Axiology and Business Ethics
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Businesspersons understand that there are many kinds of goodness in addition to moral goodness – good workers, good managers, good products, good services, good training, and good profits. But what does “good” mean? The best available answer was formulated by Robert S. Hartman (1910–1973), who created formal axiology. Axiology is value theory. This includes ethics, aesthetics, logic, and every discipline having ideal norms or standards. Formal axiology focuses on formal patterns of value and evaluation and then applies them to the concrete particulars of what we value (values) and how we value (evaluations). The headings below identify its main features, all highly relevant to the business world.
Formal Definitions of “Good,” “Better,” “Best,” and “Ought”
Formal axiology says that anything is “good” if it fulfills the standards, norms, or ideals that we apply to it. To know whether anything is good, we must (1) have a set of ideal expectations or criteria consisting of an indefinite number of ideal “good-making” qualities or relations (properties), (2) examine or learn about what is being evaluated to determine its actual properties, (3) match its actual properties with those required by its ideal norms or criteria, and (4) judge it to be totally good if it has all the properties it is supposed to have or good by degrees (fair, average, poor, no good) if some but not all of them are present (Hartman 1967, pp. 101–109, 160–162; Edwards 2010, pp. 2–7). Anyone can become a better judge of value by understanding and applying these four steps.
Norms are built into all our notions about products, services, social and vocational roles, managers, workers, etc. How do we determine whether a business, its owner(s), its CEO, and its managers, workers, customers, products, or services are good? First, we must clearly grasp the ideal “good-making” qualities and relations expected of them, then learn the relevant facts about them, and then measure their actual qualities and relations against our ideal expectations of them. If they succeed, or else fall short by degrees, this tells us which ones are best and less so and how to do, be, or choose better. Without realizing, managers who proceed in this way are applying formal axiology. For example, consumer publications (like Consumer Reports) apply this axiological formula very successfully. They give specific lists of ideal norms or good-making properties, examine and compare the properties of consumer products and services, and report actual degrees of expectation fulfillment.
“Good” is complete expectation fulfillment. Degrees of fulfillment are called “fair,” “average,” “poor,” “no good,” etc. Robert S. Hartman refers to Plato’s “Form of the Good” to discern that our values are the real keys to our personalities.
6. Extend as far as needed.
6. Extend as far as needed.
Disagree about or misunderstand the ideal or expected good-making properties (on the left above)
Fail to examine, learn about, or understand adequately the actual properties of the object being evaluated (on the right above)
Mismatch the object’s actual properties with its ideal properties
Fail to draw logical conclusions in their evaluation processes
This axiological formula can be applied to anything, moral or nonmoral and business or pleasure, about which value judgments are made. Value judgments are somewhat subjective in application because disagreements or errors may occur anywhere between A and D above (Hartman 1967, pp. 110–111). Ideally, disagreements and errors can be discussed and resolved, but sometimes we just have to agree to disagree.
Value comparison is important in business and elsewhere. “Better” and “best” are positive comparative value concepts. If one good thing has more good-making properties than others in its class of comparison, it is better than those others. Employers or managers giving annual (or more frequent) job performance reviews to salespersons or other workers presumably compare them against the ideal standards or expectations in their job descriptions. Given only two workers, if one fulfills more relevant norms than the other, he or she is better qualified than the other. If one has more good-making properties than all others in the appropriate class of comparison, he or she is the best of the lot (Edwards 2010, pp. 20–22). Valuers may also need to give more weight to some properties than others using some hierarchy of value. When giving moral or professional directives to others, the word “ought” (or some synonym like “should”) is used. “You ought to do X” means “X is the best thing to do, so do it” (Edwards 2010, pp. 134–135).
Three Kinds of Goodness
Systemic goods are desirable mental or conceptual value objects. Primary examples are ideas; constructs; propositions; beliefs; laws; rules; mathematical, logical, and ritual forms; and formalities of every description. Examples of systemic business values are records, relevant laws and regulations, plans and goals, organizational structures, product or service designs, job descriptions and schedules, and the “bottom line” (numerical profits and losses). All businesses include systemic conceptual assumptions, beliefs, and ideal expectations about production, supplies, products, services, employees, customers, owners, stockholders, etc. Systemic evaluation consists of assessing all such things (or anything at all) objectively or disinterestedly. Rational objective disinterestedness is not uninterestedness. It allows minimal feelings (desires, emotions, attitudes, etc.) that do not interfere with objective or fair-minded judgment and do not express irrational biases. All evaluation involves degrees of feeling, but evaluations are not mere feelings; they also involve rationally applying criteria and measurement, as in “the Form of the Good.”
