Chapter 11: The Philosophy of Action and Authority in the Entrepreneurial and Management Ethics

Abstract

The ancient philosophical principles that define and justify notions of public action, political freedom, and the exercise of public authority, especially as explored by Arendt, are shown to extend to an American frontier-cultural foundation for the entrepreneurial ethos. It is argued here that the initiation of, and development of business organizations should be properly viewed as a category of action that is a modern substitute for the ancient civic activity (involvement in the polis). This differs from the routine “management as maintenance” approach with its lack of creative action. But both entrepreneurial and routine management activity can also be motivated by a desire to achieve social separation through wealth. As a result, one of the two classic motivations for ethical behavior, namely the fear of social ostracism (the other being living with the inner dialogue of conscience), is shown to be weakened by an entrepreneurial and/or managerial culture that is motivated to achieve a sort of “lordship” to use the description of Joseph Schumpeter. Recent relevant psychological experimental studies are also reviewed. These are shown to reinforce this notion of ethical “weakening” resulting from social separation by wealth.

This monograph is from Robinson (2015, Chapter “The Nexus of Managerial Imperfect Duty: Relations of Virtue, Discourse, and Due Diligence”).

Appendix: Fred Meyer

As an example of one of many successful entrepreneurs who created business empires, but who was strictly motivated by action within their business and community, and not social separation from it, I offer Fred Meyer, the inventor of the modern hypermarket. Having migrated from Brooklyn to Portland Oregon in 1909, Fred Myer began with a small coffee and tea business. He expanded to invent the hypermarket in 1922, and eventually expanded his empire to 63 stores in the Pacific Northwest by 1975. His annual total sales exceeded $1 billion. Throughout his career, Fred Meyer demonstrated two particular characteristics:

• 1. He maintained the same living standard (same apartment dwelling, and the same personal shopping habits even in his own store where he walked the isles almost daily, and paid full price), and he continually and personally interacted with his employees and customers, treating them as friends who offered valuable advice.

• 2. He reinvested almost all of his wealth into expanding his hypermarket empire because, having successfully lived through the great depression of the 1930s, his primary stated concern was expanding and maintaining employment. He also was extremely charitable during his life, and at the end, he left his wealth to charities of various sorts in the Portland area. (See the Oregonian, September 3, 1978 and Wikipedia under Fred G. Meyer.)

Fred Meyer was so involved with the employees of his firm, as well as with members of his original social community, that the idea of social ostracism would have been a considerable motivation to avoid wrongdoing. In life, he was never publicly accused of any wrongdoing, and in death, he was considerably praised and eulogized by the significant leaders of his community, including Oregon Governor Robert Straub.