Ethics and Organizational Practice

Citation

Latemore, G.M. (2011), "Ethics and Organizational Practice", Leadership & Organization Development Journal, Vol. 32 No. 4, pp. 418-420. https://doi.org/10.1108/01437731111134689

This book is timely; post Global Financial Crisis (GFC), the BP Gulf of Mexico oil spill, and numerous corporate scandals from Arthur Anderson to Enron over recent decades.

This is a serious book on a serious topic by serious authors. The authors are mostly European (Danish, Swedish, Finnish and English) although there are two authors from Australia and New Zealand. Their purpose is also serious – to investigate the “moral foundations” for managing the complexity of today's business world. Further, the editors state that the point of this book is not to define a new business ethic but rather, to discuss its limits. The editors state that their book is a collection of texts that critically investigate what ethics means – in this regard, they succeed.

The tone of this excellent work is well‐established by the opening quote from the US Government Oversight Committee into the GFC where Allan Greenspan is being questioned by the Chairman, Henry Waxman on 23 October 2008. The exchange is as follows:

Greenspan: I made a mistake in presuming that the self‐interest of organizations, specifically banks, and others, were such, as they were best capably of protecting their own shareholders, and their equity in the firms.

Waxman: In other words, you found that your view of the world, your ideology, was not right, it was not working.

Greenspan: Absolutely precisely […]

What seems to emerge here is Greenspan's unbridled, even naïve optimism towards the foundations of the modern, self‐correcting “marketplace”. Perhaps Greenspan lacks “organisational acuity” and that he, like many others, are now realising the limits of neo‐liberalism?

It is worth remembering that even the so‐called father of economic rationalism, Adam Smith, himself presupposed the existence of and the need for an “invisible hand”, a moral compass to underpin a healthy economy. One contributor wonders, if we are moral to begin with, why did the GFC occur in the first place – did we just forget our “natural empathy?” Another contributor even suggests that we need to be on the lookout for psychopaths who behave immorally precisely because our economy and our Western organisations allow human freedom.

There are ten chapters with topics such as corruption, moral psychopathology, empathy in economic exchange, the self as moral anchor, ethical closure and international business.

Several chapters were especially worthwhile. One cleverly challenged the theoretical foundations of studies on international business (IB). For example, they highlighted some key issues: IB has developed from an historical basis of exploitation of political, economic and military strength differentials; contemporary IB theories are grounded in the continuance of those differentials as a source of competitive advantage for the good of the firm; reliance upon such theories renders IB inherently “unethical” in relation to the good of society at large at the global level. Instead the authors propose drawing upon the Aristotelian concept of phronesis, intellectual virtue, where we re‐humanise organisations such that the proper purpose of business serves a broader range of parties. Here, one clearly sees the limits of the popular stakeholder concept of strategic management.

Another chapter looking at media organisations highlights the problem of the privatisation of ethical judgment. The consequences are rightly described as de‐humanisation and the instrumentalisation of the human person.

Maybe we have forgotten the “human” in human resource management. Surely, we are not just fleshy robots, human assets?! The authors write well about the long Western tradition that sought to control “the human factor”. I see in much of the academic literature the assumption that a managerial elite needs to control workers and it must do things to elicit “employee motivation”. The authors in another excellent chapter surveyed scholars such as Elton Mayo, Abraham Maslow, Douglas McGregor and others to highlight management's concern to control irrational sentiment as a way of ensuring production and increasing productivity. As teachers of HRM, strategy and OB, perhaps we might need to be more aware of some (un)ethical assumptions behind the current fascination with high performance and employee engagement pursued unthinkingly, at the expense of human rights and human dignity.

This book also makes a strong case for the need to rethink the motivations for and the tools to enact corporate social responsibility (CSR). I also noted the Scandinavian sophistication in much of the thinking behind these chapters and their concern for value‐based management: the northern Europeans have much to teach other (especially American) business people.

Ethics and Organizational Practice is tightly written but is still quite accessible. The one annoying feature was the small size and small font used throughout – legibility would have been enhanced with a larger font and a larger publication format, especially as this book seems targeted to older, more senior academics and professionals! Surely, we do not need a magnifying glass to read the text?

The reader obtains the clear impression that a serious, collective return to the Socratic question “Why be good?” might offer more value than producing more codes of practice. After all, simply producing checklists, or writing codes of ethics does not necessarily foster ethical behaviour in organisational life.

The book is carefully indexed, and each chapter provides references. However, I would have preferred if the authors had listed all sources alphabetically at the end of the book instead as end‐of‐chapter references.

Overall, this is an excellent book with insightful chapters. It goes well beyond the typical approach to business ethics which simply encourages readers to adhere to codes of practice or makes exhortative statements about the virtues of ethical behaviour. I recommend it highly.