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Toward
Toward a holistical perception a holistical
of the content of business ethics perception
Vojko Potocan and Matjaz Mulej
Faculty of Economics and Business, University of Maribor, Maribor, Slovenia 581
Abstract
Purpose – The purpose of this paper is to offer a new requisitely holistic definition of business ethics
(BE) as a crucial component of business cybernetics and practice. The present contribution considers a
basic problem: how humans use BE to influence their business processes. Therefore, business
is/should be investigated from the viewpoint of ethics. Requisite holism of understanding and
consideration of BE in business reality is unavoidable; it can (and must) result from findings and
considerations of the interdependence between business practice, ethics, and BE.
Design/methodology/approach – In this paper, qualitative analysis is applied on the basis of the
cybernetics (e.g. especially business cybernetics), dialectical systems theory, and ethics theory.
Findings – Ethics is a crucial emotional part of human attributes. They can be viewed as the
subjective part of the starting points of any human acting/behavior process, including business. Thus,
ethics (may) have/has a crucial role in business cybernetics and practice as BE. To clarify and
beneficially use BE, one must understand relations between business cybernetics and BE, between
business practice and BE, and understand the diversity of content of BE in literature, etc. On this base
offered here is an understanding of BE, a definition of the content of BE as a specific type/part of
ethics, and a view at source of BE content.
Research limitations/implications – Content of BE. Research is limited to hypothesis and
qualitative analysis in desk research. Practical experience is considered implicitly.
Practical implications – This is a step toward development of business cybernetics with a requisitely
holistic approach founded on requisite wholeness of insight. A more specifically created and target-oriented
approach to cybernetic understanding and research of BE of business systems is encouraged.
Originality/value – This paper presents a very new approach, rarely found in main-stream
literature; a new perception and definition of content of BE.
Keywords Ethics, Business ethics, Qualitative research
Paper type Research paper
Business practice provides for guidance on how broadly the RH/RW can/should be
defined in any given real situation/case, and what levels of complexity of
understanding and consideration of BE are needed for humans to attain RH of
behavior and to attain the RW of their insight (Sections 5 and 6).
RH/RW of understanding and consideration of BE in business reality can and must
be based on findings and consideration of the content issues (Sections 6, 7 and 8).
A general framework of content of BE may enable a more unified (and requisitely
holistic) introduction and application of BE in business practice.
Let us first briefly clarify our approach.
ˆ –––––––––––––––––––––––––––––––––––––––––––––––––––– !
Fictitious holism (inside a Requisite holism (RH) (a Total ¼ real holism (a system,
Table I. single viewpoint and special dialectical system, i.e. i.e. synergetic network, of
The choice between profession causing oversights synergetic network, of all and totally all viewpoints and
fictitious, requisite, and of attributes visible from other only essential interdependent attributes of the feature/event/
total holism – the level aspects) viewpoints/professions/ process as object under
of holism for considering sciences/experiences) consideration and/or
a selected topic management/control)
organizations and individuals as so-called BSs emphasizing the so-called business Toward
viewpoints rather than the natural and/or technical/technological viewpoints of a holistical
consideration of features, events and processes comprised of real life.
BE is supposed to help business people manage/control their business lives by perception
means of aspects reaching beyond knowledge into the right hemisphere of the human
brain and heart. Control is a topic of cybernetics from the latter’s very beginning of that
field of study (Ashby, 1956; Wiener, 1956; Beer, 1979; Foerster, 1987; etc.). Humans do 583
not use only their sources (possibilities) and knowledge to control/master/manage, but
their values, culture, ethics, and norms (VCEN) as well (Potocan et al., 2005; Potocan,
2006; Mulej, 2007; Potocan and Mulej, 2009).
Thus, knowledge management is not enough for success, in BC terms. Education,
training, and other forms of formation by information tackle VCEN for humans to use
VCEN not only along, but also in synergy with, knowledge and material/outer
resources. Pioneers in application of systems theory and cybernetics to
management/control did not tackle VCEN much or at all (more about that see in:
Vallee, 2003; Francois, 2004). Mulej seems to have pioneered in linking knowledge and
VCEN in the area of systems and cybernetics consideration (Mulej, 1974, 1979; see also
later, including Mulej, 2007). When criticizing the reduction of definition of objectives
of human activities to “desired objectives”, Mulej introduced the notion of starting
points and related interdependence-based process of interaction of (Mulej, 1979, 2007;
Mulej et al., 2000, 2004):
.
outer conditions (“objective starting points”, made up of needs and possibilities,
e.g. in market); and
.
human attributes (“subjective starting points” consisting of knowledge of
content, knowledge of methods, and values/VCEN).
