Can a Corporation Have a Conscience?
The corporation is a good example of a machine with no conscience says Ray Kurzweil. In charting the historical evolution of corporations, according to Colin P Marks, they evolved from a relative few, specially chartered associations in the 18th century and were generally organized to complete projects for the public good. Much has changed, for today they have become ‘ modern profit-making behemoths of modern America.’ Corporations may be subjected to regulation, but only in response to public outcry against perceived abuses of power. The corporate evolution has resulted in ‘a general separation of ownership and control’. Marks says that with regard to the corporate “conscience,” though corporations do not have one in the traditional sense of the word, the corporation is run by corporate managers who can act based upon their own sense of morals, but that alone does not account for corporate behavior that benefits society as a whole. But corporations do tend to act based upon the decisions of management as they interact with other factors.
Kenneth Goodpaster has written elegantly on this topic. ‘There is a certain ambivalence about business ethics in American society. We begin with skepticism about the moral credentials of the profit-driven market system. As Irving Kristol wrote: “Two cheers for capitalism!†In business, as in campaign politics, we witness too often an unbalanced pursuit of goals and objectives. Over the last thirty-five years we have seen this pathology at work from Watergate to WorldCom. We have seen it in the career crashes of inside-traders like Ivan Boesky, in the corporate crashes of Enron and Andersen, and in the literal crashes of the World Trade Center and the space shuttles Challenger and Columbia. Call this the stimulus problem: a business system that lends itself to certain kinds of excess.
The ambivalence becomes evident when we recognize our reluctance to prescribe the most obvious cure for the stimulus problem: the use of moral criteria (beyond economic and political competition) to balance managerial (and political) decision making. Both our laws and our social norms caution managers and boards of directors (as agents of the corporation) against thinking that strays too far from a strict duty of care to shareholders. Perhaps we fear that incompetence might parade as virtue, or that ethical judgment might mean moral fanaticism. Either way, we seem to resist our most obvious alternative to amorality.’A corporation can and should have a conscience. Organizational agents such as corporations should be no more and no less morally responsible (rational, self-interested, altruistic) than ordinary persons. The analogy that holds between the individual and the corporation makes it possible to project to corporations the concept of moral responsibility as it applies to persons.’
Can a Corporate have a conscience? is an article scribed by Professor Goodpaster and co author, John B Matthews.
Kenneth E. Goodpaster, a faculty professor at Harvard University, Graduate School of Business Administration, where he teaches a course entitled ‘Ethical Aspects of Corporate Policy’.
