Note: In speaking to various groups concerned with corporate ethics a cluster of questions routinely arise. One of the most frequently asked is the one in the title. It’s always important that I preface my comments by emphasizing that I’m not speaking of corporations that are relatively small and still owned and/or controlled by their founders. I am, instead, speaking of the very large corporations that control the market and are listed on the world’s stock exchanges. There is no reason why corporations that are owned and controlled by individuals or families cannot behave morally, if only because in doing so they are, presumably, fulfilling the wishes of their shareholders. But corporations that are publicly traded have a strict responsibility to serve the interests of their shareholders by maximizing the value of the assets they control. In other words, by maximizing profit, and thus the shareholders’ return on investment. This severely limits the choices open to their employees and managers.
Can the corporate workplace be a moral environment? Yes, and no. The corporation itself is, and was always intended to be, an amoral institution. [Here I am speaking of what I call the “modern business corporation,” which is defined as being large, publicly-traded and widely held, and professionally managed. Think Exxon or Yahoo! or Nike.] It is, in other words, expected to be blind to morals and ethics, and in fact, according to its design criteria, it will not function optimally unless it is. So, with out major design alterations that would change the nature of the institution, a corporation can only, at best provide a morally neutral environment for workers.
Whether workers can or should be expected to behave morally within that environment is a more complicated issue that hinges on the question of free will and morality.
The question of free will is a basic one in philosophy. When we reflect on it, it seems to us as though we have freedom to act as we choose. No matter how determining the circumstances surrounding a choice between two options, we feel that, ultimately, we are free to go against the grain and do as we want rather than what is demanded or expected of us.
But there are those who take the view that that what we perceive as freedom of choice is actually an illusion, that we are simply unaware of the complex genetic and environmental factors that actually determine the choices we make. They argue that mind, which provides the illusion of free will, is an epiphenomenon or spin-off of brain activity, which is a purely physical phenomenon and therefore strictly determined. Mental activity, including the illusion of free will, is merely the movie through which we experience life. “What we want” is merely the mind’s fanciful reflection of what our genes and environment are compelling us to do.
If you are a proponent of free will, you will argue that the reverse is true—that it is mind (mental activity) that causes the changes in brain state that scientists monitor on their instruments, and not vice versa. Scientists are typically loath to accept this position, obvious though it may seem to the rest of us, because it leaves them with a dilemma, namely, the nature of mind. For science, that which cannot be weighed, measured, or in some way observed, does not exist. Mind seems to fall into this category.
It could be argued that the fact that we form an intention to do something in our minds and then go ahead and do it, and that our actions are observable, is ample evidence of mind’s existence. For example, I feel thirsty and decide to get myself a glass of water; my mind instructs my body to get up from my chair and walk to the kitchen, turn on the tap, get a glass down from the cupboard, fill it with water, and drink it. All of that is the observable result of mental activity, or mind. But our determinist friend could as easily argue that this is simply how we experienced the chain of events, and in fact everything we did was determined in a strictly mechanical sense, that once we felt thirst the rest was a foregone conclusion.
There appears to be no way in logic to escape from the philosophical impasse presented by free will versus determinism, if only because everything ultimately rests on our subjective impressions—that is, what seems to us to be the case when we think about it. Our observable actions, our only other source of clues, can be interpreted either way.
In such circumstances it seems to me that the best course of action is to determine which argument will result in the most beneficial outcomes in terms of human behaviour, and to accept that position, if only provisionally, as correct. It becomes a socially constructed truth, which may or may not also be objective, absolute truth—we can’t know for sure, though we have our strong suspicions. The truth value of such a supposition is similar to that of a scientific hypothesis.
Seen from this perspective, it is quite clear that free will is the best option in the case of free will versus determinism. First of all, it just makes the most intuitive sense—it seems to coincide with our subjective experience. And secondly, there is an enormous price to be paid by adopting the opposing notion of determinism.
Simply put, if there is no such thing as free will, then there can be no such thing as moral action. And if there is no such thing as moral action, the whole idea of morality becomes, at best, an intellectual curiosity with no real-world application. In other words, if we are not free to make choices, if we are utterly unable to overcome the constraints placed on our behaviour by heredity and environment, then we are not morally responsible for what we do. Our actions are neither right nor wrong, they just are.