Anything can also be evaluated as if it belongs to some other dimension of goodness. Ideals, beliefs, physical behaviors, products, processes, and people may be evaluated systemically (objectively) but also in other ways. We may objectively evaluate ideas and formalities (e.g., business rules or norms) without bias or prejudice or extrinsically for their usefulness or intrinsically through intense personal devotion to them. Persons, e.g., job applicants or employees, are evaluated systemically when measured objectively by the criteria contained in their job or task descriptions. They are valued extrinsically for their productiveness. They are valued intrinsically when recognized and treated as ends in themselves, when there is deep professional concern for their personal well-being, rights, job fulfillment, and overall satisfaction.
Extrinsic goods are tangible means to ends beyond themselves. They include both useful practical actions and physical objects and processes located in public space-time. Examples are beneficial human behaviors, natural resources, the physical necessities of life, and our natural physical environment. In businesses, extrinsic goods are such things as workplaces, raw materials, physical means of production, and tangible products and services. These are called “mere things” because they are inanimate, lack consciousness, and have no values of their own. Extrinsic evaluation approves of mere things for their usefulness in fulfilling everyday practical or business interests.
Since anything can be evaluated as if it belongs to any other dimension of value, systemic goods like ideas, beliefs, and mathematical formulas as well as intrinsically valuable persons may be evaluated extrinsically, i.e., for their usefulness as means to ends beyond themselves. Businesses regularly do this. There is nothing morally wrong with evaluating and treating persons (employers, workers, customers, investors, etc.) as productive means to business ends – as long as they are also treated as ends in themselves. Morally questionable business practices exploit persons as mere things, mere means to ends beyond themselves (as in production or profits at all costs), while failing to recognize, respect, and treat them as real persons.
Perhaps the most moral businesses are the most profitable businesses – especially if governmental regulations level the playing field to prevent immoral competitors from having unfair advantages over businesses that treat everyone fairly, respectfully, and with dignity (Hartman 1991, pp. 193–199). Workers at every level are much more loyal, industrious, productive, and creative when they receive respect on the job; have worker rights; are treated fairly; have safe working conditions; enjoy and find personal fulfillment in their work; receive benefits like medical insurance, retirement plans, and profit-sharing; and are allowed to innovate and express their own unique capacities in getting their jobs done more creatively, efficiently, and economically. Similar considerations apply at every business level. Happy, repeat, and loyal customers are those who get fair deals and are treated with dignity and respect. Loyal employees are not much valued by many businesses today, but those that offer workplace conditions that foster company loyalty, identification, and commitment can save huge sums of money in hiring, job placement, training, or retraining.
Intrinsic goods are ends in themselves, desirable for their own sakes. Primary examples are the unique persons involved at every level of business. Intrinsic evaluation consists in relating to value objects with intense respect, awareness, positive feelings, concern, and compassion. Since everything can be evaluated in any dimension of value, businesspersons may love or identify intensely with business ideas and plans, with physical objects, products, and processes or with managers, coworkers, and customers. Businesses are not primarily about loving, but all good businesses strive for a keen awareness of and respect for persons as ends in themselves and incorporate comprehensive intrinsic evaluations at every level. In business and elsewhere, people have the highest moral priority.
Not all philosophers agree that unique and unrepeatable persons are intrinsically good or valuable as ends in themselves. Some contend that repeatable abstractions like happiness, pleasure, beauty, creativity, truth, knowledge, laws, talents, virtues, adventures, desire and interest fulfillment, etc., are the only intrinsic goods, the only things valuable for their own sakes. After considerable reflection, plausibly, all such entities are “good for us” values rather than “good in, to, and for themselves” values. No such abstractions are or have selves or values of their own. None realize or care that they are valuable or mean anything to themselves or can even exist apart from us. They are valuable only because they are beneficial, meaningful, and self-fulfilling to unique conscious beings. They definitely are good for us, but we are the realities valuable as final ends. Only unique persons or conscious beings are of value in, to, and for themselves.
Good businesses recognize and actualize all three dimensions of value according to their degree of goodness. All businesses are selling something that excels, hopefully, in one or more of these dimensions. Poor businesses fail to the degree that they fail to actualize one or more of their systemic, extrinsic, or intrinsic value dimensions – in accord with the following hierarchy of values.
The Hierarchy of Value
Businesspersons are very naïve if they think that only profits matter. All three realms of goodness are essential to every viable or profitable business but some dimensions of value matter more than others. In all of life, some good things are better than others. We must recognize, establish, and act upon priorities, but how? How can we tell which good things are better than other good things? All people, including business people, need a hierarchy of values, as well as good-making criteria or standards applicable to particulars.
All good things have what philosophers call “good-making” properties (qualities and relations). They are the components of all human norms. “Good” just means having some set of ideally expected good-making properties. This can be applied either within or between each dimension of value. Some particular entrepreneurial schemes, business resources, products, and services have more good-making properties than others, as do some employers, workers, customers, or job applicants. Many good things are better than others, and “better” just means having more good-making properties, properly ranked.
“Better” also applies between the three dimensions of value. Intrinsic goods have more good-making properties than extrinsic goods, which in turn have more good-making properties than systemic goods.
