Anton A. van Niekerk

Transcription

1 Can more busi ness eth ics teach ing halt cor rup tion in com pa nies? Anton A. van Niekerk Director: Centre for Applied Ethics Dept. of Philosophy University of Stellenbosch Pri vate Bag X1 Matieland 7602 South Af rica Abstract This ar ti cle deals with the ques tion of whether an in creased teach ing of busi ness eth ics can/will have a pos i tive ef fect on the fight against cor rup tion in com pa - nies. It is writ ten from a (South) Af ri can per spec tive. Sta tis tics about the alarm - ing state of cor rup tion in South Af ri can busi nesses are pro vided in the be gin - ning. A He geli an ap proach to the prob lem, in terms of which the ory can and does in flu ence prac tice, is com pared to a Marx ist ap proach, in terms of which the ory is only a re flec tion of prac tice. The au thor chooses a po si tion that me di - ates be tween these two ex tremes. In the end, he de vel ops a model that re lies heavily on the idea of an eth ics of re spon si bil ity that draws on Ar is totle s idea of phronesis (prac ti cal wis dom based on de lib er a tion). The prac ti cal im pli ca - tions of these ideas for the uti li za tion of busi ness eth ics teach ing in com pa nies are con se quently spelt out. While more teach ing of this dis ci pline can not guar - an tee better mor als in a com pany, it can better equip all in volved to deal with the ever-in creas ing moral prob lems that busi ness peo ple have to deal with. There can be no doubt about the se ri ous ness of the cri sis in mo ral ity faced by both gov ern ment and busi ness on the con ti nent of Af rica, and in South Af rica in par tic u lar. To il lus trate: Trans par ency In ter na tional has de vel oped a so-called per cep tion in dex of cor rup tion in dif fer ent coun tries. Busi ness peo ple s im pres sions of the lev els of cor - rup tion in a coun try are thereby mea sured. The higher the fig ure, the worse the sit u a - tion. In 1999, South Af rica came out in po si tion num ber 32. The one con so la tion is that South Af rica was, at least, not in the last po si tion (Esterhuyse 1999)! Cor rup tion and fraud are ram pant in both the pub lic and pri vate sec tors. As far as the pub lic sec tor is con cerned, Shaw and Camerer re port that the South Af ri can state loses some R17 bil lion ev ery year as a re sult of tax eva sion. In many sec tors of so ci ety it is ar gued that this phe nom e non is the re sid ual of the sit u a tion be fore 1994 when South Af rica had a gov ern ment which the ma jor ity of cit i zens re garded as il le git i mate. The ad vent of de moc racy and its con com i tant gov ern men tal le git i macy did not, how - ever, ame lio rate this sit u a tion sig nif i cantly. On 31 De cem ber 1995 the Com mer cial Branch of the SAPS was han dling cases of white-col lar crime, in volv ing some R7.3 bil lion. Some 80% of these cases in volved fraud, and the other 20% theft (from em ploy ers) as well as trans gres sions of more than 50 stat utes which the branch po - lices. Be sides this, on 29 Feb ru ary 1996 the Of fice for Se ri ous Eco nomic Of fences

2 S. Afr. J. Philos. 2003, 22(2) 129 (OSEO) was in ves ti gat ing 33 mat ters in volv ing ap prox i mately R8,5 bil lion (Shaw & Camerer 1996: 51-60). In the pri vate sec tor, fraud, in par tic u lar, is ram pant in Af rica. In a study done by Unisa s Dept. of Crim i nol ogy in which 200 busi nesses were sam pled, it was found that 20% of these busi nesses suf fered fi nan cial loss in ex cess of R through em - ployee fraud over a pe riod of one year. Ernst and Young did a sur vey in 1998 which re vealed that as many as 80% of the com pa nies that were sur veyed in Af rica has ex pe - ri enced fraud in the past year. And of these com pa nies, more than 33% were de - frauded more than five times in a sin gle year (Rossouw 2002: 157). A KPMG sur vey on fraud in 1999 showed that as many as 86% of the busi ness peo ple sur veyed ex - pected fraud to in crease, against only 3.5% who ex pected a de crease (Esterhuyse 2001). Shaw and Camerer note in this re gard: It is well known that of fi cial crime sta tis tics are be set with dif fi cul ties since they only re flect crimes that are in fact re ported to the po lice. For var i ous rea sons, most white-col lar crimes are not re ported to the po lice and are there fore never re corded. In an at tempt to es ti mate the dark fig ure of white-col - lar crime, sur veys have been con ducted among top busi nesses on the ex tent of fraud, whether or not these were re ported, why they were not re ported, their (mon e tary) value and what steps were be ing taken to pre vent them form re cur ring. A re cent study un der taken lo cally found that a mere 20% of re spon dents had re ported de tected fraud to the po lice - i.e 80% of de tected fraud u lent ac tiv ity was go ing un re ported (1996: 56-57). Al though we do not know all the rea sons why white-col lar crime so of ten re mains un re ported, the KPMG sur vey re ferred to ear lier, listed the fol low ing as main rea sons for not re port ing fraud to the po lice : No con fi dence in the abil ity of the po lice 18% No con fi dence in the jus tice sys tem 15% No chance of fi nan cial re cov ery 13% De sire not to tie up own re sources for years with a crim i nal case 11% In con ve nience 7% Ex pe dite the mat ter to con tinue as