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Morality and the consequences of marketing action
Journal of Business Research 57 (2004) 1222 – 1230
Morality and the consequences of marketing action John Desmond a,1, Andrew Crane b,* a
Department of Management, University of St. Andrews, St. Katherine’s West, The Scores, St. Andrews, KY16 9AL, UK b Cardiff Business School, Cardiff University, Aberconway Building, Colum Drive, Cardiff, CF10 3EU, UK
Abstract This paper explores issues of morality in relation to the consequences of marketing action. It addresses the reasons why, despite adverse social consequences, as well as the exhortations of marketing ethicists, a societal-based morality continues to languish at the margins of marketing practice. We note that ethicists mistakenly characterize organizations as being ‘amoral’ and their decisions as being ‘purely economic’. This ignores the reality that marketing theory and practice are suffused with the morality of economic self-interest. This has important implications for whether one can understand the consequences of marketing action as intended or unintended. We suggest it is due to the power of egoism that attempts to import ethical maxims from moral philosophy have been sidelined. Finally, we discuss the difficulties of securing a more moral basis for marketing decision-making. D 2002 Elsevier Inc. All rights reserved. Keywords: Morality; Consequences; Marketing
1. Introduction This paper explores the consequences of marketing action with respect to the normative elements of ‘ethicist’ and ‘egoist’ strands of moral theory. By ‘ethicists’ we mean those scholars who argue that the embodiment of the maxims of moral philosophy within management theory and practice will lead to better moral outcomes. We term as ‘egoists’ those like Milton Friedman who profess Adam Smith’s view that the pursuit of one or another form of ‘self-love’ or ‘selfinterest’ will ultimately tend towards the best, or least worst, of moral outcomes in economic matters. The primary objective is to demonstrate that economic egoism, however flawed, has always formed the moral basis for marketing theory and practice. Friedman’s (1962) notorious argument that the only social responsibility of business is to make a profit—‘so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception and fraud,’ (p. 33) suggests that, at the level of the individual firm (as opposed to at the level of the economic system), adverse * Corresponding author. Tel.: +44-29-20-875-392; fax: +44-29-20-874419. E-mail addresses: [email protected] (J. Desmond), [email protected] (A. Crane). 1 Tel.: +44-131-449-3848.
0148-2963/$ – see front matter D 2002 Elsevier Inc. All rights reserved. doi:10.1016/S0148-2963(02)00452-6
social consequences are less unintended than unimportant. De George (1993), in opposing Friedman, associates this view with the ‘myth of amoral business’, which assumes that firms conduct their business with no, or little, regard for personal or professional ethics. Writing in a similar vein, Robin and Reidenbach (1987) attack what they perceive to be ‘values’ of efficiency and profit, which can dominate organizational culture leading to morally unacceptable marketing outcomes—values which, they suggest, should be replaced by an ‘ethical’ approach to marketing decisionmaking. The implication of the ethicist critique is that the position advanced by Friedman is not a moral position and that to become fully moral this must somehow become suffused with an ethical orientation. Against this view we argue that, whether one likes it or not, values of profit and efficiency are perfectly consistent with principles of self-interest, which are in turn linked to some variant of economic egoism—a theoretical standpoint with an impeccable pedigree within economic theory, tracing its lineage to Adam Smith’s (1793) Wealth of Nations.
2. A brief description of egoism It is not our intention to promote economic egoism but rather to argue that its power must be fully recognized if it is
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to be engaged with. The worth of egoism as the key to the good life has a long history and may be traced to the debate between Sophocles and Callicles in the Gorgias (Plato, 1960). Egoism comes in two variants, one based on desire, the other on interests. Proponents of an egoism based on desire argue that the best life lies in one getting what one wants whenever one wants it; those who base their argument on interests assert that this consists in promoting what is in one’s long-term interests. It is important to distinguish egoism based on desire from selfishness. Whereas the egoist can be moved by pity for others in seeking to remove his own distress caused by their plight, the selfish person is insensitive to the other. Variants of egoism are consequentialist to the extent that supporters argue that the good society derives from getting what one desires or what is in one’s interests. Within moral philosophy an important criticism of egoism based on desire is that it renders patently different approaches to life as being equivalent; thus in this view the life of the drunkard is as admirable as that of the judge if both followed their desire. Also, if one argues that one ought to strive for what one desires, then one might regard those who seek to restrain or discipline their desire (e.g. those who follow an ascetic course) to be objectively less good than those who are more self-centered. An egoism based on the pursuit of interests goes some way towards addressing such concerns (Graham, 1990). The idea of interests based on the pursuit of one’s long-term well-being enables one to distinguish between the life of the judge and the drunkard. In this formulation, a gap opens up between desire or longing and what is in one’s ultimate interests, such that one can say that it is not in the interest of the drunk to give in to immediate desires. An egoism based on interests approaches the idea of objective value. Thus, it can be said that some things are, as a matter of fact, in my interests and other things are not; as an addicted asthmatic, I may desire to smoke, but it is not in my long-term interests to continue to do so. It also forms the basis for shaping moral relations towards others. Thus, in ensuring my long-term interests, I should ideally attend to the best interests of those upon whom my interest is dependent.
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wants by appealing not to their humanity but to the ‘selflove’ or self-interest: Give me that which I want and you shall have that which you want is the meaning of every such offer. (p. 21) Smith is arguing that the market exchange process is indifferent, to the extent that the parties to it focus on the satisfaction of their own interests and are relatively indifferent to the purposes of others (except to the extent that these relate to one’s own ultimate interests). This only makes moral sense in a ‘free’ competitive environment where both parties to the transaction have perfect information, in which case the final moral arbiter is the ‘sovereign’ consumer. Smith’s argument may thus be summarized as saying that one is more likely to find a moral outcome as the end-product of a system based on free competition and good information than within the mercantilist ‘closed-shop’, which was characteristic of his own time. The important point to note is that morality cannot be located in the individual case but is a consequence or emergent property of the operation of the system (the marketplace). For example, if a producer makes and sells shoddy or faulty products, then consumers may suffer in the short-term as the result of the lack of fitness of the products which they have bought. However, in the longer run, trade will suffer as consumers turn to alternate sources. This example begs several questions, of which the persistence of oligopoly, anti-trust practices, deceptive practices, and buyer – seller informational asymmetries are but a few (see Smith, 1990). Clearly, a discussion of the egoism of firms in the market environment is different to that of the Platonic individual. For one thing, an organization is by definition a collection of individuals and so one must take into account the effects of modes of organizing on the exercise of moral choice. A second difference is that the marketplace (rather than some system of ethics such as hedonism) is seen to provide the context for the development of self-interest such that organizational ‘well-being’ is universally indexed to some benchmark of share-value, return on assets, or profitability.
4. Egoism in marketing theory 3. Egoism in economic theory Smith (1793) defends egoism on the basis of lack of knowledge—the simple fact that one cannot ever know the full consequences of one’s actions. As Shand (1990) notes, the advocacy of self-interest is not merely derived from a cynical view of human nature, but is rather a recognition of the fact that economic agents have limited knowledge, and hence, limited objectives; it is simply not possible for them to know all the possible consequences of everything they do and to adjust their actions accordingly. This argument leads to Smith’s (1793) contention that, rather than seeking to gain the favor of another, one is more likely to obtain what one
As the academic discipline of marketing has its origins in economics (Jones and Monieson, 1990), it is not surprising that it owes its prevailing sense of value to this tradition. Marketers’ recognition of the ultimate power of consumer sovereignty has found expression in the marketing concept, which argues that the self-interest of the firm is obtained through satisfaction of consumer desires, or interests. Without going into detail, we would ask the reader to note the parallels between the above quote by Smith, and formulations of the marketing concept. For example, McKitterick (1957), in reputedly the first rendition of the marketing concept, focuses on the difficulties
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of competing in ‘quicksilver’ markets by urging the marketer: Not so much to be skilful in making the customer do what suits the interests of the business, as to be skilful in conceiving and then making the business do what suits the interest of the customer. (p. 78) In this, as in other formulations, marketing is useful in that it is an adaptive mechanism; those who serve the interests of the customer best, best serve their own interests. Marketing academics have been careful to police the boundaries of this self-interest, being keen to distance this from related concepts such as selfishness, which Levitt (1962), for example, equates with selling and not marketing. Enlightened self-interest is presented as constituting the basis of marketing morality by ensuring the most advantageous social consequences. Kotler’s (1972) celebrated development of the Societal Marketing Concept (SMC) may be interpreted in this light as a bid to shift the basis of marketing morality from self-interest based on the satisfaction of desires to a more robust footing based on the satisfaction of consumer interests and social welfare. Kotler is quite clear that the ultimate interest is that of the producer (Kotler, 1972, p. 54) and argues that; ‘The societal marketing concept calls for a customer orientation backed by integrated marketing aimed at generating long run customer satisfaction and long-run customer welfare as the key to longrun profitable volume’. However, focusing on this extract might lead one to think that welfare is primary and profit merely follows from this. This interpretation is tempered by the extent of Kotler’s (1972) appeal to the self-interest of firms in the same paper. In fact he argues that the profitable nature of societal marketing ‘is the most difficult and yet the most critical of my five conclusions to prove’ and that ‘Obviously, if consumerism is profitable, businessmen will put aside their other objections. It is mainly because of its perceived unprofitability that many businessmen object so vehemently’ (p. 53). From this, we believe that it is clear that in the last instance, it is profitability and competitive advantage that really matter: The enlightened marketer attempts to satisfy the consumer and enhance his total well-being on the theory that what is good in the long run for consumers is good for business. (p. 57) On this basis, we contend that morality, in the form of one or another variant of egoism or self-interest, has always been central to marketing thought. Indeed, it would be unsurprising to remark on the importance of the pursuit of profit or market share as a goal of commercial marketing.
