The Wheatley Institution

Fellow Notes

Ethics & Virtuousness

“Do virtuous organizations perform better than less virtuous organizations? The answer is an unequivocal ‘yes’.”

Kim S. Cameron | July 25, 2014
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A sign, representing the ethical decisions we face, shows

The Wheatley Institution is a leader is the study of ethics and ethical behavior. This focus is crucial in our modern era at least partly because change is ubiquitous. No one would confidently predict what the world will be like in as little as 5 years. For example, one Exabyte of data was created in the world from the history of mankind until the year 2003. We now create one Exabyte of data per day. More than 75 percent of the content on the web was not available three years ago. Thus, much of the information learned by college freshmen will be outdated by the time they are seniors. The nonlinear nature of current change trends makes accurate predictions impossible.

Without a stable, unchanging reference point, direction and progress are indeterminate

When everything is changing, it is impossible to manage. Without a stable, unchanging reference point, direction and progress are indeterminate. Without a stable, unchanging referent such as land, the horizon, or the stars, for example, it is impossible to steer a plane. Pilots with no visual or instrumentation contact with a fixed point are unable to navigate. Consider the last flight of John Kennedy, Jr., who, as he flew up the New England coast at dusk, crashed into the ocean without even knowing he was headed toward water. He was unable to manage the continuously changing position of his airplane without a standard that remained unchanged.

The same disorientation afflicts individuals and organizations in situations where there are no unchanging referents. When nothing is stable, people tend to decide for themselves what is real and what is appropriate—based on criteria such as past experience, immediate payoff, expediency, or personal reward. They end up cheating, lying, waffling, or claiming naiveté, not only because it is to their political or economic advantage, but because they have created their own rationale for what is acceptable.

Highlighting ethical standards is one option often espoused to address this problem. Just identify what is ethical and then let these standards guide behavior. The problem is, in practice, ethics is understood and implemented as duties designed to avoid injury or prevent damage. The dominant (although not exclusive) emphasis in the ethics literature is on avoiding harm, fulfilling contracts, and obeying the law. However, standards that avoid harm are not the same as standards that lead to doing good. Avoiding the bad is not the same as pursuing the good.

In addition, ethical standards often change with the social will of the people. Consider standards governing marriage, pollution, accounting practices, gender roles, and language. Ethical standards in each of these domains have changed markedly. Ethical standards, therefore, do not represent unchanging, stable, fixed points. This implies that ethical standards must be supplemented in order to have a true fixed point that can guide human behavior.

An emphasis on virtuousness is that standard. Virtuousness is what individuals aspire to be when they are at their very best. The word is derived from the Greek arête, which means excellence, or the Latin, eudemonism, referring to the highest aspirations of human beings. Virtuousness refers to the best of the human condition. It is obvious that achieving a condition of virtuousness would solve almost all of the world’s problems.

Virtuousness refers to an aggregation of individual virtues such as unconditional love, compassion, forgiveness, charity, gratitude, and trustworthiness. Achieving these attributes is essentially a universal and unchanging aspiration in all societies, cultures, and religions. Virtues serve, therefore, as a more stable and universal fixed point for guiding human behavior than does ethics.

Do virtuous organizations perform better than less virtuous organizations ?

Virtuousness is represented, of course, by the Gospel of Jesus Christ, but it is not confined merely to theological discussions or religious practice. Rather, in the past ten years, I have conducted a series of research projects investigating the impact of virtuousness and virtuous practices on the performance of organizations in a variety of industries and sectors, measuring—including profitability, productivity, quality, health and well-being, customer satisfaction, stock price, and so forth. The question of interest was: Do virtuous organizations perform better than less virtuous organizations?

The answer is an unequivocal “yes.” Abundant evidence over the last decade confirms that when organizations engage in virtuousness practices, when they use virtuousness, not merely ethics, to guide decision making, and when they embed virtuousness into their cultures, they outperform other organizations by a wide margin. Virtuousness pays—in profits, productivity, human flourishing, and customer retention—as well as in helping to achieve the highest aspirations we hold for ourselves.