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WHY BE MORAL IN BUSINESS?

A RAWLSIAN APPROACH TO MORAL MOTIVATION

Richard H. Toenjes

Abstract: This article puts forth the thesis that the contractualist ac-
count of moral justification affords a powerful reply in business
contexts to the question why a business person should put ethics
above immediate business interests. A brief survey of traditional
theories of business ethics and their approaches to moral motivation
is presented. These approaches are criticized. A contractualist con-
ception of ethics in the business world is developed, based on the
work of John Rawls and Thomas Scanlon. The desire to justify our
choices in terms that others can be reasonably expected to accept,
or at least in terms that others cannot reasonably reject, is identified
and differentiated from other accounts of motivation. It is this desire
that constitutes the core motive to be moral in business on the
contractualist conception. Implications of this contractualist concep-
tion for the theory and practice of business ethics are then discussed.

/. Introduction

T he issue of moral motivationWhy be moral in business?spans both the


empirical and the philosophical work in business ethics. This overlap might
not appear obvious, for it is commonly assumed that matters of the require-
ments of morality fall in the area of normative philosophy, while questions of
the motivation to do what is moral are addressed by empirical science.' This
dichotomy does exist when the philosophical conception of morality in busi-
ness follows the paradigms of stakeholder theory, or virtue theory, or the
traditional paradigm of applying moral principles (utility, rights, justice) in busi-
ness settings. The argument in this paper is that in a contractualist paradigm of
business ethics, philosophic issues and motivational issues coalesce into one
focal concern. This is the concern to justify actions to others in terms that all
can accept. As we shall see, the desire to justify involves more than the psycho-
logical question of whether individuals who tend to think in terms of agreements
and contracts will be less likely to act unethically (Dunfee 1995). The link be-
tween the contractualist conception of ethics and the motivational desire to justify
is essential, not merely contingent. To situate the issue of motivation, 1 will begin
with a brief survey of the variety of philosophic approaches to business ethics.

2002. Business Ethics Quarterly. Volume 12, Issue 1. ISSN 1052-150X. pp. 57-72
58 BUSINESS ETHICS QUARTERLY

We can distinguish two fundamentally different philosophic approaches in


business ethics. The more traditional one involves the application of principles,
rules, and maxims to cases. These principles might be utilitarian in nature, or
they might be deontic principles of rights and justice. Commonly all three prin-
ciples are used as standards applicable to cases for the sake of directing or
criticizing conduct. Manuel Velasquez's Business Ethics: Concepts and Cases
is an excellent example.
The other approach seeks to demonstrate that the goals of business include
or somehow coincide with the goals of ethics. There are several varieties of this
approach. One (call it the Hobbesian variant) demonstrates the mutual advan-
tages gained in cooperation defined by ethical principles. David Gauthier's
Morals by Agreement works out the details of this Hobbesian variant. Another
approach is formulated by LaRue Hosmer in terms of the trust, commitment,
and effort companies need for long-term success (Hosmer 1994). Another variety
examines the nature of community and the human good achieved as members of
the community. This communitarian variant demonstrates how ethical business
is good business when seen from the perspective of the whole, virtuous person
and the whole community. Robert Solomon's Ethics and Excellence and The
New World of Business and Edwin Hartman's Organizational Ethics and the
Good Life illustrate this variant.
There are obvious problems with either approach.^ The problem central to
the concern of this paper is the question of motivation. Why should a person
moved by business interests be moved also by considerations of utility, rights,
or justice? Alternatively, on the mutual advantage or the communitarian mod-
els, why should decision makers take the perspective of long-term mutual
advantage or the perspective of the whole good of persons as members of a
community when immediate interests so apparently lie in a different direction? I
believe the truly hard cases in business ethics are dilemmas of this kind, ones in
which business interests and ethical interests do not coincide. In this paper I will
argue that contemporary versions of social contract theory shed new light on the
ancient question: Why be moral when one's interests appear to lie elsewhere?
This ancient problem is presented in Plato's fable of Gyges Ring. Gyges
finds a magic ring that allows him to become invisible and thus avoid suffering
the legal or social consequences of his actions. Of course, as we know, Plato
shows how Gyges would not in fact achieve happiness in this way, thus demon-
strating that morally correct and virtuous action is after all in Gyges' best interests.
Accordingly, Plato is advocating a version of the communitarian approach to eth-
ics mentioned above. The contemporary social contract theories developed by
John Rawls and Thomas Scanlon take a radically different approach to the moti-
vational question. An examination of this contractualist alternative will shed
new light on this ancient motivational question, one that still grips business
persons and ethicists today.
WHY BE MORAL IN BUSINESS? 59