nor mal 5% Fear of neg a tive pub lic ity 4% (Source: Esterhuyse 2001) Fraud can be de fined as ac tions which are in ten tion ally dis hon est, and that in volve de - ception with the intent of acquiring illegitimate gain. 1 The possibilities created by mod ern tech nol ogy in crease the op por tu ni ties for fraud u lent be hav ior sig nif i cantly. Fraud flour ishes in a re sources-de pleted so cial con text such as Af rica. One of the most per plex ing prob lems fac ing busi ness peo ple from abroad is how to han dle the per verse in cen tives that some times, al most as a mat ter of course, are ex pected when busi ness deals are clinched in Af rica. What we all, how ever, also know, is that fraud is, in the long run, a very costly af fair, not only for spe cific busi nesses, but for our coun try and con ti nent as a whole. It es ca lates the costs of run ning a busi ness, since it di rects re - sources to ad dresses that do not de serve them. As knowl edge of the prev a lence of cor - 1 For a thor ough anal y sis of these el e ments, see Rossouw 2002:

3 130 S. Afr. J, Philos. 2003, 22(2) rupt prac tices spread, it acts as a dis tinct dis in cen tive to con tinue in vest ing in that coun try or re gion. Dis in vest ment breeds pov erty, and more pov erty, in turn, is one of the al most in ev i ta ble in cen tives for more cor rup tion and in ef fi ciency. Crime or fraud does, as the say ing rightly goes, not pay in the end nei ther for an in di vid ual nor for a coun try. I say in the end, be cause we all know of the many cases in which crime seem ingly pays quite well in the short term. Lester Venter writes in his re cent book that, cur rently in South Af rica, one s chances of get ting caught for car-hi jack ing is less than 2% (Venter 2001: 89)! It is there fore of the ut most im por tance to fight fraud and cor rup tion. The ques tion is: how? The self-ev i dent an swer is to jack up sur veil lance and risk man age ment pro - ce dures and to es tab lish a jus tice sys tem that ad vo cates and prac tises zero tol er ance to all crime. The ex pe ri ence of Rudy Giuliano (in his days a mayor of New York City) and com pany is well known. Zero tol er ance to ward crime in that city at one stage im - plied that when a prob lem oc curred with UN of fi cials tak ing lib er ties with un au tho - rized park ing in the city and hid ing be hind dip lo matic im mu nity against per se cu tion, Giuliano threat ened on TV that if NYC has to choose be tween ad her ence to park ing reg u la tions and the con tin ued so journ of the UN in the city, we shall choose the for - mer! The trou ble is, as we all know, that we are deal ing in South Af rica with a grossly un der staffed and un der paid po lice force a phe nom e non which, in ci den tally, is in it - self an in cen tive to cor rup tion that ought to cause grave con cern. Deon Rossouw, in his re cent book on busi ness eth ics in Af rica, ar gues that ad her ence to eth ics, i.e. more ed u ca tion in busi ness eth ics, is a better an swer. He writes: Within the Af ri can con - text, or ga ni za tions would do well to not rely too heavily on ex ter nal law en force ment agen cies to fight fraud, as these agen cies are of ten not very ef fec tive. In stead they need to de velop their own ca pac ity to fight fraud within their or ga ni za tions. Sim ply re strict ing the op por tu ni ties for fraud by in tro duc ing con trol and de tec tion mech a - nisms is not suf fi cient. A much broader ap proach is needed. This must un der mine both the mo ti va tion and the ra tio nal iza tion of fraud. Eth ics has a prom i nent role to play here (Rossouw 2002: 163). The pre sump tion clearly is that the more eth ics ed u ca tion and train ing we in tro duce into an or ga ni za tion or busi ness, the better chance we have of di min ish ing and, hope fully in the end, erad i cat ing fraud and cor rup tion. The main is sue that I want to deal with in this ar ti cle, is whether this is a valid as - sump tion. Can an in creased (and im proved) teach ing of busi ness eth ics re ally con trib - ute to the fight against fraud and cor rup tion? 2 If it is, there is good rea son for hope. We sim ply have to up grade the busi ness eth ics teach ing func tion in our com pa nies. The for mula will then be sim ple: ad min is ter a thor ough eth ics au dit, ap point an eth ics of fi cer (some one with a proper train ing in eth ics, pref er a bly at a rep u ta ble uni ver sity), let this per son fa cil i tate the for mu la tion of a code of eth ics, of fer reg u lar courses in eth ics to em ploy ees, and pre fer man a ge rial ap point ment of peo ple who have com - 2 I am not, by any means, claim ing that the teach ing of busi ness eth ics is the only eth ics in ter ven tion that is avail able to com pa nies. I am fully aware that busi ness eth ics has in re cent years grown into much more than mere philo soph i cal eth ics and the for mal dis sem i na tion of the lat ter in an or ga ni za tional con text. I thank an anon y mous ref eree for bring ing this pos si ble mis un der stand ing in an ear lier draft of this ar ti cle to my at ten tion. How ever, my ex pressed pur pose in the ar ti cle is to con cen trate on the ques - tion of whether, spe cif i cally, the teach ing of busi ness eth ics can sig nif i cantly con trib ute to the fight against fraud and cor rup tion.

