Analysis of Organization Ethics: Do They Exist? How Can We Think about Them?

By Slavitt, Evan | Southern Journal of Business and Ethics, January 1, 2013 | Go to article overview

Analysis of Organization Ethics: Do They Exist? How Can We Think about Them?


Slavitt, Evan, Southern Journal of Business and Ethics


ABSTRACT

Whether an organization is ethical or not has become an increasingly important question both in public and legislative discourse as well as in the application of tort and criminal law. Historical approaches to organizational ethics have either attempted to evade the problem or sought to use paradigms developed for individuals. This Article reviews the various models that have already been proposed and explains why those models are unsatisfactory, focusing particularly on the attempts to articulate an organizational substitute for individual intent. The article then proposes a new framework that differentiates the various aspects of organizations and clarifies how ethical questions should be framed for organizations and how to answer those questions.

But you were always a good man of business, Jacob," faltered Scrooge, who now began to apply this to himself. "Business!" cried the Ghost, wringing its hands again. "Mankind was my business. The common welfare was my business; charity, mercy, forbearance, and benevolence, were, all, my business. The dealings of my trade were but a drop of water in the comprehensive ocean of my business!"^sup1^.

I - INTRODUCTION AND OVERVIEW

Introduction

The issue of organizational ethics is not new. According to Philip Pettit, "[i]n 1246, Pope Innocent IV argued that a corporate body, or universitas, cannot be excommunicated, being only a fictional person, not a real one."^sup2^ Some years later, Blackstone came to the same conclusion . "A corporation cannot commit treason, or felony, or other crime, in its corporate capacity: though its members may in their distinct individual capacities."^sup3^ Implicit in these assertions is the premise that organizations, as such, are not subject to ethical analysis nor can they be held to ethical standards. The more specific question of the meaning of criminal liability vel non for organizations (at least with respect to crimes involving knowledge or intent) has been a thorn in the scholarly side for as long as courts have permitted corporate prosecutions.^sup4^ It has also plagued courts seeking to identify and apply international law to organizations.^sup5^

The problem is that there is no satisfactory account of ethics as applied to organizations. For some, such as Pope Innocent IV, even the phrase "organizational ethics" is a meaningless one, the equivalent of saying "desk ethics" or "chair ethics."^sup6^ As the Second Circuit recently explained the state of current international law,

From the beginning, however, the principle of individual liability for violations of international law has been limited to natural persons-not "juridical" persons such as corporations-because the moral responsibility for a crime so heinous and unbounded as to rise to the level of an "international crime" has rested solely with the individual men and women who have perpetrated it. As the Nuremberg tribunal unmistakably set forth in explaining the rationale for individual liability for violations of international law: "Crimes against international law are committed by men, not by abstract entities, and only by punishing individuals who commit such crimes can the provisions of international law be enforced." The Nurnberg Trial (United States v. Goering), 6 F.R.D. 69, 110 (Int'l Military Trib. at Nuremberg 1946) (rejecting the argument that only states could be liable under international law).^sup7^

More recently, during the establishment of the International Criminal Court, the proposal to grant it jurisdiction over organizations was rejected.^sup8^

For many, however, intuition^sup9^ indicates that the phrase is meaningful.^sup10^ In the last decade, for example, Enron has become such a symbol for organizational evil that the phrase "Enron scandal" triggers over 200,000 Google hits. Such usage strongly suggests that it is the corporation Enron itself that is being referred to in moral terms^sup11^ rather than the several individuals whose misconduct has become widely known. …

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