A basic understanding of the free will controversy is helpful in clearing up some of the moral confusion that is endemic to life in the business corporation, because within the corporate environment, free will is severely compromised and determinism is actively promoted. The result is that the corporation has often been described as a institution deliberately designed to keep culpability perpetually afloat.
In the modern business corporation—large, publicly traded, professionally managed—the concept of limited financial liability has been extended to encompass moral liability, or blame. The corporate structure, which has been designed to legally shelter one’s financial assets from liability exposed by the corporate entity or “person,” is also used to rationalize moral culpability. The corporation seems custom-made to cloud questions of moral responsibility because it is a highly deterministic institution—in simple terms, a kind of machine—that demands of its parts a machine-like compliance with its rules of operation. Although we think of corporate managers and employees as autonomous persons, the fact is they have voluntarily entered into a web of incentives, punishments, contractual obligations both formal and implied, cultural conditions and assumptions and other forms of coercion and manipulation so thorough and elaborate that there is little or no room for dissent or unorthodoxy. To put it another way, when any of us accepts a job within a corporation, we accept a contractual arrangement whereby we willingly suspend our freedom of choice in areas of responsibility relating to our job, in return for a salary.
Disobeying a direct order, or even acting in opposition to the spirit of the agreement under which we were engaged, means breaking the employment contract. The only real option offered to an employee confronting a conflict between profit and ethical behaviour is what might be called professional martyrdom. That is, to choose the ethical path and be fired for endangering profitability. Most of us are so entangled in the web of consumerism and debt (another deliberately-designed aspect of the system) that this kind of actions is extremely difficult, and will usually be judged irresponsible, especially where there are dependants involved.
No other choice is possible, unless the employee can convince his superiors that ethical action and profitability are in this case congruent. Conditions for this kind of congruency do exist, but not nearly as frequently as business ethicists would have us believe. That “business ethics” was a kind of oxymoron was well understood by the founders of economic science, who believed they were devising an institutional structure that would guarantee ethical outcomes, if and only if individuals, including corporations, behave selfishly. Selfishness, or egoism, was believed by these Enlightenment thinkers to be a fundamental aspect of human nature. “Doing well by doing good” is not part of that economic orthodoxy.
Those of us who work in corporations are highly constrained in what we can and cannot do when faced with a moral dilemma on the job. We tend to rationalize our actions, as a result, by telling ourselves and others that we have no choice. That “business is business.” We do not, we argue, have the degree of freedom of action that is required for the assigning of moral responsibility, because we are not responsible for what we are forced to do or are unable to avoid.
But the fact is that as creatures with free will we can avoid unethical actions, though to do so will often involve sacrifice. How do we justify that sacrifice? There are several possibilities. If we are religious, we may believe that we will be rewarded in an afterlife. Or, there is the notion that “virtue is its own reward,” meaning, one presumes, that virtuous acts bring personal happiness, perhaps through a closer communion with the Divine. In purely secular terms we can subscribe to the environmental movement’s slogan “if you’re not part of the solution, you’re part of the problem.” The presumption here is that none of us wants to be part of anyone else’s problem. We can subscribe to the idea that who we are is determined by how we behave, and resolve to construct the best “me” possible by behaving well as often as possible. We may offer our lives to posterity, an idea popular during the Enlightenment, justifying our sacrifices in terms of the benefits they will bring to our children and grand children, to our community, to our nation, or the wider world.
Justifications aside, we all know that the world would be a better, happier place if we all acted ethically all the time. The fact that such a morally perfect world is utopian and unachievable should not deter us from doing what we can to approximate it. Indifference is not an ethically acceptable option. The knowledge that ethical behaviour spreads happiness places on each of us a moral responsibility to do what we can to help at least approximate the goal. Only irremediable ignorance, or irresistible coercion, can free us from that responsibility—these being the only cases in which free will is suspended.
So long as we accept that free will exists, as we must if we are to create a moral world, there is no escape from moral responsibility within the bureaucratic labyrinths of the corporation or anywhere else.