Oscar Bulaong Jr.
Business ethics is a species of “applied ethics”, of which there are several others, such as “medical ethics”, “environmental ethics”, “information technology ethics”. These specific fields of real-world application fall under a broader and conventionally more academic field, called ethics or moral and . In this simple classification, business ethics then is typically understood as the application of ethical concerns to a specific area of human social life; namely, for-profit organizations and all the relevant commercial activities that such organizations undertake. This essay attempts to describe the ethical roots of business ethics and portrays how a person interested in business ethics can approach it usefully, not just with a mindset, but more so with a specific attitude about organizational decision-making. This essay can also serve as a simple introduction to business ethics that can orient how a learner may proceed in the course of learning business ethics.
The word “ethics” comes from a Greek word, ethos. To understand this word, we need to step back for a moment and try to reflect on the “ethics” portion of the term, business ethics, for which we can attain an adequate starting point. So what does “ethos” mean? One possible translation for this term is “a way of being and behaving”. This refers to the specific manner by which a person or organization does things. At this point, let’s not focus on what a person or organization does, but the specific way that it does things. What determines an organization’s ethos are many things, but they mainly involve the person’s or organization’s self-perceived identity and capacity—how they name and frame their character through the significant moments of their life. This is typically articulated in a vision-mission statement, but sometimes one’s ethos remains unarticulated, but still visible to others, and is revealed by what others say about them.
A useful way to concretize and depict ethos as “a way of being and behaving” is via a story about three stonemasons. This story is becoming more and more popular online. It is also featured in a book entitled Grit: The Power of Passion and Perseverance by Angela Duckworth. In the story of the three stonemasons, there is a church that is being constructed. They cut stone and fix the pieces in a jigsaw puzzle-like assembly, to make a wall. The architect of the church approaches three stonemasons and asks each one a simple question: What are you doing?
To that question, the first stonemason answers, “I am making a wall, and getting paid for it.” The architect thanks the first stonemason and asks the second one the exact same question, what are you doing?
The second stonemason answers, “I am helping to build a church.” The architect also thanks the second stonemason and goes to the third stonemason and asks the same question.
The third stonemason answers, “I am doing the work of God, helping to save souls.”
Observe that the three stonemasons are doing the same kind of work and yet their answers are different. Could we identify the difference among the three answers? On the surface, the difference between the answers of the first stonemason and the third stonemason has to do with how narrowly or broadly they look at what they are doing. The first stonemason only sees the activity of cutting stone and the financial compensation for doing that activity. The third stonemason, in comparison, casts his activity as part of a “big picture”, in which he consolidates the direct result of his activities (a wall that is part of a church) with the spiritual activities that will take place in that church (salvation of souls). He takes into account his contribution to that big picture, unlike the first stonemason, who only narrowly understands the scope what he is doing. Thus we can characterize that big-picture answer of the third stonemason as having a
sense of “place” and “purpose”. The third stonemason believes that he takes part in that grand narrative. In this example, a “grand narrative” can be any religious, philosophical, or ideological conviction.
We will embed the term ethos in the third stonemason’s response, but first let us make use of some terms to better understand the answers of the three . The first stonemason has a job. The second stonemason has a career. The third stonemason has a mission. Here are some characteristics. The one with the job focuses on salary, personal gain, maximum output for minimum input. This means the less work I can do for higher return, the better. We don’t judge the first stonemason, it’s just the way a job is often undertaken. A career’s concern is a bit broader; namely, the growth of the organization or industry. It is in the middle of a job and mission. Now the one who has a mission has a sense of “place” and “purpose” in the world, and is driven by a “grand narrative”. A mission is often concerned with long-term sustainability in the context of a grand narrative. It is often aligned with nation-building or a social cause.
