Recent scandals at Theranos, Fiat, and Volkswagen are just the latest examples of companies under investigation for ethical breaches in attempts to maximize profits. The frequency of ethical lapses among executives suggests that there exists an alternate moral framework in corporate culture, which might create its own “special norms.”
In his article “Business Ethics: Profits, Utilities, and Moral Rights,” Alan Goldman puts it this way: “We may call a social position strongly role-differentiated if such special norms are applicable…and if its occupant is thereby permitted or required to ignore, or weigh less heavily in relation to the professional norm, considerations that would otherwise be morally crucial.”
The idea of a “role differentiated” profession is inherent in our culture. Good soldiers are judged by valor in the field—often manifested by taking human life. Doctors are judged less harshly for prioritizing work over family, if a patient’s health is in peril. Journalists may be considered socially conscious for breaking laws to uncover institutional corruption. Ethics are fluid; we weigh what values are sacrificed for what purpose when making judgements.
Businesses may see themselves as one of these role-differentiated professions, and not purely out of self-interest.
Goldman argues that “pursuit of profit in a competitive situation best promotes aggregate social good.” Even detractors of corporations must admit that the world’s Coca-Colas, Amazons, Volkswagens, and Fiats create significant employment and bolster economies. Their salaries support families. Their health insurance covers medical bills. Large corporations are inarguably a vital part of free market economies.
After all, a business’s foremost function is to growing and profiting. Wider social obligations are ideal to consider, but ultimately secondary to prosperity. This, in and of itself, is a moral code, with wider social good embedded firmly within. Failure to turn a profit is failure to fulfill a primary obligation: minimizing profitability is minimizing potential to provide value to society.
Additionally, even CEOs answer to somebody. Though we refer to the relative wealth of a company, we forget that a hefty percentage of its wealth belongs to its shareholders. “They are entrusted with their money for the express purpose of earning a return on it,” explains Goldman. “But if they sacrifice profits in order to aid what they perceive to be moral or social causes…then they are in effect taxing stockholders without authority to do.”
A wealthy shareholder wanting to contribute directly to social welfare has ample opportunity to do so independently through charities or non-profits. Shareholders in for-profit companies have actively tasked managers with generating income. An individual manager’s personal moral compass may point towards one decision, but their job description may compel them to do the opposite.
These are small examples of dilemmas that many businessmen face. It’s easily to vilify a decision when it comes to light, but may be more difficult in practice. This isn’t to argue that businesses should be held to a different moral standard; however, attempting to understand a mindset that nurtures the potential for ethical lapses permits a deeper understanding of how to balance profit with principle.