Abstract
For more than three decades, business ethics has suggested and evaluated strategies for multinationals to address abject deprivations and weak regulatory institutions in developing countries. Critical appraisals, internal and external, have observed these concerns being severely constrained by the overwhelming prioritization of economic values, i.e., economism. Recent contributions to business ethics stress a re-imagination of the field wherein economic goals are downgraded and more attention given to redistribution of wealth and well-being of the weaker individuals and groups. Development ethics, a lesser known field of normative enquiry, already offers nuanced justifications against economism which business ethicists can use in their current attempts to wean the field from old habits.
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Introduction
Concerns of business ethicists with poverty in developing countries are by no means recent (Amba-Rao 1993; Pratt 1991; Donaldson 1985; Naor 1982).Footnote 1 For a variety of reasons, not least the embroiling of multinationals in human rights violations and the resulting outcry by civil society actors, business ethicists argue that multinationals (should) and can contribute to alleviating misery in developing countries. Their arguments and practical strategies draw their support mainly from the canons of classical western normative thought—social contracts, Kantian deontology, utilitarianism, liberalism and libertarianism among others (Wicks et al. 2010; Werhane et al. 2010; Scherer et al. 2009; Gilbert and Rasche 2007; Moon et al. 2005; Maitland 2004; Arnold and Bowie 2003; Werhane 2000; Boatright 2000; Donaldson and Dunfee 1994; Donaldson 1985).
Simultaneously, throughout their long history, business ethicists have been aware that theorizations intending to address societal goals can be rendered ineffectual when economic goals are prioritized (Arnold 2010; Marens 2010, 2007; Worden 2009; Karnani 2007; Wry 2009; Hartman et al. 2003; Freeman 2000; Boatright 1998). As empirical evidence from contemporary scholars both within and outside business scholarship underlines, business ethicists have been known to endorse (however reluctantly and partially) business policies dominated largely by economic concerns that turn out to have devastating impacts for developing countries (Rajak 2010; Banerjee 2010; Jeppesen and Lund-Thomsen 2010; Karnani 2009, 2007; Utting and Zammit 2009; Newell 2008; Khan et al. 2007; Marens 2007; Barley 2007; French and Wokutch 2005).
However, notwithstanding the long-standing accusations both from within and outside the field, it would be unfair to ignore the enormity of changes underway in the core of business ethics. For example, a larger number of mainstream ethicists are demanding changes that would require diverting the primary focus of multinationals from profit generation to human welfare and social justice (Cragg et al. 2012; Mele et al. 2011; Arnold 2010; BEQ 2010; Wettstein 2010, 2012; Oosterhout 2010; Hsieh 2009). This direction for the field offers significant potential to alter the hitherto favored normative stances and also, hopefully, the nature of the usual multinationals’ contributions. Prior to discussing this turn, the undesirable traits against which the stand is being made needs explication and characterization.
Critics have labeled the profit-oriented perspectives pervading business ethics negatively as “strategic” (Wry 2009; Marens 2007; Margolis and Walsh 2003; Husted and Allen 2000). However, the term “strategy” in itself need not be unethical and it is imprecise to malign the entire perspective: a strategic approach is merely one which orients firm activity to its competitive advantage (Powell 2002, 2001; Mintzberg 1990). Nevertheless, as these critics are aware, strategy is usually present in combination with economism, as defined by Merriam-Webster: “a theory or viewpoint that attaches decisive or principal importance to economic goals or interests”.Footnote 2 Related and underlying ideas that are referred to as “economism” include the following: (1) assumption of a separation between economics and society, (2) belief that economic goals always contribute to social goals, (3) extension of economic calculations into social spheres, and (4) assumption that individuals are perfectly knowledgeable and masterful consumers (Gasper 2004). Strategy is less of an issue than the combination of strategy and economism (more precisely termed strategic economism) that renders well-intentioned contributors to business ethics blind to the risks inherent in their ethical models. Ethical models infused with strategic economism tend, for instance, to endorse limiting multinational obligations so that profit margins remain unaltered, reputations are burnished, the role of markets is prioritized, the separation of market and society justified and to accept a prominent corporate role in political processes without acknowledging the associated risks.
The aim of the paper is to show that development ethics, which has a longer history in normative criticisms of economism, offers more nuanced approaches than those now available in business ethics and can, therefore, help quicken the transcendence of strategic economism in business ethics. Without giving a comprehensive review of all contributions concerned with developing countries, it provides (section two) a stylized representation of the new directions business ethicists have charted for the field, getting away from a milieu dominated by perspectives that are instances of strategic economism. Toward this end, it introduces development ethics (section three) and highlights how the prioritization of human dignity in development ethics can inform scholarship in business ethics, at least in those quarters that envisage a repositioning toward ethically justifiable goals (section four). It then illustrates how development ethics can contribute within three focus areas that have attracted business ethics scholarship—human rights, relationship with the state, and the ethics of consumption. These lead to the main arguments and lessons for managers are drawn in the final section.
Turning Away from Strategic Economism
Business ethics seem to have recently turned a corner. At least in some quarters of business ethics, there is a significant agreement to subsume economic objectives within the larger goal of ensuring a positive contribution to the well-being of individuals in less developed contexts.
For instance, though human rights have figured in ethical formulations that dealt with deviance of multinationals in developing countries (for instance in the debates on sweatshops), the role of multinationals in the larger human rights agenda is recently being made more explicit (Cragg et al. 2012; Arnold et al. 2010). This includes the recent suggestion by Arnold et al. (2010, p. 574), drawing on mainstream moral theories, that a key future work for business ethics is identifying “core human rights that should be respected by business”. It also includes, through The United Nations Sub-Commission for the Promotion and Protection of Human Rights, elaborating the role of multinationals and human rights, which, as a common point of departure for business ethicists, embeds the field in larger debates in academic circles (Cragg et al. 2012; UN 2007, 2008). This new role is beginning to reflect beliefs that have been mainstays outside business ethics, including, as Arnold (2010) has proposed that multinationals have an obligation to respect basic human rights “even when doing so will result in higher costs” (p. 388, see also Hsieh 2009). Similar, as Wettstein (2012, 2010) emphasizes, multinationals’ obligations extend beyond mere adherence to laws in countries where they work; particularly when those laws are weak or the states themselves are perpetrators of human rights violations. Even “silent complicity” by multinationals in the midst of egregious violations, even if the company is not directly responsible for any of it, is no longer considered justifiable by scholars (Wettstein 2012).