The three dimensions of goodness fall into a hierarchy of value (Hartman 1967 pp. 249–265; Edwards 2010, pp. 39–40). Since “better” means “having more good-making properties,” conscious individuals are better or more valuable than merely mindless things, and mere things are better or more valuable than conceptual symbols of good things or of people (Edwards 2010, pp. 40–41). Expressed abstractly, intrinsically valuable entities (people) have more value than extrinsically valuable, useful, inanimate, mindless, and physical objects and processes, and desirable extrinsically valuable entities are better than, have more good-making properties than, our mental signs or symbols for them. This is as true in the business world as anywhere else.
Some good things can be very good, yet others even better. Systemic values like business plans and know-how are merely mental signs that point toward even more desirable realities like actual business products and services. Mental symbols point or refer to realities beyond themselves. That is their primary purpose. No one should confuse the value of a good thing with the value of a mere symbol for it. An actual product is more valuable inherently than the mere idea of it. Which would you prefer: the mere idea of a new car or an actual new car, the mere idea of a new computer or an actual new computer, or real money in the bank or the mere thought of such? Both physical entities and human activities are more valuable extrinsically than our words for, thoughts about, or conceptual symbols for them. We can actually spend the coins in our pockets, but not our thoughts about them. Money in the bank is worth more than the money that exists merely in our minds, thoughts, or daydreams, even when numerically identical in face value. A good worker is more valuable than his or her job description. Real moral or practical actions are more valuable than merely thinking or dreaming about doing the right or useful thing.
We have words or symbols for people, for useful things, and for good ideas, but real people, products, and plans are much more valuable than, i.e., have more good-making properties than, our symbols for them. People are also more valuable than physical products, services, and activities. No cars, computers, or coins would have any value, or even any existence, without people. The buck of goodness stops and starts with people. People have vastly more good-making qualities and relations than mere thoughts or mere things. Which would you prefer: the mere idea of a good friend or an actual good friend, a real spouse and family or the mere thought of them, or a real employee or the mere idea of such? Qualitatively, people have thoughts and feelings and engage in intentional activities. They are animate, conscious, thoughtful, valuing, affective, caring, loving, and compassionate, but bank accounts, bottom lines, computer programs, cars, houses, smartphones, etc., are not. Real people, friends, loved ones, and coworkers are worth more than all of our thoughts about them. In proportion to nonconscious extrinsic goods, they are priceless.
Value Combinations, Calculations, and Profiles
Valuable objects belonging to each of the three dimensions of goodness may be combined with one another in positive or negative, helpful or hurtful, and value-increasing or value-decreasing ways. Value combinations may form organic wholes that are more valuable than the mere sum of the values of their components or parts. For example, we can use the insights and designs of entrepreneurs to create innovative and attractive products, and we can give useful or physically beautiful products to our coworkers, friends, and loved ones. People can unite intensely and intrinsically with others in marriage, family, friendship, and coworker identification. They can also collaborate extrinsically with other people in effective work and service relations. Good products can be sold for profit. Homes can be bought or built for people. Good ideas can help us become more thoughtful of and affectionate toward others or more useful to our employers, employees, and customers. The potential number of such value combinations is practically inexhaustible.
Things that are otherwise good may also be combined with other good things in hurtful or destructive ways, for example, when two good cars crash to make good junkers. Good ideas, useful things, and active people can be used to hurt or injure people, destroy property, degrade beliefs, and critique bad ideologies. Workers and machines can make production mistakes and errors.
Combinations of values and evaluations in or from diverse dimensions can be symbolized and assigned numerical values for calculation purposes, e.g., systemic (S), extrinsic (E), and intrinsic (I). When one value or evaluation enriches another, the form of their combination can be symbolized as Xx. When one diminishes the other, the form is XX. Genuinely useful E products (E) can be symbolized as EE. Genuinely flawed E products (E) can be represented as EE. Loving (I) useful E products (E), as acts of valuing useful E products intrinsically, can be represented as (EE)I – and so on – to practically endless levels of complexity. Symbols for value objects, evaluations, and combinations can be assigned numerical values, though exactly how to do this without conflating the three value dimensions is somewhat troublesome and controversial (Edwards 2010, pp. 175–176). Values and their combinations can be calculated.
Because positive and negative values and their combinations fall into a logical sequence of degrees of value, value combinations can be used to create value profiles like the Hartman Value Profile (Hartman 2006), now widely and successfully used by business consultants and employers to discover the strengths and weaknesses of job applicants, workers, managers, etc. To learn more, go to www.hartmaninstitute.org. The best way to understand businesspersons is to know what and how they value. Value-based profiles can successfully identify those applicants most likely to be loyal to, successful in, and fulfilled by their jobs – thus immensely reducing replacement or retraining costs. They can show that some current employees would be better suited for some other position or whether they are ready for promotion or if they need additional training. They can measure workplace morale and spirit. They can help immensely in the quest for goodness in businesses.
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