Abstract
The paper completes a trilogy of papers, under the title: “A Quasi-Personal Alternative to Some Anglo-American Pluralist Models of Organisations: Towards an Analysis of Corporate Self-Governance for Virtuous Organisations”. The first two papers of the three are published in Philosophy of Management, Volumes 10,3 and 11,2. This last paper argues that three dominant Anglo-American organisational theories which see themselves as “business ethics-friendly,” are less so than they seem. It will be argued they present obstacles to collective corporate moral agency. They are: 1) the dominant “soft pluralist” organisational theory of Bolman and Deal, published in 1984 and more recently expressed in Reframing Organisations: Artistry, Choice, and Leadership, 5th edition, 2013, which is based on “reframing,” and which we will call reframing theory (RT); 2) the Business Ethics deployment of Stakeholder Management Theory (SMT) associated with R. Edward Freeman, and several colleagues, dominant in the same period (1984-); and 3) to a much lesser degree, an adapted version of SMT in the Integrated Social Contract Theory (ISCT) of Donaldson and Dunfee (Ties That Bind, Harvard Business School Press (1999)).
This paper suggests a return, from RT, SMT, and ISCT, to an older “participative-structuralist” Neo-Aristotelian virtue-ethics based account, based on an analogy between “natural” persons, and organisations as “artificial” persons, with natural persons seen as “flat” architectonically related sets of capacity in complementary relation, and organisations as even flatter architectonic hierarchies of groups of incumbents in roles. This quasi-personal model preserves the possibility of corporate moral agency and some hierarchical and lateral order between leadership groups and other functional roles in the ethical governance of the whole corporation, as a collective moral agent. The quasi-person model would make possible assigning degrees of responsibility and a more coherent interface of Ethics, Organisational Ethics, and Management Theory; the reconfiguring of the place of business in society; an alternate ethico-political basis for Corporate Social Responsibility; and a rethinking of the design of the business corporate form, within the practice and institutions of business, but embedded in a state as representing the community.
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D. Ardagh “ A Quasi-Personal Alternative to Some Anglo-American Pluralist Models of Organisations: Towards an Analysis of Corporate Self-governance for Virtuous Organisations” Philosophy of Management 10, no3. (2011) pp 41–58; “Presuppositions of Collective Agency: Analogy, Architectonics, Justice, and Casuistry,” Philosophy of Management,Vol. 11, no 2, (2012) pp 5–28; “Ethics, Empowerment, and Education” Australian Journal of Professional and Applied Ethics.2, no2 (2000)pp 32–55; “Well-being, Rules, and Conscience: the Uses of Casuistry by Professionals,” Professional Ethics 7 No.3/4; (1999) pp 138–154.
Organisations can and do have moral responsibilities. See also T. Erskine Can Institutions have responsibilities? Basingstoke, London, Macmillan, 2003.For contrary views see M. Velasquez, “Why Corporations are not Morally Responsible for Anything They Do,” Business and Professional Ethics Journal, 2 Spring 1983,pp1–18; S. Miller, “ Against Collective Agency” in: G. Meggle Social Facts and Collective Intentionality, pp 273–83 Frankfurt, Hansel-Hohenhassen, 2002, and his Social Action: a Teleological Account, New York, Cambridge University Press, 2001; J. Danley “Corporate Moral Agency” in R. Frederick ed. A Companion to Business Ethics pp 243–256, Oxford, Blackwell 1999. On the dependency of markets on ethics, see also: C. Birch Challenging Economic Man. Sydney, UNSW Press 2003; P. Self Rolling Back the Market: Economic Dogma & Political Choice, NY: St Martin’s, 2000; H. Shutt The Myth of Free Trade, Oxford, Blackwell Zed Books 1985.
L. Bolman and T. Deal Reframing Organisations: Artistry, Choice, and Leadership, 5th edition (2013), San Francisco: Jossey Bass
Freeman, R. Edward (1984). Strategic Management: A Stakeholder Approach Boston, Pitman. See also: W.Evan and R.E Freeman “A Stakeholder Theory of the Modern Corporation: Kantian capitalism” in J. Desjardin and J. McCall, Contemporary Issues in Business Ethics, 3rd edition, Belmont, CA:Wadsworth (2002); T. M. Jones, A. Wicks, R. Edward Freeman, “Stakeholder theory: the State of the Art” in: Blackwell Guide to Business Ethics, pp 19–37,Oxford: Blackwell (2002);. Freeman, R. “Managing for Stakeholders” in Chapter 2 of: Ethical Theory and Business, 8thedition, T. Beauchamp, N. Bowie, D. Arnold, Pearson, Upper Saddle River, N.J.: Prentice Hall, 2009. See also R. Edward Freeman, J Harrison, A.Wicks, Managing for Stakeholders, New Haven, Yale University Press, 2007.
