An Ethics Model of the Firm

Beyond MacIntyre’s practice–institution framework

This paper has been prepared by Edward A. David for the 2022 Annual Conference of the Society for Business Ethics. Please do not copy, distribute, or cite without the author’s permission.

Introduction

[2] Business ethics is a broad church. In its pews sit familiar groups: consequentialists, weighing costs and benefits; deontologists, discerning human rights; and virtue ethicists, aspiring towards flourishing. Each group includes diverse schools of thought. But some schools appear more exclusive than others.

[3] One such school is the virtue ethics of Alasdair MacIntyre. As the most cited virtue ethic in the field, it is exclusive because outstanding in influence (Ferrero and Sison 2014). But the kind of exclusion that concerns us here is more significant. It is a type of moral exclusion, whereby intuitively good human activities—from teaching to management—are treated with moral uncertainty or even moral disdain.

[4] For MacIntyre, teaching and management are not ‘practices’—a concept central to his ethical theory (MacIntyre 2007; Macintyre and Dunne 2002)—and, as such, they do not engage directly, if at all, the virtues, which are associated with ‘practices’ alone. Thus, outside of virtue’s domain, they are, in effect, morally excluded.

[5] Commentators have criticised this aspect of MacIntyre’s thought for decades, bringing about a gradual expansion of MacIntyrean ‘practice’. Now, teaching and management are able to fit within its conceptual space (Brewer 1997; Macintyre and Dunne 2002; Beabout 2012; Rocchi, Ferrero, and Beadle 2021).

As faithful disciples, these friendly critics stay within MacIntyre’s school to rightly account for a wide array of ethically salient human activities. But, assuming some value in the effort, [6] what might moral inclusion look like if we were to step outside of the now-entrenched ‘practice’ framework?

Drawing upon the wider Aristotelian tradition, I critique the MacIntyrean notion of ‘practice’ in two ways.

[7] First, instead of asking whether management, teaching, or finance is a ‘practice’, I propose returning virtue to its less circumscribed domain—the field of human action in general. This proposal resists the idea of work-based in- and out-groups.

Second, instead of contrasting ‘practices’ (like medicine) with MacIntyre’s notion of ethically suspect ‘institutions’ (like hospitals) (Beabout 2012), I suggest accounting for virtue in business through the morally neutral concept of social action—that is, the coordination of multiple human acts aimed toward a common end (Finnis 1998; Ekins 2012).

This second proposal resists the distraction of negative portrayals of institutions and thereby focuses our attention to one of the chief tasks of practical wisdom—namely, the moral assessment of all human actions according to their objects, ends, and circumstances (Aristotle 2009).

[8] What this paper seeks to advance, then, is moral inclusion within a virtue ethical framework. Despite MacIntyrean suggestions to the contrary, all human activity is—and should be understood as—a locus for virtue’s exercise and ongoing development.

From ‘practices’ to human actions

[9] One of MacIntyre’s singular achievements in moral philosophy was the articulation of a new understanding of virtue. Instead of grounding virtue within a metaphysics of human nature as Aristotle had done (Aristotle 2009, 1097b20ff), MacIntyre defined virtue with reference to particular types of activities known as ‘practices’ (MacIntyre 2007, 196). This approach avoided the essentialism of classical thought which seemingly endorsed a static account of human nature and which had been rejected by modern moral philosophies. Instead, MacIntyre historicised the virtues, grounding them first in the concrete experiences, or ‘practices’, of acting persons (Lutz 2012, 154–55).

Thus, on MacIntyre’s account, virtue came to be understood as ‘an acquired human quality the possession of which tends to enable us to achieve those goods which are internal to practices’ (MacIntyre 2007, 191 (italics removed)).

[10] And practices, MacIntyre notes, are ‘any coherent and complex form of socially established cooperative human activit[ies]’ that involve (1) ‘goods internal’ to them and (2) ‘standards of excellence which are appropriate to and partially definitive’ of them. When done properly, practices result in (3) the systematic extension of ‘human powers to achieve excellence’ (MacIntyre 2007, 187).

