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Is Business Ethics an Oxymoron?

Business is defined by Sternberg as the exchange of products and services in
order to maximize long term equity and value over the long term (Sternberg,
2000). It has unarguably been a building block of modern human civilization
since the conception of property. Today, business constitutes one of the most
powerful social, political and most powerful innovation drivers in the planet;
able not only to provide services and products, but influence the path of
evolution of human beings, from both a biological, cultural and social
standpoint (Dogan, 2010).
Ethics on the other hand, is the practice of systemizing the concepts of right
and wrong (Houghton Mifflin Company, 2011). These concepts have been
evaluated in various ways and methods, making the field a true intellectual
goldmine of perceptions deriving from different views and analytical
propositions, all coming to divergent conclusions on what is good, bad, right,
wrong, moral or immoral based on religion, philosophy or other social dogma.
In the same way as the entity assigning morality is either personal, spiritual,
egoistical, mutable or inexistent, a myriad of consequential results arise from
the sheer possibilities of valuing an actions moral potential. In this way ethics
serves as a behavioural framework to navigate and operate in a social
environment efficiently.
Business, has been so important to the human social evolution as it created the
possibility of trading scarce items and gave birth to specialization in certain
disciplines, consequently increasing the production efficiency of society. In

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turn this allowed for larger more organized structures of cohabitation, better
familial units as well as, more safety and prosperity within the tribal societies
(Engels, 2004). These developments were the initial seeds that spurted cities
and modern culture through a long and tedious historical process. All of this
would have been impossible unless some guidelines on how society should
function hadnt been active. Even though from a historical perspective morality
has changed, we can draw parallels with moral philosophy dating to the time of
the first written human documents like the Epic of Gilgamesh to more evolved
states in Ancient Greece, where Eudaimonia was the answer to happiness and
bliss (Plott, 2000). There is an imperative in the adoption of an ethical compass
by society, which correlates with this societys monetary prosperity as well as
cultural development.
A business is based on a compromise for value exchange which, at least
theoretically, increases both participants utility (tangible or intrinsic), each sale
serves as a contract between both agents on certain premises and conditions.
According to economic assumptions, both agents want to maximize their own
utility, thus requiring an ethical, moral force to balance the value exchange
between players of these game-theoretical interactions between agents.
The question whether business and the act of profiting, are ethical will be
analysed using four theoretical models which will assess the alignment of
business decisions. Each framework offers benefits and drawbacks in terms of
tangible or intangible utility derived from each action. Thus the purely
economically efficient, utilitarian Homo Economicus1 will be analysed along
1 Homo Economicus- A term coined by John Stuart Mill, denoting a purely
classic utilitarian man, without any other goal other than maximizing economic
utility.

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with the diverse clusters of what is considered Ethical in different thought
models. Such structures are frequently backed with legislation that govern
transactions tend to act like mediums that drive the system to an optimized
state. Yet in most cases, its debatable whether the profit making mechanisms
are conform different ethical positions.
For this analysis four models will be used to dissect the issue whether Business
Ethics is an oxymoron, or whether an ethical framework agrees with the
concept of profits and thus whether it is compatible with the concept of
business as previously defined. All models will test efficiency versus ethical
behaviour in a company, and whether they are in contradiction, in harmony, or
whether they are strictly dichotomous phenomena.
Utilitarianism, Kantianism, Virtue Ethics and Nietzscheism shall show how
differing methodologies produce different results and how can ethics come to
an agreement with the profit generating nature of a company.

A Utilitarian Dissection
Dissecting the issue from a utilitarian point of view seems the most appropriate
way to analyse the matter at least from an economic perspective. The true
nature of Utilitarianism becomes evident in its consequential nature and its
focus of imbuing the agents within a system, with the highest utility, which
derives from a persons preferences. The utilitarian view is in harmony with the
basic business principle of making profit, and delves further into what this
profit is, in term of Utils rather than dollar value.

