The Missing Link Between Virtue Theory and Business Ethics

The Missing Link between Virtue Theory and Business Ethics

JOHN MORSE

abstract In arguing against the view that the ethical standards for business are separate fromnormal interpersonal standards, virtue theory has been applied to business ethics in a limitedmanner. Previous virtue theorists have argued that this separation need not occur because thevirtues for succeeding in business are congruent with civic and personal virtues. However, theyhave neglected the fact that virtue theory stresses that virtues are formed to fulfil certain desires,ends, and purposes of the person. Since ends are formed within a community, business andcorporations should view themselves as members of the community which contributes to the ethicaldevelopment of its individuals. Hence, I argue that business cannot have a separate standard ofethical behaviour than that of its community, because its goals are means which are subordinate tothe ultimate goal of individual and community flourishing.

The General Debate

For many years the phrase `business ethics' elicited the quick and cynical response, ``that

is an oxymoron.'' This response was fuelled by the idea that when acting as a business-

person, an agent steps outside the normal confines of justice for the sake of succeeding in

his/her business endeavour. The notion that business ethics and personal ethics are

separate became the prevalent vision of business ethics at its earliest roots. Two classic

examples of the separation are embodied in thinkers Milton Friedman and Alfred Carr,

who forwarded ideas such as that the purpose of business practice should disregard

communal ends [1], and that the rules governing acceptable practice within business are

both different from and opposed to that within personal ethics [2]. Even more recent

business ethics texts like Archie Carroll's Business and Society: Ethics and StakeholderManagement note that the àmoral' manager, described as one who thinks that both

business and management practice do not need to account for personal morality, is still

accepted [3]. Again, we are confronted with the idea that the realm of interpersonal

justice is separate from the considerations of business.

However, given the profound influence of business on persons in our society, it seems

important that we overcome the assumption that business and ethics are wholly separate.

In the last decade, we have come to recognise the importance of applying ethical theories

to the business world, and this realisation has coincided with the remarkable resurgence

of virtue ethics in the discourse of ethical theories. With regard to business, the standard

response of virtue ethicists has been that the virtues which make one a good moral person

mirror those virtues which make one successful within a business environment. Hence,

thinkers like Robert Solomon argue that character dispositions or virtues, such as loyalty,

Journal of Applied Philosophy, Vol. 16, No. 1, 1999

# Society for Applied Philosophy, 1999, Blackwell Publishers, 108 Cowley Road, Oxford, OX4 1JF, UK and 350 MainStreet, Malden, MA 02148, USA.

integrity, justice, and prudence are necessary components of both the good business-

person and the good moral human being. Since these virtues are congruent, a business or

corporation should not require that individuals deviate from their interpersonal moral

standards when in the business environment. But this standard application of virtue

ethics to business fails to accommodate the full weight and power of virtue theory,

because it neglects an essential characteristic intrinsic to virtue theories.

Despite the focus on the congruence between the virtues of business with civic and

personal virtue, there is an important link which has often been missed between business

ethics and virtue theory which makes this congruence possible. Business cannot be

thought of as an entity whose practices, goals, and purposes are separate and different

from the goals, purposes, and practices of the communities within which they find

themselves. Rather, a business should be conceived as a moral entity which is necessarily

situated within a community and contributes to the good of the whole community. It

follows that as a moral member of the community, a business must realise that it has a

profound influence on the formation of the members of the community through the

cultivation of desires and by encouraging and discouraging various kinds of moral

behaviours. Business, therefore, must see its own ends and practices as subordinate to

and commensurate with the ends and practices of society at large. Virtue and business

will only properly be linked together once business sees itself as a member of the

community which is involved in promoting and fostering virtue in its members.

Early Views of Business Ethics

In some early views of business ethics, business was often thought of as a game which

adheres to a set of rules separate from the normal rules which govern moral actions. For

example, Carr's position regarding business ethics is built on his renowned poker analogy.