5. Modes of organizing self-interest: effects on morality While the organization of the pursuit of self-interest is not difficult for the single trader, those who manage large organizations are faced with the problem of organization
and control. For example, Starkey and McKinlay (1994) note that when Henry Ford II took his place as chairman of Ford Motors in 1945, he was ‘acutely aware of the limits of his knowledge and control over the managerial decision-making within the company’ (p. 6). Ford remodeled the company along the lines of General Motors, and over the next two decades, ‘managers became no less cogs in Ford’s bureaucratic machine than assembly line workers’ (Starkey and McKinlay, 1994, p. 4). Smith’s (1793) issue concerning lack of knowledge and the division of labor thus raises itself once more within the context of organizational structure and control. Weber (1947) provides important conceptual underpinnings to understanding bureaucratic organization, in arguing that this is the ‘ideal type’ of structure for ensuring command and control in large organizations. Importantly, Weber also notes the impact which this structure has upon the exercise of morality, arguing that in a bureaucratic structure, a person’s sense of morality becomes subjugated to the functionally specific rules and codes of behavior, which are set in place to provide for the organization’s survival. In an extensive study of modern managers and marketers, Jackall (1988) developed Weber’s theme of morality shaped by bureaucracy to argue that the moral code of managers centers on rules for personal survival and success. He suggests that individuals will tend to bracket their personal moralities while at work, and adopt the prevailing ‘self-interested’ ethic of the organization. While there is some disagreement among researchers as to whether or not individuals do bracket their personal moralities at work, the majority of studies indicate this to be the case. Starkey and McKinlay (1994) interviewed over 100 Ford managers in Europe and the USA, concluding that the managerial culture focused on the importance of numbers and systems and depended on a powerful finance function that ‘knew first and foremost how to minimize costs and maximize profits’ (Halberstam, 1987, p. 213). Violent imagery and language were employed to describe the role of these ‘axe-men’. The culture fostered functional isolation among the company’s employees, and relationships between functions such as sales and manufacturing were described as ‘a never ending war of attrition’ (Starkey and McKinlay, 1994, p. 8). Despite this, Gioia (1994), who worked for Ford at Dearborn as Field Recall Coordinator during the 1970s (and hence a key player in the Pinto recall decision), notes that during that time the company felt ‘‘buffeted, beleaguered and threatened by international competition and the threat of government regulation: The changes were mostly external . . . and led to a strong feeling of we-vs-them, where we (Ford members) needed to defend ourselves against them (all the outside parties and voices demanding that we change our ways). (p. 99) Thus, some form of fellow-feeling persisted even in the bear-pit described by the authors—although this was directed towards those who were ‘like us’ and not ‘like them’. Writing
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in the tradition of work by Turner (1971), Van Maanen (1973) and Harvey et al. (1984), Watson (1994, 1998) provides rich and compelling evidence of moral engagement on the part of his managers, particularly in terms of trust, mutuality, and cooperation. This cultural view of management resonates with Robin and Reidenbach (1987) in that it suggests that organizations can benefit from a more ‘values-based’ approach to management (see also Peters and Waterman 1982). However, these concerns with culture and values principally address the relationships concluded within the work group, or the moral community of managers in which work is enacted. With respect to those outside of the organization: Issues of morality and the necessity of moral choice are frequently pushed to one side as pressures to get results, to get the job done, and to survive in a competitive or otherwise hostile world, press organizational managers endlessly to seek more efficacious means without giving too much consideration to the ends to which they are oriented or the values which are implicit in the means. (Watson, 1998, p. 253) There is then common ground between Watson and the analysis of life at Ford offered by Starkey and McKinlay and Gioia (op. cit.), i.e. the boundaries of the moral community are defined in relation to colleagues who form part of the work group. However, what does this mean for how the organization, through its marketing activities, relates to those outside the moral community that constitutes the organizational ‘self’? Marketing is fundamentally a boundary-spanning function, and to speak of culture in the context of external relations poses problems for where we draw cultural limits. It is to this question that we now turn.
6. External relations: beyond the moral community? In search of a less rationalistic and egoistic morality in marketing and management decision-making, researchers have recently begun to explore the phenomenon of ‘green business’. However, even in this context, where there is clear potential for adverse ‘unintended’ consequences well beyond the boundaries of the firm, the evidence suggests little change in the prevailing ethical code of self-interest. For example, Fineman’s (1996, 1997, 1998) extensive analysis of interviews with managers has led him to conclude that the discourse on corporate environmentalism ‘‘encloses its members in a self-sustaining rationality, rendering morality invisible beyond a limited organizational boundary’’ (Fineman, 1998, p. 243), where the boundary is defined by the customer. Crane’s (2000) account of the morality understood, felt and communicated by participants in green marketing programs paints a similar picture. Evocations of an ethic of selfinterest permeate his organizations, with some companies even centering their environmental sense-making activities
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around the theme of ‘sound environmental sense makes good business sense’: When you’re selling [environmental] initiatives to other staff, the one you put first is the customer, because it’s good for the customers. That’s always number one . . . After that comes the commercial justifications, the cost savings . . . And only after that you look at the environmental side . . . Because at the end of the day, saving the world is not going to keep us in business. (p. 90) The above is as clear an explication of ‘enlightened’ egoism as one is likely to get. In this reading, finance issues are not primary (as they were at Ford). Instead there is the recognition that, first and foremost, one is reliant on customer satisfaction for one’s own well-being and that cost factors must be taken into account within that context. Overall then, while it is clear that more research should be carried out, the weight of evidence to date strongly supports the view that managers view the rational pursuit of selfinterest as being key to organizational survival and the rhetoric of self-interest as the ‘proper’ way to engage in discussion about business issue.
7. Ethicists aims to change organizational values Robin and Reidenbach (1987) take the pursuit of selfinterest in marketing to be morally reprehensible, especially if this is defined narrowly in terms of a focus on profits or efficiency. In common with other ethicists (e.g. Chonko and Hunt, 1985; Laczniak and Murphy, 1993; Pratt and James, 1994; Smith, 1995), they suggest that such values tend to permeate corporate decision-making and that by replacing these with a ‘more ethical’ approach to decision-making, better moral consequences will ensue. They advocate that marketers use ethical principles in an ‘appropriate’ manner, arguing that deontological and utilitarian principles should be explored in relation to the decision context and blended to the right consistency. For example, where the activities of marketers could have a foreseeable and potentially serious impact on individuals, they argue that deontological reasoning should be used. Robin and Reidenbach (1987) suggest an approach to marketing ethics based around the reformulation of corporate culture, because this is the seat of two fundamental values: profit and efficiency. They see the key to this as being the elicitation of core values and their integration throughout the organization’s culture; arguing that, in the absence of a set of values, the organization should come up with its own. They are agnostic as to which primary ethical system to use, whether deontology or utilitarianism, but are chary of inviting firms to adopt one of the myriad of codes of ethics which they regard as being largely superficial in their effect, suggesting that instead it is only when top managers internalize certain values that an effect is noted. The authors select the Aristotelian notion of prudence or moderation, as the best
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option to be applied to the system of values developed by marketers. Marketers should seek for a ‘golden mean’ of performance, being neither deficient nor excessive; while in relation to social responsibility, the organization should use the nuclear family as a metaphor. Once developed, the core values must become part and parcel of the planning procedure (Robin and Reidenbach, 1987, p. 49). How does this prescription fit with the available evidence? In fact this seems to support the opposite conclusion to that supposed by Robin and Reidenbach. Rather than ethical approaches substituting for values of profit and efficiency, they tend to be incorporated and subsumed within the logic of the discourse of self-interest. For example, the widespread use of cost – benefit analysis by firms is reported by several authors (cf. part II of Birsch, 1994). Originating from a utilitarian perspective, this technique has gradually been stripped from its original disinterested frame of reference to be utilized within the selfinterested frame of reference of the organization [While egoism argues that we have most reason to put our own interests before those of others, utilitarians insist that everyone’s interests should be treated as being equal.]. Thus, in Ford Motors’ apparently routine use of cost – benefit analysis as exemplified by the Pinto case, the ultimate interest served through the determination of the calculation was that of Ford. Crane (2000) also found considerable evidence for the use of CBA in ‘green’ marketing contexts. Robin and Reidenbach themselves point out that in practice codes tend to be used in the interests of profit and efficiency. In the light of evidence from recent empirical studies, it is difficult to see how the terms of ethical debate as encapsulated by deontological or utilitarian principles could gain proper admission to debate within the context of corporate decision-making. For example, Crane (2000) found evidence of a widespread mistrust and unease with ideas and terms which did not fit into the ‘self-interest’ script as being morally troubling or unconventional in some way (see also Bird and Waters, 1989). Such ‘semantic suspects’ were both avoided, and were carefully reframed in more ‘acceptable’ language, as this manager illustrates: If you are talking to senior managers, they think you are going back to the hippie days, you know. Sustainability? We are running a business to make profits. It’s not about furry things. . . .You have to be realistic. Things like sustainability—unless you dress them up in more business language, they are going to be resisted. (p. 63) Gioia (1994) reflecting on his role in Chief Recall Officer for Ford during the time of the Pinto controversy describes the means by which anything other than the prevailing rationality is squeezed out by equating that which is outside or beyond organizational discourse as being ‘idealist’ compared to the ‘realism’ inside. To illustrate this point, he describes ‘one instance of emotion’ which came to him when
