Corporations as Moral Agents
Corporations as Moral Agents
I chose to evaluate the second debate because I thought it was the most significant to the purpose of the class: to analyze the moral responsibility of business. The debaters were assigned to negate and affirm the following motion: Corporations are Moral Agents. In my opinion, this motion comes down to the decision to hold corporations responsible for their (corporations) decisions on a moral basis or just hold them responsible for their decisions on a legal basis.
If a company were found to be a moral agent, then they would not only have a utilitarian obligation to who they are fiduciaries for, but also a moral obligation to society regardless of stakeholder or shareholder theory. On the other hand, if a company were not found to be a moral agent, then the phrase “it’s just business” would hold truth for corporations as a whole; as long as the company acted within the boundaries of the law and to maximize the utility of whom they represent as an agent, there would be no moral ground to criticize or opt for a change in practices.
In this essay I will outline the arguments each side used to support their case, the additional arguments I believe should have been used, and an evaluation of who won the debate and reason why. The debate was composed of two teams, each of which had 4 members. They each had a 5-minute main speech to prove their arguments, and a 2-minute rebuttal speech to disprove that of their opposing counterparts.
Although the speeches were given in an alternating fashion between both teams, I will layout all of the proposition’s arguments, then layout all of the oppositions arguments, and finally move on to chronologically stating the rebuttals. The first speaker of the proposition cleverly set the tone for the debate by defining important terms from the motion. Speaker 1 defined agents as something or someone that acts in behalf of another, and then went on to use the transitive property and identity thesis to state that corporations are moral agents but not moral entities.
Yet, the law treats and defines corporations as entities. Just because people are needed to help make decisions does not mean that a corporation is not an entity. Speaker 1 then mentioned that individuals are moral agents, to confirm the fact that the transitive property makes corporations moral agents because they are built from such. Without the assumption that corporations are not entities, the transitive property makes less sense because a corporation would be defined as one single unit.
Under law, people and corporations are considered legally equal entities The affirmative team had four main arguments that were divided amongst their four speakers. The first speaker stated that there is legal and social precedent that the corporation entity is a fiction, and that it is an association of shareholders for the gain of shareholders solely. Their second speaker said that morality is related to the law and the freedom of the individual to decide what he/she will do in regards to the law.
The third speaker reiterated their definition for moral agents as an argument: the corporation is not an entity of itself because it cannot make decisions on its own;, yet is a moral agent because it is made of individual moral agents, thus it acts with moral imperative due to the transitive property (a leads to b leads to c). Finally, their fourth speaker used the CEO of Whole Foods, John Mackey, to support his claim saying that a corporation is a moral agent because their decisions do not affect parts of the corporation but affect it as a whole.
The first speaker not only defined the terms, but also spoke about the legal obligations and precedent that forces companies to maximize profits for shareholder within the confines of the law, without having to weigh in the morality of their decisions. She stated that it is management’s duty to safeguard the wealth of the corporation. Speaker 1 said that utilitarianism supports the motion because when the happiness of society in general is measured only individual happiness is aggregated with no regard for the happiness of corporations.
Just because the theory of utilitarianism does not include corporations in their measure of happiness does not mean they are not entities. A dog is an entity, but is not included in this measure either. Moreover, mentioning that law does not require companies to weigh in morality of their decisions completely limits any argument the affirming side could say with the exception of the transitive property. According to that phrase, corporations are not moral agents under law.
Also, they use the law here to support their argument, while in their definitions the argued against it to disprove corporations as entities. This double purpose use weakens the claims. The debate concluded by leaving the audience with an analogy that was to be used again later on in the debate: a corporation is a sports team: its an agent, comprised of constituents or players, that makes plays to win or lose a game; yet without the players, it does not exist.
