pragmatism and business ethics

8/2/2019 Pragmatism and Business Ethics

1/9

Collin Kennedy

Pragmatism and Business Ethics

On the topic of the American Business ideal, Gerald Cavanagh once wrote,

One of the strengths of the American business ideology has been its pragmatism:

how to get the job done without much inconsistency. Simply put, pragmatism says

that which works is by that good and true, (1976, p. 172). Such a loose

interpretation of William James conception of truth has to be taken lightly. Im sure

the colonist thought that the use of slave labor significantly increased their

productivity and dividends when it came it the tobacco trade, but one could hardly

say that such practices were good and true. From the outside looking in, it would

be a fair assessment to say that the United States uses a pragmatic approach in

regards to the way business is practiced. Much of the business world holds to the

belief that the main goal and responsibility of any business is to generate the as

much profit as possible for its shareholders. Firms and corporations implement

policies and procedures that try to optimize resources and expand that bottom-

line number. While such practices do fit in with the pragmatic view, the four main

contributors of this field of philosophy would argue that such views come with its

own set of ethical codes. Business ethics, for many years now, has been an area of

discussion in which numerous viewpoints of past philosophers have been argued

and weighed. I can still remember taking my ethics class sophomore year and

looking at all of the different ethical theories and how they related to different

aspects of business and different case studies. While we discussed the pros and cons

of each theory of thought, I distinctly remember the lack of a final conclusion to


2/9

which school of thought is superior to the rest. One of the main problems that these

pragmatists had with their classical philosophy counterparts was their call for

finding absolute truths and principles. In an era of business that usespractical

means to accomplish goals, it follows that apragmatic code of ethics should be

utilized. This paper will examine current business and management processes and

see how they fit into the pragmatic framework. Special emphasis will be put of

Dewey and his pragmatist thoughts and insights.

Lets begin by looking at the idea of big business and see how itfits into the

pragmatist framework. One of the centrals nodes of pragmatism that Dewey and his

counterparts came up with is that there is no such thing as absolute truth. Rather,

pragmatism relies on constant experimentation (both natural and morally) and

growth. The views and idea we hold now are only true until they are either outdated

or disproved. This same principle carries over to the business world. Government

policies regulating trade and capitalism are only relevant until the collective decides

that such guidelines no longer apply and need to be updated and changed. At the

heart of both business and pragmatism is the idea of innovation, or changing with

the times. As an individual or a business, refusal to grow and readjust as times and

society changes can have detrimental effects. This brings up the question of what

exactly it means to be an individual in the context of society. The pragmatist view

holds that there is no such thing as an atomistic individual. That is, no person can be

completely separated from the context of the rest of the community. True

community occurs in the interplay between the individual and the generalized

other, and this takes place through ongoing communication in which each adjusts,


3/9

or accommodates the other, (Rosenthal p. 11). I believe that this quotes by Susan

Rosenthal also applies to the relationship that businesses has with both the

collective community and the government as well. There is so much talk today about

the public vs private sector and whether the government should govern business. I

think, as Dewey would think, that this dualism should be gotten rid of. Businesses

are like the individual in the former quote. If we want to make a true community

each business needs to communicate with the generalized other, including the

government.

In todays world of business ethics the phrase Corporate Social

Responsibility is often thrown around. This refers to a business taking

responsibility for its impact on society through safe labor practices, being

environmentally friendly, and spending capital in the best interest of society. In

many instances, businesses and corporations have been found guilty of

implementing poor CSR practices and come under much attack and backlash when

sought to amend these problems. Take Nikes labor debacle in 1997 a labor policy

watchdog released a report that highlighted unsafe working conditions in one of

their Vietnam factories, including low wages, teenage workers, and poor treatment

of workers. As can be expected customers were shocked and outraged at such

findings. Nike spent the next seven years putting in policies that outlined new

procedures for Nike in terms of labor practices, environmentally friendliness and

other guidelines. They even become one of the leading activists in the Fair Labor

Association. Throughout all of the implementations the company put in place, Nike

still came under fire. Critics claimed that Nike was simply using these policies to


