When business behaves badly, who is held morally responsible? The firm or the individual? The post-financial crisis world is becoming a more business-critical one. There are unprecedented levels of scrutiny of large corporations and their actions and those who fall foul of the law face a more severe backlash than before. This is breathing new life into the debate around corporate moral responsibility and the extent to which business organisations can be correctly said to have moral responsibilities and obligations.
Under Anglo-American law, at least, a corporation such as BP is considered a legal person, but is it a moral person?
The Moral Responsibility of Firms: For or Against?
It is often argued that only individual human beings can be morally responsible and that the actions of a firm are those of its individual members. Corporate moral agency raises the possibility that a corporation can be considered morally responsible and accountable for an action but no individual person. The first set of speakers we gathered were all proponents of corporate moral agency, but they approach the problem in different ways.
Peter French, the Lincoln Chair in Ethics, Professor of Philosophy at Arizona State University and an early proponent writing over thirty years ago, argued that acts of individuals within a corporation become the intended acts of that corporation on the basis of a Corporate Internal Decision CID structure. French noted that the moral responsibility of firms and individuals are not mutually exclusive; both BP and its managers can be morally responsible for the Deepwater Horizon disaster.
In his view, the corporation has a voice of its own, distinct if not different from those of its members.
Moral responsibility for collective crime
Like French, Iwai and Pettit urged that we can and should hold both individuals and groups responsible, avoiding a potential responsibility deficit where only a group is held responsible and not the individuals involved. Other speakers also advanced the case for corporate moral agency. Bratman extended his work on the shared agency of small groups to suggest it might also apply to larger more complex organisations, such as firms. For Bratman, shared intentions of a group and shared framework policies entailing commitment to action are sufficient conditions for group intention.
List observed that we hold human beings morally responsible because they are intentional agents in contrast to, say, an avalanche. We can hold firms responsible where three jointly necessary and sufficient conditions are found: 1 Normatively significant choice possibility of doing something good or bad, right or wrong ; 2 Access to relevant information the agent understands and has the evidence available to make judgments about the options ; 3 Control over the choice of option.
These conditions do not hold for all collectives e. He differentiated between extrinsic and intrinsic intentionality, observing that even a we-mode group is not literally an agent person and thus cannot be responsible in terms of intrinsic intentionality because it only has extrinsically intentional attitudes. However, group responsibility may be something extrinsically attributed to groups and thus many organised groups can be regarded as morally responsible.
Hodgson argued in favour of accepting collective intentionality on the grounds that a firm is greater than the individuals who make it up.
Four speakers opposed to the idea of corporate moral agency, both on theoretical grounds and in light of its implications also made their case. He asserted that every organisational act is causally produced by its organisational members; drawing a parallel with a wind-up toy, he pointed to the winding-up of the toy as indicative of the individual responsibility for the actions of the toy.
Other Subject Areas
Citing the example of misconduct at National Semiconductor, Velasquez made the case that it is important to reject the idea of moral responsibility of organisations because it lets individuals off the hook, innocent parties get punished, and it takes away the incentive for individuals not to again engage in misconduct. Drawing on multiple examples, Ian Maitland, Professor of Strategic Management and Entrepreneurship at the University of Minnesota, also asserted that the idea of corporate moral agency can give rise to morally unacceptable outcomes, including the possibility of the officers of a firm being unaccountable for its actions.
He concluded that the anthropomorphism of the corporation does not humanise the corporation but rather dehumanises individuals. According to David Ronnegard, a visiting scholar at INSEAD, whose recent published work builds on that of Velasquez, at the heart of the matter is whether a corporation can be morally responsible without any of its members being morally responsible.
In his view, autonomy debunks the idea of corporate moral agency because autonomy demands that we must be consciously aware of the choices we make and corporate structures CIDs are not aware of anything.
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While John Hasnas, Associate Professor of Business at Georgetown University, accepts that corporate moral agency might be feasible theoretically, he argued that it only has practical significance as a means of authorising the punishment of corporations as collective entities and he concluded that this is not desirable.
Corporate moral agency is not necessary to punish individual wrongdoers within an organisation, to require an organisation to make restitution for the wrongdoing of its employees, to subject an organisation to administrative regulation, or to criticise an organisation. In his view, it is impossible to punish a corporation; the punishment inevitably passes through to consumers, employees and shareholders.
To illustrate the unjustness of this approach, Hasnas points out that the Nazis operated on this principle in occupied France during the Second World War, by punishing innocent members of communities where sabotage was occurring to deter acts of resistance. In response, various participants pointed out that these parties might not be so innocent or should have engaged in sufficient due diligence so as to avoid being in the situation where they are punished for corporate misconduct e.
Amy Sepinwall, Assistant Professor, Department of Legal Studies and Business Ethics at The Wharton School, University of Pennsylvania, contended that a capacity for emotion is necessary for knowing the difference between right and wrong, thus arguing that corporations are not persons. However, she then asserted that corporate personhood is a red herring and not necessary or sufficient for attention to the corporate rights or moral responsibility of firms; in her view, these are normative and political questions instead. In a similar vein, Kendy Hess, Assistant Professor of Ethics at Holy Cross, observed that the philosophical debate does not have to be resolved to address the important problems of corporate moral responsibility.
In contrast, however, she questioned the assumption of human psychology as a necessary condition in determining corporate moral agency. On a more pragmatic level, she also highlighted the messiness of organisational decision-making, questioning the simplistic model of controlling individual decision-makers in organisations and noting the distributive decision-making often found in organisational contexts. Richard De George, University Distinguished Professor at the University of Kansas, observed that the discipline of business ethics does not in fact need to reach a final determination on the question of corporate moral agency as the law clearly accepts that corporations can be held responsible, whether legally or morally.
Other speakers looked beyond the direct question of whether there is moral responsibility of firms to related considerations. Edward Freeman of the Darden School of Business and University Professor at the University of Virginia, also offered a meta-analytic perspective, remarking that the debate is framed by particular uses of language and highlighting the fact that most business activity is not that of large corporations.
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Teemu Ruskola, Professor of Law at Emory Law, noted how treatment of the question of moral responsibility of firms is coloured by cultural differences in theories of the firm, distinguishing between Western liberal views, state socialism, and Chinese Confucianism. While Ryan Burg, Assistant Professor in the Faculty of Management at the University of Moscow, brought a monetary perspective to the question, asking the audience to imagine an economy that issued a traceable, reclaimable moral currency, in which morally questionable business actions would have less value than moral ones.
At the end, we could have an advanced society where no single person is fully responsible for any action except for hypothetical unmoved movers. Instead, responsibility is shared among his or her influencers, relatives, coworkers, friends, etc. While this notion might sound radical, it is not that different from how machines are made and treated today.
Take cars as an example, each car has tens to hundreds of thousands of parts, coming from hundreds or thousands of OEMs original equipment manufacturer. If the car breaks down, BMW is the primary responsible party for the malfunction. In case there is a widespread problem with all i3 models, BMW and authorities might go back and track down the OEM most responsible for the widespread problem. It is hard to grasp how this could apply to humans, true, but it is in my opinion mainly due to the opaqueness of our actions and their causes that we cannot seek the root cause.
There is nothing stopping us from developing the right scientific means of inspecting the human mind the same way we inspect cars and other machines for problems.
I conclude that we do not have nor need free will. Neither the kind that requires us to be the sole source of our decisions nor the kind that merely requires us to be acting under no constraint. Over generations, we could gradually distance ourselves from our natural and unnatural biases and constraints. Each generation could be slightly more aware and in charge of its own condition. Tweet This.
Beyond Blame | Boston Review
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