Personal Code of Ethics in Business July 20, 2009
The debate on personal and private ethics in business has been an unresolved issue for centuries. Therefore, a resolution to the issue cannot be quickly obtained. However, we can concede to our self-interested human nature and resolve to find more utilitarian alternatives which can turn this flaw into an advantage. In recognition of self-interest, we can address community social needs that stimulate social stability by engaging in directed economic enterprise for long term improvements that rely on ethically motivated development.
In the January 18, 2008 edition of The Wall Street Journal, Cate Doty, the cartoonist for Pepper…and Salt, provided a very succinct tongue in cheek dichotomy faced by modern business when she said, “Raise your hands those in favor of saving their soul rather than the company” (Figure 1.) In response to this witticism and in the hope that the alternatives are not mutually exclusive I ask this question, “What if we didn’t have to choose?"
“In jest, it is humorous. In reality, I am appalled that there is a pervasive belief in American society that one has to give up making ethical decisions in order to survive in business” (Fiedler, 2008). Historians, sociologists and economist have jousted with distinguishing ethical choices that appear in daily business operations. But this is only one facet of the ethical confusion landing in the laps of business owners who are faced with the reality of the multiple standards derived from cultural diversity, geographic location, religious beliefs, and a governing construct that believes there should be a separate consideration for private and public ethics (Bragues, 2005).
Bernard Mandeville, the 18th Century Dutch author of The Grumbling Hive: or, Knaves Turn’d Honest, personified this split in private and public ethics. Though he was a self-professed Christian, his public belief recognized that a certain lack of ethics was necessary in business since “commerce necessarily involves environmental degradation, health dangers from risky products, ruthless exploitation of animals, and systematic favoritism of the rich over the poor” (Bragues, 2005, p. 180). Mandeville’s position on the necessary evils of business, led him to recognize that a personal level of ethics and accountability could not be universally imposed on others. He also mused that it was the self-interested desires of men that led them to seek enterprise. In The Grumbling Hive, lines 31-34, he writes,
“Vast Number thronged the fruitful Hive;
Yet those vast Numbers made ‘em thrive;
Millions endeavouring to supply
Each other’s Lust and Vanity”.
So instead of imposing his level of morality on others, he chose to focus on the universal concept of self-interest, perhaps mutual self-interest as well. Later in the same text, he brought forth the acerbic social realities of commerce in lines 175-201:
“The Root of evil Avarice
That damn’d ill-natur’d baneful Vice,
Was Slave to Prodigality,
That Noble Sin; whilst Luxury. 
Employ’d a Million of the Poor,
And odious Pride a Million more
Envy it self, and Vanity
Were Ministers of Industry;
Their darling Folly, Fickleness 
In Diet, Furniture, and Dress,
That strange, ridic’lous Vice, was made
The very Wheel, that turn’d the Trade.
Their Laws and Cloaths were equally
Objects of Mutability; 
For, what was well done for a Time,
In half a Year became a Crime;
Yet whilst they alter’d thus their Laws,
Still finding and correcting Flaws,
They mended by Inconstancy 
Faults, which no Prudence could foresee.
Thus Vice nursed Ingenuity,
Which join’d with Time; and Industry
Had carry’d Life’s Conveniences,
It’s real Pleasures, Comforts, Ease, 
To such a Height, the very Poor
Lived better than the Rich before;”
Mandeville’s concept becomes clear as is apparent in the preceding lines. Self-serving objectives in business enterprise, whether performed by owner or worker bee, can also systematically result in long term improvements in the social justice aspects of human development through increased socioeconomic status for the previously deprived. But my personal perspective is that we must make decisions and lead with our morals, not with a business sense that would simultaneously allow a (wo)man to make money that promotes the vices of others even in the interest of long term incremental gains in social status for the poorest members of a population. It is a reality that for every lotto winner, there are many more who have sacrificed for the ‘luck’ of the winner. And, there are many others who have succeeded in gambling, prostitution and other less virtuous business enterprise at the expense of others, too. This is a high price to pay for ‘some’ elevation in social status for the depraved masses. But, I cannot deny that the reality of vices that erupt in every individual has driven our ‘free’ enterprise society to some extent. But, I also cannot deny that it has come at some ‘cost’?
