OPERATIONALIZING VIRTUE ETHICS TEACHING: LESSONS FROM A NON-CATHOLIC INSTITUTION Aliza Racelis I. Introduction The tendency of financial-economic theory toward an exclusively materialistic corporate culture —“shareholder wealth maximization”— can obfuscate lofty ideals that those studying and teaching business ought to hold. Schools and universities have to be encouraged to debate the moral, legal and governance issues that envelop business and economics. Universities’ curriculums seem to need revising to incorporate teaching strategies that can imbue students with a greater “ethical sensitivity”. Given the long list of prominent business scandals just around the turn of the twenty-first century, there is no escaping the fact that ethical reasoning is vital to the practice of business and finance. In addition, certain institutions lack an emphasis on the nurturing of human resources, as human capital has been shown to be the engine for economic growth. Thus, a shift in pedagogical practices in leadership and management education is required (Villegas, 2011; James and Schmitz, 2011; Racelis, 2008). In the first few years of the twenty-first century, the corporate world has come under increasing pressure to behave in an ethically responsible manner. In particular, accountability failures have led to bankruptcies and restatements of financial statements that have harmed countless shareholders, employees, pensioners, and other stakeholders. These failures have created a crisis of investor confidence and caused stock markets around the world to decline by billions of dollars. Standards for what constitutes ethical behavior lie in a hazy area where clearcut right-versus-wrong answers may not always exist (Racelis, 2010; Walker, 2005). As practitioners, regulators and researchers study the matter and consequences of unethical business behavior, there is the need to study its antecedents, dynamics and impacts (Reidenbach and Robin, 1990). In the normative ethical literature, various ethical paradigms are available: deontological (duty-based) ethics, consequentialism, and teleological (end-oriented) ethics. To the latter belong Aristotelian virtue ethics and discussions of the character of persons. While there has been a resurgence in virtue ethics, teaching it both at the theoretical and the practical levels has remained an educational challenge. II. Models of Business Ethics teaching in secular institutions: Use of natural moral philosophy The Corporate Governance and Business Ethics course at the University of the Philippines (UP) business school is an elective class at the undergraduate level. The professor

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assigned to teach it is given autonomy to design and craft the course syllabus 1. Depending on the philosophy exposure of the students enrolled, the professor would typically start with basic sessions on ethics and ethical standards. Distinctions are made between ethics theory and practice, and between deontology and consequentialism, and exposition is done on business values and virtues. It is usually found helpful to expose the students to Aristotelian Ethics and his treatment of the virtues. The students’ response has come to depend on the combination of social science and philosophy subjects they would have taken up prior to Business Ethics, as the General Education program for undergraduate students had been “revitalized” ―that is, choice as opposed to prescription since Academic Year 2002 2―, to take into consideration the prior knowledge and exposure of students who come from both private and public secondary schools. The giving of importance to Business Ethics in the curriculum and in faculty research at the UP business school is manifested in a few journal articles 3 as well as in the efforts at research projects carried out by Filipino professors teaching in universities abroad visiting the Philippines for short periods. The recent assignment of the Business Ethics course, however, was the fruit of a series of training courses on Corporate Governance, the need for which was keenly felt due to the notable accountability failures globally in the last decade or so; these corporate scandals have led to bankruptcies and restatements of financial statements that have harmed countless shareholders, employees, pensioners, and other stakeholders. Against this backdrop, there has been an explosion of interest in the corporate and investment sectors. Likewise, more and more universities are offering corporate governance and organizational ethics as a module, either on undergraduate or postgraduate degree programs (Mallin, 2004; Tirole, 2005). Some UP business professors have since been at the forefront of publishing work in the area of corporate governance 4 and ethical culture 5. III. Background of University of the Philippines (UP) and the UP Business School Established in 1908 as a secular institution, the University of the Philippines (UP) started as a small Manila campus with only a few colleges. Over the years, UP has made a reputation for itself as a research and graduate university that produces scientific and creative outputs of the highest quality which receive both national and international recognition. Today, UP is made up of seven constituent universities and one autonomous college located in 14 campuses throughout the Philippine archipelago 6. The flagship campus is that in Quezon City; the UP Business School is situated within this autonomous campus. The UP College of Business Administration (UPCBA) offers degree programs at the graduate and undergraduate levels. The Ph.D. program 1

https://sites.google.com/site/alizaracelis/corporategovernance

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http://cvm.uplb.edu.ph/index.php/academics/dvm-curriculum/51-rgep [accessed 28 April 2012]

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http://www.journals.upd.edu.ph/index.php/pmr [accessed 28 April 2012]

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http://www.journals.upd.edu.ph/index.php/pmr

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http://apmr.management.ncku.edu.tw/abstract.asp?id=364

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http://www.up.edu.ph/site/content7a0b.html?r=2&c=2 [accessed 28 April 2012]

