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Toward
Toward a holistical perception a holistical
of the content of business ethics perception
Vojko Potocan and Matjaz Mulej
Faculty of Economics and Business, University of Maribor, Maribor, Slovenia 581
Abstract
Purpose – The purpose of this paper is to offer a new requisitely holistic definition of business ethics
(BE) as a crucial component of business cybernetics and practice. The present contribution considers a
basic problem: how humans use BE to influence their business processes. Therefore, business
is/should be investigated from the viewpoint of ethics. Requisite holism of understanding and
consideration of BE in business reality is unavoidable; it can (and must) result from findings and
considerations of the interdependence between business practice, ethics, and BE.
Design/methodology/approach – In this paper, qualitative analysis is applied on the basis of the
cybernetics (e.g. especially business cybernetics), dialectical systems theory, and ethics theory.
Findings – Ethics is a crucial emotional part of human attributes. They can be viewed as the
subjective part of the starting points of any human acting/behavior process, including business. Thus,
ethics (may) have/has a crucial role in business cybernetics and practice as BE. To clarify and
beneficially use BE, one must understand relations between business cybernetics and BE, between
business practice and BE, and understand the diversity of content of BE in literature, etc. On this base
offered here is an understanding of BE, a definition of the content of BE as a specific type/part of
ethics, and a view at source of BE content.
Research limitations/implications – Content of BE. Research is limited to hypothesis and
qualitative analysis in desk research. Practical experience is considered implicitly.
Practical implications – This is a step toward development of business cybernetics with a requisitely
holistic approach founded on requisite wholeness of insight. A more specifically created and target-oriented
approach to cybernetic understanding and research of BE of business systems is encouraged.
Originality/value – This paper presents a very new approach, rarely found in main-stream
literature; a new perception and definition of content of BE.
Keywords Ethics, Business ethics, Qualitative research
Paper type Research paper

1. The selected problem and thesis

Our work on business cybernetics (BC) (Potocan et al., 2005; Potocan, 2006; Potocan and
Mulej, 2006, 2009, etc.) let us discover that researchers tend to divorce dealing with
material resources from dealing with knowledge and from dealing with ethics, especially
business ethics (BE). We will devote a later contribution to this synergy, because we feel
the need to firstly discuss some dilemmas concerning the content of BE as a crucial
component of BC. Clarification of these dilemmas might help us make a proper synergy
possible and attain requisite holism (RH) (see Table I in Section 2) of working and
behavior –, i.e. monitoring, perception, thinking, emotional and spiritual life, decision
making, and action, of humans as business persons/business systems (BS).
Our current research, based on cognitions from our previous contributions (Potocan
et al., 2005; Potocan and Mulej, 2006, 2007, 2009), and cognitions from relevant Kybernetes
Vol. 38 Nos 3/4, 2009
literature (Vallee, 2003; Francois, 2004; etc.), have merged into our present thesis which pp. 581-595
reads: humans use BE to influence their business processes. Therefore, business q Emerald Group Publishing Limited
0368-492X
is/should be investigated from the viewpoint of ethics, too. DOI 10.1108/03684920910944803
K RH of understanding and consideration of BE in business reality is unavoidable; it
38,3/4 can (and must) result from requisite wholeness (RW) findings and considerations of the
interdependence between:
.
business practice;
.
ethics; and
582 .
BE (Sections 2, 3 and 4).

Business practice provides for guidance on how broadly the RH/RW can/should be
defined in any given real situation/case, and what levels of complexity of
understanding and consideration of BE are needed for humans to attain RH of
behavior and to attain the RW of their insight (Sections 5 and 6).
RH/RW of understanding and consideration of BE in business reality can and must
be based on findings and consideration of the content issues (Sections 6, 7 and 8).
A general framework of content of BE may enable a more unified (and requisitely
holistic) introduction and application of BE in business practice.
Let us first briefly clarify our approach.

