Chapter 8

Moral and Ethical Behavior

Chapter Objectives

When you have read this chapter you should be able to:

• define morality and ethics,

• identify differences between ethical and moral behaviors, explain ultimate objectives of moral and ethical conduct,

• identify components of moral thoughts and behaviors,

• identify components of ethical conduct,

• describe moral idealism, realism, hedonism, and eudaemonism theories, and

• describe ethical teleological and deontological theories.

Introduction

Life is not worth living without periodically questioning what excellence is. Intellectual questioning is the structural processing of an individual’s analytical mind to reach specific cognitive points of values concerning the means and ends of virtuous and passionate behavior. Since the behavior of an individual is concerned with means and ends, some people prefer to focus only on the means or ends, while others can concentrate on both. It is almost a truism to say that people act according to their emotional, sensational, and intellectual powers. Nevertheless, some people conceive their behavioral power according to the right and appropriate reasons because they believe that right reasons are suitable to their intellectual natures. This intellectual state of an individual’s mind reveals that no individual can avoid either pleasure or pain and/or happiness and misery as a possible end result of behavior. Therefore, learning through intellectual questioning is an efficient method not only of bringing moral virtue into existence, but also of maintaining it as well.

To live with virtue and/or with passion is a fact for individuals. Individuals are not taught to be virtuous, but they have been told to behave properly. Virtue, as concerned with rational activity and passion, is a strong and extravagant attachment to feelings and emotions such as hope, fear, joy, grief, anger, love, and desire. The meaning of virtue depends upon the individual exhibiting the virtue.

To perceive positively the end result of organizational life, an individual should strive for the accomplishment of self-desires. This means to strive for reaching and maintaining the highest well-being. In seeking to establish and maintain the well-being of life objectives, we need to strive in order to achieve moral and ethical excellence. We must apply a mode of scientific dynamic effort, obligation, prudence, and legal compliance in our daily lives in order to complete our will. An individual can relate these holistic modes of behavior to the reasoning of what must be the ultimate objectives in life. An individual’s desires as a member of an organization and/or for all people as members of a community need to establish such a state of wellbeing. We need to examine the means and end result objectives of our emotional, sensational, and rational achievements and failures.

In the fields of politics and business, sometimes powerful and wealthy people begin to decline and fall very quickly because of unethical, immoral, and/or illegal behavior. For example, in politics, the Watergate scandal (1972–1974) forced Richard Nixon, then President of the United States, to resign from his job. The president’s unethical behavior caused the public’s view of the federal government to change; they no longer considered it an instrument of high morality and pure motives (Jackson, Miller, and Miller, 1997: 259). Similarly, in the field of business, in January 1986, Ivan Boesky, an arbitrager for Ivan Boesky Corporation in New York, reported receiving a call from Michael Milken, who was the head of high-yield securities for the financial firm of Drexel, Burnham, Lambert, Inc. in Beverly Hills, California (Stewart, 1992: B1). Milken represented Occidental Petroleum Corporation through his firm for merger. Milken told Boesky that he had learned of a merger between Occidental Petroleum Corporation and Diamond Shamrock. According to the terms of the merger, Diamond Shamrock’s stock would go up in price and Occidental’s would fall. The merger agreement terms showed that the end result of such a deal was to split profits evenly. The ethical, moral, and legal questions rose for such a business agreement between two companies, insiders, and stockholders. After Milken’s call, Boesky immediately rushed to buy as much Diamond Shamrock stock as he could. However, unexpectedly, the Diamond Shamrock board of directors turned down the merger and both Boesky and Milken lost $10 million. Considering this one case, you can imagine how the two had worked together in other deals to make an unethical, immoral, and illegal fortune. Both Ivan Boesky and Michael Milken worked together and earned more than a billion dollars. A few months later, Ivan Boesky’s financial empire quickly fell as he formally pled guilty in federal court to a felony charge of stock manipulation. Five years later, both men completed their prison terms and paid fines of a million dollars.

Knowledge of wealth, such as patents, copyrights, trade secrets, inventions, formulas, trademarks, and the like, are vital aspects of businesses. Accordingly, keeping a corporation’s trade secrets, inside information, and managerial decisions private are other aspects of organizational behavior. It should be noted that knowing secret organizational information may offer a business an advantage over another. We should analyze many of these issues as follows:

• From a sociopolitical and legal point of view, who owns what is in your head as an organization member?

• From a legal point of view, are you the sole owner of that knowledge or information?

• From an ethical point of view, what may be kept secret and what must be considered public information?

• From an organizational point of view, when and where should or shouldn’t information be disclosed to the public?

• From a business point of view, who should have access to business decisions or who should show the corporation’s information to the public?

• From a moral point of view, how should businesses value individuals’ knowledge and their contributions to organizational effectiveness, efficiency, and productivity?

• In a broad sense, what are the moral, ethical, and legal responsibilities of organization members concerning knowledge, information, and secret decisions in a corporation?

These and other issues are the main focal points for further discussion in this chapter.

Complexity of Global Business Behavior

New York City-based Windham International, which conducted a survey on expatriate employees, predicted the number of expatriate women would reach 20 percent (of all U.S. expatriates) by the year 2000. In addition, the U.S. workforce is ethnically and culturally more diverse than ever before and it is expected this trend will continue (Hardman and Heidelberg, 1998: 202). The gender gap between men and women, the cross-cultural value differences between domestic and international employees, and the specific moral and ethical principles as well as legal customs and laws that differ from culture to culture, and the severity of behavioral issues all become more crucial for managerial decision-making processes in multicultural organizations.

These and other similar issues raise many problems. For example, in multicultural organizations, what is acceptable in one culture may be disrespectful and insulting in another; what U.S. citizens may construe as sexually provocative or offensive may be acceptable in other cultures. Before 1977, for example, U.S. companies that were operating internationally had a history of paying off foreign officials for business favors (i.e., bribery). Such acts were declared illegal in the Foreign Corrupt Practices Act (FCPA) of 1977, which the U.S. Congress passed in the wake of the discovery that nearly 400 American companies made such payments over the years, amounting to payouts of about $300 million. Egregious within this sordid pattern of international bribery was Lockheed Aircraft Corporation’s $22 million in secret payoffs to foreign politicians to get aircraft contracts (Shaw, 1996: 284). These and other examples raise questions concerning how a company decides which behaviors are moral and ethical in both home and host countries. Should an organization operate in a host country where there are different religious faiths and cultural value systems? Should multinational corporations conduct their businesses either on the basis of cultural beliefs, expectations, customs, and traditions of the host or home countries? Should all behavioral patterns of expatriate employees be measured according to the home-country standards or to the host-country value and legal systems? If men and women have interacted in certain ways for many years in a culture, who will judge that a type of behavior is right or wrong within a company and within the sociogeographical location of a company? To anayze these issues in the following paragraphs, I define moral, ethical, and legal ordinations and their implications in both domestic and global markets.

Moral, Ethical, and Legal Ordinances

The primary focus of this chapter is to study moral, ethical, and legal influences on individual and group behavior in organizations. These are three major behavioral “ordinances” of reasons for people who strive for achieving a common good. Ordinances of reason signify the establishment of cognitive and behavioral orders in a search for proper ends through good means. Not all ordinances establish practical patterns of expected excellent behavior. One kind of ordinance gives you “idea,” another kind gives you “content,” and the third binds you with “perceptual” commitments. All these ordinances are rooted in such variations in generalization, understanding, and defining fundamental principles and distinctive outcomes of these three phenomena. Ethical, moral, and legal ordinances should be understood by managers. These three ordinances are covered in the full expositions in multicultural organizations.

The various ordinances for an individual’s behavior—ethical, moral, and legal means and ends—are the three major topics in this section. In addition, the notions of sensational and emotional pleasure respond to an individual’s enjoyment and pleasure. The rational decisions and actions provide longterm happiness. Sometimes the means justify the ends or vice versa. Nevertheless, I will analyze both success and failure for an individual and for an organization.

Historically, conservative cultures are driven to seek a firmer “foundation” than motives to legitimize actions and behavior. In contrast, modern cultures are driven to seek practical “motives” based on objectively oriented data gathering to value peoples’ competitive actions and behaviors. Consequently, one thing seems certain, and it is that in advanced industrialized, developed, developing, and decaying societies, ethics, morality, and legality play important roles in peoples’ daily behaviors. For the clarity of the two types of conservative and views of the modern world, Table 8.1 illustrates the major comparisons. There are two major captions: (1) the conservative cultural worldviews, and (2) the views of the modern industrial cultural world.

As you are looking through the changes in the history of the industrialized world, you will observe how science and technology played important roles in all societies. Table 8.1 illustrates comparative changes in all dimensions of people’s lives.