4 S. Afr. J. Philos. 2003, 22(2) 131 pleted courses in busi ness eth ics dur ing their train ing in man age ment sci ence. Thus, eth ics teach ing will mi rac u lously emerge as the an ti dote to cor rup tion, and all will be well and fine. The sit u a tion is, alas, a lit tle more com pli cated than that. I do not want to den i grate the model and the el e ments of eth ics train ing that I have just enu mer ated. I shall re turn to some of these is sues later on. But, be fore we pro ceed with the mat ter, it will be use - ful to re mem ber that the de bate whether the fight against fraud and cor rup tion will be al le vi ated by more eth ics teach ing, is part of a wider philo soph i cal de bate about the re la tion ship be tween the ory and prac tice. The story about and the de tails of this de bate is long and in volved, dat ing back to, at least, the ep och mak ing con tri bu tions of the most re nowned fig ures of nine teenth cen tury phi los o phy, Hegel and Marx. Hegel was the cham pion of ide al ism, i.e. the view that what is real, is what can be thought. His big con tri bu tion was the no tion that ideas the prod ucts of our think ing or in tel lec tual pro cesses are the driv ing force or mo tor of his tory. In fact, ac cord ing to Hegel re al ity ex ists in so far as it can be thought, and re al ity is no more than the so-called Ab so lute Idea in its prog ress of di a lec ti cal self-un furl ing. 3 Par a mount in Hegel s think ing, there fore, is the idea that what and how we think, can and does in flu ence the na ture of re al ity and his tory. In so far as eth ics is un der stood as a set of ideas or the ory about the dif fer ence be tween right and wrong, the es pousal of these ideas or the ory can and will, ac cord ing to a He geli an, have a de mon stra ble in flu ence on prac tice, i.e. the way we live and in ter act. Ac cord ing to a He geli an ap proach, there fore, it makes a lot of sense to teach eth ics, be cause the ideas, prin ci ples and the o ries pro pounded in that pro cess have a sig nif i cant chance of not only ef fect ing peo ple, but of in flu enc ing and even chang ing their be hav ior. It is in this same vein that Vic tor Hugo coined his fa mous phrase: Noth ing is as pow er ful as an idea whose time has come. The pre sup po si tion of this phrase is that an idea can not only in flu ence peo ple s at ti tudes and be hav ior, but can en trench it self in a so ci ety, change per spec tives and suc ceed in hold ing an en tire cul ture un der its sway. Marx s con tri bu tion, as most of us know, was an al most di rect re ac tion to that of Hegel. In a fa mous phrase, Marx en vis aged that, while Hegel made us walk on our heads, he (Marx) will in verse the pro cess and, again, make us walk on our feet. For Marx, life is not de ter mined by con scious ness (as the im pli ca tion of Hegel s ideas sug - gest), but con scious ness is de ter mined by life. It is worth quot ing in more de tail the pas sage where this fa mous state ment was first made: The pro duc tion of ideas, of con - cep tions, of con scious ness, is at first di rectly in ter wo ven with the ma te rial ac tiv ity and the ma te rial in ter course of men, the lan guage of real life. Con ceiv ing, think ing, the men tal in ter course of men ap pear at this stage as the di rect efflux of their ma te rial be - hav iour.in di rect con trast to Ger man phi los o phy which de scends from heaven to earth, here we as cend from earth to heaven. That is to say, we do not set out from what men say, imag ine, con ceive, nor from men as nar rated, thought of, imag ined, con - ceived, in or der to ar rive at men in the flesh. We set out from real, ac tive men, and on the ba sis of their real life pro cess we dem on strate the de vel op ment of the ideo log i cal re flexes and ech oes of this life pro cess. The phan toms formed in the hu man brain are also, necessarily, sublimates of their material life-process, which is empirically verifi - able and bound to ma te rial pre mises. Mo ral ity, re li gion, meta phys ics, all the rest of 3 Cf. GWF Hegel For an ex cel lent ex po si tion of Hegel s ideas, cf. Tay lor 1975.