In contrast to Mandeville’s choice to maintain separate private and personal personna’s,, Adam Smith wrote “The Theory of Moral Sentiments” (1759) and “The Wealth of Nations” (1776) amidst the rumblings of the actual American revolution decades later to illustrate the mutual relationship between public and personal ethics. Smith saw the combined role of private and public ethics as a necessary consideration that relies upon a ‘Devine intervention’ according to R. H. Campbell and A. S. Skinner in their book, “Adam Smith” (1982). The concept of a “Devine intervention” has since become generally accepted in literature as the ‘invisible hand’.
Smith’s belief in the concept of the ‘invisible hand’ adheres to the understanding that an individual would draw on their “personal fundamental principles of religion” (Campbell et al., 1982, p. 94) to extol virtues that can benefit others based on moral judgment tempered with sympathy for the human condition. These virtues include “meekness, beneficence, generosity, and moderation” (Campbell et al., p. 100). Scholars of faith-based doctrines may recognize these virtues in The Ten Commandments or in the list of what is known as the ‘seven deadly sins’. However, it was not enough for Smith to have sympathy for the plight of another. Personal sympathy driven by a faith-based doctrine merely evoked the passion to initiate action to ameliorate the circumstances that evoke the initial response. Since Smith was an economist, he was able to formulate some sense of social justice by providing an understanding of opportunity through commerce in the form of “agriculture, manufacture, and trade” that was dependent on the equitable distribution of assets in the form of “land, labour, and capital” (Campbell et al., p. 172). Clearly according to Campbell, Smith’s approach to economics relied on the premise that engaging in the interdependent nature of commerce would provide solutions to the inequity in resource distribution and simultaneously bridge the great division among the ‘haves’ and the ‘have nots’.
As a result of their individual perspectives on business ethics, Mandeville and Smith represent opposing sides of the question posed by Doty when she said, “Raise your hands those in favor of saving their soul rather than the company”. I believe Mandeville would have sided with saving the company and Smith would have saved his soul while still believing that some ‘Devine intervention’ would save his business. Or, at minimum, provide for his needs until such time that commerce can be reestablished.
Personal Business Ethics
“Though following this pattern of development has provided for a higher economic status, I believe that we have lost the pure foundational essence of the American spirit that was historically based on the inseparable notions of free enterprise and honor” (Fiedler, 2008). Or was the essence of the American spirit ever based on the inseparable notion of free enterprise and honor? Indeed, Mandeville wrote these items in 1705 at the pre-birth of the nation. Perhaps it was instead built on the “…tough minded approach of harnessing self-interest for public purposes via the application of market mechanisms” that is the more realistic version of the American spirit (Mandeville as cited in Bragues, 2005, p. 198). Indeed, we may have opted for a disjointed directive that mocks these sound beliefs as antiquated which disarms an entire populace by creating an increasingly diverse demographic that believes that it can advance without moral guidance. “The juxtaposed position of our populace into unfamiliar demographics should be a clear sign that we have erred” (Fiedler, 2008). This statement gains credibility as we watch the contraction of the middle class that leads to a greater void in those who “have” and those who “have not”. As such, it is evident that next to Adams’ ‘invisible hand’, there is another implausible slow-moving mechanism that is at work to increasingly remove ethics in business that can be called ‘sleight of hand’. The result of the ‘sleight of hand’ movement “has already blinded our ability to grasp tangible alternative solutions for lack of foundation or example” (Fiedler, 2008). Removing the impact of this deception “will take a determined reach into the darkness (which includes a belief beyond ourselves in tune with Adam’s ‘invisible hand’), to gather support for a vision that could dare to recapture the personal responsibility associated with the inseparable qualities of business ethics” that cannot be split into public/private considerations (Fiedler, 2008). Recognizing the inseparable qualities of business ethics “becomes necessary to provide an avenue that not only embraces but demands economic advancement that does not tear at the ethical fiber of our nation” (Fiedler, 2008). “We cannot be a nation of good rules written on paper” (Fiedler, 2008). We have to be a nation of individuals where enforcement and accountability are staples in the business community that emanate from leaders who are willing to make ethical commitments.
