Application of Virtue Theory to Business Ethics

Application of Virtue Theory to Business Ethics

Business and Consumers

• Aristotle differentiated between ‘oecinoicus’ small scale trading just above the subsistence level and ‘chrematiske’ which is trading for profit. He did not agree with the latter and viewed people engaging in it as selfish parasites. Therefore, firms should not be charging sky high prices and making supernormal profits. - Not realistic and why would someone take the risk and become and entrepreneur then?
• Virtue theory is about developing virtues within community so eudaimonia which is a high societal stage of human flourishing can be achieved. Virtue theory follows the stakeholder view of business ethics which is endorsed by Harvard Business School.

Employees and Employers

• Employees have to create a good environment for employees to work in, by this we mean one where they can cultivate the virtues.
• Justice is one the moral virtues and one of the means by which this can be achieved is whistle-blowing hence why whistle-blowing is seen as a moral action on virtue ethics.
• Work is a school of character formation because it is where we learn to acquire certain virtues like scientific knowledge.

Weaknesses

1. Corporations in reality are uncomfortable with thinking about justice, honesty etc.
2. Is it really practical to have virtues as opposed to rules and regulations? How could we develop a code that was dedicated to embodying virtuous behavior, the development of virtue in stakeholders and the ultimate aim of well-being for all concerned?
3. Why would someone want to become and entrepreneur and take a large risk where the reward is simply the chance of eudaimonia? Also, as Aristotle himself points out not everyone will develop their virtues and fulfill their potential which means it makes it very hard for a business to survival on the basis of corporate social responsibility.

Strengths

1. Virtue Ethics insists on care and respect for the worth of the individual rather than assignment to an abstract mass market.
2. Virtues such as justice, honesty. prudence, courage, hope, endurance are among the more critical building blocks to which construct a stable economy.
3. Aquinas stresses that the virtues are “habits productive of good action, directed at work well done.”
4. Some may class as using this theory as “too difficult” but this would be to forget Thomas More’s Utopia ‘“You must not abandon the ship just because you cannot control the winds.”
5. The father of economics, Adam Smith, was influenced by virtue theory. He theory of specialisation and division of labour can be seen to have close link with this theory.