2. The law of requisite holism

Systems theory was established as a worldview and methodology of wholeness of
insight, thus as an opposite way to the usual over-specialization (Bertalanffy, 1979;
Jackson, 1987; Vallee, 2003; Francois, 2004; etc.). The increasing amount of
humankind’s knowledge has outgrown the natural human capacity to act with a
complete insight and has made narrow specialization unavoidable: narrow
specialization is beneficial for insights, and detrimental for oversights. The latter
requires RH of humans behavior and wholeness of their insight to avoid crucial
mistakes. Most of the many current systems theories deal with other topics or use other
viewpoints (Francois, 2004).
The real – total/absolute – holism of human acting/behavior and wholeness of
insight is impossible, while holism and wholeness inside a single viewpoint, which
most specialists practice is rarely sufficient for humans to succeed rather than fail
(Vallee, 2003; Francois, 2004; etc.). Therefore, humans act best with RH (Mulej and
Kajzer, 1998, based on: Mulej, 1974, 1979; see also later, including Mulej, 2007) (Table I).
We are trying to attain RH/RW in consideration of BE as a component of BC here.

3. Business cybernetics and business ethics

In Kybernetes, Vol. 34 Nos. 9/10, pp. 1496-516 we published “Business cybernetics – a
provocative suggestion” (Potocan et al., 2005). We defined that BC is specializing in

ˆ –––––––––––––––––––––––––––––––––––––––––––––––––––– !
Fictitious holism (inside a Requisite holism (RH) (a Total ¼ real holism (a system,
Table I. single viewpoint and special dialectical system, i.e. i.e. synergetic network, of
The choice between profession causing oversights synergetic network, of all and totally all viewpoints and
fictitious, requisite, and of attributes visible from other only essential interdependent attributes of the feature/event/
total holism – the level aspects) viewpoints/professions/ process as object under
of holism for considering sciences/experiences) consideration and/or
a selected topic management/control)
organizations and individuals as so-called BSs emphasizing the so-called business Toward
viewpoints rather than the natural and/or technical/technological viewpoints of a holistical
consideration of features, events and processes comprised of real life.
BE is supposed to help business people manage/control their business lives by perception
means of aspects reaching beyond knowledge into the right hemisphere of the human
brain and heart. Control is a topic of cybernetics from the latter’s very beginning of that
field of study (Ashby, 1956; Wiener, 1956; Beer, 1979; Foerster, 1987; etc.). Humans do 583
not use only their sources (possibilities) and knowledge to control/master/manage, but
their values, culture, ethics, and norms (VCEN) as well (Potocan et al., 2005; Potocan,
2006; Mulej, 2007; Potocan and Mulej, 2009).
Thus, knowledge management is not enough for success, in BC terms. Education,
training, and other forms of formation by information tackle VCEN for humans to use
VCEN not only along, but also in synergy with, knowledge and material/outer
resources. Pioneers in application of systems theory and cybernetics to
management/control did not tackle VCEN much or at all (more about that see in:
Vallee, 2003; Francois, 2004). Mulej seems to have pioneered in linking knowledge and
VCEN in the area of systems and cybernetics consideration (Mulej, 1974, 1979; see also
later, including Mulej, 2007). When criticizing the reduction of definition of objectives
of human activities to “desired objectives”, Mulej introduced the notion of starting
points and related interdependence-based process of interaction of (Mulej, 1979, 2007;
Mulej et al., 2000, 2004):
.
outer conditions (“objective starting points”, made up of needs and possibilities,
e.g. in market); and
.
human attributes (“subjective starting points” consisting of knowledge of
content, knowledge of methods, and values/VCEN).

This process takes places before objectives are defined to make them requisitely
holistically grounded – rather than merely desired. Subjective starting points cause
humans to select their viewpoints (either per profession, or per VCEN, or per profession
and VCEN, or per synergy of profession and VCEN), hopefully as a dialectical system,
as their basis to select the perceived needs and possibilities, and later on the
preferential needs and corresponding possibilities. Later on, the synergy of definitions
of the preferential needs and corresponding possibilities leads to definition of
objectives, further on of related tasks, related procedures and organization, and
resulting outcomes of the process of human activity at stake.
Thus, outcomes depend on VCEN crucially.
Literature on ethics and BE abounds, but less so about the link between VCEN and
BC, although BC reflects and supports human efforts to master their business issues,
including VCEN, especially. This is the topic to be tackled here.