Carr asserts that `no one expects poker to be played on the ethical principles practiced in

churches'; namely, that within the confines of poker, one is permitted and encouraged to

act on a different set of standards from one's everyday moral norms [4]. In fact, the

person who plays in accordance with the standards of the church may even hurt his or her

chances of succeeding in poker, or in business for that matter. Carr continues, arguing:

That most businessmen are not indifferent to ethics in their private lives,

everyone will agree. My point is that in their office lives they cease to be private

citizens; they become game players who must be guided by a somewhat different

set of ethical standards [5].

Basically, Carr is arguing that the standards governing action and behaviour in the

business realm are separate from the rules and standards which one finds in the realm of

private morality. As separate, the standard of justice within the corporate environment

will be different from the standards which each individual has set for himself or herself in

the private realm. Moreover, a person's actions within the business environment should

follow the rules and practices governing the realm of business. Morality and interpersonal

justice are for the development of the individual in his or her private life. In the business

world the individual becomes an agent of the company; thus individual private morality

and private conceptions of what is just and unjust will be put aside, and he or she will

develop the virtues necessary to achieve the goals of the company.

# Society for Applied Philosophy, 1999

48 J. Morse


Virtue Theory and Business Ethics 49

Carr's argument is essentially based on the idea that in each game there are various

rules, practices, and skills specific to that game which would not apply to other games (for

instance, tackling, while encouraged in American football, is not encouraged and is a

violation of the rules of a different game Ð basketball). Similarly, within various

professions in our society, be it law, medicine, or business, there are different rules,

standards, and practices by which that profession abides, and specific skills which

constitute a successful practitioner. As an agent of a corporation, a person disregards his

own private standards of justice in lieu of the practices and standards dictated by the

corporate environment. Further, the agent will also set aside the moral virtues of his

private life for a different set of virtues or skills which will make him a successful

businessman. Carr could argue that while there may be some overlap of virtues in

different areas of our lives, we must realise that excellence in different areas requires that

we act in accordance with the specific practice within which we find ourselves. A good

business-person possesses virtues which are good for business, and these in many cases

will not be the same virtues as, and may even be antithetical to, the virtues and practices

which one exhibits in one's personal life.

A further illustration of the attempt to separate a personal conception of justice from

the standards of justice within the business environment is found in the argument of

Milton Friedman. In his famous article, `The Social Responsibility of Business is to

Increase its Profits,' Friedman offers this response regarding the purpose of the business-

person:

In a free-enterprise, private-property system, a corporate executive is an

employee of the owners of the business. He has a direct responsibility to his

employers. That responsibility is to conduct the business in accordance with

their desires, which generally will be to make as much money as possible while

conforming to the basic rules of the society, both those embodied in law and

those embodied in social custom [6].

Friedman basically asserts that it is not the place of business to be concerned with issues

like social responsibility, social justice, and civic duty, for those are not the proper goals of

business, unless, of course, those things increase profit. While it may be the case that one

is concerned with civic duty in one's personal life, an employee, as an agent of the

company, should not take into consideration the civic duties of a business and its

employees, for this is not the purpose of a business. Rather, business exists to make

money, and business-persons should do what they can to bring about that end, while

disregarding other considerations for which one would normally account in making a

decision and performing an action.

A final illustration of the belief that the realms of interpersonal morality and the

business world are separate is found in Archie Carroll's influential managerial text,

Business and Society. Carroll outlines the three prevalent styles of managerial ethics: the

moral manager, the immoral manager, and the àmoral' manager. According to Carroll,

amoral managers `do not factor ethical considerations into their decisions, actions, and

behaviors, because they believe business activity resides outside the sphere to which moral

judgments apply' [7]. The focus of the amoral manager is on whether or not his or her

decision will benefit the company without breaking the law; and he or she need not

consider any moral ramifications to his or her decisions other than the law as an agent of

the company [8].


50 J. Morse

Virtue Theory and Business Ethics

One attempt to get beyond the separation of ethics and business has been the application

of virtue theory to the business environment. Before we see how virtue and business have

been brought together by a contemporary thinker like Solomon, it is first necessary to

understand the basic structure of virtue theory as it was articulated first by Aristotle, and

in its recent resurgence championed by MacIntyre. The virtue theorist argues that an

individual's action in a given moral situation follows from the character traits which he or

she has developed throughout the course of his or her life. Ideally, a person strives to

develop a set of positive character traits which lead to moral acts, and these are known as

the virtues. For example, virtues are positive character traits such as courage, justice, and

temperance, which lead one to choose one's actions rightly in a given moral situation.

