“Kantian Ethics is the most useful approach to making decisions in Business.” Evaluate this statement. (40)

In 1997 Freeman and Evan published an article proposing a Kantian stakeholder theory of corporate responsibility, which was (from 1998) included in “Ethical Theory and Business”, the Cambridge University Press reference work in this area.  This article awakened interest in applying Kantian Ethics to business, using it to improve decision-making, broaden its ethical concern and counterbalance the superficial utilitarianism that had dominated discussions about business ethics in the later 20th Century.  Shortly afterwards in 1999, Norman E. Bowie, one of the editors of “Ethical Theory and Business”, published “Business Ethics: A Kantian perspective,” through which he argued that Kantian Ethics was indeed the most useful approach to making decisions in business.  Since then, a number of other writers have developed their own explorations of how Kant’s ethical principles might inform Business decision making and other scholars have criticised this approach. The major “Kantian Business Ethics: Critical Perspectives” edited by Arnold and Harris, which was published in 2012, outlines the debate.    In short, Norman E Bowie’s argument for a Kantian Approach to Business Ethics falls well short of addressing the true implications of Kant’s work for Business, preferring to characterise Kantian Ethics in simplistic terms as the demand that businesses should act consistently, considering the effect of actions on stakeholders and on the long-term reputation of the business.  While Kant would not disagree with the need for people to act consistently, consider the effect of their actions on those persons directly affected and on the precedent set to society in general, Kant’s philosophy raises deeper questions about the ability of a business to make moral decisions at all and about the morality of any person agreeing to be employed by a business and make decisions on its behalf which Norman E Bowie neglects.  Because of this, while it might be fair to say that Bowie’s ethical guidelines would be a useful way to approach making decisions in Business, it is a stretch to call these guidelines truly Kantian.  Kantian Ethics when properly understood, would be very far from a useful approach to making decisions in business.

In the first place, Bowie argues that a Kantian approach to decision-making demands that businesses act consistently, yet for Kant the Categorical Imperative is about more than mere consistency, it is about always doing what is universally right.  In the Groundwork for the Metaphysics of Morals Kant recommended that people should “always act so that the maxim of your action should become, through your will, a universal law”… this has far wider implications than just choosing to do whatever you do consistently.  The categorical imperative demands that people choose to do only what they could rationally will for all other people to do, ignoring the particular detail of the situation.  When facing a decision about marketing a product, the Kantian should strip away the detail about the decision being made in the content of a business seeking to make a profit and focus on whether the maxim of the action is universalizable.  Kant famously argued that lying to a suspected axe-murderer to save the life of a friend was not universalizable, so it seems probable that he would argue that the exaggerations, selective use of information and misrepresentations that are the heart and soul of advertising could not be universalised.  Both lying to an axe murderer and lying about the efficacy of a face-cream or the healthiness of a yoghurt are based on the maxim of lying… which is not universalizable.   By deceiving the customer-base the business also uses persons as means to the end of making profit.  As Karl Marx observed “capitalism is theft”… the business marketing face-cream relies on using cheap ingredients and paying its workers a lot less than the product finally sells for.  The essence of marketing is in making the consumer believe that the product is worth more than it is.  In this way, Kantian Ethics demands far more than consistency of decision-makers and decisions in business are unlikely to be consistent with the demands of the categorical imperative.

In the second instance, Bowie argues that a Kantian approach to decision-making demands that businesses consider the impact of decisions on stakeholders.  Yet, Kant’s Practical Imperative, the formula of ends and means, demands much more of decision-makers.  In the Groundwork for the Metaphysics of Morals Kant wrote “always act so that people, whether in the person of yourself or another, should be treated as ends in themselves and never as means to an end”.  Notice how Kant speaks of people, not stakeholders.  As Freeman and Evan suggested in their 1997 article, the stakeholders that a business should consider include shareholders, employees, customers and local community.  Even by this relatively generous definition, there are many people who do not count as stakeholders.  Further, Bowie makes little mention of the idea that Kant demands more of decision-makers than an impact assessment.  Treating a person as an end in themselves is not just minimising harm to them, it is about recognising that as a person they have inherent value equal to that of all other persons, including the decision maker.  The person living in the Maldives has the same value as the President of the Corporation and must, by Kant’s logic, be treated as an end in themselves.  If Kantian Ethics are taken seriously, there is no way a business could justify prioritising the short/medium term interests of its shareholders over the longer-term interests of its poorly paid employees or indeed the interests of the person in the Maldives in not having their home flooded by rising sea-levels which result from climate change.  In this way as well, Kantian Ethics demands far more than assessing impact on stakeholders; decisions in business are unlikely to be consistent with the demands of the categorical imperative.

Thirdly, although Bowie suggests that businesses should make decisions on the basis of Kantian principles, Kant’s writings reject the idea that a non-human agent can act morally.  As Matthew C Altman argued in 2007, a business is in itself neither free nor rational and cannot have a “good will” as Kant described it in the opening lines of the Groundwork for the Metaphysics of Morals.  Further, business decisions are made by people, who do have moral agency, but by people who are acting under the principle of limited liability.  For Kant, the idea that a person could sign an employment contract and so limit the extent to which they are morally responsible for their actions would be ridiculous.  For Kant, to be good a will must recognise its freedom and choose to follow the demands of reason anew in every individual moment.  Any action taken out of habit, fear, deference to authority etc, however good it may seem and whatever positive results it might yield, is in actuality an evil action and contaminates the will in a way that seems irreversible and which precludes the possibility of the eternal reward that reason makes us postulate.  By Kant’s understanding, the managers who make decisions on behalf of a business are – both in a moral sense and eternally – responsible for those decisions, whatever legal waiver might be in place.  Further, if a manager makes a decision because they have been trained to do so, out of fear for losing their job, because they have been instructed to do so or to conform with an agreed policy, their action is immoral and their will eternally damned regardless of whether the decision is in itself universalizable or compatible with treating persons as ends.  It seems that Kantian Ethics, when considered in its entirety, would not only make it impossible for a business to act ethically, but would also make it impossible for anybody to be employed by a business to make ethical decisions on its behalf.  In this way Kantian Ethics, when properly understood, is very far from a useful approach to making decisions in business.

In conclusion, Kantian Ethics is not the most useful approach to making decisions in business.  This is not to say that Bowie’s principles might not be a useful basis on which to make business decisions, but it is to say that it is a stretch to call these principles Kantian. 

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