Historically, both conservative and modern cultural views have articulated positions on specific political, educational, economic, cultural, social, and medical issues in all societies, which have shaped expected patterns of behaviors between homogeneous faiths and beliefs. For example, Roman Catholicism has a rich tradition of formally applying its core values to the moral aspects of industrial relations (Shaw, 1996: 12) or, as Sklare and Greenblum (1967: 322) note, Judaism does not demand social isolation or adoption of a unique style of life. Jews provide alternatives when a need is felt.

In the first instance, through modern industrialized views, the free market mechanism sought to make energized and hardworking people richer. Note that sociocultural, econopolitical, and religious doctrines partially and to some extent holistically play important roles in influencing an individual’s daily behavior. People have learned from both religious faith and political ideologies how to appreciate moral thoughts and ethical principles. Different religions have given their followers moral, ethical, and legal ordinances. For example:

• “Good thoughts, good words, and good deeds,” Gatta, Zoroastrianism.

• “What you do not want done to yourself do not do to others,” Analects, 15:23, Confucianism.

• “Good people proceed while considering that what is best for others is best for themselves,” Hitopadesa, Hinduism.

• “Hurt not others with that which pains yourself,” Udanavarga, 5:18, Buddhism.

• “Thou shalt love thy neighbor as thyself,” Leviticus, 19:18 KJV, Judaism, Christianity.

• “Therefore, all things whatsoever ye would that men should do to you, do ye even so to them,” Matthew, 7:12, KJV, Christianity.

• (70)	“O ye who believed! Fear God (Allah), and Make your utterance Straight forward.
  (71)	That He may make Your conduct whole and sound And forgive you your sin: He that obeys God (Allah) And His Messenger, has already Attained the great victory.” Koran, Sourah Ahzzab, Ayah 70 and 72: 1268

Moral behavior deals with an individual’s ultimate state of psychosocial doctrines and religious faith. These manners are related to the individual’s behavioral “ends.” Ethical behavior deals with pluralistic “means” in actions. Ethical pluralistic beliefs can create a qualitative ordination to facilitate an ultimate sociocultural “ends.” Legal behavior deals with the econopolitical ordinance of reason to be enforced for the “common good” (see Table 8.2).

While morality is based on individuals’ “conceptual” commitments toward the end result of excellence, ethics is based on “pragmatic” collective known values by intellectual reasoning. Ethics deals with human social acts in order to direct people to a meaningful end. The laws and regulations are based upon ideological, econopolitical, and social doctrines to establish happiness consisting primarily of peace and order. The in-depth views in research of these subject areas may be answered by the following questions:

• What are the fundamental definitions, classifications, and generalizations of moral, ethical, and legal conceptions in perceiving and operating businesses in different cultures?

• What conditions make the discussion of business ethics and moral conducts possible today?

• What does the current discussion of both domestic and international businesses mean in terms of the way people from different cultures think about the morality of global business obligations and commitments?

In order to understand the holistic means and ends of our organizational behavior, we need to define morality, ethics, legality, and their applications in human relations.

Separation of Moral and Ethical Behavior

We can understand no human thought and activity very well without defining their theoretical and practical boundaries. This is true about ethics and morality. Whatever advantages are, a shared meaning does two things. First, definition allows us to ensure that all meanings and attributes carry the same weight when discussants and practitioners use a term or refer to an idea. Second, and we closely ally this with the first, that discussants and practitioners can go after carefully defining the terms. Therefore many philosophers and social scientists spend their efforts analyzing and defining ethics, morality, and legality. These phenomena address what is true and false, good and bad, right and wrong, just and unjust, honest and dishonest, responsible and irresponsible, fair and unfair, worthy and unworthy, and the like.

The distinction between conscientious objectives marks the prevailing virtue of the intellect and wisdom of human beings of the mind and the conscious behavior of the body. Both make morals and ethics different. In making a distinction between morality and ethics, we will discover that the challenge of morality consists of intellectual generalization in universal reasoning, and that the challenge of ethics rests in the stimulation of its question rather than in the finality of its answer. Moral absolutism, which assumes that all moral issues can be measured by one universal standard regardless of cultural, religious, and political differences, has been offered as an alternative view to ethical relativism.

Etymologically, religious faiths, political ideologies, and cultural values are the three foundations of moral and ethical views among people. They have different meanings and perceptions concerning what is “common good” for individuals and groups. Most writers have stated that the term moral is essentially equivalent to the term ethical. Albert, Denise, and Peterfreund (1984: 6) state that:

In some cultures, like the American business culture, people believe in “amoral” behavior. An amoral behavior is to rely on a partial truth while it conceals a good deal of the whole truth. Some American businesspeople perceive their moral obligation to show a partial truth primarily to be able to make profit. To them, to earn a profit, means individually and/or as a business entity they need to produce goods and/or provide services in buying and selling them for making profits. According to this philosophy people and/or businesses are not explicitly concerned with ethics. They do not consider themselves unethical or immoral; rather they are “amoral” as far as they feel that ethical considerations are inappropriate in businesses (De George, 1995: 5)

There is still another sense of understanding that the words of ethics and morals are used differently in other cultures. For example, in Persian culture, the term akhlagh used for ethics and khooy for morality have been perceived separately through the philosophy of eshragh—illuminationism. Illuminationism means that intellectual enlightenment seekers should search truthful scriptures for revelation. This behavior is based upon the divine inspiration for truth and the observation of rational and logical reasoning for blessing in earthly life and revelation in eternal life after death. Therefore, discovering the intellectual truth and acting on the whole truth can provide sound behavior.

The Buddhist cultural value system involves attention to be paid to reach mundane (such as earthly refinement) and individual problems (such as health), to salvation and morality. There are many facets related to such ethical and moral goodness. Seen from this perspective, the dominant view in the Asian culture is monistic. Monism is a doctrine in which moral and ethical behaviors are considered as ultimately one unit of reality. Therefore, in such a cultural perception, there is no separation between morality and ethics (Yinger, 1970: 45).

Shaw (1996: 4) states that: “In everyday parlance, we interchange ‘ethical’ and ‘moral’ to describe people we consider good and actions we consider right. And we interchange ‘unethical’ and ‘immoral’ to describe what we consider bad people and wrong action.” French and Granrose (1995: 9) state that: “We use these terms (ethics and morality) interchangeably between the words ethics and morals is that the first is derived from a Greek word, the second from a Latin one. Both words originally referred to the customs or habits of a society or an individual.”

As we have understood, no agreement exists among philosophers and scholars in regard to a unified and generalized definition concerning the phenomena of morals and ethics. Some people object to the term ethics and prefer to characterize ethical problems as religious problems. For example, in American culture, the subject of business ethics refers to legal market liability, business and external environment, and corporate responsibility. The Germans prefer to call it Wirtschaftsethik, which literally translated means the ethics of relationship between economics and society.

On the other hand, some philosophers and scholars make a distinction between morality and ethics. They define morality as the human conduct and values and “ethics” refer to the study of those areas. Walton (1977: 6) defines ethics as a critical analysis of human acts to decide their rightness or wrongness in terms of two major criteria: truth and justice. De George (1995: 19) perceives that “Morality is a term used to cover those practices and activities considered importantly right and wrong; the rules that govern those activities; and the values that are embedded, fostered, or pursued by those activities and practices… . Ethics is a systematic attempt to make sense of our individual and social moral experience, in such a way as to determine the rules that ought to govern human conduct, the values worth pursuing, and the character traits deserving development in life.” Oesterle (1957: 5) defines “Ethics as the science which deals with those acts that proceed from the deliberative will of man, especially as they are ordered to the end of man.” Since ethics is formally practical knowledge, morality is the meaningful knowledge of what constitutes good or bad actions.

Through a spiritually aesthetic view, morality is the very delightful, intelligible, and beautiful conscious awareness. It is an individual’s knowledge. Many people feel that morality is personal and that no one should force such views on others. According to this position, each person is entitled to their own moral understanding and judgment. In contrast, many people hold another position with respect to different countries and cultures and believe that all members of a society must abide by the same cultural values. This view is another popular form of ethical relativism. They deserve careful consideration in defining and applying these terms. We need to clarify morals as a matter of individual “choice” and ethics as a matter of cultural valuable “force” which determines what action is right or wrong. Furthermore, are morals and ethics culturally determined by an individual and/or by a group? Is there a universal morality, applicable to all people in different places and times? To clarify these positions, we need to define both terms carefully: morals and ethics.

What Is Morality?

Before we consider specifically what makes an action good or bad in a moral sense, we should have a precise picture of the notion of morality itself. The term morality primarily signifies a certain relation of an individual’s acts that have some ends, to a standard or principle of action. Morality, therefore, is an abstract signifying the moral order of an individual’s acts. Newton and Schmidt (1996: 3) have defined morals or morality as, “The rules that govern our behavior as persons toward other persons; also, duties.”