T. Donaldson and T. Dunfee (Ties That Bind: A Social Contract Approach to Business Ethics, Boston, MA: Harvard Business School Press (1999).
In L Bolman T Deal, Modern Approaches to Understanding and Managing Organisations, Jossey-Bass,1984
Conflict between individuals, are contingent and partly controllable consequences of organisation. They are parasitic on authority exercise, not causes of it. Conflict, although present, is often destructive, unconscious, temporary, ambivalent, and/or merely a result of accidental convergences of interest between otherwise conflicting parties (cf. political frame). The confusion, uncertainty and chaos, to be masked by symbols, are not agents, but states (cf. symbolic frame). The entities describable by these two frames are not capable of making decisions, acting, or either having or delivering ethics. They truly describe conditions which can present a background challenge to ethics.
Burrell G and Morgan G, Sociological Paradigms and Organisational Analysis, London, Heinemann, 1980; Morgan G Images of Organisation Sage 1986
Different parts can be examples of these things at one time, or the whole can have aspects like each at different times. But all four frames are presented in the form of universal true generalisations, which are at least capable of being, on occasion, mutually contradictory, exclusive of each others’ recommendations or indications when pressed vigorously at the margins, and stated as generalisations about of management.
R Solomon Ethics and Excellence ( Oxford: Oxford University Press,1993)
K. Goodpaster, and J. Matthews,“Can a corporation have a conscience?” Harvard Business Review Jan–Feb 1982 pp 132–141.
See P. French, “The Corporation as Moral Person” American Philosophical Quarterly 18 pp 207–215 (July 1979); and his book, Corporate Ethics, Belmont, CA, Wadsworth 1994.
Only a relatively small number of theorists publicly advocated the pure “shareholder capitalist” view criticised in SMT, and even Milton Freidman held a thesis allowing concerns for custom, law, and “the rules of the game” to be consulted in business dealings.
See Tables A and B of the earlier Philosophy of Management paper in this trilogy, entitled:” Presuppositions of Collective Agency: Analogy, Architectonics, Justice and Casuistry.” (Philosophy of Management 2012 — all references to this paper and its predecessor will be identified as PoM11 or PoM12 respectively). Table A is concerned with architectonic relations between Philosophical Anthropology on the one hand and Ethics, Politics, and Organisational Theory on the other; Table B outlines the result of basing corporate ethics on the quasi-personal model, with the corporation seen as in a practice with its own goods, and as dependent on a social concession for its remit. A further paper on architectonic relations which makes clear that there is mutual dependency of the relata in different respects and orders of consideration is under consideration by a business organisation journal.
A. McIntyre After Virtue Notre Dame: Indiana: University of Notre Dame Press 1984
R Ed Freeman Managing for Stakeholders: Survival, Reputation and Success with Jeffrey Harrison and Andrew C. Wicks. Yale University Press 2007. A half truth which leaves out the philosophical anthropology of capacity-perfection set out in Table B of paper two of this trilogy (PoM12) on Presuppositions of Collective Moral Agency. I assume some things ought not to be bartered away or negotiated on ethical grounds e.g. one’s children.
as suggested in Table A: The Person/ Organisation Analogy, in the 2011 (PoM11) paper entitled:’ A Quasipersonal Alternative to Some Anglo-American Pluralist Models of Organisations.’
see also column (3) on Politics in Table A in (PoM 2012) paper, referred to above.
Ibid.
by P. Grossi in a presentation at I.C.C.A. Conference, 2007 Baruch College, New York.
In sum, a stakeholder is one who is or is perceived by managers as either a necessary condition, an affecting or affecter/ed party, one who has an interest in, receives or makes a contribution, receives or expects a benefit, has a right or is a duty bearer, or is a risk taker or poser.
