Managing with Integrity

An Ethical Investigation into the Relationship between Personal and Corporate Integrity

Augustine Chennattu

• Publisher: Fortress Press
• Year: 2020
• Print ISBN:
  9781506450421
• eBook ISBN:
  9781506450438
• Topic: Business
• Subtopic: Etica aziendale
• Index: Business

Managing with Integrity challenges the readers to explore different perspectives on and conceptions of corporate ethics. It is situated within the broader context of the emerging interests of the people of India to eradicate corporate unethical conduct. The massive protest against corporate unethical conduct and public opinion puts leaders, top managers and employees under strong social and political pressure. This book aims at articulating arguments for the necessity of incorporating personal integrity formation along with codes of ethical conduct to reduce unethical corporate activity more steadily and effectively. This book is an ethical guide for managers, employees, politicians, clergy, candidates for priesthood, and business students, equipping them to eradicate corporate unethical conduct from all spheres of life.

I

AN ANALYSIS OF CORPORATE INTEGRITY

CHAPTER ONE

Corporate Integrity Theories

Introduction

The corporate integrity theory^[1] is proposed as a solution to unethical corporate conduct. Integrity is a complex and dynamic reality, which should be understood as an essential element in both personal as well as organizational life. In this chapter, I introduce and critically analyze corporate integrity theories. At the end of the detailed analytical and critical study of the corporate integrity theories, I point out its limitations and argue for a more comprehensive approach.

1 Meaning of Corporate Integrity

In the business world there are diverse uses of the term “integrity.” Indeed, “integrity is quite possibly the most commonly cited morally desirable trait in the world of business.”^[2] Many corporate integrity initiatives have a compliance-based policy, employing instruments such as “a code of conduct,^[3] training in relevant areas of the law, mechanisms for reporting and investigating potential misconduct, audit, and control^[4] to ensure that laws and company standards are being met.”^[5] Furthermore, integrity has a strict normative connotation, which implies that “acting with integrity is the same as acting ethically or morally.”^[6] However, in general, the notion of corporate integrity as compliance with ethical norms and rules is not widely accepted. Overemphasis on integrity as a notion of compliance with rules denotes that “something is seriously wrong within a company.”^[7]

Corporate integrity is defined as the corporate conditions that stimulate the careful resolution of corporate moral problems. These conditions and corporate efforts are localized in corporate culture and structure.^[8] In a broader sense, corporate integrity refers to the “realization of the legitimate moral expectations of a corporation in a coherent manner.”^[9] In this regard, corporate integrity is the coherence between corporate intentions, related conduct, and their consequences. Moreover, corporate integrity refers to the justifiable social role that corporations fulfill.^[10] From the standpoint of corporate social responsibility, corporate integrity is also relational, which in turn demands engaging and responding to all stakeholders in a responsible manner. Therefore, so as to achieve corporate integrity, corporations “must be conscious of all relationships in which they participate, engage with all their constituencies in responsible ways, meet their reasonable expectations, and be considered a partner ensuring a sustainable future.”^[11] This stakeholder relationship is not merely motivated by an instrumental mentality^[12] but it is a responsible engagement with other stakeholders, irrespective of any benefit. Moreover, relational wholeness refers to the “whole range of relationships; internally, externally, and with societies at large.”^[13] Integrity, in this sense, refers to the extent to which an organization maintains relational wholeness. Marvin T. Brown defines a corporation as “an organization constituted by on-going verbal and non-verbal communication patterns.”^[14] According to him, corporate integrity is the character of the above-mentioned communication patterns of a corporation.^[15]

Although there are various definitions of corporate integrity, ultimately, it stands for the integration of the various demands of stakeholders. Thus, a corporation should always make morally justifiable corporate decisions and also conduct itself in such a manner. There are different methods or theories used to achieve corporate integrity within a corporation. In the following section, I analyze and evaluate the various corporate integrity theories.

2 Theories of Corporate Integrity

Various theories of corporate integrity have been proposed as solutions to corporate misconduct, including corporate corruption, structural, and contextual moral issues, which create corporate dilemmas that emerge from the debate over conflicts of interest and corporate social responsibility. Generally, unethical corporate business practices reflect “the values, attitudes, beliefs, language and behavioral patterns that define an organization’s operating cultures.”^[16] As a solution to this corporate problem, many companies implement a compliance-based ethical approach. The essence of such programs is to “prevent, detect, and punish illegal violations.”^[17] However, organizational ethics are more than rules and punishments. The theory of corporate integrity is an alternative approach, which might vary in content but tries to define a way that puts into action the efforts of companies to shape their businesses according to moral values and virtues along with the compliance approach.

My literary research enabled me to divide the theories of corporate integrity into two: social contract-based theory and corporate civic citizenship-based theory. Social contract-based corporate integrity theory attempts to develop an organizational culture and structure to promote efficient fulfillment of stakeholders’ interests.^[18] Civic citizenship-based corporate integrity theory presents corporations as a member of the civil society. Consequently, it “allows us in business ethics to also include the civic realm in our horizon.”^[19] Since corporations take part in civic morality,^[20] “business ethics can safeguard the integrity of corporations as well as, the integrity of civil society and of democratic institutions.”^[21]

2.1 The Social Contract-Based Theory of Corporate Integrity

As explained before, there are three types of relationships in organizational life: (1) the relationship between stakeholders and corporations, (2) the relationship between employees and corporation, and (3) the relationship among employees. Often the moral quality of these relationships is compromised by conflicts of values and interests. The central concern is balancing corporate interests with stakeholders’ interests. It is easy to define such relationships in a contractual way as “social contract theory is based on the idea that the authority of moral principles can come from the agreement of those affected.”^[22]

Muel Kaptein and Johan Wempe apply this contract model^[23] to business ethics, however, with emphases on different parts.^[24] The contract model is grounded in two philosophical traditions: the legal tradition, which can be traced back to Roman law and the socio-political tradition, which was developed by political philosophers.^[25] Legal contract theory involves safeguarding the possibility of cohesive forms of social cooperation and complex transactions. This theory is used as the foundation for the relationship of rights and obligations of citizens and the state. The core aim is the same in both traditions; to keep the balance between the rights and interests of individuals and collective rights. In this ...

Table of contents

• Cover
• Title Page
• Copyright
• Dedication
• Table Of Contents
• Acknowledgments
• Preface
• Introduction
• An Analysis of Corporate Integrity
• The Role of Personal Integrity in Corporate Ethics
• Personalist Approach to Corporate Integrity Theories
• Conclusion
• Bibliography