As indicated before, the term “moral” is derived from the Latin word mores. Mores means the embodiment of the fundamental social group values. There are two main traditional fields of value inquiry: morals, which is concerned with the problems of truthfulness and falsehood, worthiness and worthlessness, and goodness and badness and their bearing on moral conduct; and ethics, which is concerned with the problems of justice and injustice, fairness and unfairness, and right and wrong and their bearing on ethical decisions and actions.

“Morality” means conformity to the rules of universal right conduct. For example, the term “honesty” is a universal phenomenon. In all cultures, honesty means to be truthful. An honest individual has been praised by all cultures. Therefore, there are some values among all people around the globe which are universal and these universal values are considered as foundational principles of humanity. In addition, if we are judging “bribery” through a moral term, we arrive at the same conclusion: that bribery corrupts the individual’s character and defects the group’s cultural value systems, and it is wrong. However, if bribery is the common practice in a given culture, then, is it proper to engage in bribery in that country? This raises questions concerning the distinction between ethics and morality.

Morality is a term used to manifest humanity’s universal virtues. Virtues refer to excellence of intellect and wisdom needed to perceive a happy life. An individual’s moral obligation is directly related to the disposition of cognizance of mind to perform its proper function effectively. Moral virtues concern habitual choices of rational thoughts in accordance with universal logical principles. The contemplation of absolute truthfulness and the discovery of the rational principles, which ought to control everyday actions, have given rise to intellectual virtues. Moral considerations deal with distinctions between good and bad, truth and falsehood, and worthiness and unworthiness. For example, a moral person may consider goodness if they habitually think, value, and act in accordance with their own intellectual conscience.

Sincerity in continuity with moral thoughts and acts is the keynote for morality. In other words, the meaning of moral is one to which a moral individual aspires (De George, 1995). Thus, morality denotes the total characteristics of intellect and wisdom of a human being. The maxim of the intellect and wisdom is careful calculation of virtues in the mind or description of the essential features of righteousness, truthfulness, and goodness of the character of a human being. Thus, when we speak of morality, we refer to a human’s personal virtue through their intellectual choices. As human beings, we can make a distinction between true and false, and right and wrong. Therefore, we can make a distinction between the end results of morality and ethics. Morality’s end result through intellectual truthfulness, righteousness, and goodness of thoughts and actions is revelation and happiness.

Wisdom and intellectual ability of the mind and passionate activities of the body which can be considered right and wrong are the main contextual domain of morality. The rules that govern an individual’s thoughts and the values that are embedded in intellectual and rational virtues are the subject of morality. Therefore, morality is a universal, general, and intellectual characteristic of humanity. Distinct from both the real (natural) order of existing things and the logical (intellectual) order formed by human reason is the moral order. Both orders are caused by reason. It is within this context that the term morality is introduced as understanding formally an orderly thought which wisdom has established as rational reason in human acts. However, an individual’s tendencies toward pleasure can change such rationalized thought and behavior and divert them into passionate desire.

An individual’s passion depends on a variety of circumstances and conclusive end results. Passion is a motivational principle and tendentious operational factor in an individual’s daily behavior. We act because of joy or sorrow, love or hatred, and success or failure. It is obvious that an individual’s behavioral consequences are accompanied by either pleasure or pain, joy or sorrow, happiness or unhappiness, and courage or fear. All of these consequential motives are related to our intentional and tendentious attainment of personal objectives.

For ethical and moral behavior, individuals need to strive for excellence in behavior. Excellence in behavior is a virtue. Virtue is a positive derivative power of the mind toward happiness. Virtue is neither a passion nor a power. It is an extreme of excellence, rising above the excess and effect. Virtue regulates behavioral pleasure. It is the disposition of the intention toward good actions in a regular manner. For example, when we avoid good behavior the pain follows, or when we strive for happiness, a satisfactory end-result follows.

Component Parts of Morality

Morality contains several component virtuous parts and attributions, such as virtue, dignity, integrity, intellect, excellence in character, goodwill, fortitude, magnificence, patience, magnanimity, prudence, and perseverance. Possession and application of these virtues enhances moral, ethical, and legal behavior of a manager.

Virtue

Virtue regulates pleasure and pain, happiness and misery, courage and fear, worthiness and worthlessness, and, finally, integrity and dishonesty. Virtue is a spiritual logical habit inclining an individual to choose the relative mean between extremes of excess and defect. It is a habit consisting of an “effective choice.” Through virtue we manage anger, selfishness, pleasure, sin, and greed. Virtue is the ultimate state of excellence in intellectual thinking and moral behavior. It includes both what is rational by nature; the operation of reason itself and the operation of participating in a rational behavior. In other words, virtue is: What we may rationally think and how we may rationally act.

There are two major kinds of virtues: one is a perfection of the power of reason itself called “intellectual virtue.” The other kind is development and maintenance of the appetitive power which is rationally participating in the behavioral virtue called “moral virtue.”

What Is Intellectual Virtue?

Intellectual virtue is the intentional goodness in the essence of mind. Good intention is therefore the immediate purpose of intellectual virtue. It is by which we generate or initiate a sense of reasoning in order to lead us to good thinking through useful application of wisdom. Wisdom is considered as an order to arrive in knowledge; for we need to think well in order to acquire knowledge. Everyone must acquire knowledge by discovering selfwisdom and intellect.

Intellectual virtue is concerned about the “effective” cause of thinking (Oesterle, 1957: 59). The effective cause of thinking means to apply the “right” reasoning at the right time during a thoughtful deliberation. Intellectual virtue is the essence of thinking in order to acquire knowledge. Indeed, everyone must acquire knowledge through discovering the truth. It is through intellectual virtues by which we achieve our good and clean thoughts and behavior.

What Is Moral Virtue?

Since intellectual virtue has been considered as the essence of wisdom, moral virtue is the virtue in action and behavior toward goodness. It is viewed as conformity with common sense of rational intention and action. Moral virtue consists of the process of an action. For the process is the measure of goodness of virtuous actions. Moral virtue is concerned with the goodwill and intention of an individual. The rule of reason derives from an individual’s goodness. Good action, therefore, is the immediate purpose of moral virtue. Nevertheless, moral virtue is acquired by practice and application of principles of good faith.

Both intellectual and moral virtues can be taught by rigorous principles of wisdom. Since intellectual virtue is a matter of knowledge, moral virtue is application of knowledge and located in the appetitive power of an individual in which there are inclinations, tendencies, and drives toward something to be desirable.

Excellence in Character

Excellence in character refers to acquisition, development, and possession of superior and admirable knowledge in an individual’s personality. It manifests knowledge and superior intention and action of an individual or a group of people. There are at least two reliable signs of excellence in an individual’s character and behavior: (1) a valid universal apprehension and clear cognitive judgment which should be based on the honest and right judgment (intuition), and (2) a true universal decision to be made in perfect harmony or congruence with other universals known to be true. To be excellent in thinking and action is an ultimate objective of morality. For example, a manager needs to search for discovering the best and most suitable information on behalf of the corporation’s stakeholders and then make a decision on the basis of reliable information.

Good Intellect

Good intellect is considered as perfection of human moral power, which is to say, they attain whatever is the good of a power. Good intellect differs from the power of willingness and from the sense of desiring. Both of these powers are appetitive powers, whereas the intellectual power is a cognitive power. Good intellectual power consists of grasping things in a rational and reasonable mode of thinking. To know something is good because it is good is to know something as true. For example, in an assembly line, a production manager’s decision to “rework” a defective product may be considered a moral decision concerning how well a customer should be treated. It also makes workers conscious of doing what is right.

Goodwill

Choice and deliberation are two major component parts of “will.” We need to understand the nature of moral obligations (goodwill) for an individual to make the right choice. An individual can make a choice on the basis of either emotional or intellectual reasoning. Emotional choices can end up with pleasure (appropriate sensational and emotional enjoyment) or pain (excessive sensational and emotional deprivation). In contrast, intellectual choices can end up with happiness (appropriate usage of intellect) and avoidance of misery (inappropriate and/or no usage of wisdom). Simple emotional acts of desire are not choices of an individual’s will. Emotional desires are acts of tendencies for pleasure.

An individual’s will is an intellectual satisfactory intention of reasoning. Intellectual choices are not necessarily connected with pleasure or pain. They are connected with happiness and satisfaction. Also, intellectual choices are associated with “self-volition.” That is, an individual needs to be very intent on getting what they seek. Therefore, managers need to act on the basis of their will. This type of will is called “goodwill.”