Having described the differences between the three, let us concretize them by giving an example. Could you guess what the following person does? Suppose this person thought of what he does as a job, he would say,” I fix broken bones, so my patients pay me a lot of money.” As a career, this person would say, “I cooperate with other doctors who fix broken bones, to promote the interests of our specialization.” Now suppose the same person thought of what he does as a mission, he would say, “By promoting the musculoskeletal health of my fellow countrymen, I contribute to the well-being and productivity of the nation.”
What does that person do? He is an orthopedic surgeon. This example helps to capture our imagination to better understand the differences among job, career, and mission. Thus we would describe the third stonemason as having an ethos, insofar as an ethos is a way-of-proceeding given a certain grand narrative. To deepen our understanding, a useful activity is to imagine what a variety of professions might say, by supposing how they will describe their professions according to job, career, and mission. For example, how would an accountant, a supply chain manager, or a sales manager describe what he or she is doing, according to job, career, and mission? We have two examples above; namely, the stonemason and the orthopedic surgeon.
Here is a summary of what ethos means for a person or organization, insofar as it:
describes a way of being and behaving;
is mainly determined by one’s self-perceived identity and capacity;
is embedded in a sense of mission, a sense of “place” and “purpose” in a grand narrative
It can happen that some people may interpret ethos as only a kind of perspective or mindset, just the same way that they may interpret the difference between the first and the third stonemasons as only a difference in the way that they see what they are doing. The point here is that ethos is not merely a perspective, but more so it is a way-of-proceeding, which points to its decisive characteristic—a way of being and behaving. A person who has an ethos does not only see things differently, but he will orient his actions and behavior according to contributing to a grand narrative. In other words, when one knows one’s place and purpose in a grand narrative, one will act accordingly. Observe that the term “grand narrative” makes the orientation nondenominational. Ethos cannot be reduced to a specific dogma or doctrine; instead, we claim that ethos underlies every religious, philosophical, or political conviction.
There is a frequently asked question that arises here: does it mean that someone who only has a “job” has no ethos? Is mission the only one with ethos? For the person who has a job, that person’s ethos is unripe or undeveloped. The one who has a mission has an ethos that is ripe and mature. By using the metaphor of ripeness and development, it becomes a continuum. It’s no longer a black-and-white switch as if one can have a job entirely and another can have a mission entirely. Ethos is part of a person’s journey. A young person would often find a job, and as he gets older, might begin developing a sense of mission.
Now ethos is neither a vague nor abstract concept that is interesting to know but insignificant in the real world. Let us consider a case study briefly to see the real-world significance of ethos.
The following is an excerpt from the news article:
BEIJING Chinese officials on Monday issued a higher estimate for the number of children affected by tainted dairy products, saying that as many as six babies might have died and nearly 300,000 were sickened after consuming contaminated milk powder.
In its last update, in mid-September, the government set the death toll at three infants, with 50,000 others made ill after consuming milk laced with melamine, an industrial chemical used in plastics and fertilizers. The substance, which has also been found in eggs and animal feed, was added to
thicken watered-down milk to fool tests that measure protein content.
The melamine scandal has devastated China’s dairy industry, leading scores
of companies to order recalls and raising yet another raft of questions about
the safety of Chinese products. On Monday, the newspaper China Daily said
milk exports had dropped by 92 percent since September, when news of the
adulterated milk emerged.
The Ministry of Health issued a statement saying that 860 babies who drank
tainted milk were still hospitalized with kidney or urinary-tract problems; 154 of those were described as being in serious condition. “Most of the sickened children received outpatient treatment only for small amounts of sand-like kidney stones found in their urinary systems, while a part of the patients had to be hospitalized for the illness,” the ministry said.
