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College

Ethics &
Governance
Is Virtue Ethics Dead in Modern
Organizations?

Students Name

Ethics 2

Is Virtue Ethics Dead in Modern


Organizations?
Introduction
Aristotle believed that a virtue is a habit or quality that allows individuals to succeed at
their purpose; ethical virtues (justice, courage, temperance and so on) as complex rational,
emotional and social skills. (Aristotle., Chase and Smith, 1911) Many theorists believe that
virtue ethics is the basis of normative ethical decision making process both for an individual as
well as an organization. These theorists back their views through the Aristotelian speculations
which go back 2500 years. However, if we draw conclusions on the basis of the present
researches, we come to know that this legitimacy is misplaced and that today Aristotles ethics
are not virtuous. In other words, virtue ethics is dead in modern organizations.
In order to further analyze the topics we need to document the claims made regarding
virtue ethics, most of which are based on Aristotles thinking. Oakley and Cocking (2001) define
virtue ethics in the context of organizations as plausible options to utilitarian and Kantian
approach in order to comprehend and evaluate professional roles. Moreover, Faunce (2004)
argues that virtue ethics gives a moral foundation in the industry of health care.
Virtues are a part of rules and standards as argued by The Model Code of Ethics
Principles (Miller, 2002). Also, the codes of ethics should include action guiding principles as
well virtues and desirable attitudes. These codes of ethics are concerned with actions an
individual is bound to do and the character he should have. In addition, virtues and vices are the
elements of a character and include honesty, bravery and determination (Miller, 2002). These
theories are supported by many. For instance, Statman (1997) claims that virtue ethics is a

Ethics 3

serious rival to traditional moral theories. Annas (1993) observes that ethical decisions that are
simple choices that between consequentialist and deontological thinking are deeply inadequate.
She claims that a difficult ethical decision is not a choice between theories and to replace them
with virtue ethics is erroneous.
This paper is an endeavor to understand whether the practice of virtue ethics is still
existent in modern organizations or not. Modern organizations include the business sector the
banking sector and even educational institutions as they are an important part of our society. The
paper will be discussed in sections with pertinent examples from the stated sectors. Although the
case presented will give an impact that virtue ethics is virtually dead in modern organizations
however, I will prove with few other examples that modern organizations still uphold the value
of virtue ethics and make sure that their customers are rightly taken care of along with the
general community proving that virtue ethics is not dead in modern organizations.

Virtue ethics is dead in modern organizations


As organizations take a further step into the future, virtue ethics is no longer existent for
reasons such as profits. This can be seen in the proceedings of companies like Merrill Lynch. The
world nowadays is a chaotic place. People and organizations both want to earn more and turn
their investments into goldmines overnight. For this purpose they take measures, knowingly and
unknowingly, of all sorts and in all directions. There are organizations where the entire
organizations are involved in the wrongdoings and at times a handful of people. But in both cases
they are not being virtuously ethical. There are several examples. The biggest could be Nike and
Walmart. Both these organizations belong to different corporate sectors but one thing in common

Ethics 4

was their treatment of the employees. They both were notorious owing to their nonhuman
policies and working circumstances. Out of the profit, people and planet these worked only for
profits. The most dramatic example of this is the collapse of the banking system. Baking is a
highly regulated part of the economy but still it does not prevent exploitation (Eisinger, 2014).
Without virtue ethics the rules are a challenge to find evasion. There has been a fiery increase in
criminal laws as well as crime in the past twenty five years (Baker, 2008). The burning question
is do we really care about our moral choices? Our virtues and ethical values infuse most aspects
of our life and culture of our organizations. A great number of the choices that we make are bad
ones. This is the reason why prisons are overflowing (Web.archive.org, 2015). This is the reason
so many die violent deaths at the hand of murderers or doctors. This is also why we have unequal
distribution of wealth. This is why cheating is out of control at schools and universities
(Web.stanford.edu, 2015).
In the previous several years the media has uncovered more than a few cases of unethical
behavior, particularly the exposure of corporate ethics of in modern organizations for instance
WorldCom, HSBC, Merrill Lynch, Martha Stewart, Enron, Global Crossing, Walmart, Tyco
International,

Qwest

Communications, Adelphia

Communications,

Boeing,

Computer

Associates, Parmalat, Rite Aid, H&M, Putnam, Xerox and many more portrayed a sad story.
Criminal investigations owing to corporate failures, abuses of corporate power, falling stock
markets, dubious accounting practices point toward the flaws in the entire economic system.
Such flaws from organizations that are the pillars of the fiscal world and they virtually run the
world is quite disturbing and the confidence of the investors and the common consumers also
gets shacked. Several ventures have grown to be full scale big organizations by means of
acquisitions funded by extravagant share prices and guarantees of further brighter futures but