Deliberation is a pragmatic and possible individual intellectual workout for expressing reasons. We consider and evaluate reasons for or against doing something. We still need to understand the nature of choice itself because the act of choice may cause misunderstanding. Morally, a right choice should be based on goodwill. It should follow the intellectual reasoning for specifying the right means and ends. A manager without intellectual deliberation and good choices cannot be an effective manager. A good manager morally needs to apply sufficient goodwills, useful knowledge, and reliable information in order to make good choices and to take good actions.

Fortitude

Fortitude is blending the emotional endurance of fear and boldness into a mode of decision and action. People possess different levels of fortitude. These levels are the potential strength in their minds that enable them to endure adversity with courage. For example, a brave manager is one with the virtue of fortitude. Fortitude is clearly an admirable intellectual virtue that an individual may have which includes high quality in thinking, strong positioning power in choices, and positive attitudes in behavior. A manager needs to have the best known intelligible attitudes toward successful means and ends of self-conduct because of the leadership role.

Fortitude is not equivalent to courage. Fortitude brings out more accomplishment in intellectual deliberations, whereas courage is sometimes applied to an emotional action without assurance of the final possibility of positive consequences.

Magnanimity

Magnanimity means being generous in mind. The word magnanimity is made up of two Latin words: “magna,” signifying “great” and “anima,” signifying the “soul.” Therefore, the nominal meaning of this virtue is to be generous in mind. For a manager, magnanimity means to deliberate good reasoning by demonstration of great efforts regardless of cost and benefit analysis of an important qualitative decision and action. Magnanimity is the breath of qualitative intention and action toward building and maintaining conformity in character.

Patience

Patience is a virtue that moderates frustration arising from various hasty decisions and actions. Patience promotes and develops cheerfulness and a principally tranquil state of the generous mind despite great injuries and other subversive actions. It is closely related to the extent of endurance and tolerance. Patience in the time of miserable situations prevents breakdown of morale. It ordinates grief and sorrow. Managers need to be patient because they are behaving as thoughtful leaders who have the responsibility of leading their subordinates. In contrast, impatience often promotes selfishness, hastiness, greediness, anguish, fear, frustration, and anger.

Perseverance

Perseverance is another moral virtue that occurs when an individual is persistent in achieving specific objectives regardless of obstacles and annoyances. For example, a manager perseveres in the virtuous sense, if he or she persists reasonably in achieving a difficult action, even though the length of time in that action is long and laborious. Another example: strategists need to develop the virtue of perseverance in their thoughts and behaviors because they must wait to achieve their strategic objectives through a long period of time and continual efforts.

Prudence

Prudence is an intellectual manner of careful consideration used when an individual is facing problems and issues and acting or reacting with other people. Prudence is a careful moral obligation toward particular decisions and actions for achieving a good end through good means. A manager needs to carefully assess circumstances of a decision or an action in order to understand what should be done and/or should not be done. In addition, they need to make sure that a decision or an action should have an assent to suitable means and ends. Managers need to avoid inconsistency in their intentions and negligence in actions.

Moral Theories

Socrates, the first great moral philosopher, stated the creed of reflective individuals and set the milestone of the task of moral theories. Then most philosophers and writers examined human thoughts and behaviors in relation to morality and ethics. Some philosophers, whose views are oriented toward theological doctrines, appear to conceive that human beings are situated in the kingdom of God and they must be obedient to Him and follow orders from the Lord in order to have “revelation.” On the other hand, nontheological philosophers, such as existentialist, materialist, and naturalist theorists, conceive that human beings are situated within the general realm of nature with their own “free choices and volitions.” They believe that if human beings want comfort and peace they should not disturb or violate the rules of nature. The latter philosophers believe that human beings possess absolute control over their minds and actions and that is why they are determined solely by their volitions. In such a path of life, existentialist philosophers believe that human beings, through their decisive virtues, can discover the worthy things concerning the right way of life.

Both groups of philosophers agree that, in the kingdom of God or in the realm of the nature, human beings, through their emotional fickleness and sensational infirmities, are exposed to the mysterious flaws of greediness, bemoaning, derision, revenge, fear, anger, and discrimination. However, both theoretical ethics and morality focus their views on the nature of human beings who possess both dual efforts to overcome emotional and sensational unpleasant desires. These philosophers believe that human beings must eradicate their sensational weaknesses, emotional absurdity, and dreadful desires. In Table 8.3, you will find comparative characteristics of different moral theories.

In viewing and applying moral, intellectual, and necessitated virtues, many philosophers and researchers expressed their views through different reasoning. There are different schools of thought concerning morals, such as idealism, realism, hedonism, and eudaemonism theories of morality.

Idealistic Moral Theory

Idealistic moral theory includes all views which hold that there is an independent world that is mental or spiritual in nature. This world is full of goodness. Avoidance of such a good state of existence may cause sinful intentions and dreadful actions. Human beings should try to stay in such a good kingdom. Nevertheless, having separation of the human mind from the godly ideal of goodness is considered in terms of good intention and actions. It is the fear of bad intentions which tempts human beings to separate themselves from goodness and join badness. They need to solve this problem by “copying, following, or imitating” knowledge. Like the installment plan of buying, copying, following, or imitating knowledge can solve problems.

We may distinguish three basic meanings from the term of moral idealism:

1. There is an ideal in the sense of excellent behavior which can be realized, as when we speak of “ideal friendship” or of “ideal weather.” It is an idiom which states that: “A friend in need is a friend indeed.” This is the surest state of human mind which should pursue heavenly life without corruption and defectiveness. People need to live in harmony with nature and with peace in their intellectual reasoning.

2. To search for goodness and beauty of our character not as attainable goals, but as “direction” of our endeavor toward goodness. This direction can orient human’s mind toward goodness. This means that we need not only think and talk about goodness, but also to attend to goodness. Through mental goodness we will be able to reach the gate of mental and moral health and to be motivated for applying spiritual virtues in our deeds.

3. Finally, there is the ideal in the derisive sense of something holistically visionary to pursue goodness as happiness. Moral idealists believe in happiness through attending the process of goodness.

There is no doubt, other than “gifts of nature” (e.g., intelligence), fortitude, courage, and perseverance are desirable. They may be pernicious if the will directs them that they are not good. For example, “loyalty” in an organization is not impressive as a virtue when we examine the loyalty of an auditor to an embezzler. Courage may further evil as well as good ends, as the case of the intrepid consumer abuser shows.

Goodwill is not good merely because it may not achieve desirable consequences. The value of goodwill is based upon good means and good ends. Goodwill is reverence for duty and duty is founded on reason. Reasoning seeks universal principles for being ideally, physically, mentally, and socially good.

Realistic Moral Theory

How an individual’s decision and behavior become good or bad depends on a question of morality in a real pragmatic sense. Realism is old as naturalism. The term moral realism has to do with what actually exists—“seeing is believing.” Immanuel Kant (1724–1804) has called this empirical knowledge “science.” Kant believes in empirical moral knowledge—application of idealistic patterns of goodness and happiness in daily human life. He believes science is based on observation and direct exposure to knowledge. Such knowledge always comes after the evidence. In contrast to moral idealism, which believes in goodwill and intentions as the moral judgment, moral realists believe that good intentions are not sufficient to reach the ultimate point of goodness. Goodwill should result in good deeds. In addition, application of moral realism principles in human mind and behavior can result in a stabilized life.

Within this breadth of real endeavor, we are examining Kant’s moral philosophy which is based on “good will as the means and ends of unconditionally good deeds.” Kant concludes that the only thing in the world which is good without limitation is the goodwill to do one’s intellectual duty (Rand, 1901:539).

A moralist needs to be experienced with the universal principles of goodness. Experience is the touchstone of what is real. There are different perceptions in morality. These perceptions raise fundamental questions such as: What is the common sense of existence? What is an intellectual individual’s sense of existence? Is morality subject to a universal sense of understanding?

Thomas Reid (1710–1796) stated that the universal conviction of human beings is dependable on moral truths. We have an immediate awareness, not only of external objects, but also of the causal and other relations between them. There are at least two main ways of conceiving universal moralism: (1)We may regard universal moral laws as separated principles which govern “forms.” Forms follow the natural ordination. These forms are “mental” in their empirical nature. (2) The moral laws of nature do not govern natural processes, but they only describe such processes. These laws are the essence of common sense. Kant called it “science.”