Hence the focus of virtue ethics is on developing the kind of person who possesses these

virtuous traits; in other words, the focus of the moral life is the development of what we

often call a `good character'. The development of good character is of central importance,

because the virtue ethicist thinks actions follow from one's character; thus, the person

with a virtuous character will subsequently perform virtuous acts in a given moral

situation.

Virtue ethicists argue that a specific character trait is developed by the performance of

an action which reflects this trait, and further actions reinforce the development of the

character. Simply stated, the virtue ethicist thinks that it is a just person who performs

just actions, and that it is just actions that help reinforce the just disposition. Education

for, and training in, a virtue like justice must begin at any early age, so that the person will

develop a habit of acting in a just manner which will be reinforced throughout life.

Through habituation over a long period of time, the person acquires the `virtue' as a fixed

disposition of his or her character. For example, training will initially occur within one's

family Ð a parent will teach a basic value like ìt is wrong to steal.' Through instruction

and observation of parents, whose actions and lessons are later reinforced by teachers and

other members of my community, I will learn that it is not permissible to take something

which I do not own simply because I have the desire to possess it. Each occasion in which I

am tempted to steal and do not, and each time I refrain from putting my desires above the

well-being of others, I will have reinforced in my character the disposition to be just which

was initially taught to me. Ideally, with enough reinforcement and then performances of

just actions on my part, I will have acquired a just disposition so well that I will not even

desire to take that which is not mine. When I am posed with a situation where it is

particularly tempting to take something which isn't mine (I come across a wallet full of

money on the side of the road during my daily run), I will have been habituated to such an

extent that I will act justly by returning the money to its legitimate owner.

Virtue ethicists such as Robert Solomon argue that one need not step outside the realm

of interpersonal justice when entering the business environment, because the virtues and

character dispositions which one pursues and develops in one's personal moral life and

the virtues and dispositions for succeeding in business do not conflict; rather, they are

congruent. Solomon, in his article `Corporate Roles and Personal Virtues' [9], as well as

in his Ethics and Excellence [10], argues that the virtues which we value as a society, such as

loyalty and justice, are also virtues which are essential to a good business. Hence it is

important that businesses encourage the ethical behaviour which one requires of a person

in his or her life outside the business world, rather than promote unethical behaviour for



the supposed `good' of the business. Solomon argues that since a corporation is itself a

`community with collective goals and a stated mission Ð to produce quality goods and/or

services and make a profit for the stock holders,' the virtues which are necessary for the

well-being of a socio-political community will also apply to the community of a

corporation. This is simply because communities by their very nature require things like

shared purposes, honesty between their members, and the subordination of individual

desires to the good of the whole [11]. Solomon, as other virtue theorists do, ultimately

argues that fundamental virtues such as courage and justice apply to both the community

at large and to the community of the corporation [12].

Solomon has stressed the idea that virtue theory recognises that each aspect of a

person's life is designed `to fit together in a coherent whole,' which includes the individual

as business-person, as family member, as a political member of society and so forth. This

is to say that the individual does not compartmentalise her life; rather, she holds the same

set of values and virtues across the different roles in which she finds herself [13]. This is

diametrically opposed to the `game' analogy offered by Carr. Carr's argument seems to be

that the ends of family life (such as to create a nurturing environment) and the virtues

which correspond to that end (such as compassion) may in fact be detrimental to a

business. Business has different goals from those of family life, so a virtue such as

compassion for one's competitors, or for one's employees, doesn't seem to make good

business sense. Solomon's contention here is that the attempt to separate the two

damages the individual and that it makes him or her a worse business-person. He writes:

Good employees are good people, and to pretend that the virtues of business

stand isolated from the virtues of the rest of our lives . . . is to set up that familiar

tragedy in which a pressured employee violates his or her `personal values',

because from a purely business point of view, he or she `didn't really have any

choice' [14].