But how do we achieve this goal as a nation? For the answer, I will choose to recognize Mandeville’s argument of the self-interested nature of humanity and start with the notion that we can change one individual at a time. After all, if we can be taught that our vices can produce economic gain, we can be taught that a desire for virtuous methods can also lead to the same advancements sans the negative impact of the vice-driven approach.
The answer lies in Sauser’s (2005, p. 346) definition of business ethics: “Ethics has to do with the extent to which a person’s behavior measures up to such standards as the law, organizational policies, professional and trade association codes, popular expectations regarding fairness and what is right, plus one’s own internalized moral standards”. In other words, Sauser agrees with historical economists like Adam Smith that it was impossible to separate the personal morality of a man from their moral obligation to conduct trade in a fair and ethical manner.
Although Smith recognized that Mandeville’s self-interest approach was a relevant factor in how society responded to moral issues in business and could not ignore the impact of this position (Campbell and Skinner, 1982), it was clear that he also believed that the dependency on vices to drive social stability did not actually achieve advancements. Since self-interest was consistent with human nature, Smith knew social and economic stability required a ‘Devine’ intervention to explain any good. Subsequently, it was necessary to consider both the public ethics in business combined with a personal responsibility under a belief system that was not dependent on self. As a result, decisions made for the good of the soul should coincide with good economic outcomes. Self-interest, though a factor, should never ‘trump’ the moral obligation to a community through a business enterprise.
“In my personal pursuit of this objective, I have accepted entrance into the PhD program of Health and Public Affairs at the University of Central Florida partially in answer to our nation’s continuing moral dilemma. As a student, my goals are two-fold in nature and develop along the lines of short and long term goals. Through my own short term goal of a doctoral education, I hope to advance the development of other individuals by expanding their horizons in such a way as to allow them to take hold of opportunities that they may have otherwise missed for lack of knowledge, direction, or moral compass” (Fiedler, 2008). As an output of this belief, I have already created flexible business models under the name of Microeconomic Intentional Community Business Development (μICBD) that responds to urgent health care services for those severely impacted by reduced government funds community needs through community business development (Fiedler, 2009). The creation of this model illustrates that there are methods of economic development and business enterprise that can address societal needs while still striving for business solvency that do not rely on the vices of the community for advancement.
“First and foremost, my short term personal educational goals support my desire to accommodate the additional skills and knowledge within a dynamic academic environment that will propel me to become a catalyst for change at both a personal and professional level. Secondly, my long term career goal is to utilize my education, skills and work experience to teach at advanced academic levels and to promote community activities that funnel the information to the general population where it matters most-right in the heart of the business communities.” (Fiedler, 2008).
“These goals are also supported by the abundant opportunity to perform research for both the private and public sectors that will promote continued interest in advanced education, generate original thinking and produce viable options to diverse items that include localized business development that emphasizes the contributions of one to the many, and globalization. Through my own education and as an example of a future outcome, it is my desire to remove the present limitations that are a product of compartmentalized government programs that prohibit access to capital and vital information to the general population as a whole and inclusively in that portion of the population who have become resigned in their fate of stagnation for lack of vision” (Fiedler, 2008).
“Though I am not part of the demographic populace that believes that we can make sound business decisions without ethical guidance, I am also personally aware of the new demographic population that is facing the same fateful choices for similar reasons. What is that population?” (Fiedler, 2008). This population is the “educated, underemployed sector that is growing rapidly in this nation that must learn to succeed in a global economy with limited resources and even less financial support. But, it does not end there. If those who are normally able to start small businesses cannot do so due to the constrained business environment, the impact of the loss of economic development will only escalate the impact for those who rely on those newly created jobs for survival. Without a concerted effort to create jobs with ethical standards, the moral dilemma can only be expected to spiral downwards if the issue remains unaddressed or merely brushed over for the sake of public and community relations.” (Fiedler, 2008)
“We have not been given an easy bone to chew.” (Fiedler, 2008).