//. The Problem of Moral Motivation


It will help fix ideas if we survey the accounts of moral motivation assumed
in the traditional approaches in business ethics. The communitarian and the
mutual advantage varieties see the goals of business as included in or somehow
coinciding with the goals of ethics. Thus the answer to the question, why be
moral in business, is essentially a demonstration that successful business is ethical
business. Ethics in business is seen as a "win-win" proposition.
A major weakness of this approach is that it begs the motivational question
in just those circumstances where it is in most need of an answer. These are
situations in which it appears that business interests and ethical interests con-
flict. Ford Motor's decisions regarding the Pinto's fuel tank or Nestle's marketing
of infant formula in the third world are situations in which business interests
obviously appeared to conflict with ethical interests. Insisting to Ford or Nestle
that their long-term advantage or their flourishing as members of the commu-
nity require putting ethics ahead of immediate profit is to assume that Ford or
Nestle are ready to evaluate matters from the perspective of long-term advan-
tage or the total community good. Furthermore, it is to assume that Ford or
Nestle were simply mistaken in their calculation of their own interests or goals.^
And it assigns to empirical psychology the task of motivating people to con-
sider the full range of the consequences of their actions.
The question of moral motivation is more complex if we approach business
ethics as the application of principles to cases. Utilitarian concerns are different
from deontic concerns with rights or justice, and their accounts of moral moti-
vation are also different. Utilitarianism identifies individual human well-being
as the fundamental moral fact. In this way it shares a root assumption of the
communitarian and mutual-advantage models, which also take human well-being
as the fundamental moral fact. Utilitarianism can use the normal human senti-
ments of sympathetic identification with the good of others to explain why
individuals are motivated by a concern for the good of other persons. But what-
ever psychological account of motivation it uses, utilitarianism as a moral
principle aims at the total good, and hence there would have to be a motivation
to favor increases in aggregate well-being, regardless of how well-being is dis-
tributed. This is a highly abstract and impartial empathetic identification, and
very different from the normal sentiments of sympathy or empathy we feel to-
ward others. In relying on an altruistic or impartial empathy with the well-being
of all, utilitarianism begs the question of why be moral in business. This kind of
impartial empathy is already a moral concern, and one that does not address the
question of why be moral when business interests lie elsewhere. And as is the
case with any consequentialist approach, it assigns to empirical psychology the
task of instilling the empathy or sympathy required to motivate ethical behavior.
Deontic concerns with rights or justice, when these do not reduce to the utili-
tarian concern with the good of all, see moral motivation differently. Deontic
concerns see motivation as some kind of special intuition or perception. John
60 BUSINESS ETHICS QUARTERLY

Locke is a good example. In explaining basic natural rights he states that reason
itself "teaches all mankind, who will but consult it, that being all equal and
independent, no one ought to harm another in his life, health, liberty, or posses-
sions."* Kant's notion of duty or obligation might also be seen as appealing to a
kind of special intuition or apprehension of moral oughtness. This intuition is
understood as containing an intrinsic or self-evident significance that consti-
tutes its motivational force.^ The weakness with any such approach in business
ethics is again tbat of begging the question. Why should a person moved by
business interests also be moved by such deontic concerns?
A different and in some ways a better answer to the question, why be moral,
can be found in the contract theories developed by Rawls and Scanlon. Here we
can isolate another kind of human interest, one different from the core utilitar-
ian desire for human well-being, and one different from the desire to flourish as
a member of a community or to pursue rational self-interest in mutual coopera-
tion. It is a desire that does not presuppose the deontic concern with rights or
justice. The contractualist desire is a desire to cooperate with other persons
according to principles that all can accept. It is a desire to be able to justify our
conduct and the principles governing our conduct. Further, it is a desire to jus-
tify conduct to others in terms that we can reasonably expect them to accept, or
at least in terms that they cannot reasonably reject. The desire to justify is not
defined in terms of human well-being at all; it derives from another aspect of
moral personality.^ Accordingly, the contractualist approach to moral motiva-
tion is essentially different from the approaches just surveyed.

///. The Desire to Justify

A. Initial Characterization
The desire to justify is quite common and familiar. It is involved in attempts
to make excuses ("Don't blame me, I was just...") and attempts to get others to
cooperate ("Let's work together so we can...").^ In business the desire to justify
appears in such expressions as "The market demands it," or "It's the way things
are in the business world, the competition is doing it," or "It's legal and within
our rights," and so on. Classically the desire to justify business conduct and
institutions was seen in "What's good for General Motors is good for America,"
or "The social responsibility of business is to make a profit," or "In seeking his
own gain, each is led as if by an invisible hand to enhance the good of all." The
"trickle-down effect" is an attempt to justify disparities of income and wealth.
The desire to justify is seen in the lengths to which people will go to avoid
admitting the unjustifiability of their actions and institutions, including attempts
to discredit or even dehumanize those who might reasonably reject the justifica-
tion offered, as is often done in war, colonializing, and slavery. The function of
exclusive clubs is not limited to "networking" with the influential, but includes
the desire to justify our conduct, at least to some who we expect will agree.
WHY BE MORAL IN BUSINESS? 61