It is not just that a business should not ask a person to act against the standards which she

has set for herself in her private life. Rather, the virtue theorist insists that any ethical

decision we make is based on a set of dispositions we have acquired throughout our life.

When someone acts unethically in a business transaction, this is bound to break down the

good character habit which he or she has developed up to this point. The virtue theorist

denies that there is an ability to separate the `business' self from the `private' self, because

the actions in each realm form dispositions which apply to a person's general manner of

acting [15].

Furthermore, virtue theorists argue that the virtues are developed to fulfil various ends

of human existence. In particular, virtue theorists argue that people develop the virtues

because it is living a virtuous life which ultimately makes one happy [16]. In this vein,

Solomon argues that business effects a complex network of personal ends, including the

ends of its owners, its employees, the consumers whom it serves, the constituents of the

community in which it is situated, and perhaps even its competitors. In looking at its

complex role, we see that ends which businesses help to achieve do not stop at the `bottom

line' of shareholders of the company; therefore, a position like Friedman's which restricts

the role of the corporation to increasing profit is, according to the virtue theorist, narrow

and short-sighted. Rather than conceiving of business as a profit machine, we can see

business as, ``justified not by its profits, but by the general prosperity it brings about.

Productivity, serving the public, and taking care of one's own employees are neither mere


52 J. Morse

means, nor an afterthought of business, but rather its very essence'' [17]. At bare

minimum, Solomon's argument shows us that the reach of business into various aspects

of the community is so extensive that it has more than just economic influence on

individuals and the community. A corporation must therefore consider how its practices

might affect the moral development of its employees and the community at large.

Ends and Virtues

The impact of one's involvement with different members of the community becomes

pivotal in virtue theory because both habit formation and the setting of one's values take

place at the level of our interaction with other members of the community and their

reactions to our actions. Our community through its laws, rules, and norms helps to

shape our behaviour and instils values pertaining to what is considered a good and worthy

end to pursue. Even though we do possess the natural end of desiring happiness, it is only

within a community that we learn to distinguish that which is appropriate and that which

is inappropriate for achieving that end. Simply stated, our knowledge of what is

considered good and desirable (as well as what is bad and should be avoided) is formed

within a community which teaches and reinforces its values to the individual.

This is a significant point, because virtues are not simply any set of character

dispositions, but they are those dispositions of character which lead us to achieving our

ends or purposes. Thus, we will form virtues based on how well they allow to achieve our

desired ends. It is not simply our parents who impart these values either; rather, as

Aristotle notes, the whole political community, through its laws and ethos also plays an

important role in value formation. In Book X, Chapter 9 of the Nicomachean Ethics he

writes,

But it is difficult to get from youth up a right training for excellence if one has not

been brought up under the right laws; for to live temperately and hardily is not

pleasant to most people, especially when they are young . . . Now it is best that

there should be a public and proper care for such matters; but, if they are

neglected by the community it would seem right for each man to help his children

and friends towards excellence, and that they should be able or at least choose, to

do this [18].

Virtue is cultivated in the proper political and social environment, such that excellence in

a person comes from a state with well-ordered laws, and other individuals concerned with

development of virtue.

Business' Role in Value Formation

So, while Solomon is basically on target with his assessment of business, he neglects the

significant role which ends play in virtue theory. Solomon fails to emphasise that business

has a profound influence on the individual insofar as a business contributes to the

formation of an individual's ends and desires (which will, in turn, dictate the kinds of

virtue a person develops). The development of virtue in the work place is not simply a

matter of promoting a congruence of the virtues of workplace with the virtues that the



individual possesses in his or her social community, but business must help with the

development of the proper ends. In the first section of Corporate Ethics, Peter French puts

forward an argument in favour of viewing the corporation as a moral member of the

community which has a profound effect on an individual's value and desire formation

[19]. Namely, the ends of our actions towards which the virtues are developed are

influenced by business just as they are influenced by other members of the community.

