The Role of The Virtues

An essential feature of rationality within virtue ethics is that, rather than focussing on the material goals of the agent, it focusses on the character and motivations of the agent, and on the agent's ability to pursue a certain very particular type of excellence. A characteristic of this excellence is that its pursuit necessitates adherence to certain virtues or traits of character. These virtues place emphasis on the motivation for an action and entail the exercise of sound judgement. "Virtue lies in the reasons for which one acts rather than in the type of action one performs" (Annas, 1995, p. 250). Virtues can be split into two broad categories, namely self-regarding and other-regarding:

"When, furthermore, we look at the whole range of traits commonly recognized as virtues, we once again see that self-regarding and other-regarding considerations are both capable of underlying the kind of high regard that leads us to regard various traits as virtues. Justice, kindness, probity, and generosity are chiefly admired for what they lead those who possess these traits to do in their relations with other people, but prudence, sagacity, circumspection, equanimity, and fortitude are esteemed primarily under their self-regarding aspect, and still other traits – notably self-control, courage, and (perhaps) wisdom in practical affairs – are in substantial measure admired both for what they do for their possessors and for what they lead their possessors to do with regard to other people". [Slote, 1992, p. 9, emphasis added]

A succinct definition of virtue is supplied by MacIntyre:

"A virtue is an acquired human quality the possession and exercise of which tends to enable us to achieve those goods which are internal…" (MacIntyre 1984, p. 191).

He distinguishes between internal and external goods as follows:

"It is characteristic of what I have called external goods that when achieved they are always some individual's property or possession. Moreover characteristically they are such that the more someone has of them, the less there is for other people. …External goods are therefore characteristically objects of competition in which there must be losers as well as winners. Internal goods are indeed the outcome of competition to excel, but it is characteristic of them that their achievement is a good for the whole community who participate in the practice". [1984, pp.190-191; emphasis added]

The pursuit of external goods, therefore, is no longer recognized as the ultimate end of human endeavor, but rather as a means to the achievement of excellence. Martha Nussbaum defines this excellence as "the end of all desires, the final reason why we do whatever we do; and it is thus inclusive of everything that has intrinsic worth [i.e., internal goods], lacking in nothing that would make a life more valuable or more complete" (1991, p. 38).

A central feature of virtue ethics is its concept of professional development as fundamentally a moral process; "one cannot be practically rational without being just – or indeed without the other central virtues" (MacIntyre, 1988, p. 137). Thus rather than being some peripheral appendage or constraint on a substance-based rationality concept, this approach places morality at center stage. In a business context, Kenneth Goodpaster lists five key virtues:

(1) Prudence – neither too short-term nor too long-term in time horizon;

(2) Temperance – neither too narrowly materialistic (want-driven) nor too broadly dispassionate (idea-driven);

(3) Courage – neither reckless nor too risk-averse;

(4) Justice – neither too anarchic regarding law nor too compliant;

(5) Loyalty – neither too shareholder-driven (private sector thinking) nor too driven by other stakeholders (public sector thinking). [1994, pp. 54-55]

Clearly, to achieve excellence through the exercise of these virtues of character requires a sense of moderation. Thus managers who are said to be 'weathering the storm' or 'sticking to their guns' may well be exercising the virtue of courage. But so might a manager who 'knows when to call it quits'. It is the reason or judgement underlying the action that will determine whether the agent is truly courageous. Thus a virtue is not a maximum or a minimum. Unlike rationality in the finance paradigm, practical rationality concerns moderation and balance.

The crucial difference, therefore, between traditional approaches to business ethics and the approach adopted in virtue-ethics theory is that the latter focusses on the character and motivations of the agent, and on the agent's ability to pursue excellence through virtuous acts. As mentioned earlier, Klein succinctly distinguishes between the traditional approach to business ethics and the new virtue-ethics approach by labelling them as "action-based" and "agent-based" respectively: the former tending to focus on moral rules that can be generally applied to contractual situations (e.g. Kantianism and utilitarianism), whereas virtue ethics concerns the aspirations of the agent, and the agent's ability to exercise the moral 'virtues'.

Klein describes a similar individual in his analysis of Cervantes's Don Quixote:

"The ideal of craftsmanship is to create that which has quality or excellence; personal satisfaction, pride in accomplishment, and a sense of dignity derived from the consequent self-development are the motivations. In an 'excellent' company it is this ideal that permeates the firm, and management should provide the moral example of such an ideal; a business management craftsman attempts to create a quality organization, and quality products and services are the result of such an organization". [1998, p. 55]

Klein's managers recognize their business universe as essentially one of chaotic disorder and unpredictability where rules of logic and rationality will never fit comfortably. These managers endeavor to achieve some sort of balance and harmony in their chaotic environment. In this endeavor they are not quixotic, but rather are guided by conceptions of quality, excellence, the Good, Aristotelian eudaimonia, and by conceptions of desirable character traits — virtues — that may lead to these ideals. The acquisition of these character traits and the concomitant pursuit of these ideals is not achieved simply by the application of certain rules of logic, or of rationality. Indeed the whole pursuit is characterized by a marked absence of rules and set goals.