This paper examines the resources of Kantian ethics to establish corporate moral responsibility. I defend Matthew Altman’s claim that Kantian ethics cannot hold corporations morally responsible for corporate malfeasance. Rather than following Altman in interpreting this inability as a reason not to use Kantian ethics, however, I argue that the Kantian framework is correct: business ethicists should not seek to hold corporations morally responsible. Instead, they should use Kantian (and/or other ethical-theoretical) resources to criticize the actions of individual businesspeople. I set forth a model for decomposing business actions into their individual parts and reconstituting them in a context-specific “maxim” that Kantian ethics can evaluate. The reconstituted form of Kantian ethics that I defend is better able to manage decision-making complexity than traditional interpretations. To demonstrate the usefulness of my approach, I apply it to the recent Wells Fargo bogus-accounts scandal.
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Bowie endorses Korsgaard’s claims that the greatest wrongs from a Kantian perspective are fraud and exploitation (or, to use their terms, “deception” and “coercion”) (1999, p. 48).
For a helpful discussion of cases like this, see Sinnott-Armstrong (2005).
For an excellent defense of the alternative view (that a person-centered view of moral responsibility can be extended to corporations), see Goodpaster and Matthews (1982, p. 3).
Altman names Korsgaard, Wood, and Harman as important sources of his interpretation (2014, vi).
The two other important strategies are the “respect for persons” and “ethical community” approaches. For a discussion of these approaches, see Bowie (1999, pp. 41–81 and 82–119).
Altman and I have the same conclusion here—Kantian ethics lacks resources to hold corporations morally responsible—but our arguments differ. Altman argues that corporations are not capable of moral responsibility because they lack inclinations and the ability to use reason. I believe that there is good ground to claim that corporations do experience at least one kind of inclination: to maximize profits. As grounds for this claim, I offer that profit maximization is the goal that corporations are created to pursue. Because of possible weaknesses in Altman’s support for his claim, I have decided to provide an alternative argument.
In theory, if every member of a corporation could agree to a maxim and endorse it from their own perspectives, it might be possible to have a corporate maxim, as discussed in Rönnegard (2015). However, this seems highly impractical. Anyway, it would only permit all of the corporate actors to be held individually morally responsible when the corporation is held morally responsible. So there is no practical difference between this unlikely scenario and the scenario in which individual people are held individually responsible for their ethical achievements and shortcomings.
For an insightful discussion of this problem, see Luban et al. (1992).
Pettit’s grammar here seems suspect; the passive voice obscures that reality that individual people would abuse the lack of corporate moral responsibility—and they would be responsible for the wrongdoing.
A number of similar claims have been discussed by others. Velasquez writes that: “Saying that a corporation is morally responsible for some wrongful act is acceptable only if it is an elliptical way of claiming that there are some people in the corporation who are morally responsible for that act and who should therefore be blamed and punished” (Velasquez 1983, p. 13). He has also referred to this “elliptical” usage as a “fallacy of division” and an “as-if” usage (Velasquez 1983, pp. 546–549). Larry May has written that corporations are “vicarious” agents (May 1987, pp. 84–86). Thomas L. Carson defends a “translatability thesis”: “We can talk in a loose sense about the duties or responsibilities of corporations, provided that we remember that this is only a ‘shorthand way’ of talking about duties or responsibilities of individuals” (Carson 1994, p. 155). Ramie Tuomela and Pekka Antero Mäkelä argue that group agents like corporations are “functional,” but not literal, agents (Tuomela and Mäkelä 2016, p. 299). My “synecdochical” discussion develops these approaches by specifying the way in which the corporation serves as an elliptical, as-if, vicarious, shorthand for an individual, or functional agent within the corporation: the whole stands in for the part.
John D. Bishop’s analysis of executives’ responsibility for corporate malfeasance is relevant here (though not offered from a Kantian perspective). He argues that information typically fails to reach corporate executives in predictable ways, which corporate executives are responsible for managing and mitigating (Bishop 1991).
Altman appears to agree with this point (Altman 2014, p. 229). He discusses the idea that legal responsibility relates only to the corporation’s actions (whether they conform to the law) and not to the corporation’s motivations for meeting legal requirements. Obeying the law does not require corporations to be rational or act on maxims. It does not matter, legally speaking, why corporations have a particular policy or engage in particular practices. What matters is whether these policies and practices conform to legal requirements.
As Velasquez has it: “unlike compensatory liability, th[e]…kind of responsibility [that I call moral responsibility] does not transfer to other parties” (Velasquez 1983, p. 2).
I am here discussing and elaborating Kantian ideas, not interpreting Kant’s own writings. For a helpful discussion of Kant’s own writing about the non-transferability of moral responsibility in the Metaphysics of Morals, see Velasquez (1983, pp. 2–3). The key point, as Velasquez has it, is that “moral responsibility is the kind of responsibility that is attributed to an agent only for those actions that originate in the agent” (emphasis original)(Velasquez 1983, p. 3).
This formulation reflects what has been written about maxims by leading Kantians but is not identical to any other model. O’Neill discusses a variety of possible models. One of the most interesting of these models is “To - - - if…” (O’Neill 1975, 2013, p. 99). Rawls proposes a longer model. His model is structured differently from O’Neill’s: “I am to do X in circumstances C in order to bring about Y unless Z” (2000, p. 168). Korsgaard offers a simpler formulation than Rawls. She writes that: “A maxim of action will usually have the form ‘I will to do action-A in order to achieve purpose-P’ ” (Korsgaard 1996, pp. 57–58).
As suggested by note 17, above, scholars such as Rawls also include the circumstances of an action in their formulations of the maxims that underlie the actions.
For a complete discussion of this process, see Scharding (2016).
Note that these circumstances can (partially) explain why an employee engaged in unethical behavior, on Trevino’s account. These contextual factors do not, though, render such behavior ethical, for her (Trevino 1986, p. 602).
As discussed above, a corporation’s legal responsibility for the consequences of its actions does not depend on regulators’ being able to hold the corporation morally responsible.
For an insightful discussion of some of the problems that arise when corporations blame their employees for corporate wrongdoing, see Warren (2007).
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Conflict of interest
Tobey Scharding declares that she has no conflict of interest.
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Scharding, T. Individual Actions and Corporate Moral Responsibility: A (Reconstituted) Kantian Approach. J Bus Ethics 154, 929–942 (2019). https://doi.org/10.1007/s10551-018-3889-z
- Banking ethics
- Corporate moral responsibility
- Kantian ethics
- Wells Fargo