As part of having a moral status in the community, French stresses that through

advertising corporations can and do have a significant effect in forming people's

conception of the good life, or persuading them to act against a previously held

conception of the good life. Corporations, like other moral beings in a political

community, have an influence over what human beings desire; thus, they have an effect

on what individuals conceive as the ends to their actions. French writes:

corporations so easily maintain so great an imbalance of power vis-aÁ-vis humans

largely because of a fundamental intrinsic difference between corporations and

humans with respect to springs of actions. Because of that difference,

corporations are both particularly well suited to becoming and remaining ethical

and to exploiting natural human motivational weaknesses [20].

Within the context of virtue ethics, we can see that corporations have the means to

persuade us to give into short term goals or ends. These ends and desires become the

`springs of action' Ð they are the reasons why an individual acts. Since virtues are driven

by ends, we develop habits which are in accordance with bringing about the ends of

human action. If business contributes to the formation of ends, then it is also the case

they contribute to the formations of habits of character upon which we act in moral

situations. Let me briefly return to the example of justice. While my parents may teach

me that one is justly rewarded only when he or she performs laudable actions, a clever

advertiser may counter this disposition with advertising which tells me Ì deserve a break

today', whether or not I really do deserve one.

The Missing Link

While virtue ethicists like Solomon have been successful in showing the congruence of

business virtues with other civic virtues for the sake of good business, the effect which

business has in forming our virtues remains the neglected missing link. The above

argument of French presents a convincing case that human beings' desires, ends, goals

and behaviours are influenced by the corporation on two levels. First, most persons work

within a corporate environment, so their behaviour within that environment will either

reinforce or undermine their already developed virtues. Second, if French's assertion is

correct, the advent of television and large scale advertising of corporations has

contributed to our views as to what is necessary for good living. A virtue ethicist should

argue that business plays a significant moral role in our lives with regard to value

formation as well as behaviour reinforcement. Since business plays such a significant role

in forming our character in the two above ways it does not make sense to argue that a

person's actions within the business environment, or the business environment in and of

itself, can be separated from personal moral conceptions. Therefore, corporations should


54 J. Morse

not require that a person step outside the normal confines of interpersonal justice for the

sake of shareholder profits.

However, virtue theory cannot be correctly applied to business ethics unless we

understand an important factor pertaining to the role of business in society. While

Solomon correctly argues that virtues only flourish within a community, we must

understand that there will be a congruence between civic and business virtue only if the

business' ends are subordinate to society's ultimate end of producing good human beings.

In Aristotelian terms, members of the community need to exchange goods and money in

order to procure the necessities of life. Through business individual citizens and families

can acquire wealth (conceived of as a certain amount of property, external goods, and

money) by trading their goods or money for other such goods [21]. Even though

individuals and families strive to possess wealth, wealth is not and should not be pursued

for its own sake; rather, one acquires wealth as a means to achieving the final goal of

happiness. Aristotle notes in the Nicomachean Ethics X, 8, that a certain amount of

material prosperity is a component of the best kind of life, because ``being a man, one will

also need for external prosperity; for our nature is not self-sufficient for contemplation,

but our body must also be healthy and must have food and other attention.'' [22] Here

Aristotle offers the practical insight that the highest and best kind of life is only possible

for the individual when the conditions of material necessity are satisfied; thus, persons

can gain enough material wealth through engaging in business to make possible the

pursuit of happiness [23].

For Aristotle, one engages in the business practices of the retail trade and in the money

lending of bankers, to trade goods for goods, or to acquire money to purchase other

material goods. As argued above, the head of a household is able to acquire enough wealth

to satisfy the material necessities of his or her family through good business practice. In

Politics, I, 8, he notes,

Of the art of acquisition then there is one kind which is by nature a part of

management of a household, in so far as the art of household management must

either find ready to hand, or itself to provide, such things as are necessary for life,

and useful to the community of the family or state, as can be stored [24].

A society which possesses all the resources necessary to provide its citizens with the

necessities of life would not have a reason for business practice. But, since resources are

naturally distributed amongst various countries, cities, groups, and individuals, one must

acquire a certain amount of wealth so that he or she has the means to procure these

necessities from other persons or groups who possess the needed material goods. Money

and business become a `necessary evil' of society for the convenience of both procuring

and trading for the material goods which a society, family, and individual need to flourish.

