sick. This approval or disapproval of my neighbors is an example of what economists call a reputational good. In cases in which reputation matters for market outcomes, instead of a morality tax, we might find a "naive economist" tax. If a study of the ethical beliefs of my neighbors allows me to forecast their reaction to the additional cow, then knowing about ethical beliefs is useful to me in a market setting. More generally, as far as managers need to forecast consumers ' or regulators ' reactions to company policies, a study of ethical beliefs might be useful to agents in achieving the NPV goals of the firm. Instrumental ethics, then, might enable managers to read and understand the social values that allow market competition and to avoid unintentionally violating shared norms. Instrumental ethics also might be useful to senior managers in persuading employees and managers at other levels to avoid shirking and other forms of opportunism. In the markets in which reputation matters and industry concentration is high, a firm probably can "nurture a corporate culture that puts high value on ethical and socially responsible behavior" as a way to "insure long-term above-normal profitability for the enterprise" (Sethi, In press). In such a case, moral choice does not take place in a prisoner 's dilemma setting. Setting corporate strategies without considering the ethical judgments of consumers or regulators might threaten a firm 's profitability. Simply put, an NPV defense of ethics is now widely made in terms of an agent 's obligation to promote shareholders ' economic interests. For companies such as Johnson & Johnson, ethics is an invisible asset, which allows the company to solve coordination and other problems. Ethics is a strategic tool. Therefore, instrumental ethics and shareholder wealth are not necessarily in contradiction. As Jensen noted, "In this sense, there is no conflict between management 's service to its stockholders and to other corporate stakeholders" (1991: 21). Instrumental ethics is sometimes essential for achieving the firm 's NPV goals. Not every company, of course, is similar to Johnson & Johnson, which makes and sells consumer medical products and, therefore, is exceptionally sensitive to consumer reaction. Reputation might matter more for this firm than for almost any other U.S. firm. This situation raises the important point that, for the instrumentally ethical manager, behavior is situationally determined. In the current "ethicized" U.S. business environment, the long-term benefits of a reputation for ethical behavior usually outweigh any short-term gains from, for example, taking advantage of consumers or suppliers. Enlightened self-interest leads managers to "ethical" behavior. In those business settings, however, with either short-term time horizons (e.g., strong quarterly profit pressures) or information asymmetries (e.g., some international markets), instrumentally ethical managers might behave very differently. Here, the benefits of unethical behavior might exceed the costs, as in the contestable markets described by Baumol (1991). Instrumentally ethical managers might reasonably hope to "get away with" unethical behavior. Are there many U.S. companies, however, whose stock prices would not currently gain from at least the perception that their managers were ethical? Managers are now routinely urged to pay attention to ethics as, at least in the U.S. situation, good ethics often makes for good business. The Difficulties With Instrumental Ethics Instrumental ethics is problematic, nevertheless, for several reasons. First, if what is useful to managers about ethics is to be able to forecast how share prices are affected by the actions of consumers or regulators, managers should study socioeconomics directly. Why not avoid the long journey through philosophical ethics? Markets reflect cultural values, but these values are not only (or even usually) derived from principled moral reasoning. Consumer or regulator reactions will not necessarily reflect moral considerations. What is needed for shareholder wealth typically is the "trust" of consumers, not managerial moral rectitude itself. The two are obviously related sometimes, but other times they are not. For example, we see many allegations that Japanese corporations practice fierce discrimination against women and other minorities in the United States and Japan. U.S. consumers, however, trust that Japanese companies will produce products that are reliable and safe. Consumer trust and good company reputation might be the byproduct of sound ethical policies, but it might be more efficient for the managers of companies to aim directly at achieving trust. Managers ' ethical obligations, of course, are not exhausted once they have achieved a good public reputation. Second, the moral logic of the principal-agent model is problematic as currently conceived. The moral defense for the primacy of the obligation of shareholder wealth maximization is that increasing stock price, now joined by ethics, can produce (under constrained circumstances) the best social outcomes. The best social outcomes, of course, are what is morally desirable. This model begs one question: Why not do directly that which has the best social outcome? If that happens to be increasing the price of a common share of stock, do that; if not, do something else that has better social outcomes. The moral argument that helps managers choose among competing duties based upon the best consequences must inevitably oblige managers "to do that which is best." Discussions about stock price movements, instrumental ethics, and shareholder wealth obscure the true moral argument. Another problem with the moral logic of the principal-agent model is that the usual moral defense of the manager 's duty to maximize stock price conflates levels of analysis. Using NPV [less than] 0 as a way of making decisions is a particular form of cost/benefit analysis in which each act is evaluated in comparison to other acts in terms of financial benefits to the firm. Most forms of ethical analysis, however, offer basic moral principles as guides for action. Few, if any, consequentialist philosophers would say that the estimated financial consequences to a firm should alone be used to evaluate moral questions. Further, the appropriate relevant units of moral analyses are the welfare or rights (or both) of members of societies, which are not at all the same as wealth. A third problem with instrumental ethics is that it might not be possible to carry out because it negates reciprocity and, therefore, part of its advantage to the firm. If the senior managers of a firm employ ethics "instrumentally" or with "enlightened self-interest" or any other restrictive caveat, why will not employees at lower levels of the firm (or suppliers or customers) also employ ethics instrumentally? Can owners of firms expect ethical restraint from executive managers if the owners show interest in ethics only because ethics leads to optimum gain for owners? Can you be a "little bit ethical" without having everyone else also be only a "little bit ethical"? Can executive managers really expect to "fake" integrity if their real motivation is solely economic gain? How can instrumental ethics solve externality and agency problems if the justification for ethics is shareholder self-interest? These observations lead to a testable research proposition. Proposition 1: Ethics policies that are justified in instrumental terms are less likely to elicit support from firm employees (and other corporate constituents) than are ethics policies justified in noninstrumental terms. The compelling evidence is that instrumental ethics is hard to carry out in a corporate setting (see Jones, In press). First, ethics is hard to fake. People are adept at detecting attempts at deception (DePaulo, Zuckerman, & Rosenthal, 1980; Frank, 1988). Once people detect faking, they are likely to adopt similar behavior (Jones, In press). As employees look to executive-level managers for their moral cues (Trevino & Youngblood, 1990), the instrumental use of ethics by executive managers will lead to others using ethics instrumentally. Second, through a self-selection process, truly moral individuals, if they detect moral fakery, are more likely to leave the organization than are those for whom moral deceit is less problematic. The risk of instrumental ethics is that it might leave the corporation, in the end, worse off. In terms of an empirical proposition: Proposition 2: Ethics policies that are justified in instrumental terms are less likely to benefit the firm economically in the long term than are ethics policies justified in noninstrumental terms. A final problem with instrumental ethics follows from the analysis of Baumol (1991) and Sethi (In press). Instrumental ethics might give firms an advantage in some market circumstances, especially imperfect markets. Market circumstances, however, change frequently in this increasingly Schumpeterian world economy, as IBM, among others, has discovered. Instrumental ethics might give a firm an advantage now, but it might not later. We do not know what the consequences might be to a firm of disestablishing a culture that emphasizes ethics, but they are unlikely to be positive. Thus, instrumental ethics is hard to undertake, and the consequences of it being revealed as an opportunistic venture are severe. We doubt, however, that the ethics movement could have a
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