Significantly, journals in business ethics have opened their doors to scholars from outside the field with their ears to the ground in developing countries, notwithstanding the reputation of these authors as critical of unrestrained corporate involvement in development (Jeppesen and Lund-Thomsen 2010; Frynas 2010; Utting and Zammit 2009). This brings to business scholarship the long-standing concerns of weaker groups unable to participate in processes that set up the rules meant to protect them from (corporate-sponsored) human rights violations. It reveals instances where corporate involvement (even in UN mandated modes) contributes to the weakening of institutions essential for societal well-being (Frynas 2010; Utting and Zammit 2009). In a similar vein, postcolonial appraisals have delivered stinging insights on the tendency of business ethicists to discuss the legitimacy and capacity of corporations while at the same time avoiding discussions on fundamental inequalities in the institutional frameworks that multinationals build and defend (through lobbying, corruption, etc.). The legitimacy criteria themselves have until now been “discursively produced and defined by economic efficiency criteria” (Banerjee 2010, p. 267).
Recent reflections of past editors and editorial board members of the Business Ethics Quarterly (2010) should go further to dispel doubts about transformations in the field, assuming of course that the thoughts of established scholars can be an indication of dominant thinking in a field. Their disapproval of the fundamental tenets of business ethics is overwhelming.Footnote 3 Donaldson (2010) observes in no uncertain terms that single minded dedication to profits is a thing of the past and “all textbooks must be rewritten” (p. 728). Redistribution of wealth and equity, hitherto ignored, is highlighted as the current state of corporate affairs demands an “emphasis on distributive justice and sensitivity to the fate of others in the context of corporate decisions and actions” (Jones 2010, p. 747). De George (2010) underlines the social function of ethics and a fuller engagement with political and ideological stances. It is no longer acceptable for business leaders to be wheeler-dealers (Duska 2010). Fort (2010) believes that business ethics is at “the intellectual vortex of articulating a vision of a free, responsible, virtuous, peaceful world” (p. 738). Contributions from outside this collection also suggest an openness to engage with moral and political philosophies which had not yet figured centrally in the field due to its incompatibility with attitudes that handle profit motives with kid gloves (Mele et al. 2011; Arnold et al. 2010; Heath et al. 2010; Hsieh 2009).
So the core of business ethics seems to be eager to curtail and eradicate strategic economism. However, these new approaches, emanating largely from the perspective of corporations, have not yet shown full awareness that the entrenched structural injustices are capable of adapting and persisting in forms invisible to corporate eyes (although, observations by the external observers and postcolonialists referred to above indicate an appreciation of the intricacies). Business ethics can benefit from the theoretical approaches within development ethics, a field that has a longer history of engagement with structural deprivation and offers wide-ranging normative grounds on which to formulate corporate contributions to social justice in developing countries. A serious engagement with development ethics can accelerate the reorientation of the business ethics in the demanding, but necessary, direction its mainstream scholars have chosen.
Development Ethics
Development ethicists are concerned with “an agenda of major value choices involved in the processes of social and economic development” (Gasper 2012a, p. 120). This field of attention emerged as a philosophical criticism of top-down policies championed by national and international agencies and imposed on developing countries as supposedly harmless value-free models that would result in improvements for everyone (Gasper 2004; Crocker 1991; Goulet 2006, 1977, 1971, 1968). While these top-down policies did produce tangible advances in living conditions at the national level, it turned out that powerful sections of society were cornering the lion’s share of the gains while unjustifiable sacrifices were being forced onto sections too weak to oppose or control these transformations (Gasper 2004; Berger 1974; Goulet 1968). It dawned on concerned observers that, whether acknowledged or not, whether implicit or explicit, judgments on “the good life, the just society, and the quality of relations between people and with nature” are operational criteria often used by decision makers (Goulet 1997, p. 1161; see also Hoksbergen 1986). Therefore, highlighting and clarifying the values that underlie different meanings of development, together with drawing out the priorities explicitly (or surreptitiously) endorsed and disallowed in the formulation of policies governing social change, became central concerns in the field (Schwenke 2009; Gasper 2004; Berger 1974).
A key logic of development ethics is expressed in the realization that development involves altering society and these changes inevitably entail suffering for one group or the other. That is, development involves making “cruel choices” (Goulet 1971). Berger’s (1974) observation of calculus of pain and a calculus of meaning capture this tragedy of development which development ethicists have tried to highlight and encounter (Gasper 2004). Morality demands careful calculation of “tolerable costs to be borne in the course of change” (Goulet 1997, p. 1161) and there is, thus “no justification for not identifying, mitigating, and sharing the costs of change, rather than victimizing the weak” (Gasper 2004, p. 66). To do so, development ethics, as Goulet captured succinctly, should become the means of means “a moral beacon illuminating the value questions buried inside instrumental means appealed to by decision-makers and problem-solvers of all kinds” (Goulet 1988, p. 15).
Key contributions to development ethics relevant to recent turns in business ethics are introduced below in order to facilitate a synthesis with business ethics later on. These are (1) human dignity, (2) basic needs and human security, and (3) existence rationality.