4. Relation between business practice and business ethics

In the modern general and business environment the possible and/or actual
functioning – working/behavior – and results of organizations depend on how
appropriately –, i.e. with RH/RW, they attend to, and attain, synergy of legal, market,
stakeholders, and natural environment requirements in the BE of their internal and
external social and business environments (more about the link between VCEN and
Cybernetics see: Ashby, 1956; Wiener, 1956; Beer, 1979; Foerster, 1987; Francois, 2004;
K Potocan et al., 2005; etc.). These authors addressed those viewpoints well, but less so
38,3/4 their synergy.
On the basis of our experience from the business practice we feel that a rational
cognition of important internal and external requirements and meeting them in
business is insufficient for creation of “appropriate RH/RW business” (Potocan, 1998,
2002; Potocan and Mulej, 2003, 2007; Mulej et al., 2004). For RH/RW business, one must
584 also take into consideration that functioning and behavior of contemporary
organizations importantly depends on the impact all their crucial stakeholders. The
latter influence creation and implementation of the purpose, ways and methods of
organizational working and behaving both rationally and emotionally.
Organizations are permanently faced with the dilemma of how to create and assure
implementation of RH/RW of behavior and outcomes of their stakeholders. This also
depends on RH/RW of their understanding of human acting including VCEN.
Where does VCEN/BE fit in business activities? Our business practice persuaded us
that VCEN is a feeling rather than a part of the left-brain rationality/knowledge/skill.
VCEN enables humans to distinguish right from wrong. Empirical researchers see ethics
result from a synergy of behaviors, which tend to be preferred in a society or community,
as a social group, for long enough periods of time to become codified; moral rules result,
as a formal next step. They co-create a culture, i.e. values accepted/prevailing in a social
group. Thus, something, which is originally an individual attribute (i.e. individual
values), comes to be objectified as a component of the objective conditions: it becomes a
part of broader requirements imposed on individuals. Thus, it enters (or re-enters) the
individual’s starting points in values (for details concerning consideration of each
element of VCEN – but not about their synergy, also see: Wilson, 1998; Cooper and
Argyris, 2000; Bowie, 2001; Boonin and Oddie, 2004; Lafollette, 2005; etc.).
VCEN is especially important from the viewpoint of business success of
organizations – , e.g. individuals, enterprises, and all other organizations as BSs. As
BSs they create the economic basis of social life and therefore belong to the most
important organizations of modern society, which have a crucial influence on human
development (Potocan, 2002, 2003, 2006; Potocan and Mulej, 2006, 2007).
In literature ethics of work and behavior of BSs is in literature called BE. Literature
about ethics/BE considers extensively various areas and/or aspects of BE as
organizational ethics (and/or BE of BSs) such as employees’ ethics, organizational
relations ethics, functional ethics, etc. (For details concerning consideration of each areas
and/aspects also see: Ulrich, 1997; Shea, 1998; Crane and Matten, 2003; Jennings, 2005;
Potocan and Mulej, 2005; Trevino and Nelson, 2006; Stanwick and Stanwick, 2008; etc.).
But probably neither theory nor practice offer a solution for attempting to consider
BE more holistically, including the consideration of functioning and behavior of
organizations as BSs, or offering a unified definiton of BE (Bowie, 2001; Lafollette,
2001; Potocan, 2002; Caroselli, 2003; Potocan and Mulej, 2005, 2007; Crane and Matten,
2006; etc.). Diversity prevails.

5. Diversity of contents of business ethics

In modern literature, many diverse definitions of the term BE can be found, as used in
various contexts and for different purposes and denoting different contents (Gensler,
1998; Lafollette, 2001, 2005; Jennings, 2005; Potocan, 2006; Shaw, 2007; etc.). For
example, Webster Dictionary gives 21 different definitions for BE (Gove, 2002).
 Some of most popular definitions of BE include: Toward
. BE is the branch of ethics that examines ethical rules and principles within a a holistical
commercial context (http://en.wikipedia.org/wiki/). perception
.
BE is the field of ethics that examines moral contraversies related to the social
responsibilities/of business practice, in any economic system (www.merriam-
webster.com/dictionary).
585
.
BE is the study of business situations, activities, and decisions where issues of
right and wrong are addressed (Crane and Matten, 2003).