Ethics 5

sadly some of them have failed also. HSBC was indicted of money laundering in 2012 via the
Mexican drug alliance and several others with feasible links to terrorist groups. (Rushe, 2012)
Similarly there are several incidents in the advertising industry whereby ethics is the most
important part.
Merrill Lynch case
Bank of America procured Merrill Lynch in late 2008 amid the money related emergency. The
$50 billion arrangement came as Merrill Lynch was inside of days of breakdown, viably
safeguarding it from bankruptcy. People blamed the bank and its officers for putting forth false
or deluding expressions about the strength of Bank of America and Merrill Lynch and wanted to
look for $20 billion if the case went to trial. Bank of America denied these assertions and
consented to pay the settlement as a method for dispensing with amplified litigation. After 2001,
the land blast quickened. To administration this business sector, Wall Street made various
monetary instruments. These instruments were a noteworthy reason for the decay of Merrill
Lynch. In 2001, interest rates in the U.S. tumbled to low levels for a few reasons. The earth of
"shabby credit" energized speculators and monetary foundations to estimate in the land market,
which expanded property estimation and allured family customers to take extra debt. It took a bit
of destiny to crash the whole market. Merrill Lynch purchased the harming resources In late
2007, when Merrill Lynch was compelled to concede its liabilities of $7.9 billion and discount $9
billion in possessions. As executive and CEO of Bank of America, Lewis has an obligation to
educate the shareholders of the unfavorable conditions that were available in the Merrill Lynch
merger. The same applies to CEO John Thain, who deluded shareholders by not being
straightforward about the misfortunes at Merrill Lynch and the rewards paid. Another issue for
both the CEOs is paying out rewards just before the acquisition.Doing the proper thing" can

Ethics 6

without much of a stretch be translated as revealing the data to shareholders, however this
activity could likewise have a serious effect on the whole nation. Regardless of what Lewis did,
individuals would be affected by the choice. Ken Lewis and Thain thought they had just two
decisions: proceed with the arrangement and stay silent or haul out of the arrangement and
educate the shareholders of the material unfriendly states of the Merrill Lynch obtaining.
Obviously, Lewis and Thain ought not have given out the rewards in light of the poor execution
of administration that brought about the close crumple of Merrill Lynch. On this issue, Lewis and
Thain (CEO of Bank of America and Merrill Lynch separately) acted unethically. (Trevino and
Weaver, 2003) 'Thus, virtue ethics can be evidently seen as non-existent in modern
organizations'

Virtue ethics is not dead in modern organizations


Having said that, it is also, true that virtue ethics is not entirely dead in modern
organizations. Organizations that run on a moral basis there are still several companies that
conduct their businesses ethically and morally. This can be seen in the yearly financial reports
they publish. The taxes they pay, the way they spend in man-hours and hard earned profits for the
betterment of the community. This category of champions of contemporary corporate sector
comprises of conglomerates like Nestle, Coke, Proctor & Gamble and a lot many others.
The central focal part of the virtue ethics and governance obedience program
at The Coca-Cola Company is their Code of Business Conduct. The Code reveals guidelines for
conducting business stressing upon sincerity and veracity in ever matter. It is a pre-requisite for
the entire organization, staff management, directors and associates to read and comprehend the

Ethics 7

Code and pursue its precepts in the place of work and larger community. (The Coca-Cola
Company, 2015)
The Code is supervised by the Ethics & Compliance Committee. This senior management
team serves cross-functional responsibilities and administers all the ethics and compliance
activities and establishes Code violations and maintains discipline. The Coke Ethics &
Compliance Office has operational task for consultation, education, training, monitoring and
assessment related to the issues of Code of Business Conduct and compliance. A wide variety of
ethics and compliance training courses are devised for associates on an international scale
whereby they receive training under the management of the Ethics & Compliance Office. Coke
monitors and audits on a regular basis, the business to make certain conformity with the Code
and the law of the operative country / region.
There are numerous examples of ethical conflicts where a virtuous person, a person with
courage, honesty and integrity needed help but not provided help from virtue ethics. There are
examples in health and other fields, where loyalty towards preserving a family or sustaining a
friendly relationship to colleagues at work or making sure of the existence of the organization
has been major loyalty.