So, to understand virtue, MacIntyre suggests that one must first identify a bona fide ‘practice’. Among them, he claims, is portrait painting. With respect to (1) internal goods, portrait painting produces ‘both the excellence in performance by the painters and that of each portrait itself’ (MacIntyre 2007, 189).

Moreover, it, like any practice, requires (2) ‘a whole range of key virtues that without them the goods internal to [the] practice[] are barred to us’. Finally, as the result of engaging in this ‘practice’, portrait painting (3) extends human powers in the conceptualisation and realisation of the practice’s own internal goods (MacIntyre 2007, 189–91).

[11] Contemporary business ethicists have found rich conceptual resources in this notion of ‘practice’ as well as MacIntyre’s corresponding idea of ‘institutions’ (discussed below). Among their cited benefits, both concepts help account for ‘the relationship between the workplace and the development of virtues’ (Rocchi, Ferrero, and Beadle 2021, 75).

However, to enjoy these fruits, business ethicists must first undertake important definitional work, concerning the specific types of activities that might count as a MacIntyrean ‘practice’. On this front, they have met significant challenges.

[12] MacIntyre, for one, argues that many activities of commercial society do not count as ‘practices’ since they (says MacIntyre) are concerned with ‘external goods’—such as ‘prestige, status, power and money’—which can hinder the realisation of internal goods and related standards of excellence (MacIntyre 2007, 195–97).

Yet, against such commercial bias, impressive efforts have been made to include business activities within the MacIntyrean fold. Beabout, for example, introduces the now popular term ‘domain-relative practices’, which refers to ‘practices’ that ‘possess internal standards of excellence identifiable to practitioners’ and that ‘are always related to another particular domain’ (Beabout 2012, 414). Seen against the ‘practices’ which they are meant to support, activities such as management, Beabout argues, meet this broadened definition.

For their moral inclusivity, creative approaches like Beabout’s are most welcome. Nevertheless, remaining within a ‘practice’ framework presents difficulties.

[13] First, it is not clear that MacIntyre’s ‘practice’ definition of virtue is preferable to a metaphysical understanding. For one, it appears no easier to define a ‘practice’ than human nature. As noted above, business ethicists have taken great pains to shape MacIntyrean ‘practice’ to reflect the moral valence of business functions, and vice versa (Beabout 2012; Rocchi, Ferrero, and Beadle 2021).

As for human nature, contemporary trends in moral philosophy display renewed confidence. Ethical naturalisms are now not uncommon and, at the very least, prominent moral philosophers propose that human nature has defined, ethically salient ends (MacIntyre 1999; Foot 2001; Anscombe 2005; Finnis 2011; Smith 2015; Hufendiek 2016).

Even MacIntyre admits, in the third edition of After Virtue, that his account of the virtues requires a metaphysical and biological grounding—for ‘[i]t is only because human beings have an end towards which they are directed by reason of their specific nature that practices … are able to function as they do’ (MacIntyre 2007, xi).

Metaphysics is thus more fundamental than ‘practice’ and may offer a stronger normative and explanatory base for virtue. Being universal in scope, it may widen the types of activities that fall within a virtue’s purview.

[14] Another challenge to the ‘practice’ framework pertains to the notion of internal goods. The proposition that such goods are ‘non-rival and non-excludable’ (Rocchi, Ferrero, and Beadle 2021, 82), or that they are always ‘for the whole community who participate in the practice’ (MacIntyre 2007, 190–91), seems questionable.

Consider a practice’s discrete products. These can indeed be excludable: only Oxford’s Ashmolean Museum owns Turner’s High Street painting, for instance. And products may have been produced primarily or even exclusively for reasons of self-interest: perhaps Turner did not intend to transform or advance landscape painting through this work; fulfillment of a commission may have been front of mind (Ashmolean Museum n.d.).

