Virtue at Work: Ethics for Individuals, Managers, and Organizations

by Geoff Moore

And that, naturally enough, involves developing those in her team who are architects so that they become better architects, and particularly so in the case of the new recruit who is only just starting out.

In constructing a narrative (the story of Elaine’s life), and in understanding who she has become (her character), organizations have played an important part. An interesting question related to this would be whether she is the same person at work as she is at home (and as she is when the raft is plunging through the rapids). Another interesting question would be whether she has pursued the same kind of projects and ambitions throughout her life, and her commitment to these. Finally, just as we did with DesignCo when asking whether it was a ‘good’ organization, and when we asked what it means to be a ‘good’ manager, we might want to ask what it means to be a ‘good’ person and whether Elaine could be described in that way.

This chapter explores the ubiquity of organizations in our present social order, offers a definition of a formal organization and considers the reasons organizations exist.

Clearly there can be different understandings of organizational purpose. But, under normal circumstances, these differences will not be so great as to prevent a common effort towards the achievement of some reasonably common understanding of what the organization’s goals are.

Second, this does not imply that the common purpose is fixed for all time.

Indeed, it is likely that there will need to be a continuing debate about the purpose of any organization; why does it exist, what good is it serving?

One such explanation, hinted at above in relation to the Industrial Revolution though true even in pre-industrial societies, is that organizations come into being when the technology required becomes sufficiently complex that it is more than one person can handle. It would be difficult to imagine one person designing and making a car, for example, simply because the range of knowledge and skills required would be too much for one person to learn and be able to exercise with the requisite level of skill.

A second explanation is that organizations exist because they may well be able to offer their members inducements (wages/salary and perquisites) which are worth more to them than the contributions it asks of them (principally the time devoted to work). Thus, an organization may be able to create a whole which is greater than the sum of its parts, and therefore be able to reward its members accordingly.

At a very simple level, from a personal perspective, individuals might well earn more by working for an organization than they could by working for themselves. Organizations, in the terminology of ‘shared value’ which was mentioned briefly in Chapter 1, are valu...

A third explanation is perhaps the best known and goes under the heading of ‘transaction cost economics’. At its simplest this explanation is that an organization ‘can mediate economic transactions between ...

So the principal advantage of formal organizations derives from their ability to reduce the costs of creating and monitoring a vast set of detailed contracts under irreducible and inescapable uncertainty. Markets, in this sense, have limits.

In summary, organizations come into existence for a combination of reasons—because of the level of complexity which is beyond one person to handle, because of their ability to add value over and above that which any one individual could achieve, and because of their inherent efficiency and lack of uncertainty over a purely market-based system of individual transactions. So, we know why organizations exist and we have a working definition of a formal organization. But that is not typically how we think about organizations. To understand that, we need to consider a rather different approach.

The reason for covering these metaphorical and theoretical perspectives is that this book introduces another ‘way of seeing’, a different metaphor or a different theory of organizations and management and, indeed, of life in general. That, at least, is the claim which is being made concerning MacIntyre’s work and its application in the field of management and organizations. Of course, it would be nice to be able to say that this is the theory of organizations and management; that it explains everything; that, if followed, its predictions would lead to some kind of ‘truth’ such that, because it relates to ethics, would make organizations, management, and us as individuals ‘better’ in some sense. However, given all that has been said above, this would clearly be an overstatement. So the claim about the way of thinking and seeing, the metaphors and theory which are being introduced in this book, is only that it does have something different and important to say to individuals, to managers, and to organizations. It is one way of seeing, not the only one, but, so the argument will go, a very important and insightful one.

In summary, ‘the triumph of organization is not so much that it thwarts morality, but that it redeploys it toward the pursuit of technical ends’, and this is reinforced through the vocabulary of organization with ‘its capacity to dehumanize the objects of bureaucratic operations’.30 In other words, to refer to individuals as groups such as customers or competitors makes them impersonal and no longer ‘real Others’.

These terms each have similarities and differences in emphasis so that, for example, the difference between CSR and Business Ethics can be thought of as a difference in starting points.

Behind this perspective was a theoretical orientation which was explicitly normative:43 such impacts on workers and communities were wrong and needed to be put right, and while this might lie within the province of government overall, those organizations which caused the problems, and which potentially had the resources to resolve them, should do so. That there would be costs involved, and that these would have to be met by the businesses themselves, thus lowering profits, did not seem to be a concern.

One of the criticisms of CSR as a concept is that it is inherently vague. What, precisely, do the ‘social’ responsibilities of an organization actually mean? It is for this reason that the term social is sometimes dropped, and the more straightforward term ‘Corporate Responsibility’ used. However, by linking CSR specifically to stakeholders, this became less of a problem. Indeed, Ed Freeman,44 one of the originators of what became known as stakeholder theory, has suggested that CSR would be better understood as referring to Corporate Stakeholder Responsibility.