he saw a burnt out Pinto leading him to raise a recall for the Pinto with his colleagues: I soon ‘‘came to my senses,’’ however, when rational consideration of the problem characteristics suggested that they did not meet the scripted criteria that were consensually shared among members of the Field Recall Office. At the preliminary review other members of the decision team, enacting their own scripts in the absence of my emotional experience, wondered why I had even brought the case up. (pp. 111 – 112) Thus, just as decisions not to recall the Pinto were recalled as ‘good business decisions’ in line with everyday scripted behavior, in Crane’s (2000) study, such insider discourse encouraged respondents to be on the whole unimpassioned and largely unmoved to display any signs of personal engagement with, or duty towards, environmental protection. Notably, this ‘amoralization’ of green marketing, namely, the lack of a personal, affective morality, the avoidance of moral reflection and attachment, and the denial of explicit moral status, was exhibited across a range of different organizational types. In addition to the cost –benefit analysis, customer satisfaction and the ‘auditing’ of resource utilisation were widely privileged as the principal means of addressing green marketing questions, revealing a highly rationalist, and self-interested corporate discourse. Thus, we can see that in particular where the subject of morality lies beyond the firm (such as the environment), marketing ethics are frequently found to be instrumental, self-serving and pragmatic. Another consequence, which flows from the prescription offered by Robin and Reidenbach and others who argue for the substitution or grafting of ethical schemes onto the system of self-interest, is that they seem to argue for the creation of a kind of moral legislature which can stand above the flux of quotidian decision-making. At any given point in time, a group of managers may bring the ‘facts’ of their situation to this legislature which will then decide which form of ethics is appropriate. This prescription begs several questions. How will such ethics fit in with the existing decision processes? What if the ‘facts’, and in particular, the consequences, of the situation are unknown or if there is disagreement about the facts themselves or with respect to the assumption which underlie the facts? In any event, having warned their audience of how codes can quickly become window-dressing and how act-utilitarianism can be employed to dress up the facts, we are surprised that they did not think that rather than ‘ethics’ replacing the values of cost and efficiency within firms, ethics might not instead become recruited to the promotion of such values, particularly within the prevailing discourse of self-interest. As we have already noted, the space for ethics is already inhabited by a particularly strong and pervasive variety of the ethics genus: selfinterest or egoism. Having suggested the legislative role for ethics, which we have just discussed, Robin and Reidenbach go further to
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suggest that to avoid unpalatable consequences, ethics form part of the ‘core values’ of the organization, core values which should be reflected in the corporate mission and objectives and which should pervade the organization in a manner similar to family values. Again we must note that organizations are already pervaded by a system of value and that this is not simply a matter of creating value where there is one or of simply replacing isolated values. And within this system, ostensibly undesirable social outcomes are hardly unintended, merely incorporated into the framework of selfinterest and carefully costed-out and accepted as unavoidable given the interests of the firm. Also worrying to us, in light of our former discussion, are the implications of ethicists’ arguments for the creation of a strong corporate culture for the transmission of values. If, as we suggest, the moral aim of corporations is the pursuit of (unenlightened or enlightened) self-interest, which is realized in an organizational form and decision process based on a version of bureaucratic rational instrumentalism, the core moral impulse will be to the moral community which constitutes ‘us’, or the full-time staff. The only way in which those others who constitute ‘them’, those who are beyond this moral community, can be included is to the extent that they form a means for ‘us’ to get to where ‘we’ want to be. It could thus be argued that in advocating the creation of a ‘strong’ culture based around powerful central values, Robin and Reidenbach reinforce the internal normative ‘we’ of the moral community and that this actually buttresses the barriers which are already erected against ‘them’ outside of this (Dahler-Larsen, 1994). Dealings between members of the moral community may (or may not) be infused with moral engagement. However, the stronger the communal culture, the stronger will be the group norms and loyalty which bind it and which reinforce the boundary between the moral community and what is perceived to be beyond this. In this sense, a ‘strong’ culture is more likely to breed conformity and ‘normative control’ (Etzioni, 1964). As the social psychology literature has graphically shown (Milgram, 1965; Sheridan and King, 1972; Zimbardo et al., 1973; Kunda, 1992), such conformity tends to lead to perverse moral outcomes, with those considered to be beyond the bounds of the moral community being treated as objects of moral indifference. In this sense, one might argue that a ‘weaker’ organization culture offers greater potential for being more moral than the ‘strong’ in that the boundary which divides the organization from its constituent communities is more porous. One would expect this more permeable organization to be more tolerant of the professional, cultural, religious and other values which organizational members bring with them when they enter its domain. For example, the trend towards stakeholder inclusion and partnership to tackle social and environmental issues in marketing can provide a fertile context for the introduction of values conflicting with those of corporate self-interest (see Fineman and Clarke, 1996; Milne et al., 1996; Crane, 1998). Such developments can thus give rise to discursive struggles
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surrounding the moral ‘realities’ of the consequences of business activity (Livesey, 1999). However, due to issues of resource dependence on the part of NGOs, and strong culture on the part of businesses, once again we can see that this frequently results in a privileging of corporate self-interest as the arbiter of ‘correct’ and ‘appropriate’ action (Crane, 2000). Hence, unless corporate partners become more permeable to these competing values, rather than simply legitimating stakeholders on grounds of organizational self-interest, the ability for such partnerships to embed new values into the moral community of the corporation appears to be limited.
8. Implications and conclusions From the preceding discussion, while we have much in common with ethicists’ arguments, there are key points of difference. First, with respect to ethical codes, we share the concerns of Robin and Reidenbach and others (e.g. Pratt and James, 1994; Fritzche, 1991) that these can quickly become window-dressing. We do not, however, share their optimism that it is possible generally to persuade managers to substitute deontological and utilitarian schemes in lieu of egoism, other than when aspects of these systems can be blended with the self-interested rhetoric and practice of the organization. This is because ethicists have misunderstood and underestimated the power of the egoist ethic of self-interest, which pervades organizational structure and discourse. This in turn helps us understand why, as Sorrel (1998) notes, ethics is still of marginal significance in organizational life. A second point of difference between our view and that of most ethicists is the degree of importance which we lend to the social context. We agree with those who argue that the ethicist approach is overly psychological and individualist, taking the aggregation from the ‘individual’ to ‘group’ levels as unproblematic (Fogarty, 1995; Thompson, 1995). At the very least, the implications of our argument suggest that the key issue is not the replacement of isolated values but of seeking to replace a flexible and potent moral system. In relation to this, we should clarify our perspective with respect to indifference and, in particular, the implications of the link between the consequentialist nature of economic egoism and the indifference of organizational decision-making processes (as opposed to a lack of ‘intention’ regarding social consequences). Indifference, as we have explained, is not solely the outcome of organizational culture. It is reinforced through particular forms of structure such as bureaucracy, which Bauman (1993) cogently argues, fosters the idea of a ‘rule by nobody’ and by postbureaucratic forms such as ‘concertive control’ (Barker, 1983), which may reinforce bonds of moral community within the organization at the expense of that which lies outside its boundary. Indifference is also reproduced in the script followed by organizational actors every time that they meet to discuss matters pertinent to the self-interest of the organization (Gioia, 1994). The decision-making process itself manufac-
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tures moral distance as the moral identities of those who are defined as being beyond the organizational ‘I’ are labeled (as ‘customers’; ‘subcontractors’; ‘factors of production’), aggregated, quantified and fed into the process as inputs and outputs, targets and projections, as objects or units to be plotted onto a chart. As we have argued, the end result of this process may lead to positive as well as negative outcomes. However, this highlights a paradox at the root of moral decision-making in business. On the one hand, decisionmakers within the firm, acting in the pursuit of ultimate selfinterest, may act in the interests of others, as a means to an end. They may interpret their self-interest narrowly, and as such, are not bound to act in the interests of others—although they will no doubt incur the ire of liberal economists and marketers who issue dire warnings to those who act selfishly in pursuit of short-term gain. The paradox is, that where they do purport to act in the interests of these intermediaries, they tend to remove the moral ‘face’ of these others (Bauman, 1993). By this, we mean that within the rational decisionmaking process, which defines the organizational self-interest, the satisfaction of the desires or interests of these others is not treated as an end in itself, but as the means to an end; the other enters into the rational decision process whole (as nature, a human being) and leaves it in pieces (reduced to a series of variables and averages). This indifference is of a different kind to that described by Smith (1793), whereby economic agents are, perforce, relatively indifferent to the aims of others in pursuing (and being morally responsible for the pursuit of) their self-interest. Rather, it springs from the rational decision process itself and is further aggravated by the rational bureaucratic nature of organization. Nevertheless, albeit defined and shaped instrumentally to the ultimate self-interested goals of profit and survival, it is clear that firms do take into account concerns which others would take to be ‘socially responsible’. The question is whether one labels decisions such as to charge a ‘fair’ price, to actively promote environmental protection or to ensure that slavelabor is not used in the manufacture of goods—i.e. decisions taken not as the result of abstruse ethical reasoning but because it makes ‘good business sense’—to be morally reprehensible. The answer must be ‘sometimes’, depending upon which moral yardstick one is using. What then of prescription? Our proposal that weaker, differentiated cultures may actually offer more opportunity for the permeation of new values into the organization, while supported by the literature (e.g. Dahler-Larsen, 1994; Sinclair, 1993; Starkey, 1998), has yet to be fully tested empirically and represents an important avenue for further research. In terms of prescriptions for the practice of marketing, given that egoism is such a powerful discourse within organizations and that at present there seems little on offer that might supercede it, from a practical ethics point of view, a policy of acknowledgement and constructive engagement would be a useful starting point. For example, the promotion of stereotypes in advertising has been an important topic for ethical concern over the years (e.g.