The widespread appeal of "The Golden Rule" can be seen as an expression


of the desire to justify our actions to others in terms they could not reasonably
reject.^ We often criticize someone's treatment of ourselves or others with the
complaint "But put yourself in my or their position." The suggestion is that it is
not reasonable to expect me or them to go along, and that you would readily see
the unreasonableness if you took another perspective. The rebuttal "If you look
at it from my perspective" is suggesting it is not reasonable to reject my action.
Simply put, the desire to justify is the desire to look others straight in the eyes
and say, "It is reasonable for you to accept what I'm doing (or the scheme that
justifies it), or at least it is not reasonable for you to reject it."
Of course, it is also common to consider consequences for human well-being
when putting ourselves in the places of others, or when otherwise justifying our
actions. We might even suppose that there could be nothing other than the good
for persons that could serve as the basis of justification. The unique character of
the contractualist desire is that it does not reduce to rational concerns with well-
being, but instead intends the reasonableness or fairness of an action or
arrangement.
B. Analysis of the DesireThe Reasonable and The Rational
1. The desire to justify can be phrased as the desire to give reasons that all
can reasonably be expected to accept, or as the more limited desire to give rea-
sons that none can reasonably reject. The two formulas are not identical. In a
group that includes some altruistic persons motivated by concerns of the com-
mon good, we might expect all to accept an arrangement that disadvantages
some (the altruists) for the sake of the greater good of all. But in that situation,
it might still not be unreasonable for the disadvantaged to reject the arrange-
ment (Scanlon, 1982, pp. 111-112). This difference need not detain us here
because it will not substantially alter most conclusions we reach in applications
to business ethics.
2. The desire to justify, to give reasons that all can reasonably be expected to
accept, is further specified by the character of those reasons and the criteria of
their acceptability (or their non-rejectability). The desire to justify one's actions
is not a desire to manipulate others or to gain their acquiescence through any
means whatsoever, or with any kind of reason whatsoever. Threats and promises
might produce acceptance in the sense of acquiescence; but unless these appeal
to persons as free, equal, rational, and reasonable, the acquiescence is not rea-
sonable agreement. And not everything one might offer or take as a reason (e.g.,
one's self-interest or private religious beliefs, even false beliefs and illogical
inferences) constitutes a reason that all can reasonably be expected to accept.
When attempting to justify our actions in terms we can reasonably expect others
to accept, we make appeal to impartial considerations, to factual and objective
matters, and to a whole range of publicly accepted agreements about what con-
stitutes justification, and what distinguishes justification from manipulation.
62 BUSINESS ETHICS QUARTERLY

coercion, or uninformed and irrational thinking. In a word, we assume and in-


voke the whole network of ideas and values operating in social arrangements
where free persons reciprocally interact in ways they accept as rational, reason-
able, and equal agents. Here is not the place to discuss fully the criteria of
reasonable acceptability (or non-rejectability) of attempts to justify. We can and
do, with some degree of clarity and confidence, make the distinction between
reasonably acceptable justifications and other forms of gaining acquiescence.
The basis of the distinction and the moral force of contractualist conception of
motivation being developed here derives from the core idea of contractualism,
the notion of reciprocal cooperation among persons who seek to treat one an-
other as free, equal, reasonable, and rational.^
3. In seeking to justify an action I say to others "It is not reasonable for you
to reject it." This is not to say that others have no reason to reject it. Any interest
to the contrary of what I propose is a reason to reject my action. Environmental-
ists have a reason to reject policies that allow harvesting timber. The timber
industry has a reason to reject restrictive laws. The latest casualties of a corpo-
rate "down-sizing" have a reason to reject that plan. And the corporation has a
reason to reject claims of wrongful dismissal, or claims that an alternative but
perhaps less profitable plan should be implemented. In seeking to justify, we
are not assuming there are no reasons on the contrary. But we are saying it is
reasonable to accept, or not reasonable to reject, the action (policy, institution)
in question. In other words, in seeking to justify we are not saying that those
opposed are irrational. We are saying they are unreasonable if they reject the
justification. (Of course, those opposed may be reasonable themselves, holding
justifications for other decisions, or other justifications. There can be situations
where more than one course of action is reasonable.) The distinction between
reasonableness and rationality will be taken up below (III-7). But here it will be
helpful to illustrate how the contractualist conception and the desire for reason-
able justifications can motivate and direct business behavior.
Any number of widely publicized cases illustrate the force of the contractualist
conception of reasonableness and its suitability as an approach to the why be
moral question. Nestle's practices of marketing infant formula in third-world
countries have changed significantly in light of criticisms of the unreasonable-
ness of their practices. Obviously it would not be reasonable to expect vulnerable
mothers and their infants to agree with marketing practices that endangered their
health for the sake of Nestle's profit. Under pressures from an international
boycott of its products and from agencies such as the World Health Organiza-
tion, Nestle has changed its practices to include information on the safe use of
formula, the advantages of breast feeding over formula, maternal nutrition and
preparation for safe breast feeding, and many others. Nestle set up an audit
commission to monitor its own conduct. And while normal business practice is
to increase marketing in growth markets such as the third world. Nestle is de-
creasing its efforts to sell formula in those markets.'o To be sure, there are many
reasons and motives operational in Nestle's behavior. No doubt arguments about
WHY BE MORAL IN BUSINESS? 63