When discussing BE we must consider that BE is differently understood and defined in

different sciences and even inside the same sciences (Bowie, 2001; Lafollette, 2001;
Potocan, 2002, 2006; Jenklin, 2004; etc.), e.g.:
.
In economics and business economics, as well as in most of the natural and
technological sciences, they use the term ethics of organization solely to deal with
moral suitability of the working and behaving of the organization.
.
In organizational and management theories they make a distinction between
organizational ethics and BE and they use both terms. In the modern theories
(and literature) about organization and management most authors use the
term BE.

In the modern business environment, demand for more ethical business processes and
actions (known as ethicism) has been increasing, especially in last 20-years (Darwall
et al., 1997; Rosenthal and Buchholz, 2000; Jennings, 2005; Lovell and Fisher, 2005;
White, 2005; Ferrell et al., 2007; etc.). At the same time, the environment has continually
pressed BSs to apply and/or improve BE of their working and behavior (Cooper and
Argyris, 2000; Cooper and Vargas, 2004; Brooks, 2006; Trevino and Nelson, 2006; etc.).
In organization and management sciences, BE is mostly understood as follows
(Cooper and Argyris, 2000; Daft, 2002; Cole, 2004; Ferrell et al., 2007; etc.). BE is closely
related to the philosophy of business, which deals with the philosophical, political, and
ethical underpinnings of business and economics. It is also closely related to political
economy, which offers economic analysis from the political, normative, and historical
perspectives. As the organizational practice and career specialization, the BE is
primarily normative. In academia descriptive approaches are also taken. It takes ethical
concepts and applies them in specific business situations. Like political economy, but
unlike the philosophy of business, BE is a normative discipline. It makes specific
judgments about right and wrong. It makes claims about what should be done and what
ought to not be done. It is less concerned with explaining or describing ethical aspects of
events – called descriptive ethics – or analyzing ethical concepts to achieve a deeper
understanding of their meaning and justification – called analytical ethics.
Various known considerations of BE also differ crucially in authors’ understanding
and definition of business (Baumol, 1993; Daft, 2003; Hartman, 2004; Jenklin, 2004;
Brooks, 2006; Potocan and Mulej, 2006; Baumol et al., 2007; etc.). They, thus, define the
goals of their consideration of BE of organization as, e.g.: economic, business,
organization, management, sociological, psychological, etc. context/s of organizational
working and behavior. Thus, for example in Anglo-Saxon theory and practice about
BE there are (serious) differences between Europe and US concerning understanding,
K approaches, schools and research of BE (more about differences, see in Crane and
38,3/4 Matten, 2003; Jennings, 2005; Potocan, 2006; Ferrell et al., 2007; etc.).
In literature the basic points of discussing BE include: general BE, professional
ethics, international BE, and ethics of economic systems (for details concerning
consideration of each point see: Ulrich, 1997; Singer, 1999; Cooper and Argyris, 2000;
Bowie, 2001; Lafollette, 2005; etc.). Their discussions focus on many different
586 theoretical issues, like: conflicting interests, ethical issues and approaches, compliance,
ethics programs, ethics policies, and ethics officers, etc.
The discussion of BE often depends on the selected religious views held about BE.
The Anglo-Saxon theory and practice includes, mostly, the following religion-based
perceptions of BE (Quinn and Taleaferro, 1987; Davies, 2000; Velasquez, 2005; etc.):
Jewish, Christian, Muslim, and Buddhist BEs. But such understanding of BE is
connected to, and depends on, numerous, especially subjectively defined conceptions,
contexts and methodical starting-points (Lafollette, 2001; Caroselli, 2003; Trevino and
Nelson, 2006; etc.). For that reasons, we will not discuss it in detail, but more to our
views.

6. Our understanding of business ethics

In our research of organizations and BC we use BE attain RH/RW in attempts to
understand and consider organizations and influences over them. Because the meaning
of BE is still not unified, our next research question reads:
RQ. What is BE from the viewpoint of organizations and how to define it for our
research?
For the purpose of our research, the different definitions of the content of BE will be
classified into five groups all of which link human emotional attributes with
organizational functioning in BC:
(1) BE as a base or component of the starting points of organizational functioning
(hence: backing the objectives emotionally).
(2) BE as a factor (e.g. influential element/attribute) of organizational functioning.
(3) BE as an interest supporting the activity.
(4) BE as a process of making and applying BE.
(5) BE as a result of organizational functioning.

