Ethics Theory and Business Practice 5.2 Virtue Theory – Part Two Defining Virtue in Relation to Purpose

aims to explain how virtue can be linked to purpose to explore some conceptions of business purpose and some associated virtues

purpose, flourishing, and virtue Aristotle: to flourish is to fulfil one’s purpose as a human being since virtues are qualities that enable humans to flourish, they are also those qualities that help us to achieve our purpose so if we can identify purpose we can get a clearer understanding of what virtue consists of

applying Aristotle’s approach to the identification of business virtue a flourishing business is one which achieves its purpose since virtues are qualities that enable business to flourish, they are also those qualities that help it to achieve its purpose so if we can identify business’ purpose we can get a clearer understanding of what business virtue consists of

what is the purpose of business?

1. business purpose and maximizing shareholder value ‘the defining purpose of business is maximising owner value over the long term by selling goods or services’ (Sternberg, 2000: 32) note the difference between maximizing owner value in the long term and maximizing owner value in the short term

identifying business virtues what virtues might be associated with the long- term maximization of owner value?

2. distinguishing purpose from goals the goals of an activity relate to the way that activity happens to be structured in order to identify the purpose of an activity we have to consider the broader role that it plays in society (Solomon, 1992)

business goals and business purpose business goals relate to the way that business happens to be structured business purpose can only be identified by considering the broader role that business plays in society

what broader role does business play? some examples business creates shareholder wealth business provides opportunities for people to earn a living, to develop interpersonal relationships, to acquire skills and capabilities, to progress their careers, and to participate in a worthwhile, shared endeavour business sustains communities by providing forums within which people can interact and by supporting economic infrastructures via the payments it makes to suppliers, employees, and shareholders business supports the provision of public services via payment of taxes

3. identifying business virtues what additional virtues might be associated with consideration of business purpose in relation to the broader role it plays in society?

the community that business serves according to Sternberg’s definition of purpose, business serves the community of its stakeholders according to Solomon’s understanding of purpose, business plays an active role within a mutually supportive community that includes all its stakeholders

theory in practice management buy outs: changing the purpose of business?

key points we can think about what it is for a business to flourish by reflecting on its purpose to gain a comprehensive understanding of business purpose, we need to consider the broader role that business plays in society, rather than just thinking about the way it happens to be structured this involves reflecting on a company’s mutually supportive role in relation to its community of stakeholders

references Solomon, R.C. (1992) Ethics and Excellence: Cooperation and Integrity in Business. Oxford: Oxford University Press. Sternberg, E. (2000) Just Business: Business Ethics in Action, (2nd edn). Oxford: Oxford University Press.