This process takes places before objectives are defined to make them requisitely
holistically grounded – rather than merely desired. Subjective starting points cause
humans to select their viewpoints (either per profession, or per VCEN, or per profession
and VCEN, or per synergy of profession and VCEN), hopefully as a dialectical system,
as their basis to select the perceived needs and possibilities, and later on the
preferential needs and corresponding possibilities. Later on, the synergy of definitions
of the preferential needs and corresponding possibilities leads to definition of
objectives, further on of related tasks, related procedures and organization, and
resulting outcomes of the process of human activity at stake.
Thus, outcomes depend on VCEN crucially.
Literature on ethics and BE abounds, but less so about the link between VCEN and
BC, although BC reflects and supports human efforts to master their business issues,
including VCEN, especially. This is the topic to be tackled here.
In the modern business environment, demand for more ethical business processes and
actions (known as ethicism) has been increasing, especially in last 20-years (Darwall
et al., 1997; Rosenthal and Buchholz, 2000; Jennings, 2005; Lovell and Fisher, 2005;
White, 2005; Ferrell et al., 2007; etc.). At the same time, the environment has continually
pressed BSs to apply and/or improve BE of their working and behavior (Cooper and
Argyris, 2000; Cooper and Vargas, 2004; Brooks, 2006; Trevino and Nelson, 2006; etc.).
In organization and management sciences, BE is mostly understood as follows
(Cooper and Argyris, 2000; Daft, 2002; Cole, 2004; Ferrell et al., 2007; etc.). BE is closely
related to the philosophy of business, which deals with the philosophical, political, and
ethical underpinnings of business and economics. It is also closely related to political
economy, which offers economic analysis from the political, normative, and historical
perspectives. As the organizational practice and career specialization, the BE is
primarily normative. In academia descriptive approaches are also taken. It takes ethical
concepts and applies them in specific business situations. Like political economy, but
unlike the philosophy of business, BE is a normative discipline. It makes specific
judgments about right and wrong. It makes claims about what should be done and what
ought to not be done. It is less concerned with explaining or describing ethical aspects of
events – called descriptive ethics – or analyzing ethical concepts to achieve a deeper
understanding of their meaning and justification – called analytical ethics.
Various known considerations of BE also differ crucially in authors’ understanding
and definition of business (Baumol, 1993; Daft, 2003; Hartman, 2004; Jenklin, 2004;
Brooks, 2006; Potocan and Mulej, 2006; Baumol et al., 2007; etc.). They, thus, define the
goals of their consideration of BE of organization as, e.g.: economic, business,
organization, management, sociological, psychological, etc. context/s of organizational
working and behavior. Thus, for example in Anglo-Saxon theory and practice about
BE there are (serious) differences between Europe and US concerning understanding,
K approaches, schools and research of BE (more about differences, see in Crane and
38,3/4 Matten, 2003; Jennings, 2005; Potocan, 2006; Ferrell et al., 2007; etc.).
In literature the basic points of discussing BE include: general BE, professional
ethics, international BE, and ethics of economic systems (for details concerning
consideration of each point see: Ulrich, 1997; Singer, 1999; Cooper and Argyris, 2000;
Bowie, 2001; Lafollette, 2005; etc.). Their discussions focus on many different
586 theoretical issues, like: conflicting interests, ethical issues and approaches, compliance,
ethics programs, ethics policies, and ethics officers, etc.
The discussion of BE often depends on the selected religious views held about BE.
The Anglo-Saxon theory and practice includes, mostly, the following religion-based
perceptions of BE (Quinn and Taleaferro, 1987; Davies, 2000; Velasquez, 2005; etc.):
Jewish, Christian, Muslim, and Buddhist BEs. But such understanding of BE is
connected to, and depends on, numerous, especially subjectively defined conceptions,
contexts and methodical starting-points (Lafollette, 2001; Caroselli, 2003; Trevino and
Nelson, 2006; etc.). For that reasons, we will not discuss it in detail, but more to our
views.
587
Starting Output
Input
points BE in Working/Behavior including
E.g. BE as
including E.g. As interest made and applied BE as
a factor
BE result
A more detailed definition of the term BE depends on the selection and use of the
methodology for its consideration, i.e. the selected (dialectical system of) viewpoints,
methods, methodologies.
It makes sense to analyze BE within this framework as a network of all selected
significant viewpoints, levels and areas of activity, including their synergies (we will
address the methodological issues another time).
In the case of BE, we consider the acting of BSs from a dialectical system as a
synergetic network of all selected crucial viewpoints (e.g. organizational, management,
economic, business that enable the RH/RW of humans’ consideration/acting matching
the BS’s objectives. This is in line with Table I.