“But my directive as a future educator seems clear in this pursuit--allow the individual to first believe that they are able to move forward and then show them how this might be achieved through proactive awareness and action. In addition, the strategy emphasizes an atypical approach that serves as a primer for the individual advancement of ethics within each community one person at a time through the eyes of personal responsibility. I am an ardent believer that it is a series of individuals that exact change to impact a community, not the popular notion that believes that it is the responsibility of the community. Responsible citizens make a responsible community. Further, this approach has the ability to promote incremental prosperity that can impact the entire nation instead of feeding into the defeatism that is evident in personal and societal loss. Whether driven by complacency and/or by those who have not been offered realistic alternatives that could alter that fate, it becomes irrelevant. What matters is that if we know better, doesn’t it become our responsibility to make others aware?” (Fiedler, 2008).
“Beginning with myself, my goals are ultimately motivated by my desire to exact fundamental change in individuals which can cumulatively impact the economic and social environment of this nation. I do not wish to remain a part of the underemployed class. I believe that I can achieve these goals armed with the advanced education and exposure to a diverse student population that will capitalize on this information to enrich the prospects of this country even as we develop relations with others. In addition, the earned credential will eventually provide the necessary authority or platform that will carry credibility that has been tempered with the cumulative knowledge of my peers amongst those with the actual political power and prowess to exact the required changes.” (Fiedler, 2008).
“Summarily, this opportunity that I have undertaken is my response to making sure that I personally am not forced to acquiesce. But of even more significance, it is my desire that I will continue to find alternative solutions that will help to ensure that we, as a nation, do not have to lose our ethics in order to stay afloat professionally. This path can produce the desired impetus to match my goal to not only increase knowledge but to stand at the forefront of industry armed with the ability to promote properly motivated and socially responsible change. Though I take this first step alone, it is with the hope that we can come together and not stumble as a nation. We cannot falter on the easy stuff. It just takes one person at a time…and together we can restore what we know is the true and correct option without losing our souls or our shirts.” (Fiedler, 2008).
As for me, I raise my hand in favor of saving my soul because I believe in doing so, ‘Devine intervention’ will move me forward in good favor in recognition of my need for economic stability. We can develop goals and business enterprise with sound personal ethics and public utilitarian objectives. We just have to make sure that we add this option to our abundant list of self-interested alternatives.
Bragues, G. (2005). Business is one thing, ethics is another: Revisiting Bernard Mandeville’s The Fable of the Bees, 15(2): 179-203.
Campbell, R.H. & Skinner, A.S. (1982). Adam Smith. New York: St. Martin’s Press.
Fiedler, B.A. (2007, May 19). Retire Eaze: Serving the transitioning elderly community with dignity. [Business Plan] The Entrepreneurial Society at Kettering University, Flint, MI.
Fiedler, B.A. (2009, October). Institutional reform and innovative health care service solutions via microeconomic intentional community business development. Paper to be presented at the GLOBELICS 7th International Conference 2009, Dakar, Senegal.
Fiedler, B.A. (2008). Response to Humor. Retrieved June 6, 2009 from http://youpublish.com/bethfiedler.
Mandeville, B. (1705). The grumbling hive: or, knaves turn’d honest. Retrieved May 27, 2009 from http://www.xs4all.nl/~maartens/philosophy/mandeville/fable_of_bees.html.
Moriarty, J. (2005). On the relevance of political philosophy to business ethics. Business Ethics Quarterly, 15(3):455-473.
Pepper…and Salt. (2008, January 18). The Wall Street Journal, Editorial Page.
Sauser, W.J. Jr. (2005). Ethics in business: Answering the call. Journal of Business Ethics, 58: 345-357.