A Constructivist Approach to Business Ethics

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  • A Constructivist Approach to Business Ethics

    Michael Buckley

    Received: 28 May 2012 / Accepted: 5 April 2013 / Published online: 26 April 2013

    Springer Science+Business Media Dordrecht 2013

    Abstract A recurrent challenge in applied ethics con-

    cerns the development of principles that are both suitably

    general to cover various cases and sufficiently exact to

    guide behavior in particular instances. In business ethics,

    two central approachesstockholder and stakeholder

    often fail by one or the other requirement. The author

    argues that the failure is precipitated by their reliance upon

    universal theory, which views the justification of prin-

    ciples as both independent of their context of application

    and universally appropriate to all contexts. The author

    develops a contextual interpretation of constructivism as

    an alternative approach, and argues that this alternative

    meets the above challenge.

    Keywords Constructivism Contextualism Universalism Manager responsibility Pharmaceuticals Health impact fund

    Business ethics operates at the crossroads of various dis-

    ciplines, inviting perspectives from economists, financiers,

    sociologists, organizational psychologists and philoso-

    phers. Each perspective commands an area of expertise

    bearing on the subjects key questions and each employs its

    own methodological approach when pursuing its answers

    (Brand 2009; Garriga and Mele 2004). Given the variety of

    methods found in the literature, it is surprising that con-

    structivism has scarcely appeared, for it is both an

    increasingly important approach in normative theory and

    particularly effective at explaining how moral theory might

    suitably cover a variety of cases without sacrificing exact

    guidance on specific issues.1 This challenge is especially

    pronounced in applied ethics, where the purpose of

    applying ethical theory to practice is to inform practitioners

    of appropriate action in particular cases. If moral principles

    are too abstract, they are unlikely to perform their expected

    action-guiding function. If they are too specific, they will

    perform their expected function in too few instances. The

    challenge is to translate abstract theory into a workable tool

    for business practitioners (Hasnas 1998, pp. 1920).

    The relationship between normative principles and the

    facts comprising particular cases has received close atten-

    tion in political philosophy in recent years (Cohen 2008;

    Sen 2009). Some of this work explores the issue anew by

    developing a contextual approach to justice (Miller 2002).

    Contextual approaches treat diverse normative issues in

    terms of fine-grained, bottomup investigations, rather than

    systematically as part ofand answered in terms ofan

    overarching ethical theory. The idea is that a bottomup

    analysis can better expose how principles fit their context

    of application, thereby justifying concrete principles while

    preserving universal reach.

    Certain developments within business ethics have

    moved in a similar direction. For example, the fields

    growing body of empirical work on industry-specific issues

    is clearly contextual (Rossouw et al. 2012, pp. 386391;

    Brand 2009). The data collected by this work help facilitate

    a fact-based, bottomup analysis of ethical issues in busi-

    ness. Attempts to systematize these industry-specific

    M. Buckley (&)Philosophy Department, Lehman College, CUNY, Carmen Hall,

    360, 250 Bedford Park Boulevard West, Bronx, NY 10468, USA

    e-mail: michael.buckley@lehman.cuny.edu

    1 Epistemological constructivism and constructivism in education are

    much more commonly explored. But the kind of constructivism found

    in moral and political philosophy is much less likely to be explored.

    Take for example the fact that The Philosophers Index returns just

    four results for a search including both the terms constructivism

    and business ethics.


    J Bus Ethics (2013) 117:695706

    DOI 10.1007/s10551-013-1719-x

  • investigations into a more coherent theory are growing

    thereby overcoming what might otherwise appear a hope-

    lessly ad hoc set of ethical analyses (Werhane 2008;

    McVea and Freeman 2005). Should the latter effort suc-

    ceed, we would possess a method that meets the above

    challenge insofar as it is universal in reach yet sufficiently

    flexible to generate substantive answers to diverse, con-

    crete questions.