To summarise, the individual who engages in business does so because business is

properly seen a means to the end of procuring wealth, which in turn, is a means to the end

of procuring those material goods which are necessary for living the happy life.

Within this means-end structure, Aristotle reminds us of how it is possible the art of

wealth-getting via business can easily become immoral. If retail trade is pursued only for

the sake of making the trader a more wealthy person, then it is pursued for an end based

on a mistaken view about human existence. He argues,

Some persons are led to believe that getting wealth is the object of household



management, and the whole idea of their lives is that they ought to increase their

money without limit, or at any rate not lose it. The origin of this disposition in

men is that they are intent upon living only, and not upon living well; and as their

desires are unlimited, they also desire that the means of gratifying them should be

without limit [25].

The person who pursues profit at all costs for himself or herself or for the corporation

gears his or her business practice to the wrong end. Wealth is only useful insofar as it

allows an individual, a household, and a community to secure their material needs. Once

these needs are satisfied the further acquisition of goods associated with being wealthy

reflects an excessive desire for the pleasure and security involved in possessing material

wealth. Given that the purpose of a community and its institutions is to facilitate its

citizens' becoming happy by living a virtuous life, a business which promotes immoral

actions undermines its purpose as an institution in society. Simply stated, a business

encourages vicious persons when it both promotes desires for material goods above and

beyond what is necessary for the good life, and when it requires that its members pursue

excessive profit regardless of the normal confines of justice. In the scenario in which it

creates vicious persons, it no longer performs its proper function in society, namely, to

promote the good life by providing for the material necessities of its citizens.

Given the potential dangers of business when it focuses on the endless acquisition of

wealth by taking from the wealth of other persons, one can understand why Aristotle, at

the end of Politics I, [26] comments that retail trade and usury are, in general, unnatural

and ``justly censured.'' We are left to face the question of whether it is even possible that

civic virtue can be promoted and developed within such an objectionable practice.

Aristotle primarily stresses that business (retail trade and usury) cannot properly be

considered an end pursued for its own sake. But, the greater end for which the practice of

business is justified is the promotion of the good life of the citizens of the community in

which it is situated. As a means to the `happy' life, business cannot usurp this ultimate

goal by conceiving of itself as a separate practice that has its own sets of rules, precepts,

and guidelines. Rather, insofar as business pertains to exchange of money and goods for

the necessities of a good life, it is just one of the many practical areas in which one exhibits

the virtues of justice, temperance, and generosity, or their corresponding vices.

Thus, the business community should not have a view regarding what is considered just

within its own particular sphere, which is in conflict with the view of justice as dictated by

society. Virtues in business, as excellences in character which help the individual achieve

his or her goals, must be understood as part of a practice which ultimately contributes to,

while always remaining subordinate to, the happiness of the individuals in the society.

Since virtues are created within the community, business must see itself as a member of

that community whose practices have a profound influence in all aspects of human

existence. Further, virtue ethics with regard to business cannot only be seen as a way of

improving business practice, but must also be seen as acknowledging the role of business

in forming who we are and how we live. As an important factor in the moral and social

development of individuals, business is to be properly viewed as one of many means by

which human beings pursue happiness. As a means to happiness, the virtue ethicist must

see the virtues of business not as being parallel to the virtues of the community; rather, he

or she must see those virtues as being a means by which the community and its individuals

become happy.


56 J. Morse

A final example can be offered as an illustration of how virtue theorists have to this

point treated virtue theory and business in a limited manner. Daryl Koehn in his article, ARole for Virtue Ethics poses the question of the influence on our political beliefs on the

practice of business. He writes,

Virtue ethics invites us to consider how the larger environment affects people's

self-perception, choices, and actions . . . we should consider what aspects of

American democracy (e.g. our general laissez faire view of property) encourage

such behavior, behavior to which many people become habituated at a relatively

young age [27].

