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Can the scientific method help make ethical business decisions?

web-sig_jim-nortz_The application of the scientific method has contributed more to human well-being and the advancement of civilization than any other invention. It has helped us understand the universe and our place in it. It has provided spectacular modes of transportation and communication. It has helped us develop methods of agricultural production and food distribution that have greatly reduced hunger. It has increased our productivity to the point where many of us in the developed world have the luxury of devoting our energies to pursuits beyond those required to survive.

Inspired by the success of the scientific method in other domains, for decades now, business schools have sought to turn business management into a hard science. But, can the scientific method be used to make ethical business decisions?

To answer this question, let’s take a moment to examine the origins of the scientific method that most attribute to Aristotle who was the first to write about cause and effect and the methodology for demonstrating it; this idea was later shaped by Galileo, Bacon, Descartes and Newton, who formalized the scientific method as we know it today. Aristotle observed that the scientific method has its limitations. He stated that it was best applied to understand natural phenomena that “cannot be other than they are.”

This would include the orbit of planets about the Sun, the mass of an electron and the wavelengths of light. There is an objective reality associated with these things independent of human control. The same is not true about all aspects of ethical decision-making.

Take, for example, my framework for ethical decision-making I apply in my work as a compliance officer. I call it the Canons of Business Ethics:

Prior to making important business decisions, business professionals shall devote reasonable time and resources commensurate with their means and the gravity of the circumstances to undertake the following actions in good faith and with a genuine interest in discerning an ethical course:

  1. Determine the facts.
  2. Identify relevant moral obligations.
  3. Recognize conflicts between relevant moral obligations.
  4. Determine reasonable options.
  5. Consider the likely consequences of each option.
  6. Select an option that, at a minimum, has the following attributes:
  • Its intended purpose is to pursue a good end;
  • It pursues the good end with ethical means;
  • It takes reasonable measures to mitigate harm; and
  • The intended good is in due proportion to harm that may be caused by the chosen option.

Although the scientific method can be applied to assist business professionals in determining the facts and the likely consequences of certain options, even the strongest advocates of turning business into a “hard science” will struggle to do the same to answer other questions implied by the Canons:

  • What are our moral obligations in the circumstances?
  • What are the right vs. right conflicts we must resolve?
  • What are our reasonable options?
  • In evaluating each viable option:

ο Does it pursue an ethical end?

ο Does it use ethical means?

ο Does it undertake reasonable measures to mitigate harm?

ο Taking all relevant circumstances into account, is the good being pursued in due proportion to the harm that may result?

These questions do not seek an understanding of natural phenomena that “cannot be other than they are.” Instead, they seek an understanding of a moral landscape that is defined by our reasoned judgments rather than objective reality. Because it is impossible to perform a scientific experiment to find “right thing,” we generally rely on our moral intuition to guide our decision-making.

But, as many business professionals have discovered the hard way, this form of decision-making is often quite error-prone when money is involved. I cite the ongoing ethical lapses at Wells Fargo as one of the latest examples of this all too common phenomenon. This is why I advocate using the Canons to make important business decisions. They can help you make sound, ethical business judgments by supplementing your moral intuition with structured moral reasoning.

The Canons are not so much a new formula for moral discernment as a codification of factors you and other conscientious business professionals have likely been considering either wittingly or otherwise for many years. Although the application of the Canons will not produce results with the precision of the scientific method, they do provide a systematic approach to responsibly manage shareholder assets and conduct business in an ethical manner. And, they are certainly accurate enough to disqualify fraudulent business practices that frequently make the headlines.

When applying the Canons to real world to questions like, “Should we move our manufacturing operations to another location” or “Should we spend more to increase safety or environmental controls to reduce risks to employees and the communities in which we operate?” you may find there is significant disagreement about the right thing to do. However, by applying the Canons, you will be better able to zero in on the exact nature of disagreements that are likely to arise. Specifically, you will be able to see whether disagreements with your colleagues concern the relevant facts, obligations, options, consequences or the appropriate balance between competing interests.

Such a critical insight into the root cause of varied opinions serves to enrich dialogue and enhance the productivity of your decision-making process. It compels you and your colleagues to expressly discuss the ethical implications of your business decisions and to give “reasons” in support of your moral intuition.

By contrast, any approach that fails to systematically consider relevant facts, moral obligations, reasonable options and their consequences is more likely to lead to suboptimal business decisions than one that does. Like crossing a minefield blindfolded, you and your colleagues might get to the other side unscathed, but you’re more likely to do so with your eyes open by using the Canons to systematically determine where the mines are located and how best to avoid them.

Jim Nortz is chief compliance officer for Carestream Health Inc. He also is a former board member of the Rochester Area Business Ethics Foundation and the Ethics and Compliance Officer Association. The opinions expressed in this article are his alone and may not reflect those of RABEF, ECOA or Carestream Health. Nortz can be reached at jimnortz@gmail.com.

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