System-centred / Agent-centred Ethical Systems

1. System-centred / Agent-centred Ethical Systems Ethics in Management Business & Administration The University of Winnipeg

2. Frank Armani’s role obligations as a defense attorney • Protect the interests of his client (Robert Garrow) without regard to any other interests …. even though he knows that Garrow has murdered Susan Petz! • How can this be “right?”

3. Singularity of focus in the“Adversarial System” of Justice • Defense attorneys focus solely on protecting the interests of the defendant. • Prosecuting attorneys focus solely on establishing society’s charge against the defendant. • Judge and jury decide (on behalf of society) the relative merits of the competing (adversarial) arguments.

4. System-centred Ethics • The ethics (“rightness”) of what Frank Armani is expected to do, stem from his obligation to play a designated role in an system that society has deemed to be ethical – the adversarial justice system. • In the context of this ethical system, it would be “wrong” for Armani to consider the “big picture” (society’s concerns)!

5. Milton Friedman’s thesis • Just like a defense attorney, a business- person must adopt a single-minded focus: solely to maximize profits for the shareholders without regard to any other interests (like social responsibility). • The ethics of the business world are in the system – the best result for society occurs when everyone plays a single-focus role to the best of their ability.

6. Analogous Rationales? Justice System – Business World • All parties to a matter before the justice system will be equally well represented by a single-focus advocate. • If managers solely and single-mindedly represent the interests of shareholders, will all other stakeholders to business matters be equally well represented?

7. Analogous Rationales? Justice System – Business World • Legal procedure guarantees that all parties will be fully heard (with right of appeal) before a final decision is rendered. • No requirement that all parties be heard at all before a management decision is taken.

8. Analogous Rationales? Justice System – Business World • The judge and jury will have the opportunity to become fully informed before making a decision (and a judge is specially trained to do so). • The marketplace makes decisions on available information about the relative merits of managerial action.

9. Analogous Rationales? Justice System – Business World • To the extent possible, consequences of a legal decision are held in abeyance until the decision has been verified (through appeal) as “right.” • Consequences of managerial decisions are often immediate and effectively irreversible.

10. Analogous Rationales?Justice System – Business World • Defense attorneys defend clients against a specific well-defined charge associated with specific well-defined sanctions (consequences). • Managers proactively lead businesses in a vast variety of activities with wide-ranging, often unpredictable consequences.

11. Analogous Rationales? Justice System – Business World • Deliberate bias in favour of defendants • “Innocent until proven guilty” • “Better ten guilty men go free than one innocent man hang.” • In which direction should the economic system be biased, in favor of society or shareholders?

12. System-centred orAgent-centred Ethics • System-centred: Ethics are embodied in the system of rules and procedures. “Rightness” comes from everyone following these well. • Agent-centred: The agent (the entity taking the action) has moral responsibility for its “rightness”

13. What’s right for theBusiness World • Should the ethics of the business world be system-centred or agent-centred?

14. Closing Point to Ponder • How much of our essential selves do we (want to) give up when we take on the role of a business manager?