Reflection on Business Ethics

Reflection on Business Ethics
Reflection on Business Ethics

The purpose of this reflection is to compare the concept and experienced I have learned as East Asian scholar practitioner with the prevailing Western ethical thoughts and practices. To achieve this aim my chosen articles will need to answer the following questions:

  • What is Confucianism? And how is it differed from the prevailing Western philosophy on ethics?
    • Can Confucianism be of use to strengthen our prevailing knowledge of ethical principles and behaviour?

With the stated aim and requirements in mind, I have chosen the following articles to be reviewed:

Chan, KY Gary (2007) The relevance and value of Confucianism in contemporary business ethics.  Journal of Business Ethics, 2008 http://link.springer.com.ezproxy.liv.ac.uk/content/pdf/10.1007%2Fs10551-007-9354-z.pdf (accessed 03/07/2013)

Koehn, D. (1999) What Can Eastern Philosophy Teach Us About Business Ethics? Journal Of Business Ethics Volume: 19 Issue: 1 (1999-01-01) http://link.springer.com.ezproxy.liv.ac.uk/content/pdf/10.1023%2FA%3A1006102022834.pdf (accessed 03/07/2013)

Chan is Professor of Law at the Singapore Management University where he teaches ethics and social responsibility. I find his article interesting as it examined the relevance and value of the nearly 5000 years old Confucian ethics to contemporary business practice. I also find it to be quite relevant to my practice as it provides some key answers to the first question on the gap between Confucianism and the prevailing Western philosophy on ethics.

In reviewing Chan’s (2007) thesis I have followed Cunliffe’s (2004) advice ‘On becoming a critically reflexive practitioner’, to critically reflect on and in action.  I have also widely consulted the practical guideline found in Badaracco’s (1992) ‘four spheres of executive responsibility’ while drawing upon my own experience as East Asian business practitioner. In the process, I find myself agreeing with Chan’s (2007) finding that “Confucian ethics provides interesting parallels with contemporary Western oriented business ethics” (p 347) while, at the same time, divergence do exist in some significant ways. The exercised has this convinced me that by closely examining and reflecting on the prevailing practices of Western and Eastern ethics we should be able to make better decisions regarding ethics and the social impacts of business.

Chan’s work has largely been based on the basic Confucian tenet that “by nature men are alike, through practice they have become apart” (book 17 no. 2 in Chan 2007 p 355) as well as on Aristotle’s principle as reflected the statement that “we become just by performing just acts, temperate by performing temperate ones, brave by performing brave ones” (The Nicomachean Ethic in Chan, 2007 p 355).  Confucius and Aristotle (Badaracco, 1992, Chan, 2007) also agreed that business is necessarily Machiavellian in practice as they go about doing whatever is needed to advance their own interest, and therefore business people and politicians are inherently unethical and immoral. And like its Western counterparts, Confucian does recognize that potential conflict between personal morality and his ‘fiduciary duties’ to the organization may be inevitable. Confucius like Aristotle insisted that in event of such a conflict the objective of advancing human virtues should always triumph over economic interest.

Chan (2007) also touched upon the issue of reciprocity and tried to dismantle the prevailing believe that Western approach to management as based formal contracts, impersonality and procedures by the Western practice stands in opposite to familial personal relationships or as famously known ‘Guan Xi’ in the Eastern context.  He went to some length to point out how Kantianism and Confucian both embodied the principle of reciprocity. Kant’s categorical imperatives which are premised upon the ‘Good Will’, a sense of moral duty and human rationality, Chan argued, called “for the treatment accorded to the other person’s ends must be reciprocated by the other person’s treatment of the moral agent’s ends” (p352).  Reciprocity can be also found in the work of the like of Rawl, and that of contemporary thinker as Drucker (Chan, 2007, p 354). If we put aside the often systematic problematic application and association of guanxi with ‘rent seeking’ corrupt practices for a moment, the familial relationship is in fact a noble concept underlined with an appropriate sense of realism. Reciprocity as broad principle is therefore, Chan (2007) insisted, is not uniquely Eastern.  The main difference is of course on the emphasis as coloured, in the case of East Asia, by cultural nuances typical of collective and hierarchical societies.

Although, Chan’s thesis provide a basis from which I as practitioner can begin to digest the differences in practice is not so much the result of opposing principles, I find Chan’s presentation to be somewhat inadequate to answer why practice should differ from theory.  He made some clever arguments but the scope and complexity of the issue remained largely untouched in his article.