Transposed to the actual corporation, the corporation would be the team with the managers and employees as its players, and making or losing money as their wins or losses. The analogy is valid, with the exception of the last part, considering the existence of shell corporations or solely patent holding companies that do not require any employees. The second speaker of the proposition furthered his team’s original claim that individuals are moral agents. He proved that individuals are moral agents by using Kant and French’s arguments of identity and transitive property.
He mentions that the autonomy of the will is the foundation of morality and that a sense of law is within everyman that can reason. Moreover, he goes on to talk about universal laws and Kant’s categorical imperative saying to “act only according to that maxim whereby you can, at the same time, will that it should become a universal law. ” These arguments do prove individuals as moral agents, but at no point in time was it linked to how this would prove corporations to be moral agents, other than the restatement of the transitive property.
On the other hand, they could have tried to argue that corporations had autonomy of the will because different managers within the company exercise it to make a conglomerate of different decisions, thus giving the company a unique autonomy of the will and making it a moral agent according to Kant. The third speaker of the proposition starts by delineating the difference between an agent and a moral agent. He states that agents are something or someone that act on behalf of another, while moral agents are the same but with the ability to make decisions upon their own morality.
He then goes into mentioning the transitive property again, but this time it is at least cleverly tied to the team’s first speaker’s point mentioning that corporations cannot be moral entities as there is a legal precedent that disproves this claim, thus supporting that fact that corporations have to be composed of individual entities. I find it hard to believe that legal precedents disprove this claim when corporations are legally defined as entities. Just the fact that the word legal is used weakens the argument, which should have only spoken about precedents trying to avoid any issue of legality.
He then goes on to say that because people who are moral agents compose companies, companies act with a moral imperative due to the transitive property. This is valid, but repeated several times. It should have been built upon to create a stronger argument that legitimized corporations as moral decision-making agents on its own. The fact that a unique combination of moral agents (managers) make decisions in a company means that a corporation has a unique decision making ability different to that of any other moral agent in existence, thus making it a moral agent within itself.
Lastly, the fourth speaker for the proposition brought it some new points. He used Mackey to support his argument saying that a corporation is a moral agent because any decision it makes does not only affect parts of the corporation, but the corporation as a whole. This means that any decision a manager makes (with morality in mind) affects the company as a whole, and then the company affects the community at large through a decision that was originally made by an individual that weighed in morality in his decision making process.
He mentioned how Whole Foods acts as a moral agent because every decision made by individuals within the firm affects its customers, supplier, employees and several others of the company’s stakeholders. He now goes on to use the team/player analogy speaker 1 told the audience to keep in mind. He says that when a player makes a decision, which as an individual was based upon morality to such extent, it affects his entire team and the team then goes on to affect the community at large. This means that the morality that weighed into that player’s decision was carried on by the team, thus affecting the community it resides in.
I find this to be stretching the transitive property to thin. I made the decision to buy a mac book air computer; this decision affected Apple, Foxconn, and all the suppliers and companies involved in the process of making and distributing a mac book air. Saying that my “moral” decision to buy a mac book air computer makes all of these companies moral agents I find impossible. Moving on to the negative team, it identified 5 arguments within their speeches. The first speaker of the opposition argued that corporations were legally and contractually set-up for one purpose, thus eliminating any possibility for morality in its decisions.
Moreover, she also argued that a corporation is not independent to act by what we, as people, think is right or wrong. This really supports the transitive property the other team is arguing for because it supports the idea that companies need people to act. Afterwards, the second speaker of the team argued that the only thing that makes someone or something a moral agent is the intention to act and not consequences of his/hers/its actions, thus a corporation could not be deemed a moral agent upon the consequences of their actions.
Yet corporations do have intentions when making decisions. When Apple decided to publically apologize for its ineffective new map application on the IPhone, its intention was to help disperse the bad press and consumers irritation. The third speaker then argued that the majority of managers see themselves as acting in a morally neutral environment, thus making all the decisions made within a corporation amoral. If individuals are not basing decisions upon morality, then the transitive property would make corporations amoral decision-makers as well.