Courtney and Lockeretz, 1971; DeYoung and Crane, 1992) and has been cited by Pollay (1986) as an important unintended consequence of advertising. While authors have consistently called for a more ethical treatment, one might conceive that an argument based on the logic of selfinterest might, in the first instance, prevail where ethical arguments have failed (i.e. ethical arguments might later be advanced to ‘ratchet-up’ ethical performance). This could invoke possible negative consequences, such as the likelihood of negative publicity, boycotts and other actions that could result in loss of sales in the short term, and long-term damage to the brand. Similarly, more ethical negotiating tactics in sales and purchasing might be usefully reframed in terms of long-term self-interest in the light of the importance of fostering marketing relationships based on mutual trust and honesty (Crampton and Dees, 1993). Indeed, in hindsight, one wonders if the decision to produce the Ford Pinto without changing the location of the fuel tank would have been made had the costs of adverse publicity been known. The appeal to self-interest though flawed in the eyes of ethicists, may thus do much to advance more socially beneficial marketing practices. Our call for constructive engagement with economic egoism within organizations does not mean to say that we have no reservations about it. The argument is consequentialist in that ultimately the good is said to emerge as the result of competition in the free market. However, this argument is at such a high level of abstraction, with so many intervening and confounding variables, that it is not demonstrable except in the most general way. In this respect, the belief in the efficacy of economic egoism at the system level comes close to ‘blind faith’. While Friedman (1962) and others who espouse economic egoism argue that ultimately this produces the least-worst form of economic system, there are many who are rightly concerned about its effects upon humanity and ecology (cf. Harvey, 1989). The urgency of this requirement has resulted in the constant drive for improved efficiency, exemplified, for example, in the transition from the farmyard hen to the genetically modified hen via the battery hen. Economic egoism does not respect the ‘intrinsic’ value of the hen, but merely its ability to contribute to the bottom line. Those who believe that hens and other inputs to the market do have intrinsic value are therefore going to be at odds with those who favor the relativism of economic egoism. However, it is not difficult nowadays to contend that many values, which should arguably be ends in themselves (that people and animals should be respected for their worth rather than as inputs to the production process), tend to be subordinated to the ultimate value of the marketplace, which is to make a profit. The exploitation of cheap labor with poor working conditions in developing countries by big brand western multinationals is just one of the more striking examples of an ostensibly ‘unintended’ consequence of marketing actually being a logical consequence of economic egoism.
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There is no clear prescription for the reconstruction of the ‘face’ of the moral subject which has been dissembled. However, if the creation of the indifference characteristic of economic egoism involves processes of abstraction, quantification and calculation, it follows that the reconstruction of the moral ‘face’ requires a specific challenge to these ways of thinking and valuing. Perhaps the greatest prospect for this in contemporary marketing practice is the development of stakeholder partnerships (Crane, 1998). Clearly, there is a need for more research here: first, to extend the stakeholder partnerships literature to consider the impact on egoism of competing discourses; and second, to provide more systematic study of any form of breaches of the egoist script in the marketing organization. References Barker J. Tightening the iron cage: concertive control in self-managing teams. Adm. Sci. Q. 1983;38:408 – 437. Bauman Z. Postmodern ethics. Oxford: Blackwell, 1993. Bird FB, Waters JA. The moral muteness of managers. Calif Manage Rev 1989;Fall:73 – 88. Birsch D. Whistle blowing, ethical obligation, and the Ford Pinto case. In: Birsch D, Fielder JH, editors. The Ford Pinto case: a study in applied ethics, business and technology. New York: State University of New York Press; 1994. p. 199 – 219. Chonko LB, Hunt SD. Ethics and marketing management: an empirical examination. J Bus Res 1985;13:339 – 59. Courtney AE, Lockeretz SW. A woman’s place: an analysis of the roles portrayed by women in magazine advertisements. J Mark Res 1971; 13(1):168 – 72. Crampton PC, Dees JG. Promoting honesty in negotiations: an exercise in practical ethics. Bus Ethics Q 1993;3(4). Crane A. Culture clash and mediation: exploring the cultural dynamics of business – NGO collaboration. Green Manag Int 1998;24:61 – 76. Crane A. Marketing, morality and the natural environment. London: Routledge; 2000. Dahler-Larsen P. Corporate culture and morality: Durkheim-inspired reflections on the limits of corporate culture. J Manag Stud 1994;31(1): 1 – 18. De George RT. Ethical responsibilities of engineers in large organizations: the Pinto case. In: Beauchamp TL, Bowie NE, editors. Ethical theory and business, 4th ed. Upper Saddle River: Prentice Hall; 1993. DeYoung S, Crane FG. Females’ attitudes toward the portrayal of women in advertising. Int J Advert 1992;11(3):249 – 56. Etzioni A. Modern organizations. Englewood Cliffs (NJ): Prentice-Hall; 1964. Fineman S. Emotional subtexts in corporate greening. Organ Stud 1996; 17(3):479 – 500. Fineman S. Constructing the green manager. Br J Manage 1997;8(1):31 – 8. Fineman S. The natural environment, organization and ethics. In: Parker M, editor. Ethics and organizations. London: Sage; 1998. p. 238 – 52. Fineman S, Clarke K. Green stakeholders: industry interpretations and response. J Manag Stud 1996;33(6):715 – 30. Fogarty T. Accountant ethics: a brief examination of neglected sociological dimensions. J Bus Ethics 1995;14(2):103 – 17. Friedman M. Capitalism and freedom. Chicago: University of Chicago Press; 1962. Fritzche DJ. A model of decision making incorporating ethical values. J Bus Ethics 1991;10:841 – 52. Gioia DA. Pinto fires and personal ethics. In: Birsch D, Fielder JH, editors. The Ford Pinto case: a study in applied ethics, business and technology. New York: State University of New York Press; 1994. p. 97 – 116.
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Graham G. Living the good life: an introduction to moral philosophy. New York: Paragon; 1990. Halberstam D. The reckoning: a tale of two cultures as seen through two car companies. London: Bloomsbury; 1987. Harvey D. The condition of postmodernity. Oxford: Basil Blackwell; 1989. Harvey B, Smith S, Wilkinson B. Managers and corporate social policy. London: Macmillan; 1984. Jackall R. Moral mazes. New York: Oxford Univ. Press; 1988. Jones DGB, Monieson DD. Early developments in the philosophy of marketing thought. J Mark 1990;54(January):102 – 13. Kotler P. What consumerism means for marketers. Harv Bus Rev 1972;50 May – June:48 – 57. Kunda G. Engineering culture: control and commitment in a high-tech corporation. Philadelphia: Temple Univ Press; 1992. Laczniak GR, Murphy PE. Ethical marketing decisions: the higher road. Boston: Allyn and Bacon; 1993. Levitt T. Innovation in marketing. New perspectives for profit and growth. New York: McGraw-Hill, 1962. Livesey SM. McDonald’s and the environmental defense fund: a case study of a green alliance. J Bus Commun 1999;36(1):5 – 39. McKitterick JB. What is the marketing concept? In: Bass F, editor. The frontiers of marketing thought in action. Chicago: AMA; 1957, p. 71 – 92. Milgram S. Some conditions of obedience and disobedience to authority. Hum Relat 1965;18(1):57 – 76. Milne GR, Iyer ES, Gooding-Williams S. Environmental organization alliance relationships within and across non-profit, business, and government sectors. J Public Pol Mark 1996;15(2):203 – 15. Pollay RW. The distorted mirror: reflections on the unintended consequences of advertising. J Mark 1986 (April);50(2):18 – 36. Peters TJ, Waterman RH. In search of excellence. London: Harper & Row; 1982. Plato. The Gorgias. Hamilton W. Trans. London: Penguin; 1960. Pratt CB, James EL. Advertising ethics: a contextual response based on classical advertising theory. J Bus Ethics 1994;13(6):455 – 69. Robin DP, Reidenbach E. Social responsibility, ethics, and marketing strategy: closing the gap between concept and application. J Mark 1987; 51(January):44 – 58. Shand AH. Free market morality: the political economy of the Austrian school. London: Routledge; 1990. Sheridan CL, King RG. Obedience to authority with an authentic victim. Proceedings of the 80th Annual Convention, American Psychological Society 1972;I:165 – 6. Sinclair A. Approaches to organizational culture and ethics. J Bus Ethics 1993;12:63 – 73. Smith A. An inquiry into the nature and causes of the wealth of nations, vol. 1, 7th ed. London: A Sraten and T Cadell; 1793. Smith NC. Morality and the market: consumer pressure for corporate accountability. London: Routledge; 1990. Smith NC. Marketing ethics for the ethics era. Sloan Manage Rev 1995; 36(4):85 – 97. Sorrell T. Beyond the fringe? The strange state of business ethics. In: Parker M, editor. Ethics and organizations. London: Sage; 1998. p. 15 – 29. Starkey K. Durkheim and the limits of corporate culture: whose culture? Which Durkheim? J Manag Stud 1998;35(2):125 – 36. Starkey K, McKinlay A. Managing for Ford. Sociology 1994;28(4):1 – 16. Thompson CJ. A contextualist proposal for the conceptualisation and study of marketing. Public Pol Mark 1995;14(2):177 – 91. Turner B. Exploring the industrial subculture. London: Macmillan; 1971. Van Maanen J. Observations on the making of policemen. Hum Organ 1973;32(4):407 – 18. Watson TJ. In search of management: culture, chaos and control in managerial work. London: Routledge; 1994. Watson TJ. Ethical codes and moral communities: the gunlaw temptation, the Simon solution and the David dilemma. In: Parker M, editor. Ethics and organizations. London: Sage; 1998. p. 253 – 68. Weber M. The theory of social and economic organization. Oxford: Oxford Univ. Press; 1947, Henderson A.M., Parsons T., Trans.