Human Dignity
Early contributions to defining alternate goals of development were primarily made by development practitioners and researchers, who had the best seats to observe the damage caused by elite-friendly, public policies which largely conformed to economism (Crocker 1991; Qizilbash 1998). In particular, some development economists (of which Amartya Sen is arguably the most famous and significant) began turning to mainstream moral and political philosophies to elaborate and strengthen their alternative conceptions of well-being (Sen 1987; Streeten et al. 1981). At the same time, moral and political philosophers were realizing the significance of philosophy to bolster and defend the dignity of vast tracts of humanity (Nussbaum 2011a; O’Neill 1986; Pogge 2003; among others).Footnote 4 Denis Goulet, is considered in the English language literature to be the founder of development ethics, is exceptional in the sense that he transcended different fields like economics, anthropology, ethics, and planning (Gasper 2008); the interdisciplinary style Goulet practiced is now considered as one of the essential requirements for doing well-grounded development ethics (Gasper 2012a; Drydyk 2011). While it offers a diversity of conceptions of well-being that is staggering and has been contested, an absolute priority of human dignity (for which wealth-acquisition is considered an inadequate indicator) and a conviction in the definability of universally applicable goals are widely presupposed in development studies (Phillips 2011; Gasper 2004; Alkire 2002; Qizilbash 1998, 1996).Footnote 5
A representative example of attempts to define development goals is the capability approach, to which Sen is a central contributor (Crocker 2008, 1992, 1991; Gasper 2004; Sen 1999a, b).Footnote 6 Sen’s groundbreaking formulation that policy priority must focus on ensuring that even the weakest individuals have (access to) a range of capabilities which will allow them to freely function in ways they have reason to value, is both humane and applicable in diverse contexts (Gasper 2004). Sen’s lucid and formidable defense and promotion of this policy priority provided a timely moral grounding for development economists who were already diverting the focus of development priorities toward “human” development (Gasper 2004; Gasper and Staveren 2003). A second significant contributor to this enterprise is the ethicist and political philosopher Martha Nussbaum, who has made telling contributions to development ethics (Nussbaum 2011a, 2006a; Nussbaum and Sen 1993).Footnote 7 Though sharing the key features with Sen’s work, Nussbaum’s Aristotelian version of capabilities is often contrasted with Sen’s capability approach and argued to provide a fuller picture of human well-being (Crocker 2008; Alkire 2002; Gasper 1997; Nussbaum 1992).Footnote 8
Both Sen’s and Nussbaum’s conceptions of human dignity have come under criticism from development scholars. As Qizilbash (1998) notes, Sen leaves well-being undefined while Nussbaum’s list seems overspecified. Drawing on the work of James Griffin, Qizilbash suggests a list of prudential values that can make “any distinctive life go better” (1998, p. 52; see also Phillips 2011; and Alkire 2002 for comparisons). Sen’s overemphasis on freedom in particular, and the liberal endorsement of positive freedom and choice in general, have been seen as problematic by others who foreground values that can be threatened by an indiscriminate interpretation of freedom, such as friendship, common good, abstinence, and care (Deneulin 2011a; Gasper and Staveren 2003). Nussbaum’s recent lurch toward political liberalism has raised the concerns of scholars who attempt to rediscover her Aristotelian version of human dignity (Deneulin 2011b; Nussbaum 2011b, 2006, 1992).
In one way or the other, these contributions to goal definition in development ethics are responding to the scholars in the 1970s and 1980s who had argued from a “basic needs” perspective (Streeten 1984, 1980; Galtung 1979; Goulet 1981a).Footnote 9 Even Sen offers his capability approach, meant to specify deprivations and achievement in a culturally invariant way, as an improvement to contributions that coalesced into and promoted the basic needs approach (BNA) (Doyal and Gough 1991 Footnote 10; Crocker 1992). Since later attempts to redefine goals of development are responding to Sen, the BNA can be considered a forgotten precursor to the later attempts to define development goals. It is therefore important to revive this idea and place it in its historical and current context.
Basic Needs and Human Security
As an approach to define development goals, the BNA “attempts to provide the opportunities for the full physical, mental, and social development of the human personality and then derives the ways of achieving this objective” Streeten et al. (1981, p. 31). As introduced, the BNA emerged as a political agenda in the 1970s and 1980s as a correction to existing policy frames built on a mistaken assumption that economic growth and increasing international trade would be adequate for improving the well-being of all individuals in developing countries. BNA theorists noted that while tangible increases in national wealth were being made, the benefits were not being shared equitably within these countries (Streeten 1984, 1980; Galtung 1979) with large groups being were marginalized and some liable to dispossession and displacement. As a part of the larger critique of macro-policies, these scholars underlined the urgency of refocusing policy attention toward securing basic needs first for all individuals before aiming for lucrative macro-level objectives (Gasper 2004).
Despite the adjective “basic”, debates around BNA were already sophisticated in these early stages (see Doyal and Gough 1991). For instance, while there was a general agreement that food, water, health, and shelter are basic needs, inclusion of “non-material needs” like liberty, affiliation, and self-expression were intensely debated within the approach, leading to nuanced positions on the relationship between human rights and basic needs (Stewart 1989; Streeten 1984; applications of basic needs thinking in business ethics in the next section will elaborate this idea further). BNA was a political program, given that its explicit purpose was to reorient public policy from elite interests toward egalitarian distribution of national wealth (Galtung 1979). Being associated with a political agenda had repercussions—as neo-liberalism spread in the mid-80s and through the 90s, the perceived socialist connotations of the BNA made it unpopular in mainstream policy, planning, and academic circles (Gasper 2004, Doyal and Gough 1991).
Recently, basic needs thinking has been experiencing a revival, partly through the notion of human security (Gasper 2010a, 2005). Originally, the term human security emerged with a growing awareness that the state’s interest in security did not necessarily have a causal relationship with individual physical and socio-economic security: “history has repeatedly shown, the interpretation of state interests often mimics the power and privileges of those in positions of economic and political advantage” (Jolly and Basu Ray 2007, p. 463). In peace and conflict research, human security was (and continues to be) used narrowly to refer only to physical harm inflicted on civilians through war, genocides, and other forms of violence perpetrated by either the state or other armed groups (Liotta and Owen 2006). In contrast, human security was given an expanded reach, and entered development ethics, when the United Nations Development Programme (UNDP) underscored that security is “not a concern with weapons—it is a concern with human life and dignity” (UNDP 1994, p. 22, see Gasper 2005).