This move to defining CSR in terms of stakeholders allowed it to become more concrete.46 It became possible to define which stakeholders the organization felt it owed a responsibility to—typically shareholders, employees, customers, suppliers, and the local community, although recognizing that other stakeholders, such as government, the media, non-governmental organizations, competitors, and perhaps also the ecological environment, could also have an impact and needed to be taken into account in decision making.

This was the ‘nexus of contracts’ approach mentioned above, with managers on behalf of the organization contracting with each of the stakeholders. But this categorization and understanding of stakeholders also enabled the possibility of measuring the impact upon them of various CSR projects or programmes.

This tighter and tighter coupling of CSP with CFP meant, of course, that CSR had moved from its earlier concerns over the macro-social effects of business activity to organizational-level concerns over its effects on financial performance.

This is not to say, however, that the strategic approach to CSR does not have its advantages. As noted, by tying CSR into an organization’s strategy, and hence potentially leading to a competitive advantage, it encourages the attention of managers, and potentially legitimizes the activity in the eyes of shareholders. This has been encouraged not only by this ‘instrumental’ stakeholder approach51 (that stakeholders are means to the end of conventional organizational objectives such as, in the case of business, the maximization of shareholder value), but also by influential papers in the management literature such as those by Michael Porter and Mark Kramer in the Harvard Business Review.

Perhaps a helpful way of looking at this from a practical perspective is that organizations are likely to have a range of CSR projects or programmes.58 Some may well be generated from a strategic perspective, but others are carried out either because the organization is forced to do them by regulation or, perhaps, because of pressure from particular stakeholder groups, and then there are others besides which are generated because the organization feels it ought to do them, akin perhaps to the ‘macro-social’ altruistic perspective covered above.

More technically, ethics, on this understanding, has become purely consequentialist if not Machiavellian. In other words, ethics and its embodiment in CSR and stakeholder theory, has been ‘captured’ by business and turned to its own advantage. And that should make us profoundly concerned.

But surely we might be better with an approach which does ask these fundamental kinds of questions, which links directly from the ‘core business’ of the organization to the common good of society and how the organization contributes to this.

In both cases, however, these ethical theories offer principles by which one might come to a decision.

Another early pioneer of introducing virtue ethics in general, and MacIntyre’s work in particular, to business ethics, identified four problems with principle-based ethics: it does not handle well the question of ethical motivation (‘why should I be good or do right?’); inherently it offers generalized solutions to specific problems; Kantianism and Utilitarianism, despite their individual claims to an irrefutable logic, often lead to mutually incompatible solutions; and finally, while business ethics tends to be predominantly utilitarian (as we saw in the critique of CSR towards the end of Chapter 2), it tends to a corrupt form of pure Utilitarianism, and so regresses to a kind of Machiavellian calculation in which ends, which have been decided beforehand, justify the means.

That is to say that while principle-based ethics starts with the question, ‘What should I do?’, virtue ethics starts with the question, ‘What kind of person am I or do I want to be?’, which, of course, links directly to the notion of character. But we immediately need to clarify this by saying that actions are also important to virtue ethics. Actions lead to outcomes which enable us (or perhaps otherwise) to achieve our purpose in life (we will come back to the idea of purpose in a moment). Actions also reinforce character.

Actions, however, as well as being important in determining character, also play a role in enabling us to achieve our purpose in life. This idea of purpose is an important second component of virtue ethics, so it is worth spending some time on it. Aristotle held that every rational activity should aim at some end or good, in other words that it should have some purpose to

What, then, of a person? Could we make the same kind of analysis and judgements as with a knife, washing machine, or car? Clearly, this is much more complicated—but not necessarily impossible.

The ancient Greeks even had a term for it; the ultimate purpose or good for an individual was, in Aristotle’s terms, eudaimonia, and, although translation is not straightforward, MacIntyre suggests that it means something like, ‘blessedness, happiness, prosperity. It is the state of being well and doing well, of a man’s being well-favoured himself and in relation to the divine’.16 So one’s purpose in life is to become the sort of person who exists in this kind of state or condition.

The Greeks had a word for this idea of purpose—they termed it telos, from which we get the idea that virtue ethics is a teleological theory of ethics. Using this terminology, we could say that an individual engages in a number of activities (later, we will call them practices) each of which has its own telos and which, in combination and in the ideal, lead to the individual’s achievement of eudaimonia.

Again, this is quite a broad definition, and says nothing about what individual virtues there might be; we will need to return to that below. But this definition does tie together the ideas of virtues being qualities of an individual which, together, form their character, and which then enable the individual to achieve their purposes in life. In other words, to be a good landscape painter, musician, doctor, life partner, father requires more than just a particular set of skills or capabilities; it also requires certain traits of character, certain virtues.

Virtue ethics, then, is actor- or person-oriented and to do with the development of character; it is associated with the idea of having a set of purposes in one’s life which may be achieved partly through the possession and exercise of the virtues, leading to some overarching purpose, the achievement of eudaimonia.

