Is business ethics an oxymoron? - Editorial - Cover Story

Is "business ethics" an oxymoron? Are doing business and being ethical so contradictory that it is impossible to be both an effective business manager and an ethical individual? No doubt many--perhaps most--would answer "yes" to both these questions. But if it is true that management effectiveness and individual ethics are mutually exclusive, why would anyone want to be a manager? Can it be that all of the people who are or want to be managers are willing to sell their souls?

The thesis of this article is that business and ethics are not contradictory. Indeed, good ethics is synonymous with good management. Two principles based on ethical theory are presented that give ethical purpose to management while at the same time making managers more effective. The perception that business and ethics are contradictory is based on a generally accepted view of what managers are supposed to do and, thus, how they are supposed to act. We begin by examining that view.

The Role of the Manager

What do most people believe managers should do? To the extent that there is a social norm concerning the manager's role, people who assume that role will be apt to fulfill that norm. Social norms and role expectations are powerful drivers of behavior.

The traditional view of the managerial role is relatively clear. It has been stated frequently by people writing about management. For instance, Milton Friedman, in his essay "The Social Responsibility of Business Is to Maximize Its Profits" (1970), says:

[A] corporate executive is an employee of the owners of the business. He has 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 ethical custom.