BE as a factor of organizational functioning is what we are focusing on here. In doing

so, we use BE as a component of the starting points of the influential organizational
stakeholders, resulting in objectives with crucial impact over functioning of the
organization under consideration. Therefore, we can define BE as reflecting the interest
of individuals, units, or the entire organization into which they are united to be
formed on the higher organizational levels of work in the BE process. BE is also a
process: it is not an inborn attribute with no impact from conditions of life.
BE as a result provides information about the actual functioning and about the
necessary measures/criteria for assessment of the planned and actual situation(s).
Figure 1 shows business cybernetics view of organization’s BE.
Thus, one may understand and requisitely holistically define BE on the basis of
a synergetic understanding, and therefore use content definitions mentioned above.
 Business Cybernetics Toward
a holistical
Business ethics – our understanding perception

587
Starting Output
Input
points BE in Working/Behavior including
E.g. BE as
including E.g. As interest made and applied BE as
a factor
BE result

BE, as a base of working of an organization in

synergy with knowledge and conditions Figure 1.
Business cybernetics’ view
of organization’s
BE’ contents

A more detailed definition of the term BE depends on the selection and use of the
methodology for its consideration, i.e. the selected (dialectical system of) viewpoints,
methods, methodologies.
It makes sense to analyze BE within this framework as a network of all selected
significant viewpoints, levels and areas of activity, including their synergies (we will
address the methodological issues another time).
In the case of BE, we consider the acting of BSs from a dialectical system as a
synergetic network of all selected crucial viewpoints (e.g. organizational, management,
economic, business that enable the RH/RW of humans’ consideration/acting matching
the BS’s objectives. This is in line with Table I.
Based on the above-mentioned findings of various authors (Bowie, 2001; Lafollette,
2005; etc.) and our presented starting points, BE can be best aggregated in a definition,
in the broadest terms, as follows (Potocan, 2004, 2006; Potocan et al., 2005):
.
Organizational BE (in our definition) can be described in the most general terms
as an emotional attribute of people involved in functioning of the BS under
consideration.
.
Organizational BE is the general (requisitely holistic) and, as a rule, synthetic
attribute that is basically aimed at the functioning of the BS, along with
professional assessment and control/directing/management of, BS’s functioning.
. BE is expressed in the selected viewpoint (or, hopefully, dialectical system of
viewpoints) defining both the objectives and their realization.

The above-mentioned cognitions about BE are formed to meet the needs of

consideration of organizational and individual BE concerned with functioning of BSs.
K BE emphasizes the so-called business viewpoints rather than the natural and/or
38,3/4 technological viewpoints of consideration of features, events and processes of real life,
especially business. In a RH/RW definiton, BE includes these viewpoints in synergy.
For our research we defined four organizational levels of consideration of BE. These
levels are:
(1) BE of organizational members.
588 (2) BE of organizational groups (and/or departments).
(3) BE of organization.
(4) BE of organizational environment (e.g. BE of inter-organizational networks, BE
of important organizational environments, etc.).

The individual human being’s BE/VCEN is the basic building block of organizational
BE. The next higher organizational level is the group’s or department’s BE. These are
synergies of BEs of individuals who work together to perform group tasks. The next
organizational level deals with the BE of the entire organization. The organizational BE
is a synergy of BEs of groups or departments. The BEs of organizations can be
aggregated into next higher organizational level, which is the BE of inter-organizational
groupings and communities. BE of an inter-organizational groupings emerges as
synergy of BEs in the group of organizations with which organizations at stake interacts
with their BE. BEs of other organizations in the community also make an important part
of BE of organization’s environment. Government, non-government and other BE’s
environments also belong in a RH acting.
Now: what makes our definition of BE different?