5 132 S. Afr. J, Philos. 2003, 22(2) ide ol ogy, and their cor re spond ing forms of con scious ness, thus no lon ger re tain the sem blance of in de pend ence. They have no his tory, no de vel op ment [as Hegel would em phat i cally ar gue], but men, de vel op ing their ma te rial pro duc tion and their ma te rial in ter course, al ter, along with this their real ex is tence, their think ing, and the prod ucts of their think ing. Life is not de ter mined by con scious ness, but con scious ness by life (Marx 1977: 164). The im pli ca tions of these ideas for our theme are clear. Eth ics, as a dis ci pline which is the out come of re flec tion about the dif fer ence be tween right and wrong, good and bad and the na ture of re spon si bil ity, is, for Marx in its en tirety part of the su per struc - ture of ide ol ogy that is no more than a re flec tion of the ma te rial, eco nomic life pro - cesses of peo ple. What we think, can not in flu ence what we do; what we do, i.e. the way in which we interact socially and economically, fundamentally influences what we think. Ap plied to our prob lem, the im pli ca tion would be that mere in struc tion in or teach ing of eth ics in a busi ness en vi ron ment has lit tle chance of sig nif i cant ef fects. Rather, the moral pre cepts that peo ple hold and in terms of which they act are not more than what Marx calls their ma te rial pro duc tion and in ter course. The ory does not in flu ence prac tice; the ory re flects prac tice. The idea that more busi ness eth ics teach ing will there fore en hance the moral sta tus of be hav ior, deal ings and ac tiv i ties in a com pany, is there fore, ac cord ing to this view, both mis guided and fu tile. My own view is that both the He geli an and the Marxian ap proaches are un sat is fac - tory. The re la tion ship be tween the ory and prac tice is a more com plex, in ter ac tive af - fair than is sup posed and ar gued for by ei ther of these po si tions. There is more than enough ev i dence from his tory about ideas that not only changed the way peo ple were think ing, but that ac tu ally, through the in flu ence that these ideas ex erted on in di vid u - als and groups, changed the cul tures and so ci et ies in which they lived. Of course, the changes brought about by ideas don t oc cur over night. Some times it takes a very long time for an idea to per me ate through so ci et ies and even tu ally take hold in e.g. the po - lit i cal cul ture. A dra matic ex am ple of such a slow work ing in flu ence of ideas is that of the idea of de moc racy: the idea that the state owes its le git i macy not to the pre cepts of Scrip ture or the di vine right of kings or the or der of na ture, but to the will of the peo - ple be ing gov erned. This idea had pre cur sors in the Athe nian city state, but was, in mod ern times, for the first time force fully ar tic u lated by the so-called Lev el ers in the time of the mid-16 th cen tury Eng lish re volt against Charles I 4, systematically espoused by John Locke, a phi los o pher of the late 17 th cen tury, and fur ther re fined by think ers such as Montesquieu, Thomas Jef fer son and John Stu art Mill. Even tu ally, in our times, it has now be come the most pow er ful idea about le git i mate gov ern ment so pow er ful that a writer such as Fran cis Fukuyama iden ti fies it as rep re sent ing a con sen sus which is so uni ver sal that its cur rent-day es pousal might well be called the end of his tory. 5 Other ideas have their im pact over a much shorter time-span. The idea that the mod ern econ omy is in creas ingly be ing driven by tech no log i cally (i.e. com puter) me di ated in - for ma tion, is one that took us by storm over the past three de cades, and al lowed the en tre pre neurs who fore saw de vel op ments in stilled by that idea, such as Bill Gates and Mark Shuttleworth, to be come filthy rich peo ple. 4 For a fas ci nat ing nar ra tion about the Lev el ers and their role in those events, cf. John son 1985: For this idea, see Fukuyama 1992.

6 S. Afr. J. Philos. 2003, 22(2) 133 On the other hand, the re la tion ship be tween the ory and prac tice is by no means a one-way di rec tion. Marx and com pany were not en tirely mis guided when they in sisted that the way we think is of ten a re flec tion of the way we live and the pos si bil i ties opened up by our so cial and eco nomic re la tion ships. Let me stick with one short ex - ample. In Marxist parlance, there is a close relationship between ideological hegemony and con di tions of scar city in so ci ety. The more scar city, the more he ge mony. This can, in the his tory of South Af rica s white Af ri kaner tribe, be well il lus trated when one conpares the grow ing ideo log i cal he ge mony of the nine teen thir ties, for ties and fif ties with what hap pened to Af ri kaner na tion al ist ide ol ogy in the course of the sev en ties and eight ies. Dur ing the ear lier time, Afrikaners were poor, re cently ur ban ized and threat ened by black la bor. This in stilled in the ma jor ity the at trac tive ness of Af ri kaner na tion al ist ideas, e.g. the idea that so cial seg re ga tion is es sen tial for na tional sur vival. In fact, the very idea of the Voortrekkers 6 pop u larly es chewed as the main stream pre de ces sors of 20 th cen tury Afrikaners as the cho sen peo ple, with a self-un der - stand ing based on the Bib li cal nar ra tive of the chil dren of Is rael as the cho sen peo - ple trek king from the con fines of the house of slav ery in Egypt to wards the prom ised land, was, in all prob a bil ity, a cre ation of the 1930 s, i.e. an idea that suc cess fully took hold be cause of the Af ri kaner peo ple s socio-eco nomic pre dic a ment at that time. 7 It can quite per sua sively be ar gued that, as the con di tions of scar city changed in the lat - ter half of the 20 th cen tury and the Afrikaners be came mid dle class and rel a tively af flu - ent, the ideo log i cal he ge mony about seg re ga tion started to dis in te grate. How ever, I am not ar gu ing that, to stick with the last ex am ple, eco nomic con di tions, and noth ing else, were re spon si ble for these changes in ideas. Of course ideas and prac tices in South Af rica changed, not only be cause of per mu ta tions in ei ther the ory or prac tice, but be cause of per mu ta tions in both and be cause of their re cip ro cal in flu - ences on each other. What has all of this got to do with the ques tion as to whether and how the teach ing of busi ness eth ics can have a pos i tive ef fect on cor rup tion and fraud in a com pany? In con clu sion, I would like to ar gue three points based on the in sights es poused thus far. 1. In the fight against cor rup tion, it is ex tremely im por tant to raise the level of moral con scious ness in an or ga ni za tion. For this pur pose, the teach ing of busi ness eth ics is es sen tial. This must come about through for mal courses, but en tails much more. Noel Pres ton makes a cou ple of use ful sug ges tions in this re gard. First there must be a pre - pa ra tory phase in volv ing an eth ics au dit, aware ness rais ing ses sions, the form ing of an eth ics steer ing group and con sul ta tions with staff in or der to de velop a range of il lu mi - nat ing case stud ies from which staff mem bers can learn. An eth ics com mit tee can be ap pointed, in clud ing an ex ter nal ad viser (if the com pany does not pos sess the ser vices of an eth ics of fi cer) to mon i tor and guide the pro cess. A code of eth ics must be drawn up, based on the val ues that have been for mu lated for the or gani sa tion through ex ten - sive con sul ta tions with all staff. Dis ci plin ary mea sures have to be clar i fied to all staff. Pro ce dures and sys tems have to be thus de vel oped that they op ti mize risk man age ment and con trol and min i mize temp ta tions for fraud u lent or cor rupt be hav iour. Mea sures to pro tect whistle blow ers must be put into place. Ses sions for eth ics ed u ca tion must be 6 Best trans lated as pathfinders lit er ally: those who trek in the front 7 Cf. for a dis cus sion of these is sues, O Meara 1983.

