Business and Professional Ethics: Principles and Practices (Prof. Dennis P. McCann, CRRS Lecturer) Outline of Topic The Problem of “Market Morality”: Profit (Li) and Righteousness (Yi) A Little Hint from the West A Foreigner’s Suggestion for modernizing Confucian Moral Philosophy Practical Consequences: Rethinking “Guanxixue”

The problem of “Market Morality”: Profit (Li) and Righteousness (Yi) Market Morality: A Contradiction in Terms? Everywhere you look today, it’s “Money, Money, Money….” Does Market Reform decrease or increase Corruption? Is going into Business still like “Going out to Sea?”

The problem of “Market Morality”: Profit (Li) and Righteousness (Yi) Profit and Righteousness: Does more Li mean less Yi? A Struggle over the meaning of Modernization A Struggle over the meaning of Confucian Tradition What are the resources for bringing Li and Yi into Harmonious Relationship?

The problem of “Market Morality”: Profit (Li) and Righteousness (Yi) Business & Professions: Like Li & Yi?  Business and Profit Maximization: ONE Moral Duty of “Fiduciary Responsibility” The Business Manager’s only Moral Duty is to Maximize Li for the Owners/Investors) Professions and the Ethic of Service: MANY Moral Duties of “The Superior Person,” all converging on Ren Are Business and Professional Ethics in Conflict?

Western Resources for Overcoming the Disharmony of Li and Yi What We can Learn from “Applied Moral Philosophy”: Moral Rights and Moral Goods are to be found in Business, as in any other human Activity. Wealth Maximization (Good) is Moral, so long as Justice (Right) is always done in the way we do Business. Good Business Ethics IS Good Business. Credibility Problem for Applied Moral Philosophy

Western Resources for Overcoming the Disharmony of Li and Yi What we can Learn from Management Theory (Peter Drucker) What is the Purpose of a Business? Profit IS NOT the Purpose of a business Profit IS the measure of Success in fulfilling the purpose of a business “The Purpose of a Business is to Create a Customer” A Focus on Customers Means a Focus on Forming Ethical Relationships: Customers are People whom you have given Good Reasons for Coming Back for More. Customers are People who TRUST you.

A Foreigner’s Suggestion for modernizing Confucian Moral Philosophy Cross-Cultural Studies: The World’s Debt to Confucius and Aristotle Aristotle’s Nichomachean Ethics: Moral Virtues and a Theory of Justice in the Marketplace Confucius’s Lun Yu: The Manager’s and the Professional’s (The Superior Man’s) Moral Virtues and the Way to Cultivate them

A Foreigner’s Suggestion for modernizing Confucian Moral Philosophy Confucian Ethics as a “Rectification of Names” Harmony is Achieved when Each Person lives up to the Ethics implicit in Human Relationships The Five Traditional Relationships: »Emperor---Subjects »Parents-----Children »Husband---Wife »Older Brother---Younger Brother »Older Friend-----Younger Friend Moral Duties understood within the Relationship Moral Duties as “Asymmetrical Reciprocities” Moral Leadership by Moral Example

A Foreigner’s Suggestion for modernizing Confucian Moral Philosophy Limits of Traditional Confucian Ethics: The Centrality of the Traditional Chinese Family The State (Empire): the Family in “Big Characters” Modernization means Social Responsibility outside the Family Economic Globalization means Doing Business with Strangers The Scarcity of TRUST and the Expansion of Guanxixue

A Foreigner’s Suggestion for modernizing Confucian Moral Philosophy Expanding the “Rectification of Names”: A Confucian Approach to Business & Professional Ethics I propose Two New Categories of Relationships:  Merchant------Customer  Professional--Client  Both carry all Ethical Assumptions of Confucian Moral Relationships

A Foreigner’s Suggestion for modernizing Confucian Moral Philosophy Merchant----Customer:  Business Men and Women act in ways that effectively Create Customers:  Turn Strangers into Good Guanxi who want to Exchange “Gifts” with you Professional---Client  Professionals act in ways that effectively Create Clients:  Serving one another through the Application of Knowledge  Professionals do NOT exploit Clients

Practical Consequences: Rethinking “Guanxixue” How did “Guanxi” come to mean the same thing as “Corruption”?  What is Corruption? What is Gift- Giving and Receiving? What is Bribery and Extortion? When does Gift-Giving become Bribery?  Does Modernization Change the Meaning of Guanxi? (Modernity as a World without Yi) The Need for Guanxi in a Modernizing Society: The Problem of Trust in a World of Strangers

Practical Consequences: Rethinking “Guanxixue” Confucian Ethics and Guanxi: Mencius: “The Superior Man Never Allows Himself to be Bought.” (Book 2, Part B, Number 3: Universal Condemnation of Bribery) Confucius: Good Guanxixue and Bad Guanxixue distinguished on the basis of Yi. If the ritual dimension is ignored, Guanxixue is likely to be Bad. Good Guanxixue and Bad Guanxixue are distinguishable on the basis of the Relationship that is cultivated, and the Reciprocities appropriate to it.

Practical Consequences: Rethinking “Guanxixue” Confucian Ethics and Guanxi: Bribes are distinguishable from Gifts not on the basis of the amount of money involved (US Legal Standard). Bribes are distinguishable from Gifts on the basis of Ren, one’s moral intention. (Confucian Moral Standard) If the intent is to cultivate a Relationship, and not to purchase a favor, this can be regarded as Good Guanxixue.