rights and justice, about long term profitability, public relations, etc. all were
made. My claim is that the sheer unjustifiability of their practices offers a coher-
ent account of Nestle's change. Those earlier practices fail the test of justifiability
in terms that all can reasonably be expected to accept, or that none can reason-
ably reject. Persons on all sides easily understand how reasonable persons can
reject Nestle's practices and its earlier attempts to defend them. In making
changes, presumably Nestle itself came to see the unjustifiability of its earlier
ways. Whatever might be said about public relations, long term profitability,
etc.. Nestle now behaves in a more reasonable way; it either is or can coherently
be understood as being moved by the contractualist desire to justify its actions
in reasonable terms.
Another example is the recent changes in Nike's use of cheap Asian labor
and child labor in sweatshop conditions to produce its footwear. As in the case
of Nestle, after public pressures brought in the press, including ridicule in the
comic strip Doonesbury, Nike has had a change of heart. It now requires that its
overseas producers meet U.S. health and safety standards, and it has agreed to
provide outside inspectors access to its Asian factories, things it had previously
resisted.'^ The decision reflects the need for public acceptance. And the accep-
tance involves more than public relations and image management. It involves
the acceptability involved in the contractualist conception of business ethics
being developed here. Prior to its change of heart, Nike quite apparently failed
the basic test of the contract view; it was not reasonable to expect others to
accept its practices and its rationalizations. When such unreasonable practices
come to the light, public acceptance and even sales volume can decrease. The
contractualist approach articulates and explains the dynamics of scenarios such
as the Nike and the Nestle cases.
4. The desire to justify does not reduce to the basic utilitarian concern for
human well-being. In seeking to give a reason I believe all can reasonably accept
I am not essentially concerning myself with the well-being of others. This can
be seen in Scanlon's example of a wealthy person who is moved by the horrible
suffering of children in some impoverished third-world country (1982, p. 116).
Concern with their suffering is, of course, concern with their well-being. But
there is an additional fact. The wealthy person is also moved by the thought that
the children could be helped at very little cost to the wealthy (assuming, obvi-
ously, that this might be true). This additional motive, "I could help at so little
cost to me," is not aimed at the welfare of the children nor the aggregate well-
being of all. This additional motive is more clearly evident in examples that
include deontic considerations. For example, it is nearly impossible to see how
any degree of economic advancement for an underdeveloped country could jus-
tify the imposition of "sweat shop" working conditions on children that damage
their health and leave them as bad off as they were under less prosperous condi-
tions. The sentiment that "there is no excuse, no justification" in these examples
refers to the comparative inequalities of the situation and is not explainable on
exclusively utilitarian grounds, on the balancing of outcomes or comparison of
64 BUSINESS ETHICS QUARTERLY