Broader interpretations of security uniquely illuminate the fundamental inequities in society and recast visible and expressed instances of violence as symptoms of deep rooted injustices—“freedom from wants” is causally linked to “freedom from fear”. The fragility of security, in that it is jointly constituted and threatened by facets of life like the economy, health, community, food, environment, and political needs and their interconnections, is brought into relief (Alkire 2003; Commission on Human Security 2003). The use of the basic needs approach in human security is not to be interpreted only as basic material needs (Gasper 2005). In its current understanding, human security thinking “addresses the question of guarantees for individuals, and the need for a motivational basis, including by connecting to a foundational rationale for human rights in terms of basic capabilities which concern areas of basic need” (Gasper and Truong 2005, p. 376).
This notion of “guarantees” has an important role in aiding the normative selection and prioritization from among human needs and associated rights (Gasper 2005). Prioritization resonates with core ideas of development ethics like Goulet’s “the cruel choice” and Berger’s “calculus of pain” as inevitable in defining policies in constrained circumstances that do not allow protection of all rights of every person involved (Penz et al. 2011; Gasper 2005). Guaranteeing a secure access to basic needs of the most vulnerable before expanding capabilities of the (slightly) better off, is a contribution human security offers to other major and complementary approaches for social justice like human development and human rights (Gasper 2007).
While human development stimulates “joined up thinking”, the human security approach promotes a “joined up feeling” by connecting the interests and forming broad coalitions of different seemingly disconnected groups pursuing their individual rights (Gasper 2007, 2012b; Truong 2009; Gasper and Truong 2005). The approach possesses clear ambitions to transform individuals to recognize the interdependence of their rights with the sustenance of a human “community of fate” (Gasper and Truong 2010). In addition to being an analytical concept, the motivational component of human security leads its proponents to argue for its function also as a discourse (Gasper 2005). Human security is therefore also a rallying point for stimulating individual commitments to render the world less insecure offering an emotionally rich language to instill a sense of collective responsibility and encourage sacrifices and galvanize social movements tackling global problems like climate change, migration, and unbridled consumption (Gasper 2012b).
Existence Rationality
In a series of papers on human rights and technology transfer to developing countries, Goulet dispelled the assumption that primitive practices are irrational and unscientific when compared to technical rationality (Goulet 1992, 1977). He questioned whether a community that is comfortable in its traditional world-views (including limited access to technological advances) must be forced into modernization which, while improving physical comforts, threatens traditional values and ways of living that are already fulfilling (Goulet 1971). The task of development planners, he argued “is to render development decisions and actions humane. Stated differently, it is to assure that the painful changes launched under the banner of development and progress not result in antidevelopment which destroys cultures and individuals and exacts undue sacrifices in suffering and societal well-being—all in the name of profit, some absolutized ideology, or a supposed efficiency imperative” (Goulet 1988, p. 22).
Goulet’s term “existence rationality” describes an important feature of decision making processes in traditional communities which were targets of development policies (Goulet 1971). This is unlike the rationality that serves “resource planning and modern technology”, instead being constituted from “the traditional modes of rationality which are the underpinnings of cultural value diversity” (Goulet 1981b, p. 4). Local existence rationalities are, in contrast, constituted by a set of “concrete strategies that enable … [people] to survive, to protect their identity and dignity, and to assert whatever freedoms they can muster over nature…”(Goulet 1977, p. 15). An authentic development involves trusting this “ability of people, no matter how oppressed or impoverished, to improve their lives, to understand the social forces that affect them, and eventually harness these forces to processes of genuine human and societal development” (Goulet, quoted in Gasper 2008, p. 461). An important theme in development ethics is a forthright endorsement of those forms of development that offers weaker sections within communities an opportunity to define societal goals and move beyond them if needed (Drydyk 2011; Penz et al. 2011; Goulet 1992, 1983).
However, the outcomes of a token deliberation may still not reflect the existence rationality and real concerns of the weak since they are often conditioned to accept oppressive logics in their environments in most cases (Cameron and Ojha 2007). Cultures (of both the weak and the poor) inflicting direct, structural and cultural, violence by denying basic needs to more precarious groups and individuals in the community (Gasper 2004; Galtung 1990 Footnote 11). As Gasper warns, in conditions of unequal capacity to voice their interests among and within groups (and families) “….the strong can declare themselves “different” and “entitled” to pursue their own rationality and the unique values of their own rationality and the unique values of their own allegedly incomparable ways of life, including by consuming the weak” (Gasper 1996, p. 633). For instance, village elders or heads of indigenous groups [who in addition to being from upper echelons of (poor) communities, more often than not are men] may pass off their own interests as those of the community, to preserve their privileges in intra-community affairs (see the example of semi-Nomadic Toposa farmers from South Sudan in Gasper 2004, p. 204).
Starting with this acute awareness, development ethics scholars engage in creating finely built structures for conducting deliberation to circumvent institutions that have sophisticated tools to silence weaker voices (c.f. Penz et al. 2011; Schwenke 2009; Crocker 2008). A deliberation is recognized as a moral process in which the content of debate, the process, and even selection of participants is preceded with deep introspection and careful preparation (Crocker 2008). Such a deliberation, “either assumes or includes the ideal of human dignity, social justice, human flourishing, and well-being…..(and) offers a way to specify, weigh, trade-off, and sequence the realization of these ideals’ (Schwenke 2009, p. 47, emphasis added).
The next step is to clarify who is making the claims on behalf of a culture; more often than not the defenders of a repressive cultural trait will be those who tend to benefit from the status quo. It is important to further ascertain (1) if the people have alternatives to accepting cultural norms, (2) whether individuals who acquiesce to existing structures are well-informed, (3) if they have capacity to reason or are not allowed to think and voice their doubts, and (4) whether the individuals reconciled to the current state of affairs “by adjusting their preferences and expectations” (Gasper 2004, p. 213). This means that while giving absolute importance to respecting the existence rationalities of the poor, these also must be subject to critical review and principled prioritizations.
Weaning from Strategic Economism
To recap, development ethicists define progress by the extent to which lives of the weaker individuals and groups experience authentic development which involves aiming for goals beyond monetized wealth-maximization and using means which do not demand undue sacrifices from the weak, a definition that is essentially normative. While normative models associating economic goals with other corporate obligations like equity and alleviation of misery have also been suggested in business ethics (Hsieh 2009; Wry 2009; Margolis and Walsh 2003; Husted and Allen 2000), development ethicists have articulated more firmly the inviolability of human dignity, in a manner that has important connotations for business involvement in development.