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Zimbardo PG, Heney C, Banks WC, Jaffe D. The mind is a formidable jailer: a Pirendellian prison. New York Times 1973;April 8th:38 – 60.
Further Reading Bauman Z. Modernity and the Holocaust. Oxford: Polity Press, 1989. Ferrell OC, Gresham LG, Fraedrich J. A synthesis of ethical decision models for marketing. J Macromark 1989;9(2):55 – 64.
Hartley RF. From monumental failure to outstanding success: the Edsel and the Mustang. In: Hartley RF, editor. Marketing mistakes. NY: Wiley; 1976. p. 75 – 98. Hunt SD, Vitell SJ. A general theory of marketing ethics. J Macromark 1986;6 Spring:5 – 16. Shaw WH, Barry V. Moral issues in business. 6th ed. California: Wadsworth Publishing; 1995.
Morality and the consequences of marketing action John Desmond a,1, Andrew Crane b,* a
Department of Management, University of St. Andrews, St. Katherine’s West, The Scores, St. Andrews, KY16 9AL, UK b Cardiff Business School, Cardiff University, Aberconway Building, Colum Drive, Cardiff, CF10 3EU, UK
Abstract This paper explores issues of morality in relation to the consequences of marketing action. It addresses the reasons why, despite adverse social consequences, as well as the exhortations of marketing ethicists, a societal-based morality continues to languish at the margins of marketing practice. We note that ethicists mistakenly characterize organizations as being ‘amoral’ and their decisions as being ‘purely economic’. This ignores the reality that marketing theory and practice are suffused with the morality of economic self-interest. This has important implications for whether one can understand the consequences of marketing action as intended or unintended. We suggest it is due to the power of egoism that attempts to import ethical maxims from moral philosophy have been sidelined. Finally, we discuss the difficulties of securing a more moral basis for marketing decision-making. D 2002 Elsevier Inc. All rights reserved. Keywords: Morality; Consequences; Marketing
1. Introduction This paper explores the consequences of marketing action with respect to the normative elements of ‘ethicist’ and ‘egoist’ strands of moral theory. By ‘ethicists’ we mean those scholars who argue that the embodiment of the maxims of moral philosophy within management theory and practice will lead to better moral outcomes. We term as ‘egoists’ those like Milton Friedman who profess Adam Smith’s view that the pursuit of one or another form of ‘self-love’ or ‘selfinterest’ will ultimately tend towards the best, or least worst, of moral outcomes in economic matters. The primary objective is to demonstrate that economic egoism, however flawed, has always formed the moral basis for marketing theory and practice. Friedman’s (1962) notorious argument that the only social responsibility of business is to make a profit—‘so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception and fraud,’ (p. 33) suggests that, at the level of the individual firm (as opposed to at the level of the economic system), adverse * Corresponding author. Tel.: +44-29-20-875-392; fax: +44-29-20-874419. E-mail addresses: [email protected] (J. Desmond), [email protected] (A. Crane). 1 Tel.: +44-131-449-3848.
0148-2963/$ – see front matter D 2002 Elsevier Inc. All rights reserved. doi:10.1016/S0148-2963(02)00452-6
social consequences are less unintended than unimportant. De George (1993), in opposing Friedman, associates this view with the ‘myth of amoral business’, which assumes that firms conduct their business with no, or little, regard for personal or professional ethics. Writing in a similar vein, Robin and Reidenbach (1987) attack what they perceive to be ‘values’ of efficiency and profit, which can dominate organizational culture leading to morally unacceptable marketing outcomes—values which, they suggest, should be replaced by an ‘ethical’ approach to marketing decisionmaking. The implication of the ethicist critique is that the position advanced by Friedman is not a moral position and that to become fully moral this must somehow become suffused with an ethical orientation. Against this view we argue that, whether one likes it or not, values of profit and efficiency are perfectly consistent with principles of self-interest, which are in turn linked to some variant of economic egoism—a theoretical standpoint with an impeccable pedigree within economic theory, tracing its lineage to Adam Smith’s (1793) Wealth of Nations.
2. A brief description of egoism It is not our intention to promote economic egoism but rather to argue that its power must be fully recognized if it is
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to be engaged with. The worth of egoism as the key to the good life has a long history and may be traced to the debate between Sophocles and Callicles in the Gorgias (Plato, 1960). Egoism comes in two variants, one based on desire, the other on interests. Proponents of an egoism based on desire argue that the best life lies in one getting what one wants whenever one wants it; those who base their argument on interests assert that this consists in promoting what is in one’s long-term interests. It is important to distinguish egoism based on desire from selfishness. Whereas the egoist can be moved by pity for others in seeking to remove his own distress caused by their plight, the selfish person is insensitive to the other. Variants of egoism are consequentialist to the extent that supporters argue that the good society derives from getting what one desires or what is in one’s interests. Within moral philosophy an important criticism of egoism based on desire is that it renders patently different approaches to life as being equivalent; thus in this view the life of the drunkard is as admirable as that of the judge if both followed their desire. Also, if one argues that one ought to strive for what one desires, then one might regard those who seek to restrain or discipline their desire (e.g. those who follow an ascetic course) to be objectively less good than those who are more self-centered. An egoism based on the pursuit of interests goes some way towards addressing such concerns (Graham, 1990). The idea of interests based on the pursuit of one’s long-term well-being enables one to distinguish between the life of the judge and the drunkard. In this formulation, a gap opens up between desire or longing and what is in one’s ultimate interests, such that one can say that it is not in the interest of the drunk to give in to immediate desires. An egoism based on interests approaches the idea of objective value. Thus, it can be said that some things are, as a matter of fact, in my interests and other things are not; as an addicted asthmatic, I may desire to smoke, but it is not in my long-term interests to continue to do so. It also forms the basis for shaping moral relations towards others. Thus, in ensuring my long-term interests, I should ideally attend to the best interests of those upon whom my interest is dependent.
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wants by appealing not to their humanity but to the ‘selflove’ or self-interest: Give me that which I want and you shall have that which you want is the meaning of every such offer. (p. 21) Smith is arguing that the market exchange process is indifferent, to the extent that the parties to it focus on the satisfaction of their own interests and are relatively indifferent to the purposes of others (except to the extent that these relate to one’s own ultimate interests). This only makes moral sense in a ‘free’ competitive environment where both parties to the transaction have perfect information, in which case the final moral arbiter is the ‘sovereign’ consumer. Smith’s argument may thus be summarized as saying that one is more likely to find a moral outcome as the end-product of a system based on free competition and good information than within the mercantilist ‘closed-shop’, which was characteristic of his own time. The important point to note is that morality cannot be located in the individual case but is a consequence or emergent property of the operation of the system (the marketplace). For example, if a producer makes and sells shoddy or faulty products, then consumers may suffer in the short-term as the result of the lack of fitness of the products which they have bought. However, in the longer run, trade will suffer as consumers turn to alternate sources. This example begs several questions, of which the persistence of oligopoly, anti-trust practices, deceptive practices, and buyer – seller informational asymmetries are but a few (see Smith, 1990). Clearly, a discussion of the egoism of firms in the market environment is different to that of the Platonic individual. For one thing, an organization is by definition a collection of individuals and so one must take into account the effects of modes of organizing on the exercise of moral choice. A second difference is that the marketplace (rather than some system of ethics such as hedonism) is seen to provide the context for the development of self-interest such that organizational ‘well-being’ is universally indexed to some benchmark of share-value, return on assets, or profitability.