For corporate governance a perfect framework is provided by ISO 26000. The framework
consists of best practices from commercial sector. Numerous frameworks have been
integrated in regulatory framework and the corporate world is bound to conform, so as to be
endorsed by the ISO 26000. (Sandler and Cafaro, 2005) The legal aspects incorporate the
health and safety concerns of the personnel and the consumers too. Likewise the ecological
feature is to be looked after since it is extremely significant concern at hand. Numerous
regulations have been signed in several nations globally in order to protect the planet earth. The

Ethics 8

identical guidelines correspondingly relate to benevolent feature which has been a boundless
aspect in training the corporate giants such as Nike and Wal-Mart. The workforces went on work
stoppage and they were supported by the NGOs aimed at big businesses to compensate
appropriately and offer care for the workers in every single way. (Sandler and Cafaro, 2005)
Numerous working papers of the UN Commission on Human Rights and the UN SubCommission on the Promotion and Protection of Human Rights in addition to Security Council
declarations verify an intimate relationship among the actions of certain corporations and human
rights exploitations.
These two companies especially Nike have taken a 360 degree turn and have been
striving hard to count all the three Ps people planet and profit. These are working hard to clear
their names of all the bad publicity. The hiring is done on equal opportunity basis, no race, sex or
creed can interfere. The working space and circumstances are being refurbished to maintain
health standards. The wages are being designated at a higher level and most of all the mental
harassments and physical abuse is being ended. (Sage, 2008)
With the increase in the world population and rapid industrialization of the third world
countries there will be a scenario of shortage of resources (Gilding, 2011). We require coping
with this new situation and making readjustment of values that are different from today
widespread consumerism based on hedonistic pleasures. This requires a sense of responsibility
that is strong and persistent. Virtue ethics is our hope to navigate the challenges of this new
world. This is exactly what a few modern organizations are doing. Companies like Coke and
Nestle strive hard to create welfare in the society. They are creating means for the communities
to have access to fresh drinking water educating the local communities in any country (mostly
the third world) they work by opening schools and giving scholarships. 'Therefore, even though

Ethics 9

many modern organizations do not practice virtue ethics, there are still modern organizations
who practice the culture of virtue ethics'.
Virtue ethics is not dead in modern organizations as can be seen in the above given examples.

To sum up, it gives the impression as if the practice of checks and balances that ought to
defend the interests of the shareholder were pushed to one side, obsessed and motivated by
acuity of the want to move fast in the quest of the bottom line. Despite the fact that a number of
failures were the outcome of deceptive accounting and other illicit practices, a lot of the same
organizations showed indication of definite corporate governance risks for instance
inexperienced directors, conflicts of interest, unequal share voting rights or exaggeratedly
profitable compensation (Anderson and Orsagh, 2004). There has been a new and improved
stress on corporate governance owing to the exposure of malpractices and scandals like these.

Conclusion
The world is made of yin-yang. The good and the bad coexist and its the people who
need to maintain a balance. For the virtue ethics to be effectively connected to business, business
movement must be seen as a "practice". Regardless of whether any business action qualifies as a
practice depends less on the sort of action, and more on the character and inspirations of the
individuals occupied with it. The test that any association confronts, in this way, is to teach
administrators as to the attractive quality of excellence based conduct.
As a professional, the administrator endeavors to accomplish a certain particular sort of
ethically comprehensive fabulousness. One basic element of this perfection is that its

Ethics 10

accomplishment involves adherence to specific "ethics" of character, for example, genuineness,


reasonableness, judiciousness, and valor. The perfection sought after by the genuine expert, in
this manner, is not something that can be measured in entirely material terms; it is a good and
also a financial brilliance. But difficult to measure, people or "models" who have accomplished
this magnificence are for the most part identifiable by their inclination to place individual
trustworthiness far beyond any material contemplation.
Virtue ethics needs to extend itself beyond the skills and character traits that give strength
to our relations with other. We need to outline the intellectual virtues that can help us bring us
and our modern organization n to the point of complete fulfillment. This reflects that the theories
of virtue ethics provides a useful explanatory framework in making sense of various business
ethics issues through placing a focus on the moral character of the individuals and its
transformational influences in promoting ethical business conduct. However, it is the application
of these guidelines which is lacking in our life and our modern organization today. An
implication of the virtue ethics theory, in its importance on human values and morality, lies in its
conceptualization of business as a human enterprise with entrenched ethical and moral values.

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