4/9

gain favor with consumers through positive PR. Throughout this era of CSR many

companies have come under these same kinds of attacks. The true pragmatist would

say, So what if they are? In his Later Works, Ethics, John Dewey wrote:

That men form purposes, strive for the realization of ends, is an established fact. It if

is asked why they do so, the only answer to the question, aside from saying that they

do so unreasonable from mere blind custom, is that they strive to attain certain

goals because they believe that these ends have an intrinsic value of their own; they

are good, satisfactory. (Ethics, 1932, p. 186)

It may be true that the end goal in many of these practices is to generate good buzz

about a company. Who doesnt love a business that they can relate to socially? The

important thing to keep in mind is that such CSR policies and implementations make

significant differences and impacts on the community. With the case of Nike, their

new labor policies not only allowed them to refute their previous unethical charges,

but also allowed Vietnamese workers to earn a living in which they could provide for

their families. While critics claim that such practices are such a response to negative

press, as Rorty puts it Pragmatists, in contrasts, treat inquiry in both business and

ethics as the search for adjustments, (Rorty, p. 72). Unfair practices cannot always

be prevented until they come to light. Years later after the allegations, Nike CEO

stated, After a bumpy original response, we focused on making working conditions

better and showing that to the world. It becomes a tool for both our management of

business and in giving us clues about what we need to do next. Such statements by

Phil Knight puts to practice what Rorty meant by adjustment. (Keller)

As mentioned earlier, dualism is something that John Dewey lobbied strongly

against. On this topic lets approach one of the many ethical decisions that are facing


5/9

many businesses today. In the early days of capitalism, not much thought was put

into the notion of saving natural resources or taking care of the environment. There

was this idea that our resources were endless and the nature that surrounded us

would always be around. This was the development of the Modern Worldview. The

dualistic idea that nature and humans stood distinctly apart, as the environment

was simply a means of producing natural resources to create goods. Look how that

has worked out for us. In the past 30 years, a significant number of animals have

gone extinct, oil which, we need to survive, is at an all time low, and global warming

is at an all time high. And through this, consumer consumption continues to rise and

so the businesses continue to burn through our environmental resources. One of the

foundational aspects of pragmatism is being able to observe the practical

consequences of our actions. What do you think the consequences will be if we

continue to burn through our resources as we are now? Economic growth will

diminish and our growth as a society right along with it. The pragmatic solution to

this? Weve already begun the process: green businesspractices. By producing

products in ways that are environmentally friendly and dont hurt our natural

resources, business is slowly turning away from the dualistic view mentioned above.

Instead of two separate entities, the economy and the environment go hand in hand.

While businesses and corporations on the whole play major roles in

impacting the community at large, I want to now turn and focus on the people

within those organizations, specifically managers, who help to make the decisions of

the whole. The question we turn to now is, in a pragmatic framework, how does a

manager act ethically and with integrity? For Dewey, experience is the root of all


6/9

ethics. Going along with his non-dualistic approach, there is not difference between

scientific and moral experimentation, a view that Charles Peirce would strongly

agree with. To decide how one should act, a person should come up with hypothesis

of different outcomes based on the different behavioral options. Here the different

consequences are being analyzed and the individual must choose the one in which

lines up best with their moral character. Dewey maintains that the right choice in

action will not always be openly present, but must be searched for. There might be a

multitude of goods and it is that individuals responsibility to find the right one

(Dewey, 1920, p. 163). A manager following the pragmatist view of ethics would

view the business or corporation as a means to satisfy the needs ofhumans and

societynot a means to the organizations own survival. For an example, during a time

of economic downturn many managers are faced with the issue of laying off

employees. Instead of looking at the short sighted benefits of immediately cutting

labor costs, a manager practicing Deweyian ethics would take the time to discuss the

issue with employees and talk through alternative methods. This manager would

look back at other times such downsizing was appropriate and see what lessons

were learned from those instances. Pragmatic integrity would look for ways to

ensure that in firing employees, such individuals were not left high and dry, but

given resources to move onto another job. Why? Again, because the purpose of such

an organization, in the pragmatic framework, is to benefithumans. On that same

token, Deweyian integrity wouldve had a huge issue with Nikes initial labor

practices. The practice of low wages and long hours relative to the standard of living

should not be utilized just make an organization more competitive by lowering the


7/9

cost of labor. Such competitiveness should be second rate when compared to the

social consequences of such practices.