For instance, the model by Margolis and Walsh (2003) offers a methodological and normative framework to design modes of engagement with human misery. Their nuanced contribution identifies an antinomy between economic and social goals as the starting point for corporate strategizing in matters regarding human misery.Footnote 12 However, their pragmatist approach, basing corporate involvement in the alleviation of misery on whatever works, presupposes a genuine commitment in the corporate world to social justice: researchers, scholars and managers have to be trusted to choose whether addressing social misery is necessary and if so, the mode and extent of involvement, of course subject to corporate expertise. If one shares this goodwill, the benefits offered by development ethics can be seen as just a continuation of these concerns, offering more sophisticated analytical tools to disentangle the threads from which various forms of misery are tapestried. However, as current events and scholarly reflections indicate, expecting every business strategist to approach the tension with the sincerity presupposed by Margolis and Walsh can lead to disappointments.
In contrast, development ethics offers less room for doubt about whether, in each context that businesses encounter, economic goals trump human dignity. As Nussbaum emphatically asserts: “Humanity is under a collective obligation to find ways of living and cooperating together so that all human beings have decent lives” (Nussbaum 2004, p. 13). Consequently, in the minimum moral standard she sets for multinational activity in a new global order, the capabilities of individuals in the region should be developed to the greatest possible extent—“part of doing business decently in a region is to devote substantial amount of one’s profits to promoting education and good environmental conditions”. Other benefits from such investments should be considered “subsidiary to the public understanding that such support is what decency requires” (Nussbaum 2004, p. 16). While one could argue that the normative positions assumed by development ethics are unburdened by consideration of economic goals of the firm, as the reflections of business ethicists indicate, the arguments for prioritizing economic goals seem to have had their day and business ethics seems to be headed toward values that which development ethics has always held as inviolable. Thus, considering the ways in which these values have been theorised in development ethics both suggests pathways for business ethics to follow and ways to tread these more quickly. As illustrative examples, insights from development ethics related to three focal areas within business ethics are elaborated below: (1) prioritizing competing rights, (2) interacting with the state, and (3) the ethics of consumption.
Prioritizing Competing Rights
Contributions that justify business involvement in securing human rights can benefit from making explicit, as in development studies, the tenuous relationship between needs and rights. Simply put, though some of the central human rights claims rely on equal access to needs, not all rights are really basic needs (Gasper 2005; Stewart 1989; Streeten 1980; Galtung 2004).Footnote 13 For instance, as Streeten (1980) observed, even if we accept that health and education are basic needs, to claim that these are human rights is not always straightforward. This means that: “while there are duties corresponding to all rights, the debit item on the balance sheet of providing social and economic “rights” implies depriving someone else, or the same people later, of some resources” (Streeten 1980, p. 109).
Debates on human rights obligations of multinationals in developing countries (Cragg 2012; Arnold 2010; Wettstein 2010, 2012; Kobrin 2009) have acknowledged this inevitability of prioritization of either rights or recipients. Those combining social contract and deliberative ethics to render multinational strategies humane (Hsieh 2009; Gilbert and Behnam 2008) also tend to side-step the unattainability of a solution that protects everyone’s basic needs at all times. A possible exception is Werhane (2010), who observes that corporations may have to juggle strategic and societal demands as it is “very difficult in practice not to engage in economic activities that are “grey” or imperfect”, and companies have in many cases have “to take moral risks and be content to be… satisficers” (p. 699). Nevertheless, like Margolis and Walsh (2003) earlier, principles for prioritization are yet to be formulated that can ensure the absolute priority to human dignity even in difficult circumstances.
One approach, suggested by Streeten, would be creating a simple time-profile “showing who achieves what needs, how effectively, at what time and at what sacrifices and costs”. Such mapping would expose trade-offs over the course of a process (Streeten 1980, p. 110). A more sophisticated ethical basis for prioritizing rights and allocating limited resources is provided in the elaborate development ethics framework recently built by Penz et al. (2011). Their framework emerges from seven criteria—(1) human well-being and human security, (2) equity, (3) empowerment, (4) environmental sustainability, (5) human rights, (6) cultural freedom, and (7) integrity against corruption (Drydyk 2011). The benefits of this framework are illustrated using the case of large infrastructure projects.
While infrastructure projects have often entailed vast human suffering, they also provide essential benefits to other equally precarious groups (Penz et al. 2011). Developing countries usually encompass a diversity of competing and overlapping interests making it difficult to reach a consensus on development goals and the distribution of benefits and suffering (Penz et al. 2011; Schwenke 2009). In such complex situations, while non-maleficence is primary, every material, cultural, and aspirational need of every person does not need protection (Penz et al. 2011). Rather than following international agreements on human rights verbatim, a better strategy involves patiently listening to the weak and using the possible different combinations of the principles listed above to prioritize among the human rights (Drydyk 2011). While empowerment is central, it need not be the overriding criterion—allowing for empowerment of one person or group (to stop a project) often results in reducing the capabilities of others. Instead, a principle of protective empowerment could guide prioritization: “specific freedoms by which we protect ourselves against hardships take priority over generic freedom, and having too little generic freedom is just one hardship among many” (Penz et al. 2011, p. 136).Footnote 14 This sophisticated model built by Penz et al. (2011) can be extended to contexts covered by business ethics to create frameworks to determine the level of sacrifice, negotiate the nature of sacrifice, and identify the groups who should make the sacrifices that result from corporate activities.
