As part of my grad school studies in technical management (which has kept me too busy to catch up on the site or post lately) I had to write a short web discussion on the question "Why should managers be ethical?" which I thought might be an interesting post. The end notes don't translate well so all credit to Tara Smith's "Ayn Rand's Normative Ethics" and in a few places Peikoff's OPAR.

Why should managers use ethical criteria to guide their decision making? In other words, what good is morality to a manager? This question is fascinatingly simple to answer, but I think that to most people my answer requires a bit of explanation. Managers should use the science of ethics because the moral is the practical. Morality is an objective, metaphysical necessity of man’s survival. Managers must successfully apply the right moral principles to decision making to ensure the success of an organization.

Ethics, or morality, is a code of values to guide man’s actions and decisions. The actions and decisions that a man makes determine the purpose and direction of his life. A value is “that which one acts to gain and/or keep.” Water and sunshine are valuable to plants, money, health and friendship are valuable to man. Organisms must do something, either intentionally or not, to achieve certain ends. Ethics is concerned with what one should seek and how one should act. Nonliving things have nothing at stake. Nothing is good or bad for a river, a rock or a tree. What happens to those things might matter for some organism (such as a river flooding a city to it’s residents, the tree to an owl for it’s nest) but not for these objects intrinsically.

Living things have something at stake -- their life. This alternative, life or death, is at the bottom of every alternative faced by a living organism. It is fundamental and inescapable. Every action, however indirectly, either helps or hurts a organism to survive. An organisms continued existence is not assured -- certain actions must be taken by it to survive. Organisms must achieve the values it’s nature requires.

As with any organism, the kinds of actions human beings take either impede or advance their life. These are facts of reality that we can observe and apply reason to. In other words, they are objective. They also apply to all human beings, since we all face the same choice and have the same essential nature. This is why ethical principles (a principle being a “general truth on which other truths depend” can be applied by all men to all areas of their lives where alternatives are available to him.

Since the struggle to survive is what causes values to be possible and requires the achievement of values, life is the unit-of-measure to determine what is good or bad for a man. The proper standard of ethics is man’s life ‘qua man’ (over the long range entirety of his life, not some instant in time). The purpose of pursuing morality and achieving values is a person’s own life. In other words, the standard of value is what is required for any person to achieve values but the answer to the question ‘why act morally?’ is because your life depends on it.

Bring us from the real of philosophy back to the realm of management, ethics also has a say in the decisions managers make since every decision (at least indirectly) effects the success of an organization and (provided the organization is itself good) the organization is promoting the managers life in several ways. First there is of course the material goods such as money and all the goods man can trade for it. There is also the spiritual goods (spiritual having to do with consciousness) such as self-esteem from being productive and achieving the values required for his survival. The book gives many reasons why a manager behaving ethically is good for all sorts of people and why not being ethical (actually being criminal) can be bad but I think leaves out the crucial aspect that it is in a managers rational long-term self-interest to behave ethically.