7. Our definition of business ethics versus others in terms of the RH/RW

Those other BE theories that we detected focus on the BE at the organizational level,
but they fail to consider BE of individuals, groups and environments of BS (more about
different BE theories, see for example, Lafollette, 2001, 2005; Bowie, 2002; Boonin and
Oddie, 2004; Potocan, 2006; Lawrence and Weber, 2007; etc.). When including all levels,
one can better attain RH/RW in understanding the BE of organizations including their
specific characteristics (Potocan, 2002; Potocan and Mulej, 2005, 2007).
Why should individuals’ ethics be included in BE in theory? They make it. Though,
from our viewpoint, BE theory does not consider the BE of individuals, but considers
them only in their aggregate. BEs of organizational members are important, although
they are not the primary focus of research of organizational BE. Therefore, the BE of
organizations arises from the methodological viewpoint, as a mezzo theory, because it
tackles the integration of both micro and macro levels of BE consideration. But at the
same time, BEs of individuals and BEs of groups impact the organizational BE, and the
organizational BE in return influences BE of individuals and BE of groups. This may
not be left aside.
Therefore, another open question is important for holistic definition of BE’s content
that the authors have raised in the different discussion in the past it reads: how have
been the following (basic) relations between business and BE defined so far (Shea,
1998; Potocan, 2003; Jennings, 2005; Trevino and Nelson, 2006; Boatright, 2006; Crane
and Matten, 2006; etc.)?
 Ethics for business: this relation is based on presumptions; it gives an absolute Toward
value to defined moral standards of the society and their related decisive influence of a holistical
the society (i.e. their influential members and/or moral authorities) on BSs. In this case,
the environment tries to impose the prevailing or chosen moral standards in BSs in a perception
way that enables the realization of its interests and thus the realization of its desired
direct or indirect benefits. This relation was in BSs the prevailing form of realization of
moral starting-points of the BSs social environment in the early phases of economic 589
development until the industrial revolution.
Ethics of business (or ethics in business): because of the crucial role of BSs in the
present time, from the industrial revolution to social responsibility movement in the
1960s, moral standards of most influential organizational stakeholders prevailed in
formation of BE. In this way their interests were realized. In the formation of BE of BSs
in this period, mere lip service was paid to wider social interests.
BE: formation of BE after 1960 until now is based on the idea that pluralistic
formation of BE tries-on the bases of social consultation and enforcement of ethical
co-dependence-to consider equally all different, but important, interests (e.g. interests
of organizations and their important environments). Characteristic for the development
of BE in this period, is also the change of the prevaliling descriptive approach to BE of
the 1960s into a more or less obligatory normative role defining the modern
organizations. In this framework, BE (called corporate social responsibility) is a kind of
BE becoming a crucial competitive advantage in the current economic crises times,
natural environment crises times, and an attribute of BSs in the center of interest in the
broadest international community.
In the functioning of modern BSs all mentioned relations have a synergetic influence
on BSs and on the entire society.
But the definition of BE alone does not respond to the question: how can a definition
of BE match RH/RW and hence be suitably applied to the organzational working and
behavior in terms of its content? Let us leave this issue open for a next phase to follow a
requisitely unified definition of content of BE.