As with other treatments of virtue and business like Solomon's, this point of view only

tells half the story of the connection between business, individuals, and the social/political

communities in which we live. Koehn focuses on the way in which our political beliefs

affect the way we view ourselves and affect the way we view business. This position asks

the individual to ask himself or herself, `What is the political climate which encourages a

certain business climate?' But, Koehn still is separating the effect that business has on the

individual by neglecting to treat the effect that business may have on our forming our own

goals as individuals and as a society. Instead of viewing business as an endeavour separate

from other aspects of our lives, the virtue ethicist should stress that we should be asking

ourselves how much effect business has on forming our political selves as well as our own

individual private selves.

The end of human happiness manifests itself not only in the contribution that business

makes to a society, but also in the way that business becomes tied to each of the

individuals it encompasses. Each individual (whether it be the worker, the owner, the

manager, or the consumer) participates in business as a means to his or her ultimate

happiness Ð not as an end in and of itself. Since business has such a profound effect on

the lives of individuals, particularly in our society, it has the added moral responsibility of

reinforcing the ends and desires which help persons flourish. Ultimately, this point boils

down to the claim that business cannot separate itself from the everyday morality, either

in Carr's sense of being a separate game, or in Friedman's sense of focusing on the sole

end of profit. Rather, for virtue to be applied to business, business must realise that it

helps form and shape the moral agents with whom it comes into contact, and should

reinforce the virtues which bring about the ends of the community and its members.

The Full Ramification of Virtue Theory

A complete treatment of virtue theory shows us that business is a social activity like any

other activity. Since a person's activities within the business environment cannot be

separated from their personal life, the ends, goals, and purposes of business need to be

integrated into the ends of the community and its individuals, and not placed in a

separate privileged realm. Clearly, business is an activity which has become part of the

necessary condition for thriving individuals and a thriving community. As part of this

necessary condition, business cannot narrowly limit its goals to increasing the wealth of

its shareholders. Friedman and Carr are wrong, for they try to separate the moral

ramifications of actions within a business environment from their effects on the

individuals with whom business comes into contact. Business has to be seen as a moral



entity which is an integral part of the community, and it must therefore be concerned

about the welfare of the community within which it is situated, as well as the welfare of

the individuals whom it influences.

Virtue theory may explain the proper role which business plays in both the lives of

individuals, and within a community; hence, it cannot be seen as an activity isolated from

the lives of individuals or the life of the community. There is nothing inherently wrong or

immoral in doing business and making money; but virtue theory shows us that these

activities are embedded within a complex series of means which bring about happiness.

When we understand business as a social activity, we see that it has far reaching effects

beyond its own doors. Virtue ethics, when properly applied to business, forces us to think

about how the business environment which is so prominent in our lives influences the

persons we become. Hence, full treatment of virtue ethics in regard to business shows us

that business, as a result of its extensive influence, needs to be better integrated into the

overall good of human flourishing.

John Morse, 175 Forbes Road, Westwood, MA 02090, USA

NOTES

[1] Alfred Carr (1967) Is business bluffing ethical? New York Times, March 9.

[2] Milton Friedman (1970) The social responsibility of a business is to increase its profits, New York Times

Magazine, September 13.

[3] Archie Carroll (1993) Business and Society: Ethics and stakeholder management. 2nd Ed. (Cincinnati, OH

South-Western Publishing Co.). The discussion of the àmoral' manager as one of the viable management

styles is found in Part II, Chapter 4, Business Ethics Fundamentals.

[4] Carr, op. cit., p. 145.

[5] Carr, op. cit., p. 145.

[6] Friedman (1970), op. cit.

[7] Carroll (1993), op. cit., p. 104.

[8] Carroll (1993), op. cit., p. 104±107.

[9] Robert Solomon (1992) Corporate roles, personal virtues, Business Ethics Quarterly, 2, 3.

[10] Robert Solomon (1993) Ethics and Excellence: Cooperation and integrity in business (New York, Oxford

University Press).

[11] Solomon (1992), op. cit., p. 321.

[12] Regarding the congruence of personal virtue with business virtues, see also, Robert Kennedy (1995)

Virtue and corporate culture: the ethical formation of baby wolverines, Review of Business, 17, 2. Steven

Mintz (1996) Aristotelian virtue and business ethics education, Journal of Business Ethics, 15, 8. R.E.