Another issue of concern, that is related to much of what was said above, that

any ethical manager faces is the topic of outsourcing U.S. jobs. While it is not the

extreme case of sweatshop labor, many firms utilize such outsourcing practices

because it allows them to save a good deal of capital due to lower employee

standards of living. What must be remembered in this instance is that for many of

the pragmatists truth is defined by the culture and society in which an individual

is located. With that mentality note, an American pragmatic manager would have an

issue with this idea of outsourcing. By taking part in such practices, a company is

taking away opportunities for U.S. citizens to earn a living to provide for his or

herself and their families. A manager acting with pragmatic integrity should concern

his or herself with finding qualifiedemployees locally at first, then shifting its focus

to overseas labor. This would ensure that the business is putting the social needs of

the organization first rather than market competiveness.

To a marketing major who has spent the last four years learning about all the

different ways in which a business should act in order to become the leader of a

given industry, all of Deweys points on ethics and industry sound a little bit like

wishful thinking. While I agree with many of his statements, a firm that would take

part in such practices would get eaten alive in the marketplace. On the contrary,

there have been certain exceptions to the this. There have been managers that were

willing to take such risks. Edward Filene , founder of Filenes Department Store, was


8/9

one of these managers. In talking about the way a business leader should act, Filene

said,

The sort of business man who broadly speaking, is the opposite of the reactionary,

the sort of business man who faces fresh problems with a fresh mind, who is more

interested in creating a better order of things than in defending the existing order of

things, who realizes that a private business is a public trust, and who has greater

reverence for scientific method than the traditions and majority opinion of his

class. (p.284-285)

Filene, in his business practices, dedicated himself to becoming a transparent

organization to the general public. He also realized that his employees were both

part of the private organization as well as the general public who gave the company

its true power within the community. As such, he was willing to share the power he

had with his employees. The ironic part about this, and gives credit to my earlier

reservations, was that the Filenes Board Members voted to have Filene removed

from his position because they felt their revenue was being impacted by such

practices.

American business, in its core, was founded on the idea of pragmatism.

Business did not attempt to find some higher purpose or justification for the work

that it did. Instead, it looked at the current world, took in all the various problems

and opportunities, and sought to find solutions to those immediate problems. Just as

pragmatist philosophers stressed, like philosophy, business must change with the

current environment in which it is located. As people, technology, and policies grow,

so must business or face being left in the dust by competitors. While the pragmatists

would agree that business, in its nature, is pragmatic, that view seems to have been


9/9

distorted over the years. A business is composed of its individual employees who, in

turn, part of the overall community. Under this relationship business originated with

the intent to help the overall community its everyday interaction with its individuals.

Somewhere along the way this point was lost and managers and CEOs of

corporations and firms became fixated with idea of growing their businessfor the

sake of their business. What was once pragmatic in nature has turned to greed. While

I think many of Deweys managerial ideas are loft, they are what the pragmatic

manager should strive for. The real questions becomes can such a manager survive

implementing such practices?

References

Cavanagh, G.F. 1976:American Business Values in Transition. Englewood Cliffs, NJ:

Prentice Hall, Inc.

Rosenthal, Sandra, 2000: Rethinking Business Ethics, A Pragmatic Approach. Oxford,

NY: Oxford University Press

Dewey, John, 2008: The Late Works of John Dewey, Volume , 1932, Ethics. SIU Press

Rorty, Richard, 1999: Philosophy and Social Hope. Penguin Books.

Keller, Kevin, 2008: Best Practice Cases in Branding: Lessons from the Worlds

Strategic Brands. Pearson Prentice Hall.

Dewey, John, 1920: Reconstruction in Philosophy. New York: Henry Holt.

Filene, E.A. 1924: The way out: A forecast of coming changes in American business and

industry. Garden City, NY: Doubleday, Page

pragmatism and business ethics

Documents