DEFINING THE ETHICAL CONTENT
2.3 Ethics management as discipline and practice
I would like to define ethics management as the systematic and coherent develop- ment of activities and the taking of measures in order to realize the fundamental and justified expectations of stakeholders and to balance conflicting expectations of stakeholders in an adequate way.
Ethics management is about the organization of ethics. The term management points to the activities and measures which are (a) more or less systematically or structur- ally thought through, (b) coherent, in that the different activities and measures are coordinated and not incompatible with each other, and (c) goal oriented, concerned with realizing the moral responsibilities of the corporation. Organizing ethics is about realizing the justified and fundamental expectations of stakeholders. In princi- ple, all systematic and coherent activities and measures which contributed to the realization of one or more stakeholder interests could fall under ethics management.
Considering that this includes many activities within a corporation (Le. R&D can be in the interest of profit for stockholders, better products for consumers, or less waste for the environment), ethics management is involved when organizational issues are under discussion by which several fundamental stakeholder interests can be at odds.
Organizing ethics is about stimulating a careful balance between conflicting inter- ests. The issues are looked at from a normative-ethical perspective. Activities which are designed to increase client satisfaction (Le. frequent-flyer miles or live music in a restaurant) cannot be called ethics management. Ethics management only comes into
play if, for example, fundamental client interests could be in conflict with those of the corporation or other stakeholders and in which the steps to be taken are seen from the point of view of the corporation's moral responsibilities. Opening a tele- phone complaints line to substantiate the corporate responsibilities and to reduce any possible friction with customers could be viewed as ethics management.
Ethics management is about the reflection and development of the ethics of the whole corporation. Ethics management (or the management of ethics) is not the same as the ethics of management (Hosmer, 1991), ethics in management (Chakraborty, 1995) or management ethics (Evans, 1981). Management ethics describes and criti- cizes the norms and values held by the corporation's management. Management as an activity has its own moral questions, such as: what is a morally responsible way to spend time, how much use may management make of its position of power, what is a responsible way of gathering and distributing information, and what risks are accept- able with regard to policy and strategy? In ethics management, the emphasis is on ethics. In management ethics, the emphasis is on management.ii
Ethics management is not the same as culture management. 24 Ethics relates to situa- tions where fundamental interests are at stake. Culture consists of norms and values which do not necessarily bring fundamental norms and values into risk. Corporate attire, etiquette, and parking spot assignments are frequently not morally relevant.25 Furthermore, ethics management is not only concerned about the cultural aspects of a corporation, but also, for example, about the moral aspects of an organization's structure (i.e. sanction mechanisms and selection and recruitment procedures).
Ethics management is not the exclusive realm of the management.26 In ethics man- agement, the first consideration is not a position which is filled by someone (a so- called ethics manager), but the activities by which ethics are organized. As with many others activities in the corporation, though, management does play a central role and has a major moral duty in the organization of ethics (chapters 4 and 6 go into this in detail).
In the literature of business ethics, the organization of ethics is regularly discussed in terms of institutionalization (i.e. Weber, 1981, 1993, Tsalikis and Fritzsche, 1989, and Sims, 1991) and implementation (i.e. McCoy, 1985, and Murphy, 1988). These two terms are not the same. Institutionalization can be defined in two ways. Accord- ing to the first definition, institutionalization refers to "an official agency" or
"making something officia1." In this definition of institutionalization, the formaliza-
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24 25 26
Ethics management is not the same as ethical management (see, for example, Blanchard and Peale, 1988, and Rion, 1990). Ethical management entails a positive judgment on the morality of the management itself.
Deal and Kennedy (1982) use the term "culture management."
In some cases, these aspects of culture are morally relevant. Corporate dress could be offensive or too sexy and the handicapped parking spaces can be at the far end of the parking lot.
This impression is implicitly created by, for example, titles such as Die Moral der Manager [The Morals of the Manager] (Fiedler, 1977) and Deugden in de Directiekamer [Virtues in the Boardroom] (Kimman, 1989).
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44 Chapter Two tion or structuring of certain activities is what is at issue. An ethics committee is an example of the institutionalization of ethics within a corporation (see, for example, Weber, 1981). From this definition, Hummels (1996) proposes that institutionaliza- tion implies the risk of hindering, as opposed to facilitating, the reflection. The sec- ond definition reflects a sociological interpretation of the concept institutionaliza- tion. Institutionalization in this context means making something part of something else, incorporating something or setting a pattern (see, for example, Tsalikis and Fritzsche, 1989). "Implementing" means "introducing." Implementing ethics can take place either formally or informally. A manager can implement an ethics policy little by little by conducting a lot of discussions. The implementation affects both the
"hard" (structure) and "soft" (culture) sides of the organizational context. Imple- menting is, therefore, broader than the first definition of institutionalization. Both concepts suggest a mechanical character, in the sense that what is being implemented or institutionalized is already recognized. Implementation implies a given set of measures. Ethics management is more. In organizing ethics, it is also about determi- ning what should be institutionalized or implemented. Ethics management, as one of the management disciplines, is involved with developing instruments which contrib- ute to the ethical development of a corporation, and methods that can be used to determine in what direction corporations should develop themselves. Ethics man- agement involves making a description and analysis of the current situation, deter- mining the desired situation, deciding which measures should be taken and activities implemented, and integrating these into the organizational context. Ethics manage- ment is about imbuing an organization with ethical responsibility as an indispensable element of the corporate existence.
In regards to the organization of ethics, we are faced with a paradox. On the one hand, the corporation seeks assUrance of a communal awareness of responsibility. It is important that employees express the responsibility they bear on behalf of the corporation. On the other hand, the corporation needs to respect the intentions and intuitions of the employees. In striving towards a communal awareness of responsi- bility, the corporation has to respect the rights of employees as much as possible.
The moral intuitions of the employees cannot be ignored. Indoctrination, manipula- tion or brainwashing can be very effective as extreme forms of socialization, but they are in conflict with the rights of individuals. A paradoxical demand is, then, made on the management of the corporation: respect for individual responsibility and at the same time ensuring a single communal awareness of responsibility. I would like to refer to this paradox as the ethics management paradox.
In this chapter, we have seen that the necessity of organizing corporate ethics de- pends, at least, on (a) the degree to which stakeholders are dependent on the efforts of the corporation for the realization of their expectations, and (b) the degree to which the intentions, intuitions and abilities of employees are insufficient to guaran- tee this effort from the corporation. I call the activities and measures which aim to organize ethics "ethics management." The management in particular bears responsi- bility for the management of ethics. Ethics management is a legitimate field of
managerial practice because of the importance of ethics for the organization, the specific perspective from which organizations are seen (normative ethics), and be- cause of the proper methods, skills and instruments for auditing, improving and safegUarding the ethics of organizations, which we will delve into in the next chap- ters.
Chapter 3