Lastly, the fourth speaker of the opposition juxtaposes the legally implied impossibility of a corporation being a moral agent with the societal views on the matter to further disprove the claim. Laws and beliefs are influenced and based on society as a whole. If society does not see corporations as moral agents, which it doesn’t, then they aren’t. The negative team began by redefining the terms in the motion. She said that a moral agent is a being able of acting with preference to being right or wrong.
If you look carefully at the words used, you can notice that they used the word being instead of entity, thus inherently defining a corporation as unable to be a moral agent. She first argues that a corporation has a legally binding duty to its shareholders to maximize profit. She says that, through history, corporations have only come into existence for the benefit of its shareholders. This is all partially true, but in reality profit is not always the entire purpose. When entrepreneurs create companies, they have values and specific purposes they want to tackle within society.
The need for more entertainment, or better treatment for patients with a particular disease the founder of the company might have had. Companies are founded to fulfill a purpose that is not always to make profit. Speaker 2 then moves on to say that corporations are not independent to act upon what is right or wrong. For a corporation to be a moral agent it has to be able to self-determine. She supports this claim by signaling that a legal structure that is a moral agent cannot be giving birth by communication between other moral agents (people).
To further prove a corporation lack of independence in this regard, she poses the dilemma of double counting. When an individual within a corporation commits a crime, both the individual and the corporation are punished independent of each other. Although this helps disprove the transitive property, it also means corporations are found legally liable for its self-determining decisions made by the conglomeration of its management team. The second speakers from both teams based their arguments of the same readings from Kant and Peter French.
Speaker 2 of the opposition argued that corporations do not really have any other intention other than to make profit, and that even though the consequences of its decisions can be judged through a moral lens, these cannot be used to prove the morality of such decision maker as morality lies within the intentions of the decision and not the consequences. Again, this is only true to some extent. Entrepreneurs create companies based on values and passions. To say that the only purpose for which companies are created is for profit is to say that entrepreneurs are passionless.
She concludes by saying that Corporations do not have to consider the categorical imperative of morality when making a decision, because they do not have the capacity as an entity to evaluate the categorical imperative and have the universal law in mind. This does not consider the fact that all the decisions made by managers did consider the categorical imperative of morality, thus every decision made by the firm is a moral decision. The third speaker from the negative team referred to a phenomenon seen in many large corporations; the delegation of responsibilities for one’s own decisions.
She stated that most managers actually see themselves as acting in a morally neutral environment. Yet the transitive property only needs one manager basing his/her decisions upon morality for the entire corporation to become a moral agent. Moreover, she went on to tie her teammates arguments together by using a soccer team analogy. She proposed a theoretical soccer team whose purpose is to win games (equivalent to a company’s legal binding to maximize shareholder profits), and stated that the players and managers are the moral agents leading the team to victory.
This would mean that soccer teams do not consider morality while playing, which I believe to be false. I doubt an elementary soccer team coach will tell the children in his/her team that it does not matter how much they hurt the other team with fouls as long as they win the game. She used Moore’s purposes of encouraging excellence in business practices, encourage practice of the corporation itself, etc. to prove that these “purposes” alluded to the individual morality of each employee and not to that of a corporation. Yet Moore argues that the excellence of business practices transposes to the practice of the corporation itself.
A company that makes soccer balls’ excellence in business practice would be to make the best soccer ball possible even if they cost a little more. Under Moore, as long as corporations can be self-sustaining, they are to offer the best product possible even though it does not directly maximize profits (in the short-run at least). Yes, his theory is to be applied by individuals, but for the purpose of the business practice of the corporation. There is a sense of morality in a corporation that creates the best product it can for its customers.
Lastly, the last speaker of the opposition began by establishing the notion that corporations always have a value maximization purpose and its decision-making has to reflect it. Thus inherently mandating how decisions have to be made in, and removing the corporation’s morality. Yet this ignores the morality of establishing that value maximization purpose, and assumes that a company can only have one value-maximization purpose. A division of a company might have the sole purpose of maximizing customer satisfaction. Additionally, he says that morality’s constraint on a company’s decision making exists only when a company acts outside the law.