alternative aggregate goods. The source of this additional motive is the desire to
justify my actions to them. (We might suppose the desire is actually aimed at
avoiding potential criticism of our insensitivity or selfishness. While that might
be the immediate occasion of the desire, its object like the grounds of the poten-
tial criticism itself is the comparative inequalities of the situation.)
5. The desire to justify is not limited to cases where the appeal is to mutual
advantage (to "win-win" situations). This is seen in the fact that the desire does
not cease when some have no bargaining advantage, as in the case of the suffer-
ing children just mentioned. It is also seen, for example, in the desire to justify
a corporate down-sizing to persons being laid off who, by definition, have noth-
ing more to offer the firm. We might suspect in such a case there remains a
mutual advantage in concluding the matter amicably and without embarrassing
scenes. This would be a mistake. For those being terminated might be docile
and unassertive persons who will leave quietly and without resentment upon
simply being told without explanation to do so. The manager might expect such
persons to accept the termination decision without explanation. But we cannot
say that those being laid off cannot reasonably reject the absence of a justifica-
tion. And if it were possible to give a justification at very little cost, this
comparative fact would ordinarily strengthen the motivation to do so. The de-
sire involved in this additional motivation is not aimed at the well-being of others
and not limited to their bargaining advantage. It is a different desire.
It seems clear that we do have a desire to justify a decision to someone with
"nothing to offer," with no bargaining advantage, not even a threat advantage of
making a scene or expressing resentment. In the example of employees being
laid off, a common form of justification would be to invoke the doctrine of
"employment at will." Just as employees can leave at will, so too employers can
terminate at will. Such an attempt illustrates the desire to justify, of course. But
perhaps the desire is thought to come from some recognition of other's rights or
empathy with other's feelings. No doubt often it does; but it need not. For we do
not need to be concerned with others' rights or well-being when we are moved
by the thought that a justification could be given (if it could) at very little cost to
us. Or it might be supposed that the desire to justify comes from a recognition
that even where there is no bargaining advantage in the particular scheme of
cooperation (e.g., a corporate downsizing), there remains a larger social scheme
in which bargaining advantages still exist. This would be a mistake. For the
objections being made within the confines of the schemes of mutual advantage
just considered can be raised at the level of those larger schemes as well.
6. The desire to justify does not reduce to the desire to live and flourish as a
member of a community (unless the community is essentially defined in terms
of principles that all can reasonably accept).'^ This is because the general basic
desire to belong is not limited to or necessarily governed by the idea that the
community form is one that all can reasonably accept, A communitarian scheme
recognizes persons as rational, as having a good that they can see is achieved
within the community. The community is defined by its ends, the flourishing of
WHY BE MORAL IN BUSINESS? 65

the members, and of the association itself. Therefore, persons who reject the
community form or the duties and privilege associated with their roles within it
are, on the communitarian view, irrational. I think we would all be uneasy with
such a view. For it amounts to saying to any who reject a decision either "You
are irrational" or "You are not a member of the community at all." Consider, for
example, textile workers whose jobs are being eliminated or moved to a third-
world country. Can we say with a straight face that they are irrational if they
disagree? That they somehow fail to understand their own good or the good of
the global textile community? Alternatively, must we say that they are no longer
a member of the community? That their good is not bound up with the commu-
nity to which the former employer still belongs? The desire to justify persists
even where the limits of communitarian thinking have been reached.
7. At the most general level of description, the desire to justify is not limited
to considerations of the rationality of the parties involved. The desire does not
appeal to others as rationally self-interested individuals (the mutual advantage
model). It does not appeal to others as seeking the good of community member-
ship (the community model). Nor does the desire to justify appeal to the altruistic
concern with human well-being (the utilitarian model). Indeed the desire to jus-
tify persists in circumstances where persons have reasons to reject an action, in
circumstances where there are reasons to the contrary. In fact, it is exactly such
circumstances that constitute the tough cases in business ethics. These are situ-
ations where there are reasons on all sides of the issue.
We might think that there must be some basic flaw in the account of the
desire to justify being developed here. For we might think that somehow ratio-
nality must be at the root of the desire. What else but human reason could possibly
account for attempts to justify our actions and our arrangements? The history of
ethical theory just is, we might suppose, the history of attempts to derive prin-
ciples to govern ourselves from the concept of reason itself. From Plato through
Aristotelian eudaimonistic conceptions, to Hobbesian and game-theoretic accounts
of mutual advantage, and to utilitarian accounts of human well-being, the prin-
ciples that govern our actions are derived from some conception of the human
good known to reason. In all such theories the powers of rationality are associ-
ated with individuals' conceptions of their good. Even deontic theories based on
a special intuition of rights and justice can be seen as attempts to derive moral-
ity from reason itself. The powers of rationality involve the ability to have a
good, to know it, or to construct it. Rationality also involves the powers of judg-
ment and deliberation in seeking one's own interests and ends. Rationality applies
to how these ends are given priority and to the choice of means toward those ends.
The Rawls-Scanlon account of the desire to justify being developed here
stands in sharp opposition to such attempts. The contractualist notion guiding
the present account does not derive the reasonable from the rational. Reason-
ableness is a different capacity. As reasonable, persons seek to cooperate with
others on terms that all can accept, or at least on terms that none can reasonably
66 BUSINESS ETHICS QUARTERLY

reject. It is a desire to propose and to honor principles and standards specifying