Interacting With the State
There is a pronounced accent within business ethics literature on the diminishing influence of the state and on the enthusiasm among corporations to deliver essential public services (Scherer and Palazzo 2011; Scherer et al. 2009; Moon et al. 2005),Footnote 15 something which have three interrelated explanatory and moral implications. First, in reality, structures and institutions associated with the state continue to wield considerable influence in lives of both rich and poor (Cotula 2012; Manning et al. 2011; Glassman 2011; Sassen 2010; Pahle 2010; Randeria 2003); as Banerjee notes, most theories have finally “come up against the brick walls of sovereignty and democracy” (Banerjee 2010, p. 272). Second, specific forms of knowledge, as St. Clair (2006) suggests, are created in global institutions like the World Bank (dominated by the interests of particular nation states, predominantly from the West) to the detriment of large sections of the populations in developing countries. A third unfortunate fallout of the enthusiasm to write off the state is that the shared existence rationalities of top-managements of multinationals, the better-off sections of the society and state officials have escaped attention of business ethicists (see Bardy et al. 2012; Banerjee 2010; Pratt 1991 for exceptions).
Consequently, the often vicious and unforgiving political maneuvers to influence these national and international institutions, which are of deep significance to both human well-being and profits, remain largely outside the normative view (Banerjee 2010; Sassen 2010). Consciously propagated discourses of the state rendered weak by globalization have been observed to have contributed to legitimizing a smoke-screen allowing devious corporate-political-bureaucratic collaborations to collude and plunder with impunity (Cotula 2012; Petras 2008; Randeria 2003). Holding on to inaccurate beliefs could mean that business ethicists are endowing state authorities with arguments that allow the state to abdicate its responsibilities to the poor while blithely assuming a lucrative position as handmaid to corporate interests.
Though some are searching for the moral legitimacy of a political role for corporations (van Oosterhout 2010; Heath et al. 2010; Heugens et al. 2006) once again theorists seem to prefer the coziness of economism and the related assumptions of voluntary contracts.Footnote 16 As Ferraro et al. (2005) has shown, the dominance of economic language in management theories has deleterious effects on the social conscience of managers which in turn lead to socially damaging business principles. Others attempts to legitimize the political role of corporations require “power-free” contexts of deliberation (Scherer and Palazzo 2011, p. 916), an unrealistic hope in most parts of the world, let alone developing countries with entrenched inequalities (see previous sections). Business ethicists clearly need alternate explanatory devices and moral principles to address the needs of the poor without either relapsing into economism or ignoring the imperfections of political systems in the unfortunate parts of the world (Aharoni 2013).
Organization theory, could improve the explanatory models now being used to develop moral frameworks for the political role of corporations (van Oosterhout 2010; Heugens and Scherer 2010; Margolis and Walsh 2003). For instance, the definition of the role of corporations in politics should be preceded by an application of institutional theory to the transformation of regulatory apparatuses within a nation-state reorienting itself to globalization (cf. Djelic and Quack 2003; see also Levy 2008; Sassen 2000) to map the extent of impact of global regulatory processes with more precision. This would provide a clearer empirical picture the processes (deliberate shirking of duties or genuine inability) that are diminishing the role of the state in ensuring social justice.
Development ethicists have illustrated how the same global processes (of rule formation in politics and markets) can be analyzed, with a firmer focus on how to channel their outcomes for the preservation of well-being on implementation (see St. Clair 2006 above). Such analyses are possible because development ethicists evaluate public policies on their capacity to deliver “the moral goals of social justice, protect human rights, express democracy, protect the environment, or provide the right education for the next generation” (Dower 2008, p. 188). Assuming that states will continue to provide more space for corporations, this approach offers a viable alternative to break away from the unhelpful reliance that business ethicists currently favour on market calculations and contracts in the delivery of public goods (Barley 2007). It would be especially important where ability or willingness to pay would exclude a significant section of the population, for instance in access to education, health or the creation of green zones (Gasper 2004). Approaches recently suggested for confronting deviant states adopt a human rights language (Wettstein 2012) which carries the risk of being dismissed or forcibly rebuffed in the name of sovereign priorities (growth, security, etc.). Human security offers business ethics a language for political engagement that is less confrontational and more emotional, without submitting to sovereignty when individuals within states are being denied lives with dignity.
Ethics of Consumption
Of the various approaches to balance strategic and social goals, the Bottom of Pyramid (BoP) approach stands out its ingenuity in transforming the poor into an untapped source of profits and the support it has among mainstream business ethicists as a result (Werhane et al. 2010; Hahn 2009; Prahalad and Hammond 2002). In one deft move, a solution seem to be found in meeting social commitments without corporations having to transform their primary purpose of offering profitable good and services to the community. Nevertheless, sharp criticisms have questioned the values that promote consumption and defend freedom of choice of the poor even when their actions clearly damage their well-being (Karnani 2007, 2009). The rebuttal offered by its proponents are based on a belief in the discretion of poor in matters concerning their wellbeing/consumption behavior and suspicions of undesirable “paternalism” (Werhane 2010, p. 52). But education and exposure were not barriers to middle-class Americans’ embrace of purchasing behaviors that ultimately damaged their life chances (Warren 1998). Given that better decisions are unlikely to be made by poor and uneducated consumers, business ethicists can consider the additional moral foundations offered by development ethics to circumscribe the extent to which demand from the poor must influence product decisions.
Development ethicists may agree to the freedom of choice of the poor but only to the extent that it is the defense of existence rationalities which is being argued for. For instance, Goulet had noted that individuals and groups must be given an opportunity to plan for what kinds of goods they must consume: “it is not enough for them to have access to resources downstream after initial decision have been made by other producers” (Goulet 2002, p. 16). In sharp contrast, they challenge the two key assumptions that approaches inspired by the BoP model tend to endorse—that sellers should supply according to whatever the demand is, i.e., “seller sovereignty”, and that people should get as much as they can pay for, i.e., “consumer sovereignty” (Gasper 2004; Hoksbergen 1986). The sanctity attributed to consumer and seller sovereignty allow marketeers to blatantly entice people to make poor choices (e.g., spending income on liquor rather than on the health of their children), inadvertently damaging social fabrics, promoting overconsumption and accelerating climate change (Gasper 2012b; Crocker 2008). A poignant example that Gasper (2004) cites is the decision in the 1990s to locate gambling centers near the poor townships in South Africa.Footnote 17 Evidence of the effects of various multinational strategies to promote consumption in other parts of the world are not encouraging either (Karnani 2007; Wicks et al. 2010). To mitigate these risks of consumption, development ethicists stress the immorality inherent in the value-neutral acceptance of all wants (Gasper 2004; see Crocker 2008 for an extensive evaluation of the impact of consumerism on development).
