According to the Stanford Encyclopedia of Philosophy, business ethics is defined as “the applied ethics discipline that addresses the moral features of commercial activity”, but in practice contains numerous and diverse projects that otherwise have very little in common. The article claims that the roots of business ethics can be found in the early and middle 20th century law and business literature discussing  corporate social responsibility and business-and-society.

Perhaps the heart of business ethics lies in the debate as to whether or not the corporation is a moral agent. According to law, the corporation is “a person, distinct in its personality from the persons who bear ownership shares in it (its shareholders) or conduct activities on its behalf (its directors, officers, and other employees)”. But is the corporation also a moral person? Our legal system takes no explicit position on this matter, although it has frequently become an implied legal fiction, suggesting “that the corporation’s legally recognized personality is not also ontological fact.” After reading this article, I find truth in both sides of the argument and believe it’s a gray area that needs clarification for society to function more efficiently and for the people to know where corporations stand with respect to their own personal rights and obligations. One the one hand, the corporation was created by individuals for the sole purpose of profit-making for its shareholders. It is a legally separate body from its owners and shareholders, but it should remain true to its core purpose and act as a means to create profit. In that sense, the corporation itself is not a moral agent, but a tool to maximize profit. it is the owners and managers who ought to act responsibly and ethically when conducting business, and should be held accountable when they fail to do so.

On the other hand, Peter French argues that the corporation and corporate structure contain all the necessary features of moral agency. He claims that corporations have “corporate internal decision (CID) structures that provide sufficient grounds for attributing moral agency to them”. Part of the CID structure consists of a set of rules for determining whether a decision is a corporate decision rather than merely a personal decision. Therefore, one can identify corporate actions, intentions, and aims–the components of moral agency in natural persons.

I believe that the more important issue is reaching a decision in the classification of corporations as moral agents or not, not so much what the actual decision is. There is ample support for each side, and I personally feel there is no “better” answer so long as one is chosen and implemented uniformly. For example, the recent case, Citizens United vs. Federal Election Commission, the Supreme Court ruled that corporations are people and share the same protections under the first amendment (i.e., freedom of speech) and therefore can support political candidates. This ruling was very controversial, but set the precedent that corporations are both separate legal entities, and share the same freedoms as individuals, and will hopefully provide future clarification for the role of corporations within society.

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5 responses »

  1. Much like you have stated, I completely agree that a set in stone system for corporations needs to be written. By creating a rigid system for corporations, it will prevent them from taking shortcuts or doing “shady” business, which could earn them jail time. I was highly disappointed by the ruling that was issued in this recent court case. The big question inevitable is, if companies are ‘real’ people then why is it that the ‘actual’ people are forced to bail them out from their financial problems. If they were ‘real’ people, shouldn’t they have to deal with their own problems much like every other person does today. Hopefully this system will become reality relatively soon, so we can eliminate the discrepancies.

  2. Jordi says:

    Wow. That kicked ass.

    I am soooooooo glad you brought in Citizen’s decision as it is so relevant to the discussion of corporations as “people.” Those great commentators of society, Colbert and Stewart, did a riff on this pointing out that we don’t allow these people to vote and calling for an end to oppression of corporate people. :<)

    But I am not joking…whether we can expect moral agency from corporations is a profound question. My own thinking on this will need to evolve. At the same time, as you point out, we can not afford to have lots of variation in opinion and policy on this question.

    A different point you made that I want to puzzle through is about profit. If corporations are "just" a tool, a means, to increase profit, is that not a moral position itself? What morality is that? Or, is profit-seeking combined with other moral or social goods.

  3. Jordi says:

    Small but important point…

    “efficient society”?

    Do you want to live in an efficient society? I am not sure I do…

    • This is an interesting question…I think that a perfectly efficient society could potentially take any excitement and unpredictability out of life. Perfect efficiency essentially means everything works as it should, and as expected. While our society could become more efficient in certain areas, I think that we have to be careful when we use the term “efficient society”. Efficiency could take a lot of what we enjoy out of life.

  4. […] Best Post Award goes to Claire (Stanford Encyclopedia on “Business Ethics”) The Best Title and Most Honest Award goes to Hannah (Beneficial Blogging) The Great Writing and […]

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