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aims to train candidates to be capable of engaging in academic research that advances knowledge in the management field. Its MBA program seeks to endow students with advanced management skills while the MS Finance program exposes the student to a series of courses that strikes a balance between financial theory and practice. It has two popular and sought after undergraduate programs: the Bachelor of Science in Business Administration (BSBA) degree and the Business Administration and Accountancy (BSBAA) degree 7. IV. Virtue Ethics Historical Background The development of ethical theory in Western civilization has been by the gradual accretion of insights, rather than by a systematic evolution in a straight line of progress. The first principal influence had been the classic Greek philosophers, who conceived ethics as relating to the “good life” and, thus, can be considered the first in Western history to examine virtue and character ethics (Denise et al., 2002; Murphy, 1999). Virtue ethics possesses deep historical importance and its roots can be traced to such great ancients as Socrates, Plato and Cicero (Card, 2004). Plato, through the influence of Socrates who was convinced that there is an objective truth that is not simply relative to an individual’s beliefs, philosophized a great deal on important ethical concepts, including some specific virtues: he wrote Charmides which was concerned with temperance; the Laches concerned courage, and the Euthyphro concerned piety. Believing that man is deprived of true life for as long as he remains chained to the body since the essence of man is his soul, Plato’s ethics essentially looked to freeing the soul from its bondage to the body. In Plato, therefore, sensible pleasures are devoid of moral value; the road towards the true life of the spirit, then, is a path of purification where man exerts effort to reach genuine wisdom. For Plato, the life which most closely reflects the divinity —which he conceived as a multiplicity possessing diverse characteristics— is the life of virtue (Denise et al., 2002; Yarza, 1994). Aristotle’s Nicomachean Ethics is widely viewed as the most influential early work on virtue ethics. Historically, Aristotle’s Ethics is the first systematic treatment of ethics in Western civilization: it belongs in the tradition that stresses both the supremacy of our rational nature and the purposive nature of the universe. Aristotle pointed out that an ultimate end for people must be one that is self-sufficient, final and attainable; he maintained that happiness is the goal that meets these requirements. Consideration of the conditions requisite to the attainment of happiness led Aristotle into a discussion of virtue, which for him refers to the excellence of a thing and hence to the disposition to perform effectively its proper function (Denise et al., 2002). Thus, Aristotelian virtue ethics is concerned with pursuing a certain type of morally inclusive excellence, called eudaimonia in his Ethics, which can be roughly translated as happiness or human flourishing through moral excellence (Dobson, 1997). For Aristotle, just like for the other classical philosophers, happiness was a type of activity and an achievement, rather than a feeling. His definition of happiness contains two vital concepts: “Activity of soul,” which means the exercise of reason, and “in accordance with virtue,” which describes the quality of the performance. His virtue theory, then, is focused on 7

http://www.cba.upd.edu.ph/ [accessed 28 April 2012]

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character development and describes a right action as one that a virtuous agent is disposed to make in the circumstances in order to flourish or live well. Happiness was a term indicating success: to have lived a happy life was the same as having been a success at human life. (Denise et al., 2002; Pakaluk and Cheffers, 2011; Dobson, 1997). In this classic virtue theory, four human virtues stand out as being the “hinge” or “cardinal” virtues: courage, moderation, justice, and prudence. Plato was the first philosopher to give such list of the four main virtues, although the label itself, “cardinal virtues,” was not coined until the second half of the 4th century A.D. by Ambrose of Milan. In the 13th century, Thomas Aquinas, preserving the pattern and most of the detail of Aristotle’s ethics, judged that Aristotle’s account of the moral virtues was correct in outline but incomplete in details. Being a Christian, Aquinas maintained that humans have two sources of truth rather than one: those that human faculties provide, and those that God reveals. The teleology of Aquinas, thus, differentiates and raises his ethics from that of Aristotle: that all human action has an end, and that this end is the first and most important source of morality of human action, but that these particular ends presuppose a last end which communicates its finality, and this is none other than divine causality. Hence, the eternal law —the plan containing what God wants to do— is the supreme norm of morality (Denise et al., 2002; Saranyana, 1996) David Hume, carrying on the work of Shaftesbury, Hutcheson, Butler and so on, in emphasizing the role of what we may call the emotional aspect of human nature in man’s moral life, maintained that moral distinctions are derived ultimately, not from reasoning, but from feeling, from the moral sentiment. Having examined the overwhelming case against reason, Hume came down squarely on the side of sentiment as the source of morality. With regard to the virtues, he differs from Aristotle and Aquinas in at least two ways: in distinguishing between original and secondary impressions, he categorizes pride (vice) and humility (virtue) as being part of the latter (which he also refers to as ‘passions’); also, in his lengthy discussion of justice, he always assumed social utility as an overarching intention of humans, thus rendering the otherwise virtuous action of the just person as idle, that is, superfluous or unworkable (Copleston, 1994; Denise et al., 2002). Immanuel Kant, to whom we owe the largely deontological branch of ethical theory, believed in and taught the existence of a priori moral principles which are held by all rational beings as necessary and universal, independent of our actual experience. For example, we know that we ought to tell the truth; but such knowledge is not knowledge of what is, of how men actually behave, but of what ought to be, of how men ought to behave. And this knowledge is a priori in the sense that it does not depend on men’s actual behavior. Now, he believed and taught that the universal basis of morality in people must lie in their rational nature; this alone is the same in everyone. This meant that the fundamental moral law —which he called the categorical imperative— can be stated as follows: Those actions are right that conform to principles one can consistently will to be principles for everyone, and those actions are wrong that are based on maxims that a rational creature could not will that all persons should follow. Thus, Kantian ethics has come to be considered “duty ethics”: the categorical imperative is the unconditional