This is where I find the work of Koehn (1999) to be quite handy. As the Cullen Chair of Business Ethics at the University of At Thomas, Koehn is also notable academic and seeing how his works has been quoted by thinkers in this field he is also a renowned expert in Chinese, Japanese and Korean business ethics. I found his succinct but in depth presentation of the Japanese and Chinese underlying culture to be very useful in understanding the thinking of Chan (2007) and therefore of great help to me in my attempt to understand the gap between the western and eastern approach to ethics.  Koehn (1999) was also very detailed in reminding us that East Asian is very different the rest of Asia, and within in East Asia itself the practice of Confucianism itself has been further enriched by locally found traditions and cultures. The importance of culture has been aptly stated by Swidler (1986) “Culture influences action not by providing the ultimate values towards which action is oriented, but by shaping a repertoire…of habits, skills, and styles from which people construct ‘strategies of action’” (Swidler, 1986 in Poon and Rowley, 2010, p 273).

Koehn (1999) like Chan (2007) insisted that in principle there are more similarities than differences between the East Asian and Western business ethics but the different cultural and historical circumstances governing the two have produced quite a different perspectives and practices.   For example, it is often said that East Asian places more focus on responsibilities while the West on rights but this reductionist approach can be quite misleading. It is true that Kant, Mill, and Rawl placed great emphasis on the right of the individuals but it does mean that the concept of right is completely alien to Confucian or Buddhism. Confucius is most blatant on the issue in his insistence that ‘let the government not interfere, so the people may thrive’ (Koehn, p 73).

In practice the differences lie, according to Koehn (1999) on three Basic yet pervasive East Asian values. Those three basic tenets are:

ü  The meaning of trust

ü  Relations are for life

ü  Ethics beyond rights

The meaning of trust is clearly explained by Koehn (1999) through his reference to Confucian hierarchical relationships:

         The State – Subject

         Father – Son

         Teacher – Pupils

         Husband – Wife

         Elder brother – Younger Brothers

         Friends

Following Watsuji’s perspective on Confucian practices, Koehn explained very well on how human relation is viewed in my culture. Liberty alone cannot be the cause for the individuals ‘within society to voluntarily decide to come together and to agree to show each other mutual good will’. Trust for Confucianism exists because they are embedded within the hierarchical relationships of human relationships, where due difference is accorded where difference is due. Trusting each other is basically according to this practiced tenet is all about properly living, working, interacting and acting within this social matrix.

Business organization are thus not expected to ‘win the trust’ of its employees, customers and/or consumers by compiling good records of ethical actions. Instead businesses should understand themselves as striving to match the expectation that comes from the trust they inherently enjoyed simply by virtue of human institutions operating within a social matrix. Being true to this trust should be the guiding intention behind every action, not just an idea that comes into play when there is a need for them.

For Confucius to be human is always already in relation and the rule of conduct governing that relations is set out within a matrix of inter-related highly determined relations.  These relations are for life. Like in Japan, overseas Chinese and Korean organisations also do widely practice varieties of life time employment system. Since relations are for life, people are not expected to form new relations lightly. Employment criteria are as much about professional qualifications as they are about character and background fitness. From this view commercial relations are long term as well. It is always necessary for all of us to consider the long term effect of our mutual actions on the relations. Business is about making money with the people we like. All recipients of favours are expected to reciprocate.  If you fail to reciprocate of course no law that can be used against you. You will simply lose face and others may not be prepared to give you face anymore.

Koehn (1999) right noted that there are numerous potential problem with such system.  It is difficult to fire employees.  Everything is personal. It is even difficult to change marketing agency or suppliers. There is also a strong potentiality for corrupt practices as performance and qualifications matter less than likeability. Those who are closest to the source of power benefit most all of the time.

On the other hand, as Koehn (1999) pointed out the fact that businesses ‘do not occur in void or in some discrete economic sphere completely cut off from the rest of social life’ has allowed us to plan longer into the future.  There is no way that any manager would go on strike or pushing for their ‘rights’ when the hard time comes. Mid-career turnover is usually very low and this very useful in countries like ours where trained managers are still a rarity.

Another important tenet of Confucian ethic, explored by Koehn (1999) is the emphasis on what we owe to each other. The actual value of obligation depends upon the good will and favour of the obligated person. Quid pro quo as governed and ‘decided’ by one’s place within the matrix of relationships. There is little room for the existence of the notion of right.  Obligation does not derive ethical value from the fact that rational being would make this demand and want to enforce it. This is where the saying that the West governs by guilt and social responsibilities while the East by shame and social obligation ring some truth. It is never so much about businesses making profit in a socially responsible and ethical manner but about saving and gaining face for the business and giving face to the people you do business with and to those whose opinion matters.