terms of cooperation.'^
By way of contrast, irrational persons are ones who do not know their own
good or who somehow fail to have a coherent notion of the priorities of their
final ends. Or perhaps they are irrational in failing to pursue effective means to
their ends, or in choosing less probable means over more probable ones. Unrea-
sonable persons, on the other hand, are ones who engage in (or find themselves
in) cooperative schemes but are unwilling to honor or even to propose standards
for specifying terms of cooperation. While they may pretend to be reasonable,
they stand ready to violate the terms of cooperation if circumstances permit (as
circumstances do permit in the case of Gyges). Unreasonable persons may in-
deed be rational. Free-riders and hypocrites may indeed be rational in their pursuit
of their interests and ends. Persons who lack any desire to justify their actions
to others may indeed be rational. Only if it is necessary to derive the reasonable
from the rational must we conclude that all rejections or pretences of justifica-
tion are necessarily irrational. But such rejections or pretences are necessarily
unreasonable.
The fact is that we cannot expect that conscientious and rational persons will
ultimately agree on the same conclusion. And the desire to justify does not de-
pend on such an idealistic assumption. The real world of business is not that
neatly rational, but it does contain within it the desire to justify. It is unrealistic
to suppose that all of our differences are rooted in ignorance and perversity, or
else in unrestrained rivalries for power, status, and economic gain.'''And such a
supposition is not necessary, if the present account of the desire to justify is
correct. Furthermore, the assumption that our differences are rooted in igno-
rance and perversity is a main source of the mutual suspicion and hostility we
sometimes see in ethical disagreements in business. In the truly tough cases, it
is unreasonable to expect all rational persons to agree, and to dismiss disagree-
ment as irrationality.'^ It is quite common to confront a situation where we know
the parties will never agree, where sincere and rational persons will disagree. In
such situations, however, the desire to justify persists. It is the desire to seek a
solution that none can reasonably reject, even if as sincere rational agents their
understanding of their own good (mutual advantage), the community good, the
good of all (utilitarianism), or their deontic intuition does not result in a single

IV. Implications and Applications


I argued in section III that the desire to justify exists and that it is distinct
from the basic motivational desire envisioned by utilitarian, communitarian, and
mutual advantage models of ethics as applied to business. Here I turn to the
question of what difference the desire makes, how the contractualist view ap-
plies to business ethic, and what advantages it offers.
WHY BE MORAL IN BUSINESS? 67

1. Contractualism is more realistic. The hard cases in business ethics are


dilemmas in which business interests are in tension with ethical interests. A
good business decision is not necessarily good for all, not necessarily "win-
win" all the way around. Utilitarian, mutual advantage, and communitarian
conceptions of ethics deny that such hard cases actually exist, explaining them
as failures of reason, relegating them to matters of ignorance or insincerity. The
contractualist conception, on the contrary, is compatible with the existence of
such hard cases. It allows business interests (and all other individual and com-
munal goods) to function in decision-making along with the interest to justify
decisions to others. On the contractualist conception, the desire to justify per-
sists even when sincere rational persons disagree about what is good for
themselves or their associations.
2. Because it does not presuppose that sincere and rational agents must agree,
the contractualist conception does not automatically lead to distrust and suspi-
cion in cases of disagreement. The contractualist conception separates the
reasonable from the rational. It allows rational agents to disagree, while empha-
sizing a separate capacity, reasonableness. The goal of agreement is linked not
to the rational good but to the reasonableness of decisions. In seeking such agree-
ment we are not automatically forced to view others (or ourselves) as ignorant
or insincere when we disagree. We can view them instead as persons who in full
rationality have a good that is not entirely consistent with our own or other
rational conceptions of the good.
3. The contractualist conception specifies and de-mystifies the common expe-
rience of the tension between business interests and ethical interests. This tension
is experienced when decision makers arrive at what they feel is the correct busi-
ness decision, and still wonder "But is it the right thing?" The idea of "the right
choice" has a place in business decisions, and its meaning is distinct from and
can be opposed to the idea of "the correct business decision." This tension, which
we often experience and express in language, remains unspecified and some-
what mysterious. For some it refers to their nonbusiness commitments to religious
or other moral codes. For others it refers to an inner voice of conscience or
certain personal sensibilities. Or the notion of "the right thing to do," while
operative in business discussion, remains unspecified as to its reference or mean-
ing. The contractualist conception specifies that the notion of the right thing is
connected with the desire to justify decisions in terms that all can accept, or at
least in terms that none can reasonably reject. As a separate desire it naturally
operates distinct from business interests and can easily run opposed to those
interests. But as a desire that business persons have, it operates within the busi-
ness world, not from some personal source outside the business context.'^
4. The contractualist desire to justify explains another ordinary feature of
ethical reasoning. It is commonly assumed that in evaluating a decision we must
pay particular attention to those who will be losers in the transaction (those put
out of work, for example). A decision that appears justifiable only to those who
68 BUSINESS ETHICS QUARTERLY