7 134 S. Afr. J, Philos. 2003, 22(2) or gan ised, and reg u lar re vi sion of the code of con duct must be ex er cised (Cf. Pres ton 1996: ). In other words, be cause, as we have ar gued, the ory can and of ten will in flu ence prac tice, all that is nec es sary and pos si ble on the level of the ory and ed u ca tion has to be done in or der to raise the level of moral aware ness in the com pany. At the same time, how ever, we must avoid the naiveté of ex pect ing that to be enough. The moral fi bre of em ploy ees is and al ways will be co-con sti tuted by the moral cul ture of an or - ga ni za tion. By moral cul ture I sim ply mean the gen eral moral dis po si tion of the or - ga ni za tion, in di cated above all by the ex tent to which the val ues es poused by the or ga - ni za tion are in cul cated in the be liefs, con vic tions and prac tices of the work force. What can not be over-em pha sized in this re gard is the ex am ple set by the lead er ship as the role mod els for ev ery one else. Let me give one short ex am ple. Take the is sue of the shelf price of items in a su per - mar ket that do not cor re late with what reg is ters on the cash iers ma chines. If this hap - pens, the cash iers of ten young, in ex pe ri enced peo ple, des per ate for jobs soon re al - ize that the store-owner is ac tu ally cheat ing the cus tom ers. Well, if that can hap pen, why can t I, as a young cash ier, not also cheat the owner by dip ping my hands in the till? Cor rup tion is fought from the top and by set ting ex am ples of in teg rity from the top. If we want our em ploy ees to be hon est, they must see man ag ers and own ers to be hon est. Codes of eth ics and rules will, in them selves, not com bat cor rup tion at this level. The cul ture of the or ga ni za tion must en cour age and re ward hon est be hav ior. 2. My sec ond point is to elab o rate a lit tle more on the idea of a moral cul ture and how it can be es tab lished. I per son ally pre fer the idea of an ethics of responsibility 8 to that of an eth ics of rules and reg u la tions. Space will not al low me to of fer an elab o rate ar - gu ment in this re gard. It suf fices to say that the mere ad her ence to cod i fied rules is not al ways a guar an tee for eth i cal be hav ior. Ide ally, one does not want to pro mote eth ics on the ba sis of fear for pros e cu tion, al though I do not deny that such fear also has its place in the moral life. But if eth ics is pri mar ily un der stood as con duct that does not con tra vene rules, it opens the door for ir re spon si ble be hav ior that might not be cov - ered by the rules. In fact, one some times co mes across be hav ior that, on the ba sis of or by draw ing on ex ist ing rules, clearly does not honor gen er ally ac cepted moral pre - cepts. An ob vi ous ex am ple in this re gard is the mat ter of fine print in in sur ance pol i cies and sales con tracts fine print that peo ple who are of ten quite well ed u cated find hard to make sense of, and that more than once gen er ate ad verse ef fects that evoke a lot of an ger and re sent ment, if not lit i ga tion. Here we have a clas sic ex am ple of the ide ol ogy that rules are enough, and that eth i cal re quire ments are ad e quately met if the rules are spelt out on pa per. This is where an eth ics of re spon si bil ity proves its su pe ri or ity. The re spon si ble sales man or man ager is the per son who ac knowl edges that fine print may yield in ad e quate or in com plete un der stand ing of all the con di tions of a sale, and who ac cepts re spon si bil ity for com mu ni cat ing, in com pre hen si ble lan guage, all the rel e vant in for ma tion when clinch ing the deal. What there fore seems to me pref er a ble to an eth ics of rules, is an eth ics of re spon si - bil ity. By the lat ter I sim ply mean the abil ity and the cour age to jus tify what ever ac - 8 The idea of an eth ics of re spon si bil ity has, in the lit er a ture, been pow er fully ad vo cated by, amongst oth ers, Hans Jonas (1984) and Zygmunt Bauman (1993).

