TV DRAMAS and film fare usually portray corporate executives as amoral men who live for power and cate nothing for ethical values, but this is one instance where pop culture does not mirror reality.
My experience in the corporate interior suggests that business executives approach ethical problems in much the same way as everybody else, for better or worse.
The public's attention is usually directed to corporate crime, understandably. In the past decade, there have been illegal payments to sell airplanes abroad, the theft of trade secrets, the use of corporate funds for political purposes or, to reduce the scale to local levels, such petty matters as bribing building inspectors and rolling back the odometer on used cars.
But there is no ethical question involved in these -- these are easy calls. They deal with violations of laws that reflect the public consensus of right and wrong. No responsible voice in business or outside it claims a little bribery is good for the soul.
The tough calls for corporate executives are the ones where the hats are not black and white, but all gray. How do you behave when the law is nonexistent and the maxims learned at mother's knee do not quite cover the question?
Here are five "tough calls" which really confronted corporate executives, including those at our company. In my judgment, the "right" and "wrong" answers are not as self-evident as business critics pretend. Judge for yourself. How would you decide?
Case No. 1
Your corporation has developed a prescription drug that helps prevent flu or cure it. It has other potential uses too. But the Food and Drug Administration won't grant clearance. More testing, please. Your company experts think the U.S. regulators are dragging their feet beyond reason. Other governments, with high standards for judging the safety and efficacy, have approved the drug for sale in their countries.
Should we go ahead and market the drug overseas? Or wait for U.S. approval?
Case no. 2
For years, your corporation manufactures a dye itermediate called Beta-naphthylamine without any questions of risk. Then alarming evidence begins turning up -- an unusual number of tumors among workers in the plant, malignant tumors. Beta is identified by company scientists as potent carcinogen -- but hundreds of your workers were already exposed.
Would you blow the whistle on yourself or try to do a clean-up quietly to prevent future injuries?
Case No. 3
As the head of a multinational corporation, you learn that one of your plant managers had been arrested in a distant republic. His alleged "crime" is that goods found in your warehouse lack the proper customs stamps and papers.
But the truth is more complicated. For years, "grease" has been a way of life in this country's bureaucracy and your plant manager has been paying gratuities to the customs officers. But he knows it is against "home office" policy and so he stops. Their "inspection" follows. The price for dropping all charges: $18,-000.
Would you pay up? Or let your man be put in jail? Which alternative is more ethical?
Case No. 4
Federal health investigators are pursuing a report that one of your manufacturing plants has a higher than average incidence of cancer among its employes. The plant happens to keep excellent medical records on all its employes, stretching back for decades, which might help identify the source of the problem.
The government demands the files. But if the company turns them over, it might be accused of violating the privacy of all those workers who had submitted to private medical exams. The company offers an abstract of the records, but the government insists on the complete files, with employe names.
Then the company tries to obtain releases from all the workers, but some of them refuse. If you give the rcords to the feds, the company has broken its commitment of confidentiality. What would you do?
Case No. 5
South Africa -- in or out? Many people have a ready answer: American business should "ban" South Africa as long as South Africa bans some of its people.Should your company do business there, including production operations?
The apartheid policies are morally indefensible in the eyes of many, and U.S. capital investment props up a racist government. That's one side. The other side argues economic development, stimulated by outside investment, is making conditions better for nonwhites and that specific terms can be drawn to cover the business operations, guaranteeing equal pay and promotions for nonwhites. How do you vote your shares?
I hope it is obvious by now that, case by case, there is no certain "right" answer. Here is how real company executives decided each one:
Case No. 1 -- Dupont went ahead and marketed its new anti-viral dug overseas, supported by high-quality judgments from government of Western Europe that the drug can be used safely and that it works. U.S. clearance came later and the product is now sold in the United States.
Case No. 2 -- Dupont follows what is called the "Reasonable Man Rule" on questions of disclosure. If a reasonable person, given information, would follow a different course of action to the advantage of health and safety, then the information must be given to him or her -- inside or outside the company. Whether or not it happens to increase or decrease the profits of the company is irrelevant.
This case of Beta, incidentally, occurred back in the 1930s at our plant in New Jersey. We made full disclosure in the medical journals, cleaned up the process and took care of employes to the best of medical science's ability. For the future, the company created its Haskell Lab to try to prevent such "surprises" in the future.
Case No. 3 -- The company paid the $18,000 to keep their man out of jail [for obvious reasons, I'm not going into identities]. It seemed more ethical to rescue the company manager from his real predicament than to hold out for the abstract principle.
Case No. 4 -- The issue of private medical files involved Dupont's Belle, W.Va., plant and I note, in passing, that the ethical argument came up only because Dupont does scrupulously maintain employe health records. The company decided not to comply with the government demands and the issue was decided by an outside referee -- a federal judge -- who ruled that Dupont must turn over the records, but that the government must observe strict limits to protect confidentiality. This is how this type of tough case should be decided, I think, by a third party in a legitimate process where all sides can be fairly considered.
Case No. 5 -- Dupont doesn't happen to have any production in South Africa, but the ethical point is that corporate executives should not try to make foreign policy for the United States. That is not our role or our privilege. So long as this country recognizes South Africa, corporations must make their own decisions on the basis of self-interest.
That point has broad relevance to business ethics. Business executives should not try, on their own, to decide whether the safety standards ought to be tightened in the machine shop. Nor is any other segment of society entitled to be the self-appointed Solomon of corporate conduct.
Standards of conduct -- to deserve respect -- should be drawn from a public process reflecting many views. For its part, business sould participate in that process to the full limits of its knowledge -- but only as one actor, laying no greater or lesser claim to wisdom than any other actor, and not expecting any special forgiveness if it violates the norms that are set.
There is a quid pro quo in ethical judgments. As the late Alexander Bickel of Yale pointed out, the process by which ethical judgments are shaped must itself be morally acceptable. In no other way, he argued, can there be a morality of consent.
Too often, discussions of business ethics fail to meet Bickel's test. They start off polarized and go downhill from there.
Would it be too simple to suggest that more headway will be made if we give up the Moral Rectitude Race? If we consider the possibility that most people in business have pretty much the same base of values as most of their critics?
Then at least, we could set aside the non-issues -- where conduct is already covered by law -- and examine other problems to see if the facts really indicate that ethical judgments must be made. This would put the energy of the democratic system into the tough ethical questions that remain -- the "hard calls" which really require collective thoughts.