Closing Reflection.

As we globalised we are seeing how our differences gets smaller as our differences became known, studied, and questioned.  The continuing and inevitable variances between theories and practice will naturally continue because no human beings who are completely the same in their conducts. In this respect, Khera (2001) has gone into some depth in revealing that contrary to the prevalent beliefs, some of the ethical champions in advanced countries have been as unethical in their conducts as those in developing nations. It was found, for example, that between 1975 and 1985, two thirds of Fortune 500 companies have been convicted of serious crimes from price fixing, kickbacks, rampant bribery, falsified information, stolen technology and illegal dumping hazardous waste (Khera, 2001, p 2013).  Barlett and Steele (2000) of Time magazine further revealed that much in the same way as the principle of guanxi has been abused in the Orient, the working relationships between US politicians and their commercial partners have also led to billions of USD of tax relief, immunity from certain laws, to kill or change legislations and even to declare war on other countries to satisfy the needs conjoint needs (ibid)

I am not as pessimist as Khera (2001) because I am sure that the majority of us do have the good will and intention to uphold high ethical and moral values. My reviews show that although we need to continue to examine in what ways and what extent the normative ideas about business ethics in various culture are similar or different from those of the West.  We can learn from each other simply by understanding and questioning one’s own practice and making comparison with the leading thoughts in the field. I thus agree with Enderle (1997) that “non-Western approaches to ethics can, and should, make important contributions to strengthen the moral climate of business” (p 1479).

References:

Articles reviewed:

Chan, KY Gary (2007) The relevance and value of Confucianism in contemporary business ethics.  Journal of Business Ethics, 2008 http://link.springer.com.ezproxy.liv.ac.uk/content/pdf/10.1007%2Fs10551-007-9354-z.pdf (accessed 03/07/2013)

Koehn, D. (1999) What Can Eastern Philosophy Teach Us About Business Ethics? Journal Of Business Ethics Volume: 19 Issue: 1 (1999-01-01) http://link.springer.com.ezproxy.liv.ac.uk/content/pdf/10.1023%2FA%3A1006102022834.pdf (accessed 03/07/2013)

Article Consulted:

Badaracco, J.L. (1992) ‘Business ethics: Four spheres of executive responsibility’, California Management Review, 34(3), 64-79. Available from:http://ezproxy.liv.ac.uk/login?url=http://openurl.ac.uk/?title=California Management Review&volume=34&issue=3&spage=64&date=1992 (reaccessed 03/07/2013)

Cunliffe, A. L. (2004) ‘On becoming a critically reflexive practitioner’, Journal of Management Education, 28(4), 407-426. Available from:http://ezproxy.liv.ac.uk/login?url=http://openurl.ac.uk/?title=Journal of Management Education&volume=28&issue=4&spage=407&date=2004 (reaccessed 03/07/2013)

Enderle, G (1997) A Worldwide Survey of Business Ethics in the 1990s. Journal Of Business Ethics Volume: 16 Issue: 14 (1997-01-01). http://ehis.ebscohost.com.ezproxy.liv.ac.uk/ehost/pdfviewer/pdfviewer?sid=7bd4fbd4-a773-4600-991b-f6bda9ac2d6d%40sessionmgr12&vid=2&hid=2 (accessed 03/07/2013)

Khera, I (2001)Business Ethics East vs. West: Myths and Realities. Journal Of Business Ethics Volume: 30 Issue: 1 (2001-01-01) http://link.springer.com.ezproxy.liv.ac.uk/content/pdf/10.1023%2FA%3A1006489410023.pdf (accessed 03/07/2013)

Levy, Y. and Ellis, T.J. (2006) ‘A systems approach to conduct an effective literature review in support of information systems research’, Informing Science Journal, 9, pp.181-212. Available from: http://inform.nu/Articles/Vol9/V9p181-212Levy99.pdf  (Accessed: 13 May 2010).

Poon Irene Hon-fun and Rowley Chris, Change in Asia: a review of management theory and research related to human resources, Asia Pacific Business Review Vol. 16, No. 4, October 2010, 591–607, Downloaded from mlq.sagepub.com at University of Liverpool on April 9, 2011

Rowley, J. and Slack, F. (2004) ‘Conducting a literature review’, Management Research News, 27 (6), pp.31-39, Emerald database [Online]. Available from: http://dx.doi.org.ezproxy.liv.ac.uk/10.1108/01409170410784185  (Accessed: 13 May 2010)

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