Scientific empirical knowledge is based upon good choices and volitions in human mind and actions. This is the surest moral decision and action. We can call an employer a “real moralist,” because we mean that he or she never loses sight of the bitter taste of “economic hardship.” Realistic moral managers usually manage a corporation to achieve their moral objectives despite “adverse” circumstances. These types of managers believe that if there are realities which cannot be altered, then realist managers should alter themselves to suit them. For example, T. J. Watson Jr. (1963: 15), former chairman of the board of IBM, states that: “The decision in 1914 led to the IBM policy on job security which has meant a great deal to our employees. From it has come our policy to build from within. We go to great lengths to develop our people, to retain people when job requirements change, and to give them another chance if we find them experiencing difficulties in the jobs they are in … But policies like these, we have found, help us to win the goodwill of most of our people.” It should be noted that IBM continued to practice such a tradition until 1990. Since then, IBM began to lay off 50,000 excessive employees for “right sizing” the human resources management policy.

With the same pattern of perceptions, managers in the Japanese culture believe that in times of economic recession corporations should not lay off their excessive employees because such an action will destroy laid off workers’ normal lives. Japanese corporations do not retrench their operations; rather, they accelerate their operational processes to produce more goods with lower costs in order to sell them with the lowest prices after the economic recession is over. Within this managerial culture, the Japanese believe that they have served both employees and consumers, because employees will be able to continue their normal employment lives with a lower pay and consumers will be able to appreciate their purchase power with lower prices. Therefore, Japanese business culture is based on a philosophy that indicates if everything is in their favor, they enjoy it; and if not, they adapt themselves to the reality of economic life. They believe that all people should enjoy and/or endure on the basis of the reality of life. Therefore, the realistic moral temper appears in all areas of realistic national culture. In sum, moral realists seek to describe the common sense of characters and events as they really are without idealization or sentimentality.

Hedonistic Moral Theory

There are two other moral theories whose principles we can apply as means and ends in examining our good behavior. First is that all self-centric good behaviors endorse hedonism, the view that “pleasure” is the only intrinsic goodness in life worth pursuing. Second is that all egoists believe that both intrinsic and extrinsic values are not simply pleasurable—which may differ in quality as well as quantity—but instill happiness. This second view is called eudaemonistic morality, since the basic value in terms of which the assessment is made is happiness, not pleasure. For clarity of meaning, we describe pleasure through hedonism moral theory and happiness through eudaemonism moral theory as means and ends of morality.

The view that associates morality with self-interest decisions and actions is referred to as a belief that goodness as an intrinsic power can manifest in a pleasurable and enjoyable life. The theory of morality that advocates pleasurable life is considered as means and ends of goodness and is known as hedonism, a name taken from the Greek meaning “pleasure.” One question that surfaces with hedonistic moral objectives is: Is there some least common denominator in terms of which we can assess our perceptual goodness? The answer is yes, through application of the moral theory of hedonism.

Hedonistic moral theory holds that basic human values should be oriented toward promotion of pleasure and avoidance of pain. According to this view, everything that people desire, want, or need can be reduced in one way or another to pleasure or pain. Pleasure means the absence of pain.

Pleasure, in its strict meaning, is the immediate accomplishment of enjoyable sensational, emotional, and physical ends. Pleasure is the powerful dynamic motive that urges individuals to respond positively to their good need dispositions. The immediacy and intensity of sensational and emotional delight would probably be the main reason for stability of human life and survival of human species. Therefore, all people need to enjoy their lives.

Pleasure is avoidance of experiencing depravation from need dispositions. Pleasure is a search for gratification to be experienced with fulfillment of physical, sensational, and emotional consequences. Depravation is a kind of momentary suffering from the state of deficiencies. Also, depravation is culturally assumed to be an aversive state that may involve withholding desired psychological tendencies. For example, in Jewish and Moslem faiths, fasting—and in Buddhism and Hinduism, meditation—is considered conscious deprivation from eating and drinking to motivate people to appreciate fulfillment. It does have something to do with the end result of self-confidence and self-realization.

There is an idiom which states “no pain, no gain.” To have pleasure can be considered in two different ways: (1) to experience it as the end result of an action, or (2) to imagine it at the beginning of an action by “intention.” By analyzing these two processes, interpretation of pleasure is different culture to culture. Some cultures conceive that the meaning of pleasure is striving for achieving the end result of an action. Specifically, utilitarian cultures consider that the good and bad end result of an action is based on the last thing to happen, because it is true that an end result is the last in execution of that action. But in other cultures, the end is the first, not in the order of execution, but in the order of intention. For example, some people believe in financial depravation by putting aside some income as savings for the necessity of future needs, while in other cultures people perceive pleasure on the basis of immediate intended action in spending their income for fulfilling of the end desires. This is the result of complexity of human nature. There is no doubt that both types of cultures are striving for “goodness,”—one conceives pleasure in a long period of time, while the other perceives it in a short period of time. In fact, the sense of pleasure is a trajectory state of excessive sensational and emotional enjoyment which turns an individual’s behavior up from depravation and suffering to the climax of enjoyment and fulfillment and then gradually turns it back to the original state of depravation and deficiency again. This is considered as a momentum for survival of human race.

Eudaemonistic Moral Theory

The most serious difficulty for pleasure is that pleasure does not satisfy the whole ego of an individual person, nor even the best part of that person. People can share their pleasures with others through sensational and emotional enjoyments. Pleasure does not seem to provide the sort of happiness suitable to all people. Since pleasure does not satisfy long-range satisfaction for an individual—and even the best intellectual values, as Aristotle calls it, the “moral virtue”—it would not seem to provide happiness suitable to an “intellectual virtue” because it is short lived. It may be intense, but it never lasts. The magnitude of pleasure is derived from its own restriction and, at best, it is limited to certain levels of goodness. This suggests that a certain type of moral egoism is typical of those who are concerned with avoiding harm to the self rather than gaining benefits for the self (remember that eudaemonistic egoism is a doctrine that maintains that we should seek only our own happiness through intellectual virtues). Egoism contends that an action is morally right if and only if it best promotes the individual’s long-term goodness.

Eudaemonistic theorists believe that people use their best long-term advantages as the standard for measuring an action’s rightness. If an action produces or is intended to produce for an individual a greater ratio of good to evil in the long run than any other alternative, then that action is the right one to perform, and the individual should take that course of moral action.

Moral philosophers distinguish two kinds of egoism: personal and impersonal. Personal egoism holds that individuals should pursue their own best long-term goodness, but they do not say what others should do. Impersonal egoism holds that everyone should follow their best long-term goodness choice as a cultural value system. Egoism requires us to do whatever will best further our own interests and doing this sometimes requires us to advance the interests of others.

Several misconceptions haunt both versions of egoism. One criticism indicates that pleasurists do only what they like, that they believe in “eat, drink, and be merry.” Another misconception is that self-interest endorses hedonism, the view that only pleasure is of intrinsic value; the only good in life worth pursuing is for self-enjoyment and pleasure. This will promote selfishness. Selfishness corrupts human morality and turns people into savages. Therefore, by this reason, eudaemonistic moral philosophers believe in happiness, not in pleasure, because they believe that happiness includes both intrinsic and extrinsic satisfaction.

Jeremy Bentham (1838), an eudaemonist moral philosopher, believed that morality was based on the principle that the objective of an individual’s life is the promotion of the greatest “happiness” for the greatest number of people. Eudaemonistic theory holds that the basic values in terms of moral behavior are calculations of goodness and badness in terms of moral judgment. Some maintain that “happiness” is the essence of the right kind of thoughts, habits, or behaviors. Happiness is more a means than an end. One acquires wealth and power not really for one’s own sake but as a means of achieving something else. However, it should be noted that if wealth and power have been accumulated for the sake of wealth and power, then the concentration of wealth and exertion of excessive power can produce either pleasure or misery. Because accumulation of wealth and power can be used for good or evil, it is perceived that happiness is an ultimate end when satisfaction and fulfillment of all intellectual desires are met. In attempting to determine objectively the moral nature of an individual’s life, happiness is primarily what Aristotle calls an intellectual virtue. Manifestation of intellectually virtuous behavior makes an individual’s life come into accordance with the goodness of holistic healthy body and mind.

There are two different ways to seek pleasure and happiness. First, one is searching for feelings and experiencing practical values; the second is to seek speculative cognitive knowledge in order to understand either for the sake of simply knowing or for the sake of making decisions for actions. The opinion that the state of existence consists both of pleasure and happiness deserves specific attention to be made by choices: (1) What implicitly do individuals perceive and believe about goodness in relation to pleasure and happiness? (2) What can individuals learn from scientific values, which are the end results of scientific deliberated solutions? By completing goodness, we mean an individual may seek satisfaction and happiness as the ultimate end.

What Is Ethics?

Thus far we have defined morality in terms of individual pursuit of self-interest and/or searching for self-egoism of goodness, but we have not seen what goodness is in terms of collective sociocultural value systems. Ethics involves critical analysis of cultural values to determine the validity of their rightness or wrongness in terms of two major criteria: truth and justice. Ethics examines the relationship of an individual to society, to nature, and/or to God. How individuals make ethical decisions is influenced by how they perceive themselves in relation to goodness.