4. Egoism in marketing theory 3. Egoism in economic theory Smith (1793) defends egoism on the basis of lack of knowledge—the simple fact that one cannot ever know the full consequences of one’s actions. As Shand (1990) notes, the advocacy of self-interest is not merely derived from a cynical view of human nature, but is rather a recognition of the fact that economic agents have limited knowledge, and hence, limited objectives; it is simply not possible for them to know all the possible consequences of everything they do and to adjust their actions accordingly. This argument leads to Smith’s (1793) contention that, rather than seeking to gain the favor of another, one is more likely to obtain what one
As the academic discipline of marketing has its origins in economics (Jones and Monieson, 1990), it is not surprising that it owes its prevailing sense of value to this tradition. Marketers’ recognition of the ultimate power of consumer sovereignty has found expression in the marketing concept, which argues that the self-interest of the firm is obtained through satisfaction of consumer desires, or interests. Without going into detail, we would ask the reader to note the parallels between the above quote by Smith, and formulations of the marketing concept. For example, McKitterick (1957), in reputedly the first rendition of the marketing concept, focuses on the difficulties
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of competing in ‘quicksilver’ markets by urging the marketer: Not so much to be skilful in making the customer do what suits the interests of the business, as to be skilful in conceiving and then making the business do what suits the interest of the customer. (p. 78) In this, as in other formulations, marketing is useful in that it is an adaptive mechanism; those who serve the interests of the customer best, best serve their own interests. Marketing academics have been careful to police the boundaries of this self-interest, being keen to distance this from related concepts such as selfishness, which Levitt (1962), for example, equates with selling and not marketing. Enlightened self-interest is presented as constituting the basis of marketing morality by ensuring the most advantageous social consequences. Kotler’s (1972) celebrated development of the Societal Marketing Concept (SMC) may be interpreted in this light as a bid to shift the basis of marketing morality from self-interest based on the satisfaction of desires to a more robust footing based on the satisfaction of consumer interests and social welfare. Kotler is quite clear that the ultimate interest is that of the producer (Kotler, 1972, p. 54) and argues that; ‘The societal marketing concept calls for a customer orientation backed by integrated marketing aimed at generating long run customer satisfaction and long-run customer welfare as the key to longrun profitable volume’. However, focusing on this extract might lead one to think that welfare is primary and profit merely follows from this. This interpretation is tempered by the extent of Kotler’s (1972) appeal to the self-interest of firms in the same paper. In fact he argues that the profitable nature of societal marketing ‘is the most difficult and yet the most critical of my five conclusions to prove’ and that ‘Obviously, if consumerism is profitable, businessmen will put aside their other objections. It is mainly because of its perceived unprofitability that many businessmen object so vehemently’ (p. 53). From this, we believe that it is clear that in the last instance, it is profitability and competitive advantage that really matter: The enlightened marketer attempts to satisfy the consumer and enhance his total well-being on the theory that what is good in the long run for consumers is good for business. (p. 57) On this basis, we contend that morality, in the form of one or another variant of egoism or self-interest, has always been central to marketing thought. Indeed, it would be unsurprising to remark on the importance of the pursuit of profit or market share as a goal of commercial marketing.
5. Modes of organizing self-interest: effects on morality While the organization of the pursuit of self-interest is not difficult for the single trader, those who manage large organizations are faced with the problem of organization
and control. For example, Starkey and McKinlay (1994) note that when Henry Ford II took his place as chairman of Ford Motors in 1945, he was ‘acutely aware of the limits of his knowledge and control over the managerial decision-making within the company’ (p. 6). Ford remodeled the company along the lines of General Motors, and over the next two decades, ‘managers became no less cogs in Ford’s bureaucratic machine than assembly line workers’ (Starkey and McKinlay, 1994, p. 4). Smith’s (1793) issue concerning lack of knowledge and the division of labor thus raises itself once more within the context of organizational structure and control. Weber (1947) provides important conceptual underpinnings to understanding bureaucratic organization, in arguing that this is the ‘ideal type’ of structure for ensuring command and control in large organizations. Importantly, Weber also notes the impact which this structure has upon the exercise of morality, arguing that in a bureaucratic structure, a person’s sense of morality becomes subjugated to the functionally specific rules and codes of behavior, which are set in place to provide for the organization’s survival. In an extensive study of modern managers and marketers, Jackall (1988) developed Weber’s theme of morality shaped by bureaucracy to argue that the moral code of managers centers on rules for personal survival and success. He suggests that individuals will tend to bracket their personal moralities while at work, and adopt the prevailing ‘self-interested’ ethic of the organization. While there is some disagreement among researchers as to whether or not individuals do bracket their personal moralities at work, the majority of studies indicate this to be the case. Starkey and McKinlay (1994) interviewed over 100 Ford managers in Europe and the USA, concluding that the managerial culture focused on the importance of numbers and systems and depended on a powerful finance function that ‘knew first and foremost how to minimize costs and maximize profits’ (Halberstam, 1987, p. 213). Violent imagery and language were employed to describe the role of these ‘axe-men’. The culture fostered functional isolation among the company’s employees, and relationships between functions such as sales and manufacturing were described as ‘a never ending war of attrition’ (Starkey and McKinlay, 1994, p. 8). Despite this, Gioia (1994), who worked for Ford at Dearborn as Field Recall Coordinator during the 1970s (and hence a key player in the Pinto recall decision), notes that during that time the company felt ‘‘buffeted, beleaguered and threatened by international competition and the threat of government regulation: The changes were mostly external . . . and led to a strong feeling of we-vs-them, where we (Ford members) needed to defend ourselves against them (all the outside parties and voices demanding that we change our ways). (p. 99) Thus, some form of fellow-feeling persisted even in the bear-pit described by the authors—although this was directed towards those who were ‘like us’ and not ‘like them’. Writing
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in the tradition of work by Turner (1971), Van Maanen (1973) and Harvey et al. (1984), Watson (1994, 1998) provides rich and compelling evidence of moral engagement on the part of his managers, particularly in terms of trust, mutuality, and cooperation. This cultural view of management resonates with Robin and Reidenbach (1987) in that it suggests that organizations can benefit from a more ‘values-based’ approach to management (see also Peters and Waterman 1982). However, these concerns with culture and values principally address the relationships concluded within the work group, or the moral community of managers in which work is enacted. With respect to those outside of the organization: Issues of morality and the necessity of moral choice are frequently pushed to one side as pressures to get results, to get the job done, and to survive in a competitive or otherwise hostile world, press organizational managers endlessly to seek more efficacious means without giving too much consideration to the ends to which they are oriented or the values which are implicit in the means. (Watson, 1998, p. 253) There is then common ground between Watson and the analysis of life at Ford offered by Starkey and McKinlay and Gioia (op. cit.), i.e. the boundaries of the moral community are defined in relation to colleagues who form part of the work group. However, what does this mean for how the organization, through its marketing activities, relates to those outside the moral community that constitutes the organizational ‘self’? Marketing is fundamentally a boundary-spanning function, and to speak of culture in the context of external relations poses problems for where we draw cultural limits. It is to this question that we now turn.
6. External relations: beyond the moral community? In search of a less rationalistic and egoistic morality in marketing and management decision-making, researchers have recently begun to explore the phenomenon of ‘green business’. However, even in this context, where there is clear potential for adverse ‘unintended’ consequences well beyond the boundaries of the firm, the evidence suggests little change in the prevailing ethical code of self-interest. For example, Fineman’s (1996, 1997, 1998) extensive analysis of interviews with managers has led him to conclude that the discourse on corporate environmentalism ‘‘encloses its members in a self-sustaining rationality, rendering morality invisible beyond a limited organizational boundary’’ (Fineman, 1998, p. 243), where the boundary is defined by the customer. Crane’s (2000) account of the morality understood, felt and communicated by participants in green marketing programs paints a similar picture. Evocations of an ethic of selfinterest permeate his organizations, with some companies even centering their environmental sense-making activities
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around the theme of ‘sound environmental sense makes good business sense’: When you’re selling [environmental] initiatives to other staff, the one you put first is the customer, because it’s good for the customers. That’s always number one . . . After that comes the commercial justifications, the cost savings . . . And only after that you look at the environmental side . . . Because at the end of the day, saving the world is not going to keep us in business. (p. 90) The above is as clear an explication of ‘enlightened’ egoism as one is likely to get. In this reading, finance issues are not primary (as they were at Ford). Instead there is the recognition that, first and foremost, one is reliant on customer satisfaction for one’s own well-being and that cost factors must be taken into account within that context. Overall then, while it is clear that more research should be carried out, the weight of evidence to date strongly supports the view that managers view the rational pursuit of selfinterest as being key to organizational survival and the rhetoric of self-interest as the ‘proper’ way to engage in discussion about business issue.
