Ethical Issues in Business, A philosophical Approach, Seventh edition by Thomas Donaldson, Patricia H. Werhane, and Margaret Cording. Article by John Rawls, Distributive Justice (p 193-203)
On first reading John Rawls’ article on the concept of Distributive Justice, I felt the principles seemed reasonable and I agreed with its basic ideals. However, I recognized the many assumptions about how people must act in order for the system to work could be a problem. The basic principle contains two simplistic rules. The first rule necessitates equality for every person. Each person has “an equal right to the most extensive liberty compatible with a like liberty for all.” The second rule is a caveat for when the first rule can’t be applied. It revolves around the concept that inequalities are only allowed if in the end the inequality benefits everyone. Though the article discusses applying these rules to government, they are easily applied to business as well. It is this aspect of Distributive Justice that I am focusing on. When delving into these principles and the effects they might have on business I started to see some problems.
The first gotcha involves the rule makers and rule breakers. Distributive Justice defines a set of rules that should be followed by everyone. These rules should give all people equal opportunity. If there are inequalities, these same rule makers are responsible for deciding if the inequalities are all right based on whether they enhance the greater good for everyone in the long run. Whether you think of this from the government or the corporate perspective, the problem remains the same. Who gets to make the rules? Who decides if an inequality is justified? When the rule makers decide what is just, will they take into account all the stakeholders? Do some stakeholders take precedence over others? For instance, would issues involving people out way effects on the environment? We live in a world made up of many different cultures. Even within a specific culture you find a wide range of human behavior. Each person has their own value system, and these differences can affect the importance of the stakeholders. Some stakeholders may not even be considered by certain people or cultures. Given this diversity, how do you really define what is Just?
Andrew Carnegie is an example of how these principles can go astray. Carnegie believed that private wealth should be held in trust for the public3. Carnegie also believed in acquiring this wealth buy minimizing his bottom line in his steel mills. One of the ways he accomplished this was by paying his working as little as possible. The justification for the inequalities of the workers was offset by the greater good that would be accomplished when his wealth was redistributed back to the public. This fits nicely into the second rule of Distributive Justice. Inequalities are offset as they are seen as being to the advantage to all in the long run. The problem of course, is the workers wanted to have a better life now, not in some future they may not live to see. The workers felt their quality of life was below that of slaves. Their pay was so low they could barely get by, the company controlled the housing, and the stores in an effort to assist the employee, but it was more like a debtors prison than an employee benefit. In essence, the workers didn’t think the second principle of justice was upheld. From their point of view, the inequalities were not offset by these benefits. So we see that even though Carnegie thought what he was doing was right and just, other viewpoints may have drastically different opinions of the situation. As the rule makers are human, their ideals will color their perceptions of what is equitable and just. As a rule maker, managers should poll as many different groups as possible before setting policy in order to minimize the chances of misrepresenting a stakeholder.
Now lets take a look at discrimination. Business today deals with a wide diversity of employees. The ability to travel anywhere in the world in a day or two eliminates the isolation of cultural groups or races and opens the gates for cultural mingling. With the increase in diversity in the work environment it is even more important to minimize the effects of discrimination. Since the concepts of equality for all people is central to the principles of Distributive Justice, it should follow that applying them would eliminate discrimination. In an ideal world this would work, but discrimination can rear its ugly head in the subtlest ways. Take an interview for example. It would be obvious to anyone who has even the slightest clue of what discrimination is to know that using a persons’ age, race, culture or sex as a reason for not hiring a person would be discrimination. Rion describes the typical decision making environment of a manger as usually made in a short amount of time with only some of the fact known. The typical interview exemplifies this situation. You are given a fact sheet about a person that may or may not be correct. You are given a very short time period to interact with the person, and you are then required to make a decision about hiring them. You will probably never have all the facts and probably won’t be able to verify most of those you have.
Given this situation, lets assume two potential employees have just been interviewed. The two people are on equal ground as far as experience, skills, and education. They were both personable and made a positive impression during the interview. In essence, they are both equally qualified for the position. One of these people is from a culture that you are not familiar with. The other is from the same culture you come from. The unknown work ethic of another culture brings some doubt into the decision making process. What is the work ethic of this person’s culture? Will they follow their cultural work ethic? Will other ethnic or cultural issues create problems/tensions in the work place? Given the uncertainty of the work ethic, and personality of other culture, it may make sense from the perspective of limiting unknowns to hire what you know, rather than take a chance on an uncertainty. It would seem logical to choose the person more like yourself in order to stack the deck in your favor. By choosing the person more like yourself, you are more comfortable with your choice as you have eliminated some of the unknowns from the situation. It is a rare person who can put aside all of their prejudices. People are made up of likes and dislikes, prejudices and preconceptions. Even if they tried to minimize these effects on decisions, you eventually have to make a judgment call. Even if a person could be 100% objective when dealing with issues of discrimination, the decision methodology of a manager could still result in a discriminatory decision.
Distributive Justice also discusses social minimums, but for all the good it does, it too has a dark side. For the most part, social minimums are a great thing. They help raise the standard of living for all people, regardless of income or their financial situation. It has in place a system for dealing with unemployment and for helping out those who find themselves at a temporary financial disadvantage. But what happens when the system supplies a social minimum that exceeds the lifestyle that could be afforded through work. There is a study by Martin Feldstien that has a section that discusses a group of people who due to dysfunctional life styles or personal choice, choose to live in poverty. They use the system established by the social minimum to get by. He goes on to describe a problem we have in this country were an increase in welfare benefits, combined with inflation, has surpassed the value of some peoples wages. In effect, the message the government is sending is you can live a better life by not working and living off the system. If low wage jobs don’t afford a better life than the social minimum, what is the incentive to work? How do you motivate people in a low wage situation to work hard when the alternative would be a government supplied social minimum that exceeds what you can make at work? There is a portion of the populace who choose not to work, as they are content with the life style they are supplied with through the social minimum. Is it right to foster a system that allows and even encourages to some extent this unsocial behavior. A behavior counter productive to the necessary assumption that all people want to better themselves and the communities they live in.
This setup becomes an issue for any manager who is working with people who fall within this low wage bracket. Their workforce will probably be made up of individuals who are in a stage of their life were they can afford the salary, but will move on shortly, like high school or college kids. Some portion will work hard because they are conscientious. And some are unmotivated and just want to get a paycheck. High turnover rate and constant retraining will be required as new employees come in making it difficult to build a well trained staff. If the job doesn’t have a clear path to better positions, what is the motivation for a person to work hard? Through the social minimums we can actually harm managements ability to hire, motivate and keep a workforce, thus creating an undesirable situation in the long run.
Distributive Justice is a sound ideal that can provide a solid backbone for creating a system of ethical behavior that takes into account the diversity of human morality and ethical behavior. If followed, its utilitarian approach should raise the living standards for all social levels. By its very nature it can be adapted to account for changing times and new information. Applying the principles of Distributive Justice to a business would be a good step in moving a company towards more responsible behavior. By thinking about the implications of its actions and the effects, and adhering to the principles of justice, a company can move forward in a responsible and socially aware manner. The first step to solving any problem is identifying it. Distributive Justice is a way to discover those problems.