come out ahead (appealing to their interests or rational good) will ordinarily be
met with suspicion and distrust. And we will not consider such responses unrea-
sonable, especially when it comes from those who lose. Up to this point I have
not stated specific criteria of an acceptable justification, beyond the general
constraints imposed by the contractualist conception itself. But one criterion
certainly is that the justification must not automatically exclude any who lose in
the decision being justified. The contractualist conception captures this com-
mon element of fairness, that justifications must include the less advantaged
and probably in a special way. This is because it is they who can be expected to
reasonably reject the decision, if anyone can.
5. The contractualist conception expands the horizon of factors that can be
used in justification. In mutual advantage, communitarian, and utilitarian con-
ceptions the only kind of justification possible is in terms of what is good for
persons. But human nature is not so limited. Ideals such as fairness, reciprocity,
honor, duty, and so on can enter our minds and move us to action. At the heart of
the contractualist conception is a notion of reciprocal cooperation as free, rea-
sonable, and rational persons. We are capable not only of having a rational good,
but also of regulating and justifying our actions according to reasonable prin-
ciples, ones that all can accept or at least not reasonably reject.
The desire to justify is largely, if not wholly, learned in a liberal democratic
society. By way of contrast, the desire to pursue one's rational good in commu-
nal or mutually advantageous settings may have both learned and natural
elements. The important thing is not the psychological etiology of the desire to
justify, but the fact that it is a desire that we have and that we cultivate. Further-
more, it is a desire that is not limited by conceptions of the rational. Rather it is
what Rawls terms an idea-based desire, one whose explanation must make use of
the idea of reciprocal cooperation among reasonable persons (1993, pp. 81-86).
This expansion of the horizon of factors we can use in justification of actions is
perhaps the most attractive feature of the contractualist conception. It makes
sense of our widespread (liberal democratic) understanding of ourselves as free
and autonomous, rational and reasonable persons.
6. One effect of the contractualist conception is that it shows the limits of
justifications ordinarily offered in defense of business decisions. Often we hear
that "the market" justifies a particular decision (and a suggestion that those who
disagree are ignorant or insincere). Behind the idea of the market may be a
utilitarian conception of efficiency such as that envisioned by Adam Smith. Or
"the market" might be shorthand for the notion of rights to freedom and prop-
erty as envisioned by Locke and other liberal theorists. The contractualist
conception does not assign primacy to such appeals to the utilitarian good or to
certain rights confined within a particular conception of rationality. Instead, the
contractualist conception allows disagreement in conceptions of the rational good
while insisting that justification must still be formulated such that no one can
reasonably disagree. It may or may not be irrational to reject market efficiency
or some particular decision made in its name or in the name of property rights.
WHY BE MORAL IN BUSINESS? 69

But justification seeks a different kind of agreement, one that cannot be reason-
ably rejected. For example, it might be both rational and reasonable to close a
plant to cut costs in order to preserve the whole company. Presumably all can
reasonably be expected to agree, when evidence supports the decision, and the
value of preserving the company is accepted. It might be quite rational given
some conceptions of good business and given some conceptions of property, for
the GEO to close a plant to cut costs in order to redecorate the executive offices
with expensive imports. But it would not be unreasonable for displaced workers
to reject the GEO's justification if it is based on nothing but property rights or
the CEO's particular conception of good business. Similarly, it might be reason-
able to expect agreement with a decision to move a production facility off shore,
for the sake of lower cost and hence more competitive products that can en-
hance well-being on all sides, even in areas where labor is redistributed to
different and perhaps better industries. But the same decision to move produc-
tion off shore could meet reasonable rejection if the move is justified by lowered
production costs achieved by environmentally destructive and unsafe manufac-
turing methods. In other words, people offering "the market" as justification
will recognize that in some circumstances it might reasonably be rejected. Those
offering "the market" as justification will have to look beyond their own par-
ticular conceptions of property and efficiency for the common grounds of
cooperation, the terms of which none can reasonably reject the course of action.
7. The contractualist conception forces decision makers to seek common
ground on which to provide justifications. At the same time it expands the scope
of that common ground, because it is not limited to utilitarian, communitarian,
or mutually advantageous notions (as explained in no. 5 above). The contractualist
conception directs our concern to persons understood not just as rational agents
seeking their good but also as reasonable persons capable of engaging in fair
cooperation as such, and capable of doing so on terms that others can reason-
ably be expected to endorse. It directs our attention to the ways in which people
actually do cooperate in the expectation that others will abide by the terms of
the arrangements (not just cooperation designed to achieve some rational good).
In contractualism we look at persons as members of numerous overlapping groups
(including nations, business associations, and many other less formal arrange-
ments within and across societies), and we look to the forms of justification
operative within those groups. In contractualism, justification is not limited to
individual good, but also can include commitments honored in fair cooperation.

V^ Conclusion
Beyond the implications just discussed, I cannot tell what differences recog-
nizing the desire to justify will make in business practice. But the change in
mind-set or business philosophy is definable nonetheless. Contractualism based
on the idea of fair cooperation suggests a business philosophy quite distinct
from communitarian or competitive models, and distinct from utilitarian social
70 BUSINESS ETHICS QUARTERLY

well-being models. The contractualism involved in this analysis characterizes


contemporary liberal democratic societies. Therefore, the argument in this paper
would support a variety of policies advocated in the names of corporate democ-
racy, employee rights and participation, and so forth. Neither the authority of
superiors nor the rights of subordinates would be absolute. All decisions must
be reasonable, capable of being stated publicly so that all can see the decisions
are ones which all can accept, or at least that they are decisions which cannot
reasonably be rejected.