8 S. Afr. J. Philos. 2003, 22(2) 135 tions I took by re course to ar gu ments that prove that my ac tions were mo ti vated by what is right and what is truly in the in ter est of other peo ple, and not by what is pri - mar ily in my own in ter est. In this re gard, many phi los o phers now a days are drawn anew to the ideas of the per son who is ar gu ably not only one the great est moral phi los - o phers of all times, but, mea sured in terms of the scope and du ra tion of his in flu ence, also the great est in tel lec tual that ever lived. I re fer to the great an cient Greek phi los o - pher Ar is totle. Eth ics, for Ar is totle, had ev ery thing to do with vir tues. For him eth i cal con duct was the con duct of a vir tu ous per son. Vir tue, for Ar is totle, is a state of char ac - ter in which ra tio nal choices are made that re flect the mean be tween two ex tremes and that there fore re quire re spon si ble choices that are the out come of what he calls phronesis or prac ti cal wis dom. For ex am ple, the vir tu ous man is a cou ra geous man. Cour age, for Ar is totle, is the mean be tween cow ard ice and rash ness, just as tem per - ance, as a vir tue, is the mean be tween self-in dul gence and as cet i cism, or gen er os ity is the mean be tween mean ness and prod i gal ity. 9 The most im por tant thing to be learned from Ar is totle s the ory of eth ics as vir tue, is that none of the vir tues are sim ply given to us by na ture or faith, and that we there fore nei ther have nor lack them for time and eter nity. Vir tue is some thing that must be learnt, and this in volves a long pro cess in which we must ex er cise our prac ti cal wis - dom and our sense of re spon si bil ity. Take cour age again, for ex am ple. How can we know what cour age is? There is no im mu ta ble rule that de fines cour age. Cour age re - flects the mean be tween cow ard ice and rash ness, but what that means or en tails for us in a given sit u a tion very much de pends on the na ture of the sit u a tion. For Wolraad Woltemade, the fa mous South Af ri can hero who, in the 18 th cen tury, saved al most 20 drown ing peo ple af ter a ship wreck near Cape Town by swim ming out to them on his horse and sav ing them two at a time, cour age meant the will ing ness, in the end, to sac - ri fice his life, as he even tu ally did. Com pare that with the sit u a tion of Vic tor Frankl, the Jew ish psy chi a trist who sur vived Auschwitz, and for whom cour age, in that sit u a - tion, meant do ing ev ery thing in his power to at tach mean ing to lit tle things in or der to stay alive, i.e. not to grant the Nazi s the sat is fac tion of see ing him dead. 10 Both are in - du bi ta ble ex am ples of cour age. But what the ex e cu tion of cour age meant in their re - spective situations, was significantly different. Put differently: the con tents of cour age in the two sit u a tions are dif fer ent: in the one, it en tails the will ing ness to die; in the other, the de ter mi na tion to stay alive at al most any cost. Phronesis, or prac ti cal wis dom, is the abil ity to me di ate be tween, on the one hand, the o ret i cal knowl edge of right and wrong, and, on the other, re spon si bly re spond ing to the claims of a particular situation that demands a specific application of that theoreti - cal knowl edge. 11 We are sim i larly chal lenged to think about the mean ing of cour age in the con text of busi ness. In some con texts, it en tails the guts to take se vere fi nan cial risks, such as in vest ing in prop erty shares that went down the drain af ter the Sharpeville mas sa cres in In other con texts, cour age might mean the ex act op po - site, such as conservatism in a situation where financial institutions indiscriminately 9 For an ex cel lent ex po si tion of Ar is totle s eth ics, on which I oc ca sion ally drew, see Megone 2002: Cf. Frankl For Ar is totle s own ex po si tion of phronesis, see his (Nichomacean) Eth ics (Ar is totle 1953), Book 6, 1140a24-b For a lu cid dis cus sion of Ar is totle s idea of phronesis, see Bernstein 1986: 99 ff.