Development ethicists have simultaneously underlined other practical and spiritual priorities that, for the rich and poor alike must trump unrestricted freedom in consumption-related decisions. Building on Aristotle’s notion of Public Good, the related Christian notion of Common Good, and Buddhism, Goulet decried “development as mere wealth-getting or the conquest of technological power” as foundations for both “persistent poverty and of human rapacity toward nature” (Goulet 1992, p. 239). Along with accepting that various spiritual sources agree on the precedence of material goods over higher things up to a certain level, Goulet highlights their convergence on the value of internal freedom to use material goods “as a springboard for cultivating those higher spiritual goods which alone bring deeper satisfactions: virtue, friendship, truth, and beauty ” (Goulet 2006, p. 146, see also Hoksbergen 1986). Clearly, Goulet’s views on values promoted and damaged by consumption and production patterns is as relevant today as it was when he proposed it. Common good as a regulating principle for organizing duties and rights in societies has been independently suggested in both business ethics (Sisón and Fontrodona 2012; Mele et al. 2011; Argandona 1998) and development ethics. The shared philosophical sources should make combined work on this fundamental topic relatively smoother.
Conclusion
Development ethics underlines the permanence of cruel choices involved while securing human dignity in resource-constrained settings and offers justifications for selecting from among the possible choices. Given that business ethicists have begun in recent years to critique the seemingly convenient quick-fixes I have labeled strategic economism, development ethics is a logical place to look for tools that can address the complexities involved in furthering business objectives in contexts that are characterized by daunting combinations of resource scarcity, nationalism, ethnic and religious tensions, and pressing needs. Development ethics, having dealt with similar concerns for a longer period, can equip business ethicists with a range of appropriate, normative approaches, to negotiate these contexts. These would permit the stated aims of business ethicists (around social justice) to be achieved more quickly than would be the case given only the means currently available in the field. This can be clearly seen in the three focus areas in business ethics—human rights, the relationship of corporations with the state, and the ethics of consumption—described in this paper.
These transformations within business ethics, an important normative beacon of management studies, may also over time filter into and transform the language in management theories taught in business schools, stemming the proliferation and legitimation of managerialist attitudes devoid of social conscience. They could improve practical guidance offered to managers in at least four ways:
First, by exposing the hollowness in the comfort experienced through reliance on straightforward market calculations on matters related to social justice, the need for a wider range of explicit criteria becomes unavoidable (Penz et al. 2011; Goulet 1977). Acknowledging the gravity of managerial responsibility (in weighing the type of technology, work schedules, decisions on restructuring and layoffs, and products that are introduced to a society) would consequently require a thorough reflection on which (not whether) and/or whose existence rationalities are being sacrificed by corporate (non) intervention (Gasper 2004; Goulet 1977; Berger 1974). The inspiration for continuous justifications for corporate policy will, it is hoped, derive from acknowledging the inevitable tragedy in some form or the other associated with every aspect of corporate existence (Gasper 2013; Nussbaum 1986).
Second, alertness to the internal dissent within communities can inoculate corporate policies against tendencies by stronger groups, who tend to dominate management hierarchies, to defend favorable norms as inviolable on account of their ancientness or justifications in religious scriptures. While the default attitude must be utmost respect for cultural needs of any group, managers must be able to identify and dislodge unethical community norms (however ancient), even those held dearly by the weaker sections in a society must not be spared critical evaluations. Managers can use alternate criteria already available in development ethics to clarify and strengthen their own normative positions, giving them the confidence to wade beyond the security of relativism and evaluate and criticize claims made by diverse groups with distinct agendas (Penz et al. 2011; Gasper 2004; Goulet 1977).
Third, within the ideological rifts formed by proponents of different goals of development, identifying the position of corporations is a significant contribution development ethics can offer. Corporations involved in global and national politics cannot avoid but get involved in the murky worlds of power-plays, where corruption, criminal networks and propaganda machines combine to promote lucrative policies. Especially in countries where the states are increasingly receptive to corporations (this includes almost any country), corporate managers informed by clear moral boundaries can transform policy making from a process that tend to eviscerate the weak into one that is imbued with tenets of justice. Whether business ethicists and managements in multinationals will have the stomach to risk being directly targeted or caught in the crossfire in these “emerging markets” is an open question (Ghosh 2012; Teltumbde 2012; BBC 2012; Khan et al. 2010).
Finally, the single most important contribution that development ethics offers to business ethics is a reminder to listen to the weak, and to elaborate mechanisms that will capture their views (Drydyk 2011; Penz et al. 2011; Goulet 1968). Instead of being satisfied by organizing a perfunctory societal interface or participatory structure with communities, managers would have to critically question whether the individuals know what is good for them and have both the confidence and vocabulary to express this. Rather than elide over possible harms caused by their presence and strategies, corporations could encourage disparate groups to criticize company policies. Such levels of transparency on the damages caused to the society (or violence left undisturbed) may seem like an anathema to many corporations obsessed with amplifying positive contributions. Nevertheless, it is the right thing to do. Provided deliberations are sincerely organized, managements may be surprised to find ordinary persons accepting reasonable settlements for the sake of a genuine common good.
The economic crisis now engulfing advanced societies is giving clear indications that societal suffering from inequitable and unjust institutional features may no longer be (or never was) exclusive to the poorer regions of the world. It asks for further elaboration of principles developed in development ethics in the context of corporate life anywhere in the world. This could amplify the relevance of business ethics in a world reeling from the compounding effects of growth patterns that strip humans of dignity, blatant distortions of democracy, a rapidly degraded environment and a deepening and widening pessimism about the role of corporations in addressing these pressing societal concerns.
Notes
Although, the idea that business must contribute to society is much older (De Bakker et al. 2005; Garriga and Melé 2004; Husted and Allen 2000), I have taken the launch of the Journal of Business Ethics (JBE) in 1982 as the starting point, for a specialist journal represents the emergence of a self-conscious field. The review of contributions focusing on developing countries that follows in later sections is largely limited to contributions to the JBE and Business Ethics Quarterly (BEQ); these journals have been suggested earlier as acceptable indicators of current trends in business ethics scholarship (Talukdar 2011; Collins 2000).