Erwin (1995) The virtues appropriate to business, Business Ethics Quarterly, 5, 4.

[13] Solomon (1992), op. cit., p. 322.

[14] ibid, p. 330.

[15] This argument is also put forward by Peter French (1996) Corporate Ethics (Orlando, FL, Harcourt Brace

& Co.) He argues that many persons within a corporation identify themselves (that is, their personal self)

with the job which they perform within a corporation. He recounts the story of businessmen who, after

being involved in shady banking deals, had trouble coming to grip with the fact that they were dishonest

persons. They did not in fact separate themselves from the roles they performed as managers; rather, these

businessmen identified themselves with the manner in which they performed their work (p.16). French's

example points the realisation that a person who is dishonest in business dealings becomes a dishonest

person in general. He or she cannot separate a dishonest `business' self from an honest `private' self.

Therefore, a business which promotes dishonest employees encourages dishonest persons.

[16] It is important to note here that I am not arguing that there is a specific fixed end to human existence. One

only needs the arguments of Aristotle in Book I of the Nicomachean Ethics, and J.S. Mill in Books One and

Three of Utilitarianism, to understand the point that human action is purposive; namely, it is end or goal


58 J. Morse

oriented. For both these thinkers, the ultimate purpose or end for human beings is happiness, because it is

happiness which all persons ultimately pursue when they act.

[17] Solomon (1993), op. cit., p. 124.

[18] Aristotle Nicomachean Ethics 1179 b 31±1180 a 4; 1180a 29±33 in (1941) Basic Works of Aristotle, R.

McKeon (ed.) Trans. by W.D. Ross (New York, Random House). All following textual citations from

Aristotle will be taken from this edition.

[19] French (1996), op. cit., p. 1±90. French's full argument for affording corporations a moral status separate

from its individual constituents is developed extensively in the first section of Corporate Ethics. This

argument is based on the idea that the salient features by which we identify an individual moral agent can

be applied to a corporation as an entity separate from the individuals who work for it.

[20] French (1996), op. cit., p. 46.

[21] Aristotle offers a view of money centred around the idea of money as a medium of exchange and as a

measure of value for natural goods. Since it is practically cumbersome to have direct barter for exchange of

goods within the life of the city, money is properly used both as a medium of exchange for goods (i.e., it is

easier to trade a sum of money or coin for a natural good like apples instead of trading dozen chickens for a

bushel of apples). Also, money becomes a measure of the value of that good as each good is assessed a

monetary value for the purchase of good. For a good analysis of Aristotle's view of both money and

business trade, see Odd Langholm (1984) The Aristotelian Analysis of Usury (Bergen, Norway,

Universitetsforlaget AS) and (1983) Wealth and Money in the Aristotelian Tradition (Bergen, Norway,

Universitetsforlaget AS).

[22] Aristotle, EN, X, 1178 b 33±35.

[23] In Book X, the final book of the Nicomachean Ethics, Aristotle puts forward the argument the best and

happiest life is not the life of moral virtue. Rather, the life of contemplation (intellectual virtue) combined

with the life of moral virtue better fits the criteria for the happiest life. Aristotle's sudden turn towards

contemplation as the best life at the end of the Ethics is the source of scholarly controversy regarding his

ethics. For some excellent treatments on this debate, see John Cooper (1975) Reason and Human Good in

Aristotle (Cambridge, MA, Harvard University Press), Sarah Broadie (1991) Ethics with Aristotle (New

York, Oxford University Press), and Terrence Irwin (1987) Aristotle's First Principles (Oxford, Clarendon

Press).

[24] Aristotle Politics Pol. I, 8, 1256 b 27±31, in (1941) Basic Works of Aristotle R. McKeon (ed.) Trans. by

Benjamin Jowett (New York, Random House). All following citations from the Politics will be taken from

this translation.

[25] Aristotle, Pol. I, 9, 1257 b 37±1258 a 2.

[26] Aristotle, Pol. I, 10, 1258 a 38±1258 b 9.

[27] Daryl Koehn (1995) A role for virtue ethics, Business Ethics Quarterly, 5, 3.

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The Missing Link Between Virtue Theory and Business Ethics