    This paper contributes to the latter effort by explaining

    how one might apply a constructivist approach to busi-

    ness ethics. I argue that a contextual interpretation of

    constructivism enables business ethicists to analyze a

    wide array of familiar moral issues in a manner that

    generates concrete, context-sensitive moral principles,

    thereby meeting the above challenge. Section Universal

    Analyses of Ethical Issues in Business of this paper

    looks at one such familiar issue, namely: what standard

    should managers use to gauge morally responsible busi-

    ness behavior? An appropriate moral standard should be

    both suitably general to cover various cases and ade-

    quately substantive to inform appropriate action in a

    particular case. However, two central approaches to this

    questionstakeholder and stockholder approachesfail

    by one or the other requirement. I argue that the failure

    is precipitated by their reliance upon what is sometimes

    called a universal approach (Miller 2002). This con-

    trasts with contextual approaches, a version of which I

    outline in Constructivism: A Contextual Approach to

    Normative Theory section where I identify four features

    of constructivism and argue that these features facilitate a

    reversal away from a universal to a contextual approach

    for business ethics.

    The four features of constructivism outlined in Con-

    structivism: A Contextual Approach to Normative Theory

    section are formal and orientate different kinds of norma-

    tive investigationsmoral, political, and applied. If they

    are to be useful to business ethics, they must be specified in

    a language more conducive to the discipline. Sections A

    Variety of Formal Problems Associated with Resource

    Allocation, The Teleological Structure of Business

    Practices, The Scope of Public Interest Concerns

    Reflected in Business Practices, and Competing Values

    Implicit in the Concept of Efficiency provide this crucial

    step, thus extending the outline of Constructivism: A

    Contextual Approach to Normative Theory section in a

    direction suitable for practitioners of business ethics.

    The final section of this paper provides an example of a

    constructivist analysis. It investigates the question: what

    principle best informs a pharmaceutical managers

    responsibility to the global poor? The question is particu-

    larly pressing given the degree to which the poors health

    needs go unattended (UNDP 2003, pp. 97103). However,

    it is not easily dealt with from within a universal approach.

    Constructivism offers a perspective that promises a

    detailed analysis on which a concrete principle can be

    firmly established. This brief example, together with the

    other sections, serves as an outline for how one might apply

    constructivism to business ethics.

    Universal Analyses of Ethical Issues in Business

    This section introduces the distinction between universal

    and contextual approaches to ethics by reviewing a familiar

    question in business ethics, namely, what principles should

    managers use to gauge morally responsible business

    behavior? A universal approach answers this question by

    relying on principles that are both justified independently

    of their context of application and applied invariantly

    across all contexts (Miller 2002). This view conceives

    moral theory as aiming at fundamental principles of right.

    Insofar as the principles are fundamental, they are justified

    independent of circumstantial fact, although circumstances

    may be taken into account when applying them.

    One problem with this influential strain of thinking in

    business ethics is that it often leads to indeterminate out-

    comes (Heath 2006, p. 535). Abstract principles typically

    support contrary assessments of particular cases and, as a

    result, fail to deliver an indefeasible metric for guiding

    action. A second problem concerns the appropriateness of a

    principle to a particular case. In the absence of reference to

    the circumstances of a case when defending principles,

    their application to a particular instance may appear arbi-

    trary and in need of further justification. To illustrate both

    problems consider stockholder and stakeholder approaches

    to the question: What standard should managers use to

    gauge morally responsible business behavior? A stock-

    holder approach recommends profits as the standard

    measure of right action, arguing that profits serve as a

    proxy for how well a company satisfies consumer demand

    and, by extension, overall utility (Friedman 1970; Econo-

    mist 2005). This approach is sufficiently determinate to

    provide an exact and easily quantifiable standard of prac-

    tical action. Its notable and familiar defect is that it serves

    as a poor guide to moral action, since profits are sometimes

    realized through morally inapprop