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In Utilitarianism, utility maximization is removed from the personal standpoint
of the agent. The aggregate value generated in the system is what matters,
rather than what a single person needs or wants (Scarre, 1996). Universal
Utilitarianism makes no distinction between the benefit and utility of the agent
and every other human being. This viewpoint which has altruistic nuances,
homogenizes all human interest in a shared conceptualized utility, composed of
a basket of all the utilities of all objects in the basket, much like the Stock
aggregate Indexes aggregate the value of all the stocks present in their
portfolios.
An example of such ethical framework in practice can be easily demonstrated:
RedTech, a firm that specializes in the production of pesticides and other
chemical compounds, set a production plant in the outskirts of the city of
Patonia. The plant produces a large amount of pollution which will damage
the people living just outside the city, near the industrial parks. But the
company will generate a large amount of revenues for the city as well as open
hundreds of jobs, reviving its failing economy. What should RedTech do: Keep
operating, and pollute the area, causing trouble for the inhabitants of the area,
or rather omit production and retreat?
According to Utilitarianism, the highest aggregate utility decision should be
taken, thus the people living in the outskirts should live with the pollution,
because the utility of thousands of people benefiting from a booming economy
and more jobs, thus providing an ethical background for RedTech to choose the
option that generates the most aggregate utility.
It becomes evident that any activity which maximizes utility within a system is
compatible with Utilitarian ethics. Profit generating activities do not fall in

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contradiction with the core principles of the method of analysis. By providing a
long term increase in the value of the owners wealth a business activity falls
within the realm of Utilitarian ideologies. Even though in certain cases, the
principle of Harm, which dictates that ones rights end where the rights of
another individual begin, takes a negative utilitarian approach like in the case
of RedTech, in which the chosen action provides the most utility for most
people rather than some utility for all people (Scarre, 1996). Through the lens
of Utilitarianism, we can see that business and the concept of profits are
ethical, and not oxymoronic in its core.

Dont do that.
Kantianism, on the other hand, tends to be more absolutist, and much less
dynamic than a Utilitarian approach to ethics. Not coincidentally, Kant has
been a founding stone in the analysis of ethical issues in business (Abouzeid,
1999). Kant builds a proper ethical framework that can be used in all situations
universally, it produces a basis for a theoretical analysis of a situation through
three filters, or as he put it three maxims. These three maxims rest under the
umbrella of the Categorical imperative, which forms a domain where one acts
upon philosophy, disregarding consequence (Kant, 1996). Kant conserves a
policy of never lying, as it comes in direct conflict with his principle theorem
of- What if everybody did that?. Kantianism can be seen as a logical
approach to a Biblical morality, but not based on God, but rather on logic;
imposing a few challenges for both business efficiency and Kantian ethical
morality to coexist in the same system (Pasternack, 2014).

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As previously stated, the Kantian approach grounded on the Categorical
Imperative, creates much friction in terms of consequence based, dynamic
tactics which allow a business to be profitable. In this prism of thought, all
contracts are binding, singed once, and would not adapt to the ever changing
markets, or the needs of the business activity. Kants non-consequential views
oppose those of the Hypothetical Imperative, which focus on the goal rather
than the mean. More specifically the Hypothetical Imperative focuses on the
results of each action rather than the dynamic of such action, thus being
irrelevant to Kants views on ethics, but being beneficial to a business. Intracompany cooperation would also suffer, as managers would struggle to
arbitrate conflict. More detrimentally, negotiations with suppliers, partners and
rivals can become daunting and ultimately damaging for the company. An
example of Kantian ethical behaviour can be demonstrated with the following
example:
ChemCube is a company producing industrial chemical compounds. Recently
there has been communication with a supplier in China which can source them
with the basic materials at half the price of their current local supplier,
terminating the contract on the premise of insufficient quality. In truth, the
quality would be the same, but with the new setup the company would be much
more profitable. The decision would impact the future of the company as
profits are running low. According to a Kantian manager, this decision would
not be taken with the highest monetary benefit in mind, but rather on ethical
grounds.

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The manager on the basis of the Categorical Imperative decides to keep the
current supplier, as he deems that consequence is unimportant for as long as
behaviour was rationally ethical.
On another level of analysis, hierarchy in a company will not exist on the same
principle as the Categorical Imperative puts all orders and decisions on the
same filter, along with other issues arising from the universalization of all
actions.
Fundamentally, Kantianism stands against the ideas of profit maximization, as
it focuses on the actions and undermines the need for dynamicity. Profit
maximizing will at times need omission of information, and acting in selfish
way to provide the most ample profits for the company. On the other hand
Kantianisms ideas of the importance of the Categorical Imperative can
frequently create frictions in a profit maximizing businesses. From a practical
standpoint it offers an impartial analysis tool for businesses, but it doesnt
support the basic ideas of value optimization, and puts no importance to the
goal-based business models.