Notes
The author wishes to thank the anonymous referees of BEQ for their very helpful ideas and
comments,
A double special issue of Business Ethics Quarterly 8, no, 3 (July 1998) is devoted to
topics relating empirical work in psychology with theoretical work in normative philosophy,
^Indeterminacy is one problem. Exactly what decision is indicated by the particular prin-
ciple or approach taken? Indeterminacy in business ethics is one reason philosophers have
begun to speculate that business ethics is a post-modern, non-foundational, and historicist
enterprise. A recent special edition of Business Ethics Quarterly 3, no, 3 (July 1993) is
devoted to this theme,
'Johnson & Johnson's decision to take all Tylenol off the shelves to prevent risk of poi-
soning from tainted product is often heralded as a paradigm case in which ethical interests
and business interests coincided. Perhaps so. But J & J's decision was motivated by concern
with safety, not ultimately the bottom line. At the time, no one could know the decision that
would advance business interests the most,
^Locke, John, Two Treatises of Government, rev, ed,, Peter Laslett, ed (New York: Cam-
bridge University Press, 1963), 309, 311, as quoted in Velasquez, 1982, 143,
'It can be argued that Kant does not hold such an intuitionist view. It can be argued that
Kant grounds morality on a conception of rational human nature and membership in an intel-
ligible order of existence. Viewed this way, Kant is close to the contractualist view being
developed here. Indeed, Rawls argues that there is a Kantian interpretation of his theory of
justice as fairness, where the root ideas of the Rawls-Scanlon contractualism are first articu-
lated (Rawls, 1970, 251-257), This clarification was offered to me by the anonymous reviewers
for BEQ.
^The distinction between the interest in human well-being (the good) and the desire to
justify is rooted in Rawls' conception of moral personality. For Rawls, moral personality is
characterized by two capacities: one for forming a conception of the good, the other the
capacity for a sense of justice. This point is developed more fully in section III, B, 7,
''The fact that these often reduce to self-interest and manipulation, especially in children,
is not an objection. For justification cannot be reduced to manipulation in all cases, unless
we simply assume there is no such thing as justification distinct from manipulation,
8The golden rule in some version appears in many religions and philosophies. It can be
explained on most moral theories, including those 1 am rejecting as inadequate to answer the
why be moral question in business. But that doesn't mean it doesn't exhibit the desire to
justify. If I'm right, it means that the desire to justify is exhibited in those religions and
philosophies.
WHY BE MORAL IN BUSINESS? 71

'The questions about the nature and adequacy of justification in morals, while basic, is
not the central concern of this paper. The present analysis of the desire to justify actions pre-
sumes the general correctness or acceptability of the work of Rawls, Scanlon, and others. On
the specific notion of public reason, see Rawls "The Idea of Public Reason" (1993, 212-254).
"The treatment of the Nestle case comes from a case written by Eugene Buchholz, Loyola
University of New Orleans, reprinted from Business Environnment and Public Policy, in
Beauchamp and Bowie (1997, 606-607).
"The treatment of the Nike case comes from Shaw and Barry (2001, 228-231).
'^If justifiability is the limiting concept and not the end of individual or community flour-
ishing, then what we have is not recognizably a community at all. It is not formed by a
common conception of the good known to reason. It is instead a society, as understood on
the contractualist notion guiding the view being developed here.
"The distinction between the reasonable and the rational is so basic and pervasive in
Rawls' thought, its roots are traceable to the conception of moral personality itself (what for
Rawls functions as a foundation in human nature). Moral persons are characterized by two
moral powers and two corresponding highest-order interests in realizing and exercising these
powers. The first is the capacity for a sense of justice, the basis of the reasonable. The second
is the capacity for a conception of the good, the basis of the rational. This characterization of
moral personality appears early in A Theory of Justice on p. 9. It is referred to periodically
through the years between 1971 and 1993 {Political Liberalism). See for example "Kantian
Constructivism in Moral Theory: Rational and Full Autonomy," The Journal of Philosophy
11, no. 9 (September 1980), 515-535.
'"Rawls makes this point regarding philosophical and religious differences (1993, 58).
"Ronald Duska (1993) takes this as a reason to deconstruct the idea of truth, in his
discussion of Aristotle as post-modern.
'I cannot take up the obviously crucial question of priority and weighting of business
and ethical interests. One thing is clear, however. Someone who says "The heck with justifi-
cation, I'm going after the business" exhibits nothing of the desire to justify.

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