To analyze this case, consider the different processes that manufacturers undertake to produce milk, such as reconstitution, recombination, fortification, or a combination of such processes. In these different processes, water is often added to increase volume. Increased volume results in more units sold, and thus higher revenues. So what prevents a milk manufacturer from excessively adding water, to maximize revenues for itself? Government regulatory tests ensure that the milk is still milk, by measuring certain elements in the milk. In this case, the test involved protein content. But there is a shortcut to fool these tests, as we have been in the case above. We can speculate that the milk manufacturer added water to their milk production to increase volume, and then added melamine to ensure that it passes the regulatory tests, insofar as melamine acts like a proxy of protein. On the surface, this decision to add melamine could be considered a good business solution to maximizing shareholder wealth. When we look at it more deeply, however, the “good business solution” turned out to have devastating effects not only to the manufacturer, but also to the entire industry. And what makes this case tragic is the harms caused on the infants that ingested the milk with melamine.
Following our analysis above, we can imagine that the hypothetical decision-maker who ordered the addition of melamine to the milk would think like the first stonemason, who thinks of what he does as a job. A person who has only a job focuses narrowly on salary, short-term gain, and maximizing output for a minimal input. We could say he had an unripe ethos, when he made that decision to add melamine. Milk production is only a vehicle for personal gain, so maximizing revenues and minimizing expenses would be the narrow concern of this hypothetical decision-maker.
Here is a thought-experiment that will help us understand the practical significance of ethos. Suppose that our hypothetical decision-maker (who ordered the addition of melamine) actually had a ripe and developed ethos, and considered himself as having a mission. Would he have still added melamine, if he had a sense of place and purpose—a mission? In whichever grand narrative he promoted, he would have thought beyond maximizing shareholder wealth, and would have taken a stakeholder perspective. He would have thought, “This milk that we produce has an impact on the health and brain development of the infants that ingest it. I can have an impact on the performance of the next generation of leaders in my country.” From this insight evolves the possibility of a mission. Thus we claim that this mission-centered hyposthetical decision-maker would not have added melamine. Instead, he would have developed the product to contribute to a grand narrative in the spirit of nation-building.
This is then the decisive question: between these two kinds of decision-makers (the one who actually added the melamine and the other one supposedly mission-centered), which one do you think will sustain a successful and profitable business in the long-term? We know the first one had maximum short-term gains but the result were devastating and tragic. How do you think the second one will flourish in his sense of mission? Would his customers become loyal to his brand, and thereby would this loyalty generate more sales revenues in the long-term? Would he be fair to suppliers, and build good business relations that would translate to profitable transactions? The claim we are attempting to shed light on is that doing good is good for business. There is a
certain wisdom that is necessary to understand this claim. The third stonemason would have that wisdom, that doing good is good for business.
Given all these insights, we ask: How can we implement this learning about ethos to anorganization? The implementation lies in the cultivation of a sense of mission across the organizational chart, from the operating layer, up to middle managers, and all the way to C-suite and the board of directors. This is then the starting point of business ethics, not in the codification and implementation of a code of conduct, which is of course necessary but will promote mere compliance, rather than genuine ethical behavior. The starting point of implementing ethics in a business is the cultivation of organizational ethos, which is oriented and motivated by a mission. This requires a deep-dive of the functional areas of an organization (marketing, operations, finance, et cetera), to make the continuous assessment and intervention cycle of aligning themselves with the self-determined mission of the organization. Are you a food manufacturer, then how do you see your place and purpose in the nourishment of your population? Are you a construction company, then how do your infrastructure projects improve the lives of the people who use them? Are you a university, then how do your programs contribute to the competencies of future decision-makers in industry and government?
Naturally, the specific empirical studies and intervention strategies to cultivate ethical decision-making in business will have to be articulated more, but this is not the space to do that articulation. At the beginning, we claimed that the objective of this essay was to describe the ethical roots of business ethics, and portray how a person interested in business ethics can approach it usefully, not just with a mindset, but more so with a specific attitude about organizational decision-making. We now have a clearer description of how the ethical roots of business ethics can have a significant impact on decision-making in organizations. The ethical person in business is exemplified by the third stone mason who orients what he does towards contributing to a grand narrative in the spirit of a mission. That person has an ethos. And we end with a reflection question: if we can deepen our understanding of ethos, in this regard, how can that not result in a flourishing business? For a business that is ethical is a business that flourishes.
Comments