8. The specific content of business ethics

8.1 Ethics theory’s framework for business ethics’s content
Understanding and consideration of BE depends on ethical cognitions, which are used
as a basis for one’s dealing with the chosen target field from a VCEN viewpoint. From
the discussion of ethics, we will choose its basic theoretical framework to consider BE.
In theory, there are some well-recognized approaches to the content of ethics (Lafollette,
2001, 2005; Jennings, 2005; Shaw, 2007; etc.): philosophers sometimes call it the “science
of morality”; some theologians consider ethics a branch of theology. Ethics is
inseparable from economics in some theories (but not in all of them), and professionals
usually use or interpret “ethics” to refer to elements of professional practice that are
parts of dispute resolution.
For our research we understand ethics as a general term for what is often described
as the “science of morality”. In philosophy, ethical behavior is that which is “good”.
The western tradition of ethics is sometimes called “moral philosophy”. This is one of
the three major branches of philosophy, alongside metaphysics and epistemology
(Kagan, 1998; Lafollette, 2001, 2005; Bowie, 2002; Chadwick and Schroeder, 2002;
Boonin and Oddie, 2004; Horgan and Timmons, 2006; Shaw, 2007; etc.).
K Philosophers (in analytic philosophy) today usually divide ethics (and/or ethical
38,3/4 theories) into three general subject areas: metaethics, normative ethics, and applied
ethics (for details concerning consideration of each area, see for example, Ulrich, 1997;
Kagan, 1998; Wilson, 1998; Ferrell et al., 2007; etc.). By using the conceptual tools of
metaethics and normative ethics, discussions on applied ethics attempt to resolve
various controversial issues. In practice, the lines of distinction between them are often
590 blurry.
Philosophers have also developed a number of competing ideas (e.g. doctrines) to
explain how to choose what is best for both the individual and society (Kohlberg, 1976;
Shea, 1998; Singer, 1999; Jennings, 2005; Trevino and Nelson, 2006). No ideal option has
gained universal consensus. In theory and practice several (different) major
philosophical doctrines are known, such as: altruism, divine command ethics,
consequentialism, etc. (for details concerning consideration of each doctrine, see for
example, Kohlberg, 1976; Shea, 1998; Singer, 1999; Jennings, 2005; Trevino and Nelson,
2006; etc.).
In theory several sub-branches of applied ethics also exist concerning the ethical
problems of different professions (for details concerning consideration of each doctrine,
see for example, Fredrick, 2002; Caroselli, 2003; Brooks, 2006; Trevino and Nelson,
2006; Lawrence and Weber, 2007; etc.). Each (sub-) branch characterizes its own issues
and problems that may arise in the ethical codes of the given profession, and define its
members’ common responsibility to the public, or to obey social expectations (like, e.g.
BE, medical ethics, accountancy ethics, etc.).
In theory, resolving particular applied ethical issues should be easy, including BE
content. Unfortunately, there are many rivaling normative principles from which to
choose, many of which yield opposing conclusions. The usual solution is to consult
several representative normative principles on a given issue and see where the weight
of the evidence lies. Hopefully, long-term and broader criteria of RH/RW are applied.
Arriving at a short list of representative normative principles in applied ethics is a
complex and complicated action (Potocan, 2002, 2006). The selected principles. must
not be too narrowly focused, and must also be seen as having merit by people on both
sides of the given applied ethical issue. Some important principles are, e.g. personal
benefit, social benefit, principle of benevolence, etc. (Ulrich, 1997; Velasquez, 2005;
Potocan and Mulej, 2007; Trevino and Nelson, 2006; etc.).
Modern theory and practice discuss ethics and/or BE using (specific) bases of ethics,
especially concerning applied ethics, such as: ethics by cases (Shea, 1998; Jennings,
2005), political virtues (Crick, 1982, 2002), situational ethics (Ross, 1995; Simons and
Usher, 2000), descriptive ethics (Singer, 1999; Shaw, 2007), and the analytic view of
ethics (Bostock, 2000; Simons and Usher, 2000; Bowie, 2002; etc.).
The contributions of many authors of ethics theories, which provide for the
necessary general ethical content framework for the need of the target discussion about
BE, are shown in Figure 2. It opens the issue of content of BE.

8.2 Impacts on the content of business ethics

The content of BE in single BSs is defined by ethics theory cognitions (as the general
part of the content of BE – see Figure 2) and specific needs and demands of
organizational working, which are defined with the (dialectical) system of all important
and selected organizational factors.
 Ethics Toward
Applied ethics
a holistical
Metaethics Normative ethics
(With two basic areas: (With two basic areas:
(e.g. With different perception
sub-branches of
e.g. metaphysical issue; theory of conduct,
applied ethics, e.g.
psychological issues) theory of values)
business ethics)
591
Different philosophical doctrines
(for explaination how to choose what is best for both the individual and society)

Divine Consequen- Virtue Social Etc. – Other

E. g. : Altruism
command ethics tialism ethics contract theory possible doctrines

Different normative principles

(which can be used for representative normative principle)

Personal Social Principle of Principle of Principle Principle of Etc. – Other possible

E.g.:
benefit benefit benevolence paternalism of harm honesty normative principles

Specific Bases of ethics (especially for Applied Ethics) Figure 2.