Thus, we circle back to the difficulty of defining ‘practices’ such that the term is broad enough to account for varieties of moral actions and circumstances.

But if we are concerned with such variety (as I think we should be for the sake of informed moral reasoning (Biggar 1989)), then [15] perhaps we would do well to ask more about a particular action’s moral qualities and less about a ‘practice’ narrowly construed.

Asking this broader question refocuses moral inquiry upon the core subject-matter of Aristotelian ethics—[16] i.e., the self-constituting human act—and so invites far-ranging investigation into an act’s intelligible goods, associated choices, and relevant conditions (Finnis 1998; Anscombe 2005; Lutz 2012).

Through this lens, each acting person is seen as a moral agent, whose acts may be assessed by standards of practical wisdom, no matter the person’s relation to a ‘practice’ (Kavanagh 2013). In this light, we find both the practitioner and the manager included in the same moral space.

Photo by mentatdgt on Pexels.com

From ‘practice–institution combinations’ to social acts

Thus far, I have argued that a ‘practice’ framework risks excluding a range of significant actions and persons from virtue ethical reflection in business. Better instead, I suggest, to adopt a more general action-perspective which, when anchored to a human telos, includes more particulars within its field of vision.

To further appreciate the significance of this argument, it may help to examine a MacIntyrean conception of the business firm. This conception, I argue, can distract from moral reasoning due to its negative and limited description of organisational life.

[17] Complementing ‘practices’ is the notion of ‘institutions’. MacIntyre defines the term through examples: ‘Chess, physics and medicine are practices; chess clubs, laboratories, … and hospitals are institutions’ (MacIntyre 2007, 194). At their heart, institutions are ‘structured in terms of power and status’ and, having an existence of their own, they distribute ‘money, power and status’ to sustain ‘not only themselves, but also the practices of which they are the bearers’ (MacIntyre 2007, 194).

Given their relationship to ‘practices’, ‘institutions’ are involved in the morally praiseworthy role of sustaining internal goods and standards of excellence. Nevertheless, institutions remain ‘characteristically and necessarily concerned’ with external goods. Morally blameworthy concepts, like competitiveness and possession, mark them (MacIntyre 2007, 194).

[18] Building upon this distinction, Moore and Beadle describe business firms as ‘practice–institution combinations’ (Moore and Beadle 2006; Moore 2012). Therefore, businesses produce internal goods (that is, products and services, and moral progress for their practitioners) as well as external goods (for example, money and status within an industry).

This combinational account is meant to highlight the moral potential of business firms. But MacIntyre’s negative characterisation of ‘institutions’ remains operative.

‘[T]he practice’, he writes ‘is always vulnerable to the competitiveness of the institution. In this context, the essential function of the virtues is clear. Without [the virtues] … , practices could not resist the corrupting power of institutions’ (MacIntyre 2007, 194).

Thus, by MacIntyre’s lights, the virtues do not lie within the domain of ‘institutions’, given the latter’s concern with external goods which are possessive, individualistic, and corrupting in nature. ‘Practices’ alone are the true home of virtues (Brewer 1997; MacIntyre 2007, 194).

Now, every theoretical construct will have its particular strengths; and MacIntyre’s ‘practice–institution combination’, it has been said, is compelling because it helps describe ‘the relationship between the workplace and the development of virtues’ (Rocchi, Ferrero, and Beadle 2021, 75).

But no theory is without its limitations. And, in this regard, we might wonder whether the MacIntyrean construct, given its ‘practice–institution’ antagonism, may distract us from other virtue-relevant concerns. A brief mention of three will have to suffice.

[19] First, the issue of corporate and individual responsibility. The ‘practice–institution combination’ may be good at diagnosing and negotiating virtue dynamics within a business community. Yet this treatment of institutions is fairly one dimensional.

