Jul 25, 2014

The Ethical Duties of "Corporations" by Kirk Jackson

A corporation, dealing with it as an abstract entity, has two main duties: the first, to seek a profit; the second, to obey the law. The second duty is problematic with large corporations due to various phenomena. Firstly, corporations have the ability to bypass the law when paying the fines associated with their infractions is lesser than the benefit of breaking the law. Secondly, a large corporations have an influence on the law, either through the importance to the economy by its size, or its political ties concerning key employees and shareholders directly holding important government positions or possessing the ability to affect those who do. Because corporations can break the law (or alter it, which is, in effect, the same thing) moral philosophers deem it important to draw up an ethical system to govern corporations.

Deontology is a normative ethical principle that sets out to judge one’s actions based on its adherence to a set of guidelines or rules. It is a duty based ethical system. This is strongly contrasted to consequentialist ethical principle such as utilitarianism where the outcome is the basis for judgment. Kant utilizes deontology to create his ethical system; he states that a man must act in a morally right way and from duty, and that the consequences of the actions do not make the actions right or wrong but rather the intent and motives of the man who does the action. In opposition to utilitarianism because Kant does not believe that morality should be given a purpose outside of itself. A moral act is moral regardless of the consequences.

Kant does not encourage acting in order to obtain happiness, as is one of the founding guidelines of utilitarianism. Acting upon a categorical imperative is more fundamental than acting in order to achieve happiness. However, Kant also said, “A man even has an indirect duty to seek happiness. The more he is troubled by the burdens of anxiety and need, the more he may be tempted to fail in his duty. Even apart from duty, everyone has the most fundamental urge to be happy, since the idea of happiness more or less sums up in our minds the satisfaction of all our desires, cares, and needs.”

Kantian Deontology which is often summarized with the following statement by Kant: “Act in such a way that you treat humanity, whether in your own person or in the person of any other, never merely as a means to an end, but always at the same time as an end”. Kant did not intend to say that one should never be used as a means to end but that one should never be exclusively a means to an end.

Kant went further to claim that a party is not necessarily being ethical if they are only doing the right thing out of prudence. The essence of morality according to Kant is derived not from what the duty may have prescribed but from the concept of law (not to be confused with a nation’s law). In today’s highly regulated business environment this has a large impact. Many corporations, it may be assumed in example, only act in an outcome that is considered ethical because they are forced to by forces such as the law. If it does not act this way it may be fined, leading to less profit than acting in accordance to the law (atleast this is one of the purposes of fines, it may appear to some that the fines are insufficient to produce the best possible outcome for society). In Kantian ethics this behavior is deemed reprehensible. A corporation should act ethical out of duty and obligation not simply because it is prudent to do so. Kant worries more about the motives than the consequences. In the increasing globalization of large corporation this idea takes on an even greater weight. Many developing countries still do not have the legal infrastructure necessary to prevent unethical corporations from taking advantage and its citizens are left to the moral whims of corporations.

This subject takes us to Kant’s categorical imperative. He states it as follows, “I ought never to act except in such a way that I can also will that my maxim should become a universal law.” A corporation should not take advantage of consumers of developing nations because that would make for a lousy imperative. Kant believed that the man should act as if the principle were to be set as a law in the “kingdom of ends”.

The categorical imperative gives us a necessary but not sufficient criterion of virtue. For example one of Kant’s categorical imperatives is to not commit suicide. He offers no reasons as to why one should not commit suicide. In order to practically use the categorical imperative one must look at the consequences of the actions undertaken. Kantian ethics has been criticized for not providing a concrete application in various ethical dilemmas. For example, I jump into my car in the morning to go to work, but if everyone in the world were to do the same thing the Earth would choke to death; so should I not drive my car to work? Most people may be able to accept the former imperative; that of treating man as the ends and not merely the means; this could be taken as a form of human rights put into ethical law, but many circumstances require a more rigorous ethical platform.

I stated earlier that Kantian ethics has its foundation in the idea that ethics is based on adhering to a set of obligations and duties. But where do these duties come from? Do they come from the state? That’s hardly a satisfactory answer as ethics would be highly subjective to time and culture. Do they come from a greater power? In this modern business environment of numerous different religious beliefs it is hardly prudent for society to base its ethics on the guidelines associated with a divine creator. Some philosophers defend the view that a common morality exists and is the foundation of all theories of morality. This could explain why people accept Kant’s statement of treating people not exclusively as means to an end. Modern biochemical science has attempted to isolate a brain chemical that scientifically explains this phenomenon of human compassion. These finding may have a drastic impact on theories of common morality. Many ethical dilemmas are simply caused by differing interpretations of the event and not so of the principles governing the conclusion.

Kantian ethics also raises numerous questions about the ethical treatment of things outside of human kind. What kind of treatment to lesser creatures such as dogs, cattle, chickens etc. deserve? How should humans treat Earth and nature? Using Kant’s categorical imperative could possibly provide numerous divergent and impractical answers.

Modern thought places much more emphasis on empirical facts and purports that very little can be proved a priori. This poses a problem when a society attempts to convince a corporation to act ethically and not simply by the law. Ultimately, however, it is up to society to define what it believes is ethical and have these beliefs reflected in law. These ethical laws provide the concrete framework for corporations to follow that is lacking in Kantian ethics. Perhaps, all we can expect of corporations is for them to be prudent. A corporation has a duty to its shareholders to deliver a profit, and to society to operate within the boundaries of law. For example, a corporation treats it employees ethically because (a) its the law and (b) it has a positive effect on the bottom line.

I was surprised when I first heard the idea that corporations are not affected by Kantian ethics because they are not technically humans, although legally defined as a separate legal entity. I put corporation in quotations in the title of this post to highlight that a corporation is not a thing in the world but a construct of human relations.

Humans within a corporation may be completely indifferent to the actions of the corporation. For example, I worked at a casino a few years ago. I felt that the casino was taking advantage of many gambling addicts. But, I wasn't the casino. I wasn't in charge. So I just let it go. However, a corporation is people and people need to be aware of their actions, regardless of their orders. A member of a corporation is not absolved from the ethical implications of his actions simply because he was following orders. The "blame", if you wish to call it that, falls upon all members involved. A corporation involved in ethical decision making needs to remove its veil and the people involved need to truly feel involved in the actions undertaken. When a corporation does something unethical, there needs to be real responsibility by all the people involved from the board of directors and CEO who set the broader strategy, to the people involved in the implementation of the actions, and even to the members of government who need to set appropriate laws.

At the end of the business day we all go home to our families and friends and we would do well to not lose touch with our individual humanity and empathy while at work. Profits and money are meaningless without the people that we love (especially considering our fiduciary monetary system relies on others). If we wish to enjoy the care and love of our family, we must also enable others to do the same; meaning we should not abuse our corporate power. Obeying the Kantian maxim of treating people not merely as means to an end will have a positive societal, economic and, individual impact. Kantian ethics does not provide a fully applicable ethical principle to be used in all business situations but it is useful in helping us focus on the most important thing: people.

Kirk Jackson
Admitting that this blog is created by people in Kelowna, BC
October 8, 2013

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