The Eudaimonic Egoism of Saul, the Ethical Businessman

Athenians believed that lifes goal was reaching Eudaimonia, which roughly
translates as fulfilment or happiness in English. Its a philosophy that bases
itself on a self-improvement through the bettering of the character. The
foundation of Virtue Ethics is the fact that every moral or immoral action,
reflects itself in the character of the agent performing such action. Actions that
model the character of everyone can be classified in qualities or vices (Stace,

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2010). This view sees all altruistic actions through a selfish filter on the
assumption than any good deed, any heroic gesture, or selfless sacrifice makes
you better off, rather than the beneficiary. It holds a self-benefiting view on a
basis of maximizing value through intrinsic means, rather than material means;
which is preferred by virtue ethicists. In accord with this concept, the Ethics of
Virtue perceive and individual without vices and who has a strong classical
qualities of character as being Eudaimonic (Heit, 2014).
Through this lens, the efficiency-based, profit maximizing goals of
corporations, pale. Using a virtue ethical framework, it is evident that the agent
would gain most benefit from the virtue on action rather than from tangible
monetary profits which give life to a business entity. Another interesting case
to be made in this framework is the lack of a social motivator to be moral, but
in synchrony with other concepts like Ethics of Egoism, the propensity to be a
positive agent in any situation is derived purely from the personal gain of
virtue thus bettering ones self rather than helping the other. In its unadulterated
form, it is Eudaimonic Egoism, or a personal, selfish need to achieve
Eudaimonia. To illustrate such decision making framework in action we will
use the following example:

Saul Goodman is the CEO of SpiriTech, a company producing weaponry. Saul

is approached by an arms dealer named Kostantin, offering a 7 year contract
which allowed the company to produce a large amount of weapons, to be
delivered in an ongoing war region; an action which would guarantee the

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death of civilians, while allowing the company to make large profits in terms
without much effort.
Saul chooses to decline the offer. Kostantin is a classical utilitarian, while Saul
firmly believes in a Virtuous approach to ethical behaviour. Saul does not
derive is utility because of the people he saved, but rather from the virtue of his
action; in harmony with the concepts of virtue ethics, ideally putting an ethical
action above the consequence of such action. Sauls goal is neither money, nor
sainthood, but rather the amelioration of his characters virtues.
It can be assessed that in the virtue ethics point of view, the optimization of a
business profits is not a main goal, rather focusing on personal betterment
through virtue as the main motivator. From a practical standpoint Eudaimonism
advocates the use of phronesis2 as a measure to resolve conflict and dilemmas.
Phronesis being an Arete3, or a virtue, increasing the characterial benefits one
gets from doing a certain activity. Courage and fighting lifes adversities,
taking risks and facing them will increase the power of ones character thus
being in unison with a business goal of profit maximization, though its
immaterial consequentialism can be in complete contradiction with a business
goals. In most cases this creates friction with the profit maximizing nature of
business and the personal nature of virtue that Aretaic Ethics confer. This
ethical framework fails to recognize the fact that value has to be tangible rather
than intrinsic to make a business profitable, as well as ignoring the social
dynamic behaviour of the activity of a business entity in regards to its relations
with suppliers and consumers. In this situation, profit if not oxymoronic, is at

2 Phronesis- Ancient Greek; practical intelligence of acting virtuously

3 Arete-Ancient Greek; virtue

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least not a primary focus of Eudaimonia, even though wealth can be considered
as a virtue. Much like in Sauls case, profits are less important than virtue.