Ethics theory framework
Ethics Political Situational Descriptive Analytic view Etc. – Other possible
E.g.:
by cases virtues ethics ethics of ethics bases of ethics
for BE’s content

Organizational BE emerges from the interaction based on interdependence of general

and specific organizational factors (Figure 3) (Potocan, 2002, 2003, 2006, for details
concerning consideration of each factor – but not in their synergy, also see: Shea, 1998;
Singer, 1999; Bowie, 2001; Crane and Matten, 2003; Daft, 2003; Cole, 2004; Armstrong,
2006, etc.).
As shown in Figure 3, the environmental factors with (important) influence on the
definition of BE are called general factors. The important general factors include:
organizational factors, historical and cultural factors, industrial factors, and economic

General factors
Organizational Historical and cultural

Specific factors
BE of
organization
stakeholders

Structural
VCEN of BE of
factors of
organization organization
organization

Content
factors of
organization
Figure 3.
Factors that influence on
organizational BE
Economic Industrial
K factors (Potocan, 2002, 2006; Potocan and Mulej, 2005, for details concerning each
38,3/4 general factor – but not in their synergy, see for example, Cooper and Argyris, 2000;
Daft, 2002; Jennings, 2005; Stanwick and Stanwick, 2008; etc.).
The general factors describe important characteristics of internal or external
organizational environments, including the needs and demands of environments
concerning organizational functioning, including BE. Their details exceed our frame of
592 discussion.
On the other hand, the specific BE factors describe important characteristics of
organization, and needs and demands of organizational stakeholders concerning
organizational functioning, including their views on BE (Potocan, 2002, 2006; Potocan
and Mulej, 2005). The basic specific factors include: organizational VCEN, structural
factors, contextual factors, and characteristics of BE of organizational groups and/or
organizational stakeholders (e.g. BE of all organizational levels being considered) (For
details concerning each specific factor – but not in their synergy, see for example,
Cooper and Argyris, 2000; Daft, 2002; Jennings, 2005; Stanwick and Stanwick, 2008; etc.).
VCEN of organization: for some further thoughts about VCEN of an organization
see in Section 4 at paragraph 4.
Organizational structural factors (mainly) define the internal organizational
characteristics. They create a basis for measuring and comparing organizations.
Important structural factors include: formalization, specialization, hierarchy of
authority, centralization, professionalism and personnel ratio, etc.
Organizational content factors characterize the entire organizations. They describe
the organizational setting that influences and shapes the structural dimensions (e.g. its
business program, markets, etc.). Important content factors include: technology, skills,
size, objectives and strategy, and environment. Content dimensions can be confusing
because they represent both the organization and the environment, but definition of
environment in that case is based on organizational understanding of the environment.
Therefore, they can be envisioned as a set of overlapping elements that underly an
organization’s structure and work process.
Danger of oversight requires understanding to match RH/RW. It requires us to
consider also that characteristics of BE of organizational groups make the synergetic
entity of all important factors that create and influence the organizational BE.
The interaction and synergies of all crucial factors produce different BEs in different
organizational parts (e.g. organizational levels, areas), and different organizations, and
cause changes in BE over time. They include: factors with influence on BE of
organization and/or factors of BE of organizational stakeholders, factors of different
organizational levels of research, factors of different areas of research, interaction of all
factors with influence on BE, interaction of all factors of BE, etc.

9. Some conclusions
In a RH approach to research of business practice and development of business
cybernetics, consideration of knowledge is not enough for RW of cognitions. Ethics,
especially BE, is equally crucial as knowledge and outer/objective conditions are, because
humans are both rational and emotional and spiritual beings, and are so in synergy.
Ethical behavior of humans and their organizations belongs to preconditions of
their success, especially in a longer term and under severe competition. Once this is
self-evident, the detected diversity of definition of contents of BC is a surprising fact.
 These facts force us to create our own definition of BEs’ content. This definition Toward
matches RH/RW better than others do, because we include more general and specific a holistical
factors that we summarize in Figure 3, and we include their synergies to, as well as BE
of organizational units and members, and environments of BSs. perception

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Corresponding author
Vojko Potocan can be contacted at: vojko.potocan@uni-mb.si

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