Retrieved from: http://www.merriam-webster.com/dictionary/economism. Accessed on April 11 2011.
Of course, the majority of these contributions can be considered to be voices of Americans shocked by the role of their corporations in destroying lives and futures of their countrymen, in some cases by adopting attitudes they themselves may have espoused. See Marens (2010) for an historical overview of the influences of American political economy on the generation of ideas within business ethics. But the overall stress on securing the well-being of societies from insidious corporate misconduct is applicable in almost any context in the world.
Though these philosophers do not identify themselves explicitly as development ethicists, since they position themselves as aiming to reorient social ethics as such, normative analysis of development without references to their work are rare (Drydyk 2011). Further, being a new and interdisciplinary field of attention, development ethicists do not necessarily associate themselves solely with development ethics. See the website of International Development Ethics Association (IDEA) and contributions to its partner Journal of Global Ethics.
Gasper (2010b) observes that though “well-being” is used when we speak in terms of individuals and “quality of life” when we speak of societies, their meanings overlap. The former terms comes from psychology while the latter from sociology and social policy. Though the fine-grained differences in human well beings and qualities of life offered in development ethics is significant for business ethics, considering the introductory purpose this paper is intended to serve, these variations are not separately tackled.
The impact of John Rawls’s Theory of Justice is deeply felt in most contemporary ethical theorizing that links moral philosophy to the social sciences (Coleman 1974), and development ethics is no exception. Central contributors to development ethics, including Sen and Nussbaum, have developed their theories against the backdrop of Rawlsian notions of a just society and individual capacities, extending its application to unique contexts in developing countries characterized by extreme diversity, resource scarcity, and historic forms of oppressions (Sen 2009; Nussbaum 2006a, b, 2011a, b). Rawlsian political philosophy is also pivotal in discussions among philosophers of the role of global institutions regulating distribution of wealth from rich to developing nations, since most of the flow is in the other direction (see, Pogge 2003).
Summarizing Galtung (1979), the idea of basic needs was proposed as an alternative to the New International Economic Order (NIEO) intended to correct international trade imbalances considered to be skewed in favor of the advanced nations as a result of colonialism. The politicians and the elite in developing countries were, and still are, champions of the NIEO as they stood to benefit from increased trade and production in their countries. The basic needs approach (BNA) emanated in intellectual circles concerned with the lack of equitable distribution of the benefits of development within these newly independent countries; these scholars argued that basic needs of the poor be met as a condition for access to the lucrative global trade system. The elite in the developing countries often vociferously objected to these demands and interpreted these demands as surreptitious plots by advanced nations to maintain the advantages they could, in previous centuries, maintain by force (Galtung 1979).
Later works on basic needs have, in turn, drawn from Sen’s insights. For instance, Doyal and Gough use Sen’s insights to distinguish between universal needs and “culturally-sensitive satisfiers” to indicate the level of satisfaction basic needs: “Basic needs, then, are always universal but their satisfiers are often relative”(Doyal and Gough 1991, p. 155).
‘Direct violence is an event; structural violence is a process with ups and downs; cultural violence is an invariant, a permanence remaining essentially the same for long periods, given the slow transformations of basic culture” (Galtung 1990, p. 293). Galtung uses the metaphor of earthquakes as direct violence, movement of tectonic plates as structural violence, and the fault lines as cultural features.
Rights are a “major set of tools in the political struggles to claim fulfillment of needs” (Gasper 2005, p. 231). There are differences in the use of the terms—rights are used in legal and humanitarian worlds and needs for policy making and planning purposes (Gasper 2005). The differences in usage obscure the shared structure of both needs and rights language as concerning an intermediate requirement to attain an acceptable level of human existence. However, “rights” are understood as justified claims of individuals while “needs” are criteria used to allocate resources. (ibid).
Their ethics of conducting deliberations involves an early identification of stakeholders, prior distribution of project information, facilitation of negotiations, and management of resettlement when required, good governance, and avoiding corruption (Penz, et al. 2011). Any change to the existing a living pattern of a community can be justified only if the supporters of a change can prove that (1) the new development is authentic development, (2) the development improves an existing barrier to well-being, (3) alternatives have been considered, and (4) fair deliberations were held to arrive at the decision. These are conditions more stringent and steps more explicit than what is currently available in business ethics (Byrne 2012; Kemp et al. 2011; Gilbert and Behnam 2008).
It is quite surprising that business ethicists continued developing theories on the basis of a premise that academic opinion in global sociology and political economy on globalization had already concluded was a myth; rather the overwhelming evidence pointed to a reoriented but centrally relevant state (Hay 2005; Djelic and Quack 2003; Sassen 2000; Hirst 1997; Dicken 1994).
Drawing interesting parallels between the past decades of business ethics scholarship and seventeenth century Britain, Marens (2007) argues that a majority of business ethicists who prefer the language of contracts tend to adopt Lockean versions of social contracts due to the match with the elitist purpose (protection of private property) Locke intended to serve. Adoption of a broader Rawlsian version, explicitly focusing on redistribution of wealth (the difference principle) also risks repelling the consumers (and/or funders) of business schools (Marens 2007). There are, of course, business ethicists like Hsieh (2009) who adopt Rawlsian versions of social contract. Development ethics, as noted earlier, believe even Rawlsian contracts require supplementing (cf. Sen 2009; Nussbaum 2004, Pogge 2003).
The clients, many of whom were workers living in shanty towns were, according to market principles, assumed to be capable of making decisions on what is good for them. It was only after some poor workers started gambling away their monthly income and adversely affected the lives of family members, including children and elderly, the government stepped into pressure corporations to responsible to adapt and publicize the risks (Gasper 2004).
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Poruthiyil, P.V. Weaning Business Ethics from Strategic Economism: The Development Ethics Perspective. J Bus Ethics 116, 735–749 (2013). https://doi.org/10.1007/s10551-013-1818-8
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DOI: https://doi.org/10.1007/s10551-013-1818-8