9 136 S. Afr. J, Philos. 2003, 22(2) em braced the mi cro lend ing in dus try in view of its ap par ent lu cra tive po ten tial con - ser va tism that paid off much better in the end, as has re cently been proved. I de velop these ex am ples to dem on strate one claim: moral vir tue is some thing that we must cultivate, that co mes with time and with ex pe ri ence. What must, in par tic u lar, not be un der es ti mated, is the value of what I would like to call crucial experiences in the acquisition of virtuous responsibility. Let me illustrate with an example. Fraud is de tected in the be hav ior of a num ber of se nior of fi cials in a com pany. It of fers bad press, and ap pro pri ate ac tion is taken against the of fi cials. Man age ment, for the sake of dam age con trol, is strongly tempted to un der-play the se ver ity of the of fence for the sake of the avoid ance of fur ther bad press and a re turn to nor mal ity in the com pany. Thereby the op por tu nity is missed to have a frank and open dis cus sion with all em - ploy ees about what ac tu ally hap pened, what loop holes for fraud u lent be hav ior were thus ex posed, and what the se ver ity of the con se quences are. In this way, the events be come, for all in volved, a cru cial ex pe ri ence that mould their eth i cal con science and thus con trib utes to the avoid ance of sim i lar events in fu ture. A moral cul ture, which is as im por tant for the en hance ment of the moral fi bre of a com pany as is eth ics ed u ca tion, is, ide ally not a cul ture of rules and codes of con duct that are neatly for mu lated on pa per, but sel dom trans lated into moral prac tice. With out den i grat ing the un doubted im por tance of rules and codes of con duct, my point sim ply is that true mo ral ity is the out come of the cul ti va tion of the vir tu ous life, which is life marked by cru cial learn ing moral ex pe ri ences that are trans ferred into a sus tained sense of moral re spon si bil ity. 3. My third and fi nal re mark on the ques tion of how the teach ing of busi ness eth ics can con trib ute to the fight against cor rup tion in com pa nies, has to do with the is sue of what can and ought re al is ti cally to be ex pected from a more rig or ous em pha sis on busi ness eth ics teach ing and conscientization. The im por tant point in this re gard is that no quick fixes are to be ex pected. Busi ness eth ics ed u ca tion is no magic word that will make cor rup tion and fraud dis ap pear in an in stant. Teach ing busi ness eth ics does not pro vide easy for mu las that will au to mat i cally en hance the moral sta tus of peo ple and ac tions in a busi ness. Its ef fects will be there, but it will take time and pa tience. While busi ness eth ics ed u ca tion can not pro vide any quick fixes, what it can pro vide is the in tel lec tual equip ment to deal better or more ad e quately with the per sis tent phe - nom e non of moral am bi gu ity and per plex ity. We live in a world, also and in par tic u lar in the busi ness en vi ron ment, that is rife with moral di lem mas. A moral di lemma is a sit u a tion to which more than one eth i cal prin ci ple is ap pli ca ble, and that con fronts one with a choice of more than one ac tion. A choice for one ac tion, seem ingly de manded by hon or ing one prin ci ple, will in ev i ta bly vi o late the de mands of an other, seem ingly equally ap pli ca ble prin ci ple. Which prin ci ple s de mands weigh the most, is, in ad di - tion, typ i cally un clear in a moral di lemma. Con se quently, the de mands or ap pli ca bil ity of the con flict ing prin ci ples have to be weighed, and some de ci sion has to be made a de ci sion that will sel dom be per fect or void of fur ther ques tion ing or un cer tainty. Let s take an ex am ple of a typ i cal moral di lemma in the world of busi ness: the is sue of in cen tive schemes. The pur pose of busi ness is to make money; there can be no bones about that. Elaine Stern berg uses a more el e gant for mu la tion which boils down to very much the same thing: The spe cific ob jec tive which is unique to busi ness, and which dis tin guishes busi ness from ev ery thing else, is max i miz ing owner value over

10 S. Afr. J. Philos. 2003, 22(2) 137 the long term by sell ing goods or ser vices (Stern berg, quoted by Megone 2002: 26). An ac cepted tech nique for such max i miz ing of owner value is to of fer in cen tives to the peo ple who are re spon si ble for the sales: a trip to Mau ri tius, a large bo nus, etc. How far ought these em ploy ees go in their ef forts to at tain these in cen tives? More per - ti nently: what is the de mar ca tion be tween what a sales per son is pre pared to do in or der to max i mize his/her own wealth, and what is good for the cus tomer and the com pany? These kinds of di lem mas typ i cally oc cur in the in sur ance in dus try. For ex am ple: when do I, as a fi nan cial ad viser, ad vise in fa vor of a sin gle pre mium in vest ment with rel a tively low com mis sion con tent, as op posed to in vest ing the cli ent s money in an an nu ity which funds a re cur ring pre mium en dow ment? The lat ter car ries a much higher com mis sion con tent for me, but is not nec es sar ily in the cli ent s best in ter est, if for no other rea son than that it cre ates an ad verse tax im pli ca tion. Al though not so fre - quent any more to day, this con sti tuted a very real choice for ad vis ers in the past, and rep re sents a truly moral di lemma: do I, for the sake of the wel fare of my self, my fam - ily and the com pany s prof its, which I am ex pected to en hance, ad vise in view of max - i mum profit for my self and the com pany, or do I, at all