In this section, we define ethics as a purely theoretical treatment of moral virtues in terms of speculative and practical collective cultural value systems. In speculative and practical knowledge of goodness, righteousness, and worthiness, we are concerned with cultural value systems, which are operable, either with intending to do something or actually doing something in the realm of goodness. Now, through these two alternatives, it might seem to define what ethical life should be, a manner of reflection in which it will indicate that it is not the kind of intending or knowing goodness, but it is the complete practical execution of goodness through collective behavior of a group of people.

Ethics is concerned with psychosocial actions and it can also deal with good deeds in a society. Philosophers have identified ethics with one or the other of these extremes. Some have understood ethics to be speculative and deliberative of good thoughts and behavior (deontological) and others have tended to identify ethics completely with practical good end results (teleological).

In homogenous European and U.S. cultures, the meaning of ethics is related to “The Love of God,” and to “The Love of Wisdom” (Weber, 1960). In the Greek tradition, ethics was conceived as relating to “social niceties.” Social niceties could be considered as custom, convention, and courtesy. In Chinese culture, the term ethics has been used to signify etiquette, li, which originally meant “to sacrifice,” which refers to the fact that Chinese people should follow legally sanctioned etiquette, not to mention knowledge of hundreds of correct forms of behavior. The Chinese eventually came to believe that their behavior was the only correct etiquette in the universe—that all who did not follow the same meticulous rules of conduct were uncivilized barbarians (De Mente, 1989: 27–28).

Later on, a very different orientation was introduced by Judeo-Christian ethics. In this tradition, the ideals of righteousness before God and the love of God and neighbor, not the happy or pleasant life, constitute the substance of ethical behavior.

The term “ethics” is derived from the Greek word ethos. In the Oxford English Dictionary (1963) ethos means the genius of an institution or system. Also, it defines ethics as the science of morals and the department of study concerned with the principles of human duty. Ethics concerns itself with human societal conduct, activity, and behavior of people. Ethical behavior is considered a deliberate and conscious social awareness concerning good behavior. People need to knowingly and to a large extent deliberately have good thoughts and behaviors. Ethics is concerned with construction of a societal rational system through application of moral principles (virtues) by a group of people in a society.

As far as the term morality is related to the deliberation of individuals’ intellectual characteristics through their conscientious awareness, ethics is the collective social conscious awareness of a group of people. Thus, morality is related to individual virtues, and ethics is related to society’s fairness, justness, and worthiness—excellence. Hence, morality is the foundation of an ethical society, it also relates to the existence of moral people who make the collective distinction of right judgments from wrong and good behavior from bad. Ethics generally mandates people to behave in accordance with valuable norms and standards in excellence that they accept and to which they and the rest of society hold others.

Ethics, then, can be defined as a systematic collective attempt toward social well-being in a society in order to make sense of our individual security and social peace in such a way as to determine the rules that ought to govern human social conduct, the values worth pursuing, and the character traits deserving development in life. In other words, human beings cannot adopt ethical principles of social actions unless they can do it with consistency, and it has to be adopted by everyone else. Without an accepted universal morality—virtues—there would be no stabilized ethical society to keep the world in peace and security. Beliefs and faiths are important ingredients in ethical behavior. Different beliefs and faiths about moral and intellectual virtues can lead us to differences in what is described as ethical relativism. This is the main reason that each individual, or a group of people, perceive good differently.

Ethical Relativism

Ethical relativism claims that when any two individuals or two cultures hold different ethical views of a sociocultural value system, both can be right. Different ethical views are products of religious faiths and/or political ideological beliefs. Thus, a mode or trend of behavior can be right for a person or one society, and the same action, taken in the same way, may be wrong for another person or society, yet the two persons or societies are equally correct. For example, some members of our society believe that abortion is immoral and unethical because it has been viewed as murder and it is a sinful action. Others who are pro-choice believe that abortion is morally and ethically permissible because it is purely related to a woman’s choice to have or not to have a child. The differences are rooted in religious faiths, econopolitical ideological beliefs, and sociocultural value systems. These differences are examples of transcultural, multicultural, and intra-cultural relativism. Another example, in a culture with a religious profamily value system, like Moslem nations, economically advantaged men and disadvantaged women will probably seek monogamy. The main reason for monogamy is to prevent women from having illegitimate children. In the Moslem faith, to have an illegitimate child is not only considered a grant sin but it is also prohibited for men to have sex with women without religious marriage. Other nations with equal economic opportunities for both men and women, with approximately equal numbers of men and women, perceive marriage as ethical behavior. However, in many Western nations it is considered a legitimate affair when men and women have sex outside of marriage. In Moslem nations, according to the Koran, adultery is considered a “grant sin,” while in other cultures it is forgivable. Adultery destroys family cohesiveness.

Many people dispute some judgments on the basis of their rationality. In some cultures, an action or judgment may be right for one person or society, and the same action or judgment, taken in the same manner, may be wrong for another person or society. What exactly is meant by these claims? For such reasoning, we divide ethical theories into teleological and deontological categories.

The Ultimate Means and Ends of Ethical Behavior

In arriving at a final conclusion in daily moral organizational life, employees must analyze their activities within the end result of “goodness.” Goodness means the conscious deliberation of employers and employees toward the tendency to treat each party with dignity. Employers should prevent exploitation of employees, and employees should respect their duties. Employees should attract their tendencies or desires positively to be efficient and effective. They need to use their energy toward organizational productivity. Since the moral principle of morality is the realization of the self-evidence of goodness, all moral desires need to be good. The goodness that we strive for is the way that we perceive it. We perceive ourselves as the good agent of goodness. There is no doubt that people interpret desires either with pleasures and/or with happiness in their life. The problem is what constitutes pleasure and happiness as two major components of goodness. People are considered at the center of goodness and badness. Making profit and having money may be considered a legitimate moral goodness. The question arises: Is there any intrinsically valuable goodness in a piece of paper which is called money? The answer is no. What is the value of that piece of paper? The answer is: The intrinsic and extrinsic money power of that piece of paper, which can be considered “clean or dirty money” that we can use to buy the goods that we desire. Dirty money has been viewed as conducting business through unethical, immoral, and, in some cases, illegal activities such as selling and buying drugs, prostitution, pornographic films and paraphernalia, gambling, and the like. Clean money is considered as to be earned through legitimate business transactions and hard work. Therefore, the extrinsic value of money carries valuable ends, while the intrinsic value carries valuable means. The more profit that we generate, the more goods (extrinsically) we can buy (intrinsically).

Money can be used either as means or as an end. It depends on how we appreciate its value. There are two concepts concerning money. One is that people like money because they believe in “eat, drink, and be merry,” as stated previously. Fulfilling our needs through these behavioral activities can result in either pleasure and enjoyment or happiness and satisfaction. Since Milton Friedman’s notorious claim in 1970—that the only ethical responsibility of a corporation is to maximize profits for its shareholders— many ethicists often have criticized him. Indeed, corporations do have social responsibilities that must be met in order to be considered ethical entities. Most of Friedman’s critics found his philosophical view on social corporation’s responsibilities marginal. Friedman (1983: 81–83) asserts that a company has only one responsibility to society: to use its resources and engage in activities designed to increase its profits so long as it stays within “the rules of the game,” which is to say, engages in open and free competition without deception or fraud. Furthermore, Friedman believes that the marketplace will punish those corporations that do not stay within “the rules of the game,” and any corporate funds used toward social ends come from the pocket of shareholders and are, as such, antithetical to the corporation’s purpose.

There is a lack of moral and ethical commitment in the field of international business today. The often-neglected point in modern society is the abusive knowledge wealth power, dissemination information power, material wealth power, technological synergistic power, and religious power. Virtues are defined as the state of excellence in thinking, behaving, and interacting with self and others. Virtues refer to the excellence of intellect and wisdom and to the disposition of cognizance of mind to effectively perform its proper function. Moral virtues are the core values of humanity. Moral virtues concern the habitual choices of rational thoughts in accordance with universal logical principles. However, through some ethical and legal perceptions, “real” knowledge is not objective or socially independent, but it is a subjective system of ordered procedures for the production, regulation, distribution, circulation, and operation of information contents—what we call copyrights, patents, trademarks, formulas, and the like. Thus, the “real” knowledge, through ethical and legal endeavor, is based on the socioeconomic and political value systems of each nation. The major discrepancy between universal moral value systems (virtue) and the national ethical and legal normative systems is based upon the origin of the perception of humans about life. However, convictions born of moral insight hold greater sway against buffering temptations and tendencies toward luxury and need.