I thank Royston Gustavson of ANU Business School for this point.
Figures 1-4 in PoM 2011, pp 52-56.
One could add circles to represent the global political and natural environment
Unlike the individual, organisations are inescapably social, and act in a domain of their own. They cannot literally enter the private home, and cannot do many things like feel pain. Individuals cannot do some things which organisations can do, e.g. last 400 years. But like the individual, organisations and the states are ideally ethical and just if they can meet or fulfil the ideal description of justice below. The organisational here is sector-neutral between NGOs, businesses, or state bureaucracies.
See also A. Walsh, A Neo-Aristotelian Theory of Distributive Justice, Farnham, UK, Ashgate 1997 in note 13 page 14 of paper 1, PoM 2011 supra.
There is nothing wrong with the idea of a hyper-norm, but the consensual basis of some of their examples is questionable. Charles Taylor from whom the idea is borrowed gives the anthropological roots he mentions, based on historical exposition in Sources of the Self, Cambridge, MA, Cambridge Univesity Press 1989
P.48 of (2011) paper
Ties that Bind pp 245–262. These are: 1.Relevant communities are a primary source of guidance.2.Where there is no consensus organisations have discretion regarding stakeholder claims. 3. consistency with hypernorms is required;4. significant interests of the majority are candidates for priority.
See for example, Walzer M, Spheres of Justice, BasicBooks,1983; Sandel M, What Money Can’t Buy, HUP (2012).
Kaler, J “An Optimally Viable Version of Stakeholder Theory” Paper presented at I.C.C.A. Conference, 2007 Baruch College, New York. “Contribution” is just too vague a notion to bear the ethical weight put upon it. Does it mean: A contributes if A directs, does, or enables the work”? That would be a notion close to that proposed here, but of course lobbyists contribute also.
Presumably trade offs are to be minimised by win/win strategies and increasing the pie for all stakeholders and avoiding having to agree to less of A for Mary obtain more of B for John. This suggests either the pie can be increased by applying SMT or that cost-benefit thinking is to be avoided in favour of search for ethical win/win outcomes. But can it ? How? As happens in conflict resolution contexts, not all disputants deserve a seat at the table if ethics is factored in e.g. violent parties or behaviour in family ADR.A strict de facto ethics code and practice assures this in the case of ADR. What is the analogue for SMT?
M. Considine and M. Painter eds, Managerialism: the Great Debate, Melbourne, Melbourne University Press 1997
If there were a management ethics acronym, like POLC or POSCORB for management, the acronym might be: GRAEOS-for checking out goals, designing roles, verifying if acts follow ethical decision procedures, treatment of end-users, other players and communities, relation to the state.
There is much lateral interchange at the top of such hierarchies, as the Mondragon example shows. Mondragon is a community of the sort Ties That Bind is rightly trying to hold up as a model. But it is also a historical phenomenon of regional Spanish culture, not easily extrapolated from.
J. Dine, The Governance of Corporate Groups Cambridge, Cambridge University Press 2000; T. Donaldson, Corporations and Morality, Engelewood Cliffs, N,J Prentice Hall. 1982.
S. Turnbull “Corporate Governance: Theories, Challenges, and Paradigms” Social Science Research Network Electronic Paper Collection, 2000;”Why unitary boards are not best practice: A Case for compound boards”, The First European Conference on Corporate Governance, pp 13, 15, 26–27,.2002;“A New Way to Govern” Organisations and Institutions Network 14th Annual Meeting, June 27–30, University of Minnesota. 2004;“Why Änglo-American Corporations are Irresponsible, Unethical and Should not be Trusted”, ISBEE Conference,2000; A New Way to Govern, Sydney: New Economics Foundation n.d.
S. Bottomley, “Taking Corporations Seriously: Some Considerations for Corporate Regulation” Federal Law Review, 19 no 203 (1990); “From Contractualism to Constitutionalism: A Frame work for Corporate Governance” Sydney Law Review, 28 no 11 (1997).
J. Bakan The Corporation London, Constable 2004.
See P. French, footnote 9 supra
See footnote 4 supra
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Ardagh, D. A Critique of Some Anglo-American Models of Collective Moral Agency in Business. Philos. of Manag. 12, 5–25 (2013). https://doi.org/10.5840/pom201312316
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DOI: https://doi.org/10.5840/pom201312316