A fourth component of virtue ethics follows from these first three. As we develop our characters, we exercise the virtues so that they become ‘second nature’ to us; they become, in other words, habitual. And this means that what we desire, and how we think and feel, all blend together, so that we generally desire good things and are able to act on those desires.

And this brings us to a fifth component of virtue ethics. We already noted in the description of a knife and its purpose that we could determine whether it really was or was not a good knife only by using it over an extended period of time.

This suggests that, as we set out in life, we have only a partial understanding of what a good life is,23 and what the purposes which we might pursue within it might be, and that it is only in the living of it that we understand this more fully—‘what more and what else’ it might be.

Another way of describing this is to say that we can begin to tell the story of our lives, starting from some initially very preliminary idea of what a good life for us might be. But, over time, we may well become clearer on what projects and purposes we wish to pursue to become, in a phrase that is rather overused nowadays, what we were ‘always meant to be’. It is in that sense that we can describe our lives as being on a narrative quest.

But a sixth component of virtue ethics is that it does not just operate at the personal level; in addition, the community occupies a central part. In ancient Greece, for example, where the city (the polis, from which we get our words metropolis and politics) was both a residential and political community, ‘the virtues find their place not just in the life of the individual, but in the life of the city and…the individual is indeed intelligible only as a [political animal]’.

Virtues, in other words, enable us to ‘fit into’ the various communities of which we are a part. Indeed it might even be argued that virtue ethics ‘begins with the community as the ethical base rather than individuals existing in isolation. Within a community, people occupy recognised roles, and these roles in turn include ethical obligations. To fulfil such roles well, people need to develop virtues within themselves’.

There must be a link, if you like almost an intertwining, of the telos pursued by individuals and by their community in its shared sense of telos. Probably the best way of describing this is that the good for individuals and the common good must be interrelated.

And this indicates the essentially positive nature of the virtues and of virtue ethics. It is about striving for excellence, about doing one’s best both individually and for the benefit of the community. And it is through the pursuit of excellence in all the activities in which an individual engages that her character is developed, and she is enabled on her journey towards her own telos within a community which provides the social context of her life.

This helps in making it evident that in virtue ethics there is no direct link from virtue to action; we cannot say that the courageous individual, for example, will always act in a particular way, or even in a particular way in a specific situation, because there are always so many other considerations to be taken into account before an action is decided upon.

If we follow this approach, we can say the following about an organization, that it ‘is not merely a passive container that holds the virtues of its members, but rather it provides a more generative (or perhaps deleterious) context in which organizational members interact in ways that prompt, enable and/or enhance (or perhaps diminish or inhibit) virtue’.

Inherent in virtue ethics, as we have seen, is the idea that we have various projects and purposes in our lives which lead us, via our narrative quest, to understand what more and what else the good life for us might be, in pursuit of our true end (eudaimonia).

We have also noted that, in our pursuit of this, the community or communities of which we are a part play an important role, and hence we developed an understanding of the idea of the common good.

And following Aristotle,1 MacIntyre makes a crucial distinction between two different kinds of goods. The first kind is internal goods, the second external goods. What are they, and what is the difference between them?

Within this description, we can see the two kinds of goods which MacIntyre refers to. Internal goods are those specifically to do with chess, to do with a particular kind of analytical skill, strategic imagination, and competitive intensity. External goods are, in this case, candy. Now we might immediately react to this by saying that candy is actually bad for the girl, so that it cannot be a good in the sense intended. MacIntyre was writing at a time before concerns over the sugar content of food and childhood obesity became prevalent, but even so we might suspect that he used the example deliberately to emphasize the point that we often mistake which kinds of good we should aim for, and that external goods, while highly desirable in one sense, can be bad for us if we seek too much of them.

MacIntyre makes two further points about internal goods: they are internal because we can specify them only in the terms of the activity of which they are a part—chess in this instance—and because it is only by taking part in the practice of chess that we can really appreciate what these internal goods actually are.

This indicates that internal goods are of two kinds. First, there is the good product or, we may add in an organizational context, the good service. The internal good of the practice of architecture in which Elaine is engaged is the provision of excellent buildings: fit for purpose, aesthetically pleasing, congenial to their surroundings, and as ecologically sustainable as possible. Second, however, there is the internal good which involves the perfection of the practitioners engaged in the craft or practice. Now ‘perfection’ may seem to be a rather strong term, and we might more naturally think of this as to do with the development and flourishing of individuals. The point, however, is that it is by pursuing excellence in the products or services that, in that very process, individual practitioners are also developed as people.

What, then, about external goods? As we have seen, candy is one example, but more generally external goods are such things as fame, reputation, money, and, in a business context, profit. Perhaps most generically we can characterize external goods as involving success in some way or other, whereas internal goods involve the pursuit of excellence—the chess-playing child, we may hope, will come to have reasons for ‘trying to excel in whatever way the game of chess demands’.