This would mean anything done within the law is moral. He gave examples of how society evaluates a company to show that morality fails to form part of that evaluation process as conveyed by the continuous investments in companies (like Nike) whom are constantly found to be using sweatshops for value maximization purposes. It is true that at the end of the day investors look at the earnings, but customers might no be interested in wearing shoes that were made by hungry children, thus negatively affecting earnings. In this sense, society does judge corporations on a moral imperative. There were a total of 8 rebuttals speeches.
The statement and analysis of the rebuttals is going to be done in the chronological order of relevant speeches, thus alternating between the affirming and negating teams. The first speaker of the proposition began the rebuttal arguments by trying to completely change the playing field. She said tried to invalidate the opposition’s claim that there is no legal avenue to measure morality by saying that the fact that there is no legal avenue to measure morality says we are analyzing this question within the instrumental sphere, yet we should be doing so within a normative sphere as morality lies on it.
I would argue that the instrumental sphere is more useful for evaluation of the motion because it is defined by practice rather than pure theory. The motion deals with real physical corporations and the morality of these corporations should be evaluated through a criterion that can analyze decisions that affect the real world. The second rebuttal speaker quoted French and used the aggregate theory, frequently touched by the proposition to support their claims for corporations, to describe a mob.
This argument equaled the moral state of a corporation to that of a mob, who French explicitly said was amoral, thus completely delegitimizing the foundation of the propositions case with the use of the affirmatives team’s own sources. He closed by saying, “To treat a corporation as an aggregate for any purposes is to fail to recognize the corporation as different from a mob. ” I thought this to be the killing blow in the debate considering the third rebuttal speech basically just said that even if corporation does not need to act morally, they due consult to morality when making decisions.
I think what should have been done is clarify that a mob is a disordered group of people, while a corporation has a hierarchal defined structure. The second negating rebuttal speech focused on tackling to the transitive property by trying to turn it against the affirmative team. She said both sides agreed that a corporation was a sum of moral agents, and went on to say that the moral agency of a corporation is the sum its managers. This means that morality lies within each individual and can be summed up as such because there is no morality of the corporation on its own that has to be added.
This disproves the idea that a corporation has moral agency of its own. She used Enron as an example by mentioning that its managers were tried for immoral acts, and would otherwise not have been if Enron were actually a moral agent. Yet, the addition of morality through individual managers creates a unique moral identity that could be identified as that of the corporation’s. The sixth rebuttal from the negating team coupled the restatement of their definition of a moral agent with the team analogy mentioned at the beginning of the debate to show how outrageous the propositions use of the transitive property really was.
She said, “Our definition of a moral agent is a being that is able to act upon moral tendencies. If the player acts immorally, it does not mean the team is a moral agent, or for that matter that the entire universe is one single moral agent’. This argued against the idea that if a player makes a moral decision that has an impact on its team this is carried on by the team onto the community, thus making the team a moral agent.
Theoretically, according to the transitive property and through a moral sphere lens this would be the case, but the motion is being viewed through the instrumental sphere lens. Under this instrumental length, the transitive property loses a lot of its validity. The last speaker of the opposition made a last attempt to restate all three of his team’s arguments, but these had all already been disproved through the rebuttal and no extra supporting evidence was given to make them viable again.
On the other hand, the last rebuttal speech of the negating team focused on further disproving the aggregate theory. She stated that the moral aspects of a corporation come directly from the individuals within the firm. Moreover, she said that Kant’s requisites, for morality, of freedom of will and autonomy cannot be applied to corporations because that freedom of will and autonomy lies within each individual employee. What is not considered is the unique will a corporation has as a consequence of the wills of all of its employees.
University/College: University of California
Type of paper: Thesis/Dissertation Chapter
Date: 4 October 2016
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