Based on the above-mentioned findings of various authors (Bowie, 2001; Lafollette,
2005; etc.) and our presented starting points, BE can be best aggregated in a definition,
in the broadest terms, as follows (Potocan, 2004, 2006; Potocan et al., 2005):
.
Organizational BE (in our definition) can be described in the most general terms
as an emotional attribute of people involved in functioning of the BS under
consideration.
.
Organizational BE is the general (requisitely holistic) and, as a rule, synthetic
attribute that is basically aimed at the functioning of the BS, along with
professional assessment and control/directing/management of, BS’s functioning.
. BE is expressed in the selected viewpoint (or, hopefully, dialectical system of
viewpoints) defining both the objectives and their realization.
The individual human being’s BE/VCEN is the basic building block of organizational
BE. The next higher organizational level is the group’s or department’s BE. These are
synergies of BEs of individuals who work together to perform group tasks. The next
organizational level deals with the BE of the entire organization. The organizational BE
is a synergy of BEs of groups or departments. The BEs of organizations can be
aggregated into next higher organizational level, which is the BE of inter-organizational
groupings and communities. BE of an inter-organizational groupings emerges as
synergy of BEs in the group of organizations with which organizations at stake interacts
with their BE. BEs of other organizations in the community also make an important part
of BE of organization’s environment. Government, non-government and other BE’s
environments also belong in a RH acting.
Now: what makes our definition of BE different?
General factors
Organizational Historical and cultural
Specific factors
BE of
organization
stakeholders
Structural
VCEN of BE of
factors of
organization organization
organization
Content
factors of
organization
Figure 3.
Factors that influence on
organizational BE
Economic Industrial
K factors (Potocan, 2002, 2006; Potocan and Mulej, 2005, for details concerning each
38,3/4 general factor – but not in their synergy, see for example, Cooper and Argyris, 2000;
Daft, 2002; Jennings, 2005; Stanwick and Stanwick, 2008; etc.).
The general factors describe important characteristics of internal or external
organizational environments, including the needs and demands of environments
concerning organizational functioning, including BE. Their details exceed our frame of
592 discussion.
On the other hand, the specific BE factors describe important characteristics of
organization, and needs and demands of organizational stakeholders concerning
organizational functioning, including their views on BE (Potocan, 2002, 2006; Potocan
and Mulej, 2005). The basic specific factors include: organizational VCEN, structural
factors, contextual factors, and characteristics of BE of organizational groups and/or
organizational stakeholders (e.g. BE of all organizational levels being considered) (For
details concerning each specific factor – but not in their synergy, see for example,
Cooper and Argyris, 2000; Daft, 2002; Jennings, 2005; Stanwick and Stanwick, 2008; etc.).
VCEN of organization: for some further thoughts about VCEN of an organization
see in Section 4 at paragraph 4.
Organizational structural factors (mainly) define the internal organizational
characteristics. They create a basis for measuring and comparing organizations.
Important structural factors include: formalization, specialization, hierarchy of
authority, centralization, professionalism and personnel ratio, etc.
Organizational content factors characterize the entire organizations. They describe
the organizational setting that influences and shapes the structural dimensions (e.g. its
business program, markets, etc.). Important content factors include: technology, skills,
size, objectives and strategy, and environment. Content dimensions can be confusing
because they represent both the organization and the environment, but definition of
environment in that case is based on organizational understanding of the environment.
Therefore, they can be envisioned as a set of overlapping elements that underly an
organization’s structure and work process.
Danger of oversight requires understanding to match RH/RW. It requires us to
consider also that characteristics of BE of organizational groups make the synergetic
entity of all important factors that create and influence the organizational BE.
The interaction and synergies of all crucial factors produce different BEs in different
organizational parts (e.g. organizational levels, areas), and different organizations, and
cause changes in BE over time. They include: factors with influence on BE of
organization and/or factors of BE of organizational stakeholders, factors of different
organizational levels of research, factors of different areas of research, interaction of all
factors with influence on BE, interaction of all factors of BE, etc.
9. Some conclusions
In a RH approach to research of business practice and development of business
cybernetics, consideration of knowledge is not enough for RW of cognitions. Ethics,
especially BE, is equally crucial as knowledge and outer/objective conditions are, because
humans are both rational and emotional and spiritual beings, and are so in synergy.
Ethical behavior of humans and their organizations belongs to preconditions of
their success, especially in a longer term and under severe competition. Once this is
self-evident, the detected diversity of definition of contents of BC is a surprising fact.
These facts force us to create our own definition of BEs’ content. This definition Toward
matches RH/RW better than others do, because we include more general and specific a holistical
factors that we summarize in Figure 3, and we include their synergies to, as well as BE
of organizational units and members, and environments of BSs. perception
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Corresponding author
Vojko Potocan can be contacted at: vojko.potocan@uni-mb.si