7. Ethicists aims to change organizational values Robin and Reidenbach (1987) take the pursuit of selfinterest in marketing to be morally reprehensible, especially if this is defined narrowly in terms of a focus on profits or efficiency. In common with other ethicists (e.g. Chonko and Hunt, 1985; Laczniak and Murphy, 1993; Pratt and James, 1994; Smith, 1995), they suggest that such values tend to permeate corporate decision-making and that by replacing these with a ‘more ethical’ approach to decision-making, better moral consequences will ensue. They advocate that marketers use ethical principles in an ‘appropriate’ manner, arguing that deontological and utilitarian principles should be explored in relation to the decision context and blended to the right consistency. For example, where the activities of marketers could have a foreseeable and potentially serious impact on individuals, they argue that deontological reasoning should be used. Robin and Reidenbach (1987) suggest an approach to marketing ethics based around the reformulation of corporate culture, because this is the seat of two fundamental values: profit and efficiency. They see the key to this as being the elicitation of core values and their integration throughout the organization’s culture; arguing that, in the absence of a set of values, the organization should come up with its own. They are agnostic as to which primary ethical system to use, whether deontology or utilitarianism, but are chary of inviting firms to adopt one of the myriad of codes of ethics which they regard as being largely superficial in their effect, suggesting that instead it is only when top managers internalize certain values that an effect is noted. The authors select the Aristotelian notion of prudence or moderation, as the best
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option to be applied to the system of values developed by marketers. Marketers should seek for a ‘golden mean’ of performance, being neither deficient nor excessive; while in relation to social responsibility, the organization should use the nuclear family as a metaphor. Once developed, the core values must become part and parcel of the planning procedure (Robin and Reidenbach, 1987, p. 49). How does this prescription fit with the available evidence? In fact this seems to support the opposite conclusion to that supposed by Robin and Reidenbach. Rather than ethical approaches substituting for values of profit and efficiency, they tend to be incorporated and subsumed within the logic of the discourse of self-interest. For example, the widespread use of cost – benefit analysis by firms is reported by several authors (cf. part II of Birsch, 1994). Originating from a utilitarian perspective, this technique has gradually been stripped from its original disinterested frame of reference to be utilized within the selfinterested frame of reference of the organization [While egoism argues that we have most reason to put our own interests before those of others, utilitarians insist that everyone’s interests should be treated as being equal.]. Thus, in Ford Motors’ apparently routine use of cost – benefit analysis as exemplified by the Pinto case, the ultimate interest served through the determination of the calculation was that of Ford. Crane (2000) also found considerable evidence for the use of CBA in ‘green’ marketing contexts. Robin and Reidenbach themselves point out that in practice codes tend to be used in the interests of profit and efficiency. In the light of evidence from recent empirical studies, it is difficult to see how the terms of ethical debate as encapsulated by deontological or utilitarian principles could gain proper admission to debate within the context of corporate decision-making. For example, Crane (2000) found evidence of a widespread mistrust and unease with ideas and terms which did not fit into the ‘self-interest’ script as being morally troubling or unconventional in some way (see also Bird and Waters, 1989). Such ‘semantic suspects’ were both avoided, and were carefully reframed in more ‘acceptable’ language, as this manager illustrates: If you are talking to senior managers, they think you are going back to the hippie days, you know. Sustainability? We are running a business to make profits. It’s not about furry things. . . .You have to be realistic. Things like sustainability—unless you dress them up in more business language, they are going to be resisted. (p. 63) Gioia (1994) reflecting on his role in Chief Recall Officer for Ford during the time of the Pinto controversy describes the means by which anything other than the prevailing rationality is squeezed out by equating that which is outside or beyond organizational discourse as being ‘idealist’ compared to the ‘realism’ inside. To illustrate this point, he describes ‘one instance of emotion’ which came to him when
he saw a burnt out Pinto leading him to raise a recall for the Pinto with his colleagues: I soon ‘‘came to my senses,’’ however, when rational consideration of the problem characteristics suggested that they did not meet the scripted criteria that were consensually shared among members of the Field Recall Office. At the preliminary review other members of the decision team, enacting their own scripts in the absence of my emotional experience, wondered why I had even brought the case up. (pp. 111 – 112) Thus, just as decisions not to recall the Pinto were recalled as ‘good business decisions’ in line with everyday scripted behavior, in Crane’s (2000) study, such insider discourse encouraged respondents to be on the whole unimpassioned and largely unmoved to display any signs of personal engagement with, or duty towards, environmental protection. Notably, this ‘amoralization’ of green marketing, namely, the lack of a personal, affective morality, the avoidance of moral reflection and attachment, and the denial of explicit moral status, was exhibited across a range of different organizational types. In addition to the cost –benefit analysis, customer satisfaction and the ‘auditing’ of resource utilisation were widely privileged as the principal means of addressing green marketing questions, revealing a highly rationalist, and self-interested corporate discourse. Thus, we can see that in particular where the subject of morality lies beyond the firm (such as the environment), marketing ethics are frequently found to be instrumental, self-serving and pragmatic. Another consequence, which flows from the prescription offered by Robin and Reidenbach and others who argue for the substitution or grafting of ethical schemes onto the system of self-interest, is that they seem to argue for the creation of a kind of moral legislature which can stand above the flux of quotidian decision-making. At any given point in time, a group of managers may bring the ‘facts’ of their situation to this legislature which will then decide which form of ethics is appropriate. This prescription begs several questions. How will such ethics fit in with the existing decision processes? What if the ‘facts’, and in particular, the consequences, of the situation are unknown or if there is disagreement about the facts themselves or with respect to the assumption which underlie the facts? In any event, having warned their audience of how codes can quickly become window-dressing and how act-utilitarianism can be employed to dress up the facts, we are surprised that they did not think that rather than ‘ethics’ replacing the values of cost and efficiency within firms, ethics might not instead become recruited to the promotion of such values, particularly within the prevailing discourse of self-interest. As we have already noted, the space for ethics is already inhabited by a particularly strong and pervasive variety of the ethics genus: selfinterest or egoism. Having suggested the legislative role for ethics, which we have just discussed, Robin and Reidenbach go further to
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suggest that to avoid unpalatable consequences, ethics form part of the ‘core values’ of the organization, core values which should be reflected in the corporate mission and objectives and which should pervade the organization in a manner similar to family values. Again we must note that organizations are already pervaded by a system of value and that this is not simply a matter of creating value where there is one or of simply replacing isolated values. And within this system, ostensibly undesirable social outcomes are hardly unintended, merely incorporated into the framework of selfinterest and carefully costed-out and accepted as unavoidable given the interests of the firm. Also worrying to us, in light of our former discussion, are the implications of ethicists’ arguments for the creation of a strong corporate culture for the transmission of values. If, as we suggest, the moral aim of corporations is the pursuit of (unenlightened or enlightened) self-interest, which is realized in an organizational form and decision process based on a version of bureaucratic rational instrumentalism, the core moral impulse will be to the moral community which constitutes ‘us’, or the full-time staff. The only way in which those others who constitute ‘them’, those who are beyond this moral community, can be included is to the extent that they form a means for ‘us’ to get to where ‘we’ want to be. It could thus be argued that in advocating the creation of a ‘strong’ culture based around powerful central values, Robin and Reidenbach reinforce the internal normative ‘we’ of the moral community and that this actually buttresses the barriers which are already erected against ‘them’ outside of this (Dahler-Larsen, 1994). Dealings between members of the moral community may (or may not) be infused with moral engagement. However, the stronger the communal culture, the stronger will be the group norms and loyalty which bind it and which reinforce the boundary between the moral community and what is perceived to be beyond this. In this sense, a ‘strong’ culture is more likely to breed conformity and ‘normative control’ (Etzioni, 1964). As the social psychology literature has graphically shown (Milgram, 1965; Sheridan and King, 1972; Zimbardo et al., 1973; Kunda, 1992), such conformity tends to lead to perverse moral outcomes, with those considered to be beyond the bounds of the moral community being treated as objects of moral indifference. In this sense, one might argue that a ‘weaker’ organization culture offers greater potential for being more moral than the ‘strong’ in that the boundary which divides the organization from its constituent communities is more porous. One would expect this more permeable organization to be more tolerant of the professional, cultural, religious and other values which organizational members bring with them when they enter its domain. For example, the trend towards stakeholder inclusion and partnership to tackle social and environmental issues in marketing can provide a fertile context for the introduction of values conflicting with those of corporate self-interest (see Fineman and Clarke, 1996; Milne et al., 1996; Crane, 1998). Such developments can thus give rise to discursive struggles
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surrounding the moral ‘realities’ of the consequences of business activity (Livesey, 1999). However, due to issues of resource dependence on the part of NGOs, and strong culture on the part of businesses, once again we can see that this frequently results in a privileging of corporate self-interest as the arbiter of ‘correct’ and ‘appropriate’ action (Crane, 2000). Hence, unless corporate partners become more permeable to these competing values, rather than simply legitimating stakeholders on grounds of organizational self-interest, the ability for such partnerships to embed new values into the moral community of the corporation appears to be limited.