Components of Ethical Behavior

Everyone is familiar to some extent with ethical behavior in relation to justice, fairness, and righteousness in decision-making processes. Since ethical decisions and judgments are based on cultural value systems, there are certain ambiguities concealed within the boundaries of these cultural value systems. For example, in the field of business we speak of a just cause, fair price, right wage, and while all these meanings are closely related to one another, they are nevertheless not wholly the same. Let us begin, therefore, with the broadest meaning of ethics as a cultural value system. It involves justness, fairness, and righteousness.

Justness

The proper object of justness is right, that which is just. The proper Latin word for “right” is jus, hence “right” is only another name for the just. Through an ethical point of view, justness does have three clarifications: The first is that the source of justness is natural law. Natural law is a generalized principle for individuals’ actions inclining their feelings toward what is goodness in nature. The second point is related to extrinsic cultural reasoning, which is related to econopolitical and sociocultural value systems. These value systems are called “rights” in relation to and consequent upon end results of goodness. The third point is related to an individual’s intrinsic cognitive conception concerning human rights. Individuals are concerned about themselves regardless of consequences to the common good. It is based upon individual liberty as the means and ends of a justified decision and action. Individual liberty is the moral order. Therefore, in a moral sense, we can say we are free to do what we have a “right” to do. In the field of international management, a manager needs to consider all these “rights” during times of ethical decision-making processes.

Fairness

We divide our ethical fairness concerning holistic sensational, emotional, and rational judgments into three domains of prudence:

1. Prudence is a careful unbiased consideration that comes from special relations between duties and obligations—impartiality.

2. Prudence is viewed as those obligations that come from particular causes for right or wrong actions—straightforwardness.

3. Prudence is viewed as those obligations that come from the particular means of actions—legitimacy.

A manager needs to make a fair judgment on the basis of impartiality, straightforwardness, and legitimacy.

Righteousness

Righteousness refers to an individual’s rational judgment, which is suitable to what is supposed to occur, or what judgment should be suitable to what is in conformity with real fact, reason, standards of moral virtues, or ethical principles. From an ethical point of view, any decision or judgment could stray from the right course of action by “too little” or “too much.” An obvious instance is found in our daily attachment to special habits, tendencies, extravagancies such as workism, alcoholism, sexism, and others. A manager needs to reason correctly at the time of expressing causes of judgments and decisions according to speculative order of knowledge. The right reason is true knowledge of ethical principles.

Truthfulness

Truthfulness means conformity with fact or reality. Facts are those fundamental principles that are apart from and transcend perceived experiences (e. g., the basic truth of life). The truthful ethical decisions and actions in a corporation depend on how a manager complies with the ethics of knowledge. Is it true that the concept of scientific thoughts and statements and those of ethics and values belong to different worlds? Is it true that the world of scientific thoughts and actions are subject to tests? Is it true that the world of what is is subject to tests and the world of what ought to be is subject to no tests? Is it true that the power of intellect differs from the power of will as well as from the power of sense desire? To know something well through reason is to know something as true. Truthfulness, therefore, is the reason of intellect with which to perceive facts or reality.

Theories of Ethics

There are two core assumptions of ethical perceptions: the atomistic universal of moral laws (intellect, wisdom, and knowledge) and cultural value systems. Through our intellectual cognizance of value systems, the most fundamental agent is the universal self. All people are subject to a universal equality—regardless of the separation of contextual value systems in which they exist. Philosopher Thomas Hobbes (1588–1679) (1839: 110), the most influential exponent of the egoistic theory in the seventeenth century, believed that: “Nature hath made men so equal, in the faculties of the body and mind; as that though there be found one man sometimes manifestly stronger in body or of quicker mind than another, yet when all is reckoned together, the difference between man and man is not so considerable, as that one man can thereupon claim to himself any benefit, to which another may not pretend as well as he.” Perhaps the most significant reasoning for such a declaration in ethics is the isomorphic nature of human beings. Human beings are not different in nature; however, their characteristics and behaviors are different—personal and universal. The second core assumption is attributed to the atomistic self. Personal behavior is rooted in personal traits and value judgments. It is the starting point of our intellect and wisdom and it is part of our ontological makeup as human beings. In the realm of our ethical reasoning and moral actions, there is no consultation with other agents—we consult nothing outside of ourselves. Thus, manifestation of ethical intellect and wisdom is the deliberation of extracted thoughts and actions from our immediate intellectual cultural context.

In spite of the implication and chained value systems of both morality and ethics, there are two major approaches in the realm of value systems:

1. Either objective moral values are the universal beliefs of humanity, or

2. Subjective ethical values are the products of societally valued cultures in the form of cultural choices.

When we speak of ethics, we refer to our cultural value systems concerning the collective judgment of right and wrong and good and bad behavior. However, in multinational cultures there are different perceptions concerning what is right or wrong and good or bad. This variation has come from personal gains and the convenient lifestyle of individuals.

The vocabulary of ethics is rich and can be applied to a variety of reasoning. Social scientists and philosophers have documented the fact that people in different cultures, as well as people within a given culture, hold divergent ethical views on particular issues. Some cultures emphasize the causes of ends (teleological) while others emphasize the ends (deontological).

Teleological Ethical Theory

Telos in Greek means goals or results. Teleological ethical theory is reasoning on the basis of the consequences of decisions and actions. Rules must be followed not because of acknowledged obligations but because of the fear of punishment for breaking those rules. This theory is concerned with avoiding harm to the self rather than gaining benefits for the self. Followers of this theory believe that since cultural values vary from culture to culture, it is relevant to judge an ethical value system based on outcomes compatible with cultural and religious standards.

So the origin of an ethical action—its efficiency, not its final cause—is choice, and that choice is a desire with a view to a rationalized end. The primary ethical act of goodwill is devotion. Devotion is promptness in doing whatever pertains to manifest goodness. An act of devotion is the most important end of the behavior of intellectual virtue. This is why good and right choices cannot exist without wisdom and intellect or without a purified emotional state of harmony between mind and body. Good decisions and actions cannot exist without a combination of intellect and character. Intellect and wisdom themselves, however, move nothing. The intellect and wisdom must be motivated by virtue, because virtue always implies a perfection of human power. This power must be dynamic and operable by an individual’s will. How the intellect differs from the power of willing and from the power of sense desiring is the subject of cognitive power. Intellectual knowing and sense knowing are cognitive power. They need to be objectively oriented through a synergistic combination of personal and social embodiment of cultural value systems.

Teleological ethical theorists reject absolute universal ethical commitments because they believe that there are exceptional circumstances which can reverse a good action to bad or vice versa. For example, in the field of business, shoplifting is not moral, ethical, or legal. However, some people believe that if a hungry person really does not have any income to buy basic foods, such as fruit and bread, in special circumstances in a grocery store, the hungry person may consume food without paying, though such an action may not viewed as shoplifting. It is viewed as sampling the taste of foods for deciding whether to buy. In addition, teleologicalists believe that in all circumstances means cannot justify ends. Therefore, ethical judgments should be focused on the end results. As deontologicalists are proabsolutism, teleologicalists are prorelativism.

Deontological Ethical Theory

Deontos in Greek means obligations or duties. The foundation of deontological ethical theory is reasoning based on duties or obligations to self and others. Deontologicalists reject moral choices with mixed outcomes. They insist that an individual must always avoid harming self and others, whereas teleologicalists assume that harm will sometimes be necessary to achieve goodness.

Deontological views of ethics are concerned about causal reasoning for the truthfulness, righteousness, and goodness of decisions and judgments. They are not concerned about applicability of circumstances or situational factors in judging right or wrong actions. These people focus their attention on the right causes regardless of consequences. For example, shoplifting is viewed as unethical, immoral, and illegal by all means and ends. It is a wrong action, regardless of the motive or circumstances of the shoplifter.

Deontologicalists believe in three characteristics that are considered to be usually associated with good judgments. First, ethical judgments about the rightness or wrongness of an action is held to be universally applicable. Parhizgar and Jesswein (1998: 141), in regard to economic affordability of the borrowers and the right of lenders, state:

Within this domain of mutual ethical agreement, through the conscious intellectual cognizance of a party if an action is right for that party, it is also right for another one. If it is wrong for anyone, it is also wrong for others in similar occasions.

In the field of international business, the universal ethical rule says that it is wrong to bribe or to promote bribery for gaining an illegitimate interest. It is universal because it corrupts the dignity and integrity of humanity and it applies to everyone. Therefore, there are some universal dimensions that are central parts of moral marketing. De George (1995: 256) states that this universal truthfulness of ethical principles in advertising is: “The immorality of untruthful, misleading, or deceptive advertising, the immorality of manipulation and coercion through advertising, the immorality of preventing some kinds of advertising, and the allocation and distribution of moral responsibility with respect to advertising.”

