Ahead of writing every Partnership Economics blog post we remind ourselves of you, our typical reader. Among other things, we understand you to be curious, intelligent, and open-minded. Not so open-minded that your brain leaks out of course, but open-minded enough to be willing to challenge a particular belief when you sense that belief no longer serves you well. At the same time, we all have blind spots. One simply doesn’t know what we don’t know until we are shown. I’ll be transparent with a simple and perhaps common example.
In the blue-collar parts of New Jersey where I grew up, I started smoking cigarettes when I was a young teenager because my older friends smoked and said doing so was cool. I believed what they said, even defending my new belief to my non-smoker friends. One day, following several years of daily smoking, I found myself totally breathless after running up three flights of stairs. Unexpectedly gasping against the stairwell wall for breath, I realized no otherwise healthy twenty-year old should be so breathless after what was really an easy stair climb. My body was showing me I had a blind spot about my false belief and damaging behavior.
At least I was open-minded enough to accept the evidence in front of me and willing to challenge the belief that drove my behavior. Were my teenage friends right and was smoking cool? No. They were wrong and so was I. Within a few months I traded my smoking for regular exercise and haven’t looked back. Let’s draw an analogy between the false belief behind my cigarette smoking and a false belief of national scale and damage.
Beginning at least as early as 1970, the corporate world bought into Milton Friedman’s false belief and business ethic that the one and only responsibility of business is to maximize profits. (A previous Partnership Economics blog series, which you can read beginning here, discusses this ethical fallacy.) Like my smoking friends who led me astray, Friedman has led astray generations with this damaging belief and ethic to maximize profits. Like my willingness to be led by those I thought knew better and were cool, the rest of the nation followed the corporate world. This is true down to and including your local cookie-selling Girl Scout. No, she doesn’t know better, but she believes what her parents are teaching her.
To continue the analogy just one more step, as a nation we’ve hit our gasping-for-breath moment. We’ve mostly all come to recognize the maximize profit false belief and ethic for what it is, and that for the last several decades it has driven our damaging business behaviors. We’ve all mostly also come to recognize that it’s beyond reasonable debate whether businesses have social responsibilities beyond making a profit. Of course, they do. The question for us now is, “What’s our collective move away from this wooden and hoary maximize profit belief?” What replaces this false and damaging ethic? The answer is, “Ethical reasoning that leads to ethical decision making.” What does that look like? Glad you asked.
Rather than a single, wooden approach that works like a hammer and treats every business decision like a nail, ethical reasoning considers the form and function of ethical modes. Ethical reasoning comprises three modes, formally called teleological, deontological, and characterological. Done well, ethical reasoning integrates and uses all three modes to form a unified ethic for decision-making. Continuing with the curious, intelligent, and open-minded persona that we understand is our typical reader, let’s drill down a bit into these modes.
The word teleological comes from the Greek word telos for “end,” “goal,” or “purpose.” In this goal-based mode, actions are right or wrong depending simply upon whether or not they advance the desired goal. From this perspective, actions are evaluated not in and of themselves but on the basis of their results; the goal justifies the means.
Deontological emerges from the Greek word deon, which means “obligatory” or “binding.” A deontological approach is obligated to refrain from using wrong means to achieve results and is bound to justice and fairness in acting. From this perspective actions have a moral component, actions are inherently right or wrong. Accordingly, this rules-based mode emphasizes just rules or principles that lead to good ends.
Characterological is a term used by the ethicists Dr. David Gushee and Dr. Glen Stassen to point to our character—that part of our inner selves that holds our virtues, who we are as people. Our virtues do not operate in a vacuum but work with the rules and principles that guide us in how we act. This character-based mode can develop virtues from virtually any source, from the egregiously evil to the heavenly holy. In the ultimate sense, the character-based mode springs from one’s understanding of the Creator’s character. The ancient truth stands: We derive our virtues from how we perceive ultimate reality.
To summarize these modes and how they fit together, the deontological (rules-based) mode is about what we should do; the teleological (goal-based) is about what we could do; and the characterological (character-based) is about what we would do. Integrating these three modes results in ethical reasoning that leads to ethical decision making. These three modes and how they work together are illustrated in this unified ethical decision-making diagram.
Done well, ethical reasoning leads to ethical decision making that arrives at what Gushee and Stassen term the “ideal set.” The ideal set is a course of action or actions which are morally sound, in character, and advance the cause. For example, in the book Better Capitalism we illustrate how to apply unified ethical decision-making with a ripped-from-the-headlines example of the California utility Pacific Gas and Electric Company (PG&E) as it was navigating the aftermath of the Camp Fire crisis. There we contrast the result of the PG&E maximize profit ethic against an unified ethical decision-making ideal set. Spoiler alert: The ideal set results in an 829% improvement in shareholder value over the former, in addition to countless stakeholder benefits.
We encourage you to study the unified ethical decision-making model and use it going forward in your business decision-making. We’re confident you’ll be pleased with your organization’s improved performance and results. If you’d like help or for us to consult with you in implementing the unified ethical decision-making model, we invite you to contact us at email@example.com.
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