8. Implications and conclusions From the preceding discussion, while we have much in common with ethicists’ arguments, there are key points of difference. First, with respect to ethical codes, we share the concerns of Robin and Reidenbach and others (e.g. Pratt and James, 1994; Fritzche, 1991) that these can quickly become window-dressing. We do not, however, share their optimism that it is possible generally to persuade managers to substitute deontological and utilitarian schemes in lieu of egoism, other than when aspects of these systems can be blended with the self-interested rhetoric and practice of the organization. This is because ethicists have misunderstood and underestimated the power of the egoist ethic of self-interest, which pervades organizational structure and discourse. This in turn helps us understand why, as Sorrel (1998) notes, ethics is still of marginal significance in organizational life. A second point of difference between our view and that of most ethicists is the degree of importance which we lend to the social context. We agree with those who argue that the ethicist approach is overly psychological and individualist, taking the aggregation from the ‘individual’ to ‘group’ levels as unproblematic (Fogarty, 1995; Thompson, 1995). At the very least, the implications of our argument suggest that the key issue is not the replacement of isolated values but of seeking to replace a flexible and potent moral system. In relation to this, we should clarify our perspective with respect to indifference and, in particular, the implications of the link between the consequentialist nature of economic egoism and the indifference of organizational decision-making processes (as opposed to a lack of ‘intention’ regarding social consequences). Indifference, as we have explained, is not solely the outcome of organizational culture. It is reinforced through particular forms of structure such as bureaucracy, which Bauman (1993) cogently argues, fosters the idea of a ‘rule by nobody’ and by postbureaucratic forms such as ‘concertive control’ (Barker, 1983), which may reinforce bonds of moral community within the organization at the expense of that which lies outside its boundary. Indifference is also reproduced in the script followed by organizational actors every time that they meet to discuss matters pertinent to the self-interest of the organization (Gioia, 1994). The decision-making process itself manufac-
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tures moral distance as the moral identities of those who are defined as being beyond the organizational ‘I’ are labeled (as ‘customers’; ‘subcontractors’; ‘factors of production’), aggregated, quantified and fed into the process as inputs and outputs, targets and projections, as objects or units to be plotted onto a chart. As we have argued, the end result of this process may lead to positive as well as negative outcomes. However, this highlights a paradox at the root of moral decision-making in business. On the one hand, decisionmakers within the firm, acting in the pursuit of ultimate selfinterest, may act in the interests of others, as a means to an end. They may interpret their self-interest narrowly, and as such, are not bound to act in the interests of others—although they will no doubt incur the ire of liberal economists and marketers who issue dire warnings to those who act selfishly in pursuit of short-term gain. The paradox is, that where they do purport to act in the interests of these intermediaries, they tend to remove the moral ‘face’ of these others (Bauman, 1993). By this, we mean that within the rational decisionmaking process, which defines the organizational self-interest, the satisfaction of the desires or interests of these others is not treated as an end in itself, but as the means to an end; the other enters into the rational decision process whole (as nature, a human being) and leaves it in pieces (reduced to a series of variables and averages). This indifference is of a different kind to that described by Smith (1793), whereby economic agents are, perforce, relatively indifferent to the aims of others in pursuing (and being morally responsible for the pursuit of) their self-interest. Rather, it springs from the rational decision process itself and is further aggravated by the rational bureaucratic nature of organization. Nevertheless, albeit defined and shaped instrumentally to the ultimate self-interested goals of profit and survival, it is clear that firms do take into account concerns which others would take to be ‘socially responsible’. The question is whether one labels decisions such as to charge a ‘fair’ price, to actively promote environmental protection or to ensure that slavelabor is not used in the manufacture of goods—i.e. decisions taken not as the result of abstruse ethical reasoning but because it makes ‘good business sense’—to be morally reprehensible. The answer must be ‘sometimes’, depending upon which moral yardstick one is using. What then of prescription? Our proposal that weaker, differentiated cultures may actually offer more opportunity for the permeation of new values into the organization, while supported by the literature (e.g. Dahler-Larsen, 1994; Sinclair, 1993; Starkey, 1998), has yet to be fully tested empirically and represents an important avenue for further research. In terms of prescriptions for the practice of marketing, given that egoism is such a powerful discourse within organizations and that at present there seems little on offer that might supercede it, from a practical ethics point of view, a policy of acknowledgement and constructive engagement would be a useful starting point. For example, the promotion of stereotypes in advertising has been an important topic for ethical concern over the years (e.g.
Courtney and Lockeretz, 1971; DeYoung and Crane, 1992) and has been cited by Pollay (1986) as an important unintended consequence of advertising. While authors have consistently called for a more ethical treatment, one might conceive that an argument based on the logic of selfinterest might, in the first instance, prevail where ethical arguments have failed (i.e. ethical arguments might later be advanced to ‘ratchet-up’ ethical performance). This could invoke possible negative consequences, such as the likelihood of negative publicity, boycotts and other actions that could result in loss of sales in the short term, and long-term damage to the brand. Similarly, more ethical negotiating tactics in sales and purchasing might be usefully reframed in terms of long-term self-interest in the light of the importance of fostering marketing relationships based on mutual trust and honesty (Crampton and Dees, 1993). Indeed, in hindsight, one wonders if the decision to produce the Ford Pinto without changing the location of the fuel tank would have been made had the costs of adverse publicity been known. The appeal to self-interest though flawed in the eyes of ethicists, may thus do much to advance more socially beneficial marketing practices. Our call for constructive engagement with economic egoism within organizations does not mean to say that we have no reservations about it. The argument is consequentialist in that ultimately the good is said to emerge as the result of competition in the free market. However, this argument is at such a high level of abstraction, with so many intervening and confounding variables, that it is not demonstrable except in the most general way. In this respect, the belief in the efficacy of economic egoism at the system level comes close to ‘blind faith’. While Friedman (1962) and others who espouse economic egoism argue that ultimately this produces the least-worst form of economic system, there are many who are rightly concerned about its effects upon humanity and ecology (cf. Harvey, 1989). The urgency of this requirement has resulted in the constant drive for improved efficiency, exemplified, for example, in the transition from the farmyard hen to the genetically modified hen via the battery hen. Economic egoism does not respect the ‘intrinsic’ value of the hen, but merely its ability to contribute to the bottom line. Those who believe that hens and other inputs to the market do have intrinsic value are therefore going to be at odds with those who favor the relativism of economic egoism. However, it is not difficult nowadays to contend that many values, which should arguably be ends in themselves (that people and animals should be respected for their worth rather than as inputs to the production process), tend to be subordinated to the ultimate value of the marketplace, which is to make a profit. The exploitation of cheap labor with poor working conditions in developing countries by big brand western multinationals is just one of the more striking examples of an ostensibly ‘unintended’ consequence of marketing actually being a logical consequence of economic egoism.
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There is no clear prescription for the reconstruction of the ‘face’ of the moral subject which has been dissembled. However, if the creation of the indifference characteristic of economic egoism involves processes of abstraction, quantification and calculation, it follows that the reconstruction of the moral ‘face’ requires a specific challenge to these ways of thinking and valuing. Perhaps the greatest prospect for this in contemporary marketing practice is the development of stakeholder partnerships (Crane, 1998). Clearly, there is a need for more research here: first, to extend the stakeholder partnerships literature to consider the impact on egoism of competing discourses; and second, to provide more systematic study of any form of breaches of the egoist script in the marketing organization. References Barker J. Tightening the iron cage: concertive control in self-managing teams. Adm. Sci. Q. 1983;38:408 – 437. Bauman Z. Postmodern ethics. Oxford: Blackwell, 1993. Bird FB, Waters JA. The moral muteness of managers. Calif Manage Rev 1989;Fall:73 – 88. Birsch D. Whistle blowing, ethical obligation, and the Ford Pinto case. In: Birsch D, Fielder JH, editors. The Ford Pinto case: a study in applied ethics, business and technology. New York: State University of New York Press; 1994. p. 199 – 219. Chonko LB, Hunt SD. Ethics and marketing management: an empirical examination. J Bus Res 1985;13:339 – 59. Courtney AE, Lockeretz SW. A woman’s place: an analysis of the roles portrayed by women in magazine advertisements. J Mark Res 1971; 13(1):168 – 72. Crampton PC, Dees JG. Promoting honesty in negotiations: an exercise in practical ethics. Bus Ethics Q 1993;3(4). Crane A. Culture clash and mediation: exploring the cultural dynamics of business – NGO collaboration. Green Manag Int 1998;24:61 – 76. Crane A. Marketing, morality and the natural environment. London: Routledge; 2000. Dahler-Larsen P. Corporate culture and morality: Durkheim-inspired reflections on the limits of corporate culture. J Manag Stud 1994;31(1): 1 – 18. De George RT. Ethical responsibilities of engineers in large organizations: the Pinto case. In: Beauchamp TL, Bowie NE, editors. Ethical theory and business, 4th ed. Upper Saddle River: Prentice Hall; 1993. DeYoung S, Crane FG. Females’ attitudes toward the portrayal of women in advertising. Int J Advert 1992;11(3):249 – 56. Etzioni A. Modern organizations. Englewood Cliffs (NJ): Prentice-Hall; 1964. Fineman S. Emotional subtexts in corporate greening. Organ Stud 1996; 17(3):479 – 500. Fineman S. Constructing the green manager. Br J Manage 1997;8(1):31 – 8. Fineman S. The natural environment, organization and ethics. In: Parker M, editor. Ethics and organizations. London: Sage; 1998. p. 238 – 52. Fineman S, Clarke K. Green stakeholders: industry interpretations and response. J Manag Stud 1996;33(6):715 – 30. Fogarty T. Accountant ethics: a brief examination of neglected sociological dimensions. J Bus Ethics 1995;14(2):103 – 17. Friedman M. Capitalism and freedom. Chicago: University of Chicago Press; 1962. Fritzche DJ. A model of decision making incorporating ethical values. J Bus Ethics 1991;10:841 – 52. Gioia DA. Pinto fires and personal ethics. In: Birsch D, Fielder JH, editors. The Ford Pinto case: a study in applied ethics, business and technology. New York: State University of New York Press; 1994. p. 97 – 116.
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Zimbardo PG, Heney C, Banks WC, Jaffe D. The mind is a formidable jailer: a Pirendellian prison. New York Times 1973;April 8th:38 – 60.
Further Reading Bauman Z. Modernity and the Holocaust. Oxford: Polity Press, 1989. Ferrell OC, Gresham LG, Fraedrich J. A synthesis of ethical decision models for marketing. J Macromark 1989;9(2):55 – 64.
Hartley RF. From monumental failure to outstanding success: the Edsel and the Mustang. In: Hartley RF, editor. Marketing mistakes. NY: Wiley; 1976. p. 75 – 98. Hunt SD, Vitell SJ. A general theory of marketing ethics. J Macromark 1986;6 Spring:5 – 16. Shaw WH, Barry V. Moral issues in business. 6th ed. California: Wadsworth Publishing; 1995.