times, first and fore most seek the in ter ests of the cli ent? The an swer to this ques tion is not al ways clear cut, and the moral cli mate that will in form the way ad vice is given in this kind of di lemma will, in ad di tion, be strongly in flu enced, not only by the moral dis po si tion of the ad viser, but also by the kind of guid ance that he or she re ceives from their man ager. How do we go about han dling these sit u a tions? This is where busi ness eth ics teach - ing co mes into the pic ture. Let me il lus trate the piv otal role that busi ness eth ics ed u ca - tion can play in these sit u a tions by quot ing two help ful pas sages. The first is by Dee Carabine: the goal of teach ing eth ics is that through a bal anced eth ics course.stu - dents should be helped to de velop the an a lyt i cal skills which can be of as sis tance in reaching decisions in troublesome areas. Therefore, students [read: employees] should be shown how to de ter mine what con sti tutes a bad moral ar gu ment and po si - tion, and to ap pre ci ate that when con fronted with a moral prob lem (Carabine 1996: 81). The sec ond quote is from Elaine Stern berg, writ ing about the value of de vel op ing a model for eth i cal de ci sion-mak ing in busi ness: A model can not elim i nate eth i cal prob lems or the com plex ity of real sit u a tions. A de ci sion-mak ing frame work can, how ever, pro mote con sis tency of de ci sions over time and place and in di vid ual de ci - sion-maker, and can en cour age learn ing from ex pe ri ence. Fur ther more, it can help to over come moral mute ness. Hav ing lit tle prac tice in deal ing with spe cif i cally moral mat ters in busi ness, and lack ing an ac cepted vo cab u lary for do ing so, many busi ness peo ple feel un com fort able with eth i cal is sues, and are re luc tant to take a stand. By pro - vid ing the nec es sary con cepts, and le git i miz ing the dis cus sion of rel e vant moral is - sues, an agreed eth i cal frame work can elim i nate the time con sum ing and de struc tive need for sec ond-guess ing man age ment (Stern berg, quoted in Megone 2002: 34). Many the o rists ar gue that it is fu tile to teach eth ics; eth ics, they ar gue, is caught, not taught. It is un doubt edly true that mere in struc tion in busi ness eth ics does not guar an tee more mo ral ity. Carabine rightly points out that our knowl edge of right and wrong and our sense of moral ob li ga tion, i.e. what the word ought means, have many more or i gins than the uni ver sity or com pany lec ture hall (Carabine 1996: 81). Our moral knowl edge and the moral dis po si tions fos tered by that knowl edge are

11 138 S. Afr. J, Philos. 2003, 22(2) shaped by many in flu ences, rang ing from par ents, teach ers, friends, tele vi sion, cul tural prac tices, books, etc. We carry this knowl edge and dis po si tions with us into our world of work. Busi ness eth ics ed u ca tion is not go ing to change us into con sis tent moral heroes or an gels. But un der go ing a busi ness eth ics ed u ca tion will help us to cope better with a world that is, ev ery day, be com ing mor ally more com plex. To have the abil ity to an a lyze mor ally prob lem atic sit u a tions, to be able to iden tify the pre cepts that are ap pli ca ble to them and the ar gu men ta tive strat e gies that one might fol low in or der to make more sense of them and, in the end, to come to re spon si ble judge ments about them, is to be come sig nif i cantly better em pow ered for the world of work. To my mind, that is one of the most im por tant con tri bu tions a thor ough busi ness eth ics ed u ca - tion and train ing in or ga ni za tions and com pa nies can bring about. 12 Bibliography Ar is totle, Ethics (Tr. JAK Thomson). Harmondsworth: Pen guin Books. Bauman, Z Postmodern Eth ics. Ox ford: Blackwell. Bernstein, R.J Philo soph i cal pro files. Cam bridge: Pol ity Press. Carabine, D Eth ics ed u ca tion and the busi ness stu dent, in M. Lejeune & P.W. Rosemann Busi ness eth ics in the Af ri can con text to day. Nkozi: Uganda Mar tyrs Uni ver sity Press: Esterhuyse, W.P Korrupsie is SA se openbare vyand nommer een. Die Bur - ger, 3 Maart 1999: 52. Esterhuyse, W.P Busi ness Eth ics (Un pub lished Pre sen ta tion). Frankl, V Man s search for mean ing. Lon don: Hodder & Stoughton. Fukuyama, F The end of his tory and the last man. New York: Avon Books. Hegel, G.W.F Hegel s phe nom en ol ogy of spirit. (Tr. A.V. Miller). Ox ford: Ox - ford Uni ver sity Press. Jonas, H The imperative of responsibility. Chi cago: The Uni ver sity of Chi cago Press. John son, P A his tory of the Eng lish peo ple. Lon don: Weidenfeld & Nichol son. Marx, K. & Engels, F The Ger man Ide ol ogy (se lec tions), in D McLellan (ed) Karl Marx: se lected writ ings. Ox ford: Ox ford Uni ver sity Press. Megone, C Two Ar is to te lian ap proaches to busi ness eth ics, in Megone & Rob in son, 2002: Megone, C. & Rob in son, S.J. (Eds) Case his to ries in busi ness eth ics. Routledge: Lon don. O Meara, D Volkskapitalisme: Class, cap i tal and ide ol ogy in the de vel op ment of Af ri kaner na tion al ism. Jo han nes burg: Ravan Press. Pres ton, N Un der stand ing Eth ics. Syd ney: The Fedration Press. Rossouw, D Busi ness eth ics in Af rica. Cape Town: Ox ford Uni ver sity Press. Shaw, M. & Camerer, L Po lic ing the trans for ma tion: new is sues in South Af - rica s crime de bate. Half way House: IDP Mono graph Se ries, no. 3, April Tay lor, C Hegel. New York: Cam bridge Uni ver sity Press. Venter, L In the shadow of the rain bow. Jo han nes burg: Heinemann. 12 I wish to thank Amy van Niekerk for her crit i cal read ing of and thought ful com ments on this manu - script.