Second, ethics is a cultural value judgment and overrides other considerations. We are ethically bound to do what sometimes we may not want to do. Third, ethical judgments should properly direct an individual’s behavior concerning morally right actions, and moral blame can properly accompany acting immorally. Therefore, while morality is considered to be a personal goodness of an individual, ethics is the collective intellectual virtues of a cultural value system of a group of people.

What Is Legality?

Since ethics is a behavioral ordinance to harmonize conflicting psychosocial interests between an individual and other people, law is another practical econopolitical attempt to resolve the disputable issues between people. Therefore, law is not formally an act of will; it is a practical reason that determines means in relation to some given ends. Oesterle (1957: 201) defines law as a “certain ordination of reason for the common good, promulgated by one who has care of the community.” Two major concerns, however, may be added to this definition. The first is that, by designation, the common good is the necessary end of every law, thus we may distinguish a true law from so-called law laid down by a tyrant. Although a tyrant is in control of a state and enacts laws for the political common good, in reality, such ordinances are directed to maintain personal power in order to rule the state; they are not true laws and do not properly carry an obligation to be obeyed by all the people, including the tyrants themselves. Second, while the common good is the necessary end of every law, the common good needs to be directly effective for the benefits of the community as a whole.

Law formalizes the sociocultural and econopolitical contract under which the community limits the harm that members can do the social fabric (Ember and Hogan, 1991). As we see, law resembles ethics in that both are social institutions that aim to improve human relations in various ways. Law is an exterior principle of action in the sense that it establishes, in a universal and objective fashion, an order of action to be followed by people seeking a common end. Law, however, presents certain mandatory minimal standards of “intellectual” conduct. Legal standards regulate people’s social actions with respect to what to do or what not to do. Therefore, law is an ordinance pertaining to reason. It is the expression of what is reasonable to do under special circumstances and situations.

Summary

Although much has been written about philosophical approaches to ethical and moral generalized behavior, much less is known about etymological differences and genealogical distinctions between these phenomena. In the pre-industrial Revolution era, economic relations among nations tended to be imbedded in the socioreligious sphere; in postindustrialized societies, social relations tend to be embedded in the econopolitical sphere. The one method of understanding the emergent meanings of morality and ethics is that, because of the advancement of science and development of technology, science and technology have dramatically changed cultural value systems in all nations. This is particularly true in developed societies. One way to identify different meanings, perceptions, conceptions, and applications of the terms morality and ethics is to study the evolution of human civilization through history. As far as the new world order goes, it has emerged through new necessities of human life and changed the domestic market economy toward the international market economy. Many cultural, legal, and ethical values and norms have been altered because of the new world order as well.

The business of multinational business is business. What kind of business is related to moral, ethical, and legal conceptions and perceptions of producers and consumers in both home and host countries? The problem in the international business transactions is sometimes related to some issues in which there are similarities between home and host countries’ laws and ethics, and in other cases in which there are differences. Little has been written or said about the ethical and moral problems and issues for international corporate commitments and responsibilities. Every nation seems to be concerned with these issues. This may be in part because multinational corporations are proportionately powerful and influential in mapping international econopolitical diplomacy. They provide employment opportunities, produce needed products and services, and earn profits for their shareholders. Also, they create problems such as polluting the air and water and in some cases ignore human rights. International business law faces a number of problems that stem directly from the simple fact that sourcing carries a suspicious motive to be justifiable for a pluralistic gain. It carries a partisan message of distrust among customers, distributors, and suppliers. Such a lack of confidence in its inherent ability gives little reason to provide international support by all involved parties. Within the global environment of business, the business of intentional business is not charity or social welfare, nor is it robbing, abusing, misusing, or exploiting one another. What constitutes business is truthfulness, righteousness, and worthiness; the relations between employers and employees, government and businesses, home and host countries; the quality and quantity of products and services; cost and fairness; justness, and worthiness of cost-benefit analysis.

Chapter Questions for Discussion

1. Explain the distinction between morality and ethics.

2. Explain the distinction between speculative knowledge and practical knowledge.

3. State and explain the definitions of morality and ethics.

4. What is moral theology?

5. What is the first principle of morality and how do we arrive at it?

6. Explain how good, as an end, is a cause of moral and ethical action.

7. What is the distinction between “all people seek pleasure” and “all people seek happiness?”

8. Through what sense do some people seek pleasure or happiness?

9. Give arguments for and against the identification of wealth and power with pleasure and happiness.

10. What are the meanings of ignorance and negligence in morality and ethics?

11. How does a desirable moral decision compare with an ethical decision of choice?

12. Explain the act of deliberation.

13. What is conscience and how it is related to consciousness?

14. What is the definition of fortitude?

15. What is magnanimity?

Learning About Yourself Exercise #8

How Do You Perceive Your Moral, Ethical, and Legal Behavior?

Following are sixteen items for rating how important each one is to you and to your organization on a scale of 0 (not important) to 100 (very important). Write the number 0–100 on the line to the left of each item.

It would be more important for me as a manager of an organization to:

Turn to the next page for scoring directions and key.

Scoring Directions and Key for Exercise #8

Transfer the numbers for each of the sixteen items to the appropriate column, then add up the four numbers in each column.

The higher the total in any dimension, the higher the importance you place on that set. The closer the numbers are in the four dimensions, the more psychosocially and econopolitically balanced you are.

Make up a categorical scale of your findings on the basis of more weight for the values of each category.

For example:

After you have tabulated your scores, compare them with others on your team or in your class. You will find different ethical and moral patterns among people with diverse scores and preferred modes of self-realization.

Case Study: Hillsdale College

The daughter-in-law of the president of Hillsdale College committed suicide on campus after it was alleged that she had been having an affair with him. Such an incident resulted in the president resigning his position because of immoral, unethical, and illegal behavior.

Hillsdale College is a liberal arts college two hours west of Detroit. The president took office in 1971 and served for twenty-eight years. The president was very successful in fund-raising from the private sector of businesses, including receiving federal aid and financial assistance for students. He appealed to the rapidly growing conservative ethical, moral, and cultural values and asked people to help and preserve the college’s independence. The president, during his twenty-eight-year tenure, raised $325 million for Hillsdale. He managed to convince the board of trustees to pay him an annual salary of $448,000.

This is the irony: While conservative cultural values are based upon ethical and moral behaviors, and despite the belief that people ought to be held accountable for their conduct, the board of trustees evidently did not wish to hold the president responsible for his misconduct for many years. Of course, conservatives sometimes avoid exposing their own immoral and unethical behaviors because they fear public condemnation. Conservatives are not the only ones who sometimes find themselves living in opposition to their cultural and religious value systems.

The alleged misconduct of the president came, therefore, as a shock when two conservative magazines, The National Review and The Weekly Standard reported an allegation that the cause of the suicide of the president’s daughter-in-law was directly related to his sexual misconduct. The magazines alleged that the president had carried on a long sexual affair with his son’s wife, the mother of his grandchild. Not only that, they said, he had also had affairs with other women (Wolfe, 1999). The president’s daughter-in-law was managing Imprimis, a monthly conservative newsletter of nearly one million readers published by the college, as well as the Hillsdale College Press.

The Chronicle of Higher Education, under the Michigan Freedom of Information Act, obtained some documents indicating that the president’s daughter-in-law had resigned from her job on September 8, 1999. She gave few details as to why she was leaving, as follows: “You know me, I hate to be the object of attention. I have been such an object in the college community for many years now. I just want this to be as private as possible and, most of all, I don’t want to have to answer any questions.” Her resignation came just days after the president announced that he planned to remarry. He had divorced his first wife, who had cancer, five months earlier (Van Der Werf, 1999).

When the president’s immoral, unethical, and illegal behavior surfaced, he resigned from his position and requested that the board honor him with early retirement. The board of trustees announced that the president’s request for early retirement had been granted. In addition, only after widespread publicity did college officials say they would investigate the allegations.

How, then, should people respond to such an important issue? Is it fair to question the moralists and ethicists, who preach moral virtues, family values, and sexual restraint, yet act irresponsibly by ignoring moral principles?

According to critics, the president consistently acted as if he were above restraint—including ethical and moral restraints—and he seemed to have had as much respect for his son as he did for dissenting faculty members, students, and the community at large. According to some dissident faculty members, the president was an autocrat whose leadership style was authoritarian in the extreme. The president allegedly treated faculty members (at least those who dared to challenge him) as nonpersons. According to the American Association of University Professors, since 1988, after dismissing a history professor (the AAUP report criticized the college for not protecting faculty members from the improper exercise of administrative power), the president had utilized such a leadership style and the trustees were aware of these facts (Wolfe, 1999: A72).