From Masters to slaves

Friedrich Nietzsche century wrote some of the most influential philosophical
works of the 19th century, creating a new way to perceive personal human
success, on a Darwinian spectrum. Nietzsche built the perfect human in Thus
Spoke Zarathustra, a modern version of Platos Eudaimonic man; a human
being, evolved past the Homo sapiens, not biologically, but rather
psychologically. The Ubermensch has complete control over his emotional and
mental attitude, a stoic man of self-perfectionism, the best version of ones self
(Nietzsche, 1999). In the Philosophers mind Johann Wolfgang Von Goethe,
was the man who was closest to this ideal (Solomon, 2001). This Uberhuman
was unaffected by the adversities life would throw at him, being
psychologically unshakable. The same concept is presented in the book
Beyond Good and Evil which will be the facet of Nietzscheian thought
model we will use to see the compatibility of profits with ethics. In the work,
Nietzsche describes a man that ventures in business as powerful and intrepid
human, with the desire to live, and the drive needed to become Ubermensch.
He throws himself to a life with way more adversity and difficulties due to the
risky nature of business, always requiring to battle with the unknown. This man
is emotionally impenetrable, he is beyond what other men with their emotions
and weaknesses can comprehend, and he is beyond comprehending or
sympathizing weak humans; he is obliged to better himself beyond what is
conceivable through a continuous war with life (Nietzsche, 2002).

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Further cementing the same concept of psychological power presented in
Beyond Good and Evil, Nietzsches Slave and Master Morality sees
psychological strength as the number one quality to bear life and succeed. The
philosopher criticized Christianity as an ethical guide birthed from the weak
slaves, who only needed support and who revered the weakness of character
over the power of the mind, as it was easier and it soothed their pain,
something considered unacceptable for an Ubermensch (Nietzsche, 2002).
Certain types of businessmen embody the Nietzscheian Overman, these people
usually have leading roles in revolutions. A modern example would be Steve
Jobs who was able to create vast amounts of value for society as a whole. He
faced all adversity including being thrown out of his company and was able to
prevail. These men are beyond good and evil, from a Nietzscheian perspective.
In this case, profit and value maximization is done as a way to better oneself,
rather than stemming from insecurity or emotional despair.
According to Nietzsche, an Ubermensch will have to face all adversity with
complete stoicism and emotional absolutism. The complete emotional
unavailability along with the purely rational decision making, which is a
marriage of harsh classical Utilitarianism with Platonic idealizations of
Eudaimonia. From this standpoint, a business can flourish, within an ethical
background that allows a utilitarian approach, and lacks egoistical or classical
altruism. It allows the business to grow in different environments, and removes
moralistic boundaries of progression for both the business entity and its owning
entity, opening a large amount of dynamic approaches to be taken with the
intent to optimize the profits of the company. It is evident that profit

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maximization, as well as power play, are in harmony with a Nietzscheian
ethical view, focused on the Ubermesch.

Conclusion
Different philosophical models of ethical decision making, offer different
results in terms of analysis of certain phenomena. In our case we focused on
seeing if the profit maximizing nature of a business was compatible with
different ethical approaches. More specifically if it is oxymoronic to have a
profit maximizing business within the boundaries of ethics. The four
theoretical philosophical filters yielded different results relating their
compatibility with profit maximization.
According to Utilitarianism, profit maximization is part of its consequential
nature of utility maximization. The view puts a lot of emphasis in applying
ethics based on the principle of harm minimization relating to the benefits, thus
generating the largest aggregate benefit. Due to its goal oriented structure a
profit maximizing business can flourish using a utilitarian approach to ethics.
Kantianism, on the other hand, focused solely on its Categorical Imperative
and the concept of universal application of ethical questions, is incompatible
with profit maximization. A firm, wants to generate profits through all means
possible, and Kantianism does not focus on the goal, but rather on the action.
Due to its non-consequential nature a profit maximizing firm, is oxymoronic
from a Kantian perspective.
Virtue Ethics focus on gaining utility through virtue. Its self-bettering
philosophy is focused on immaterial consequentialism, thus making profit
maximization not a goal of its own, but rather an effect of virtuous behaviour.

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This it can be conferred that, though profit maximization is not an oxymoron
through this analytical lens, it is not focal to the philosophy which will push the
firm to take decisions that hurt profits.
Finally, Nietzscheism provides a strong frame to build on self-improvement.
Based on his analysis in Good and Evil it can be deducted that the perfect
Ubermesch would be someone like Steve Jobs, a fierce businessman, focused
on profit maximization as a mechanism of self-amelioration. From this point of
view, a profit maximizing business not oxymoronic and lies within all the
ethical grounds of Nietzsches philosophy.

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