Beyond their link between institutions and vices, we may also investigate how institutions feature in moral reasoning itself, helping individuals to coordinate to achieve shared ends. This query is possible if we look to institutions of more granular sort than MacIntyre’s ‘chess clubs, laboratories, … and hospitals’ (MacIntyre 2007, 194).

For instance, decision-making processes—including shareholder voting mechanisms and strategy development—are one institutional way in which individuals coordinate to advance shared commercial ends.

If a firm does something morally blameworthy, we can look to the persons who participated in the decision-making process (Aristotle 2009, 1110a1ff) and, from there, determine exactly who may be individually responsible (Finnis, Boyle, and Grisez 1987). The same investigation holds if the firm does a morally praiseworthy act.

And so, as a descriptive and indeed obvious fact, institutions feature prominently in organisational settings and may influence the moral quality of an organisation’s acts. Clear-headed practical reasoning can help discern the enabling features and personal responsibilities involved. But, on this front, the antagonism of the ‘practice–institution combination’ may interfere, as its default mode appears to be moral accusation, especially of macro ‘institutions’ in particular.  

[20] A second consideration overlooked by the ‘practice’ framework involves disciplinary ways of thinking. According to Aristotle and his commentors, practical wisdom—or what we may call moral philosophy—has ‘self-determining human conduct’ as its chief subject-matter (Finnis 1998, 23; Aristotle 2009, 1098a16). Within this domain are found politics, law, and economics—social fields in which human actions centrally feature (Aristotle 2009, 1141b20ff).

Each field, of course, can be associated with distinct intellectual disciplines whose relevance for, and situatedness within, moral philosophy cannot be ignored (Finnis 1998; Smith 2015). Yet, the ‘practice–institution combination’, it seems, downplays or even disregards the contribution of economic, legal, and political ways of thinking in virtue’s exercise and development.

For example, instead of acknowledging how economics may aid practical wisdom in dealing with scarce resources, the ‘practice–institution’ framework seems to stress how ‘institutions’ (or, more broadly, economic reasoning) can corrupt virtue through acquisitiveness. Such emphasis risks locking out disciplinary contributions and so maintains a wall of separation between disciplines which traditionally were cut from the same stone.

[21] Finally, despite its emphasis on the development of virtues, the ‘practice–institution combination’ appears to overlook many embodied and environmental aspects of virtue formation, such as the emotions or the physical layout of a workplace. This may be the result of its underlying focus upon the voluntary choice of rational human agents (Lutz 2012, 13).

This focus, of course, is not misplaced within an Aristotelian notion of moral philosophy (Smith 2015). However, as contemporary affect theorists point out, moral decision-making is deeply influenced by factors that lie ‘beyond language and reason alone’ (Ellis 2022, 5), from deep-seated emotional conditions to the built environment.

Attention to such factors may aid in the curation of spaces and processes that may positively influence moral behaviours and spur virtue development. It may even help in the holistic assessment of organisational actions, insofar as such factors contribute to the circumstances in which persons make moral decisions and collectively act.

An ethics model of the firm

And so, the ‘practice–institution’ view of the business firm has a limited moral vision due in part to its negative portrayal of institutions which, in turn, distracts attention from other virtue-relevant concerns.

A preferable alternative may involve stepping out of the ‘practice’ paradigm and returning to the chief subject-matter of Aristotelian moral philosophy. [22] A business, then, could be seen as a coordination of purposeful human acts; and this social action may be analysed according to its discernible object, end, and circumstance. I refer to this perspective as an ethics model of the firm.

This model need not crowd out MacIntyre’s ‘practice–institution’ approach: indeed, it could benefit from MacIntyre’s emphasis upon communal understandings of virtue. But, as argued above, the ethics model can serve as a more inclusive and fundamental partner for moral reasoning.

Applying to any social act, the ethics model supports a broad church.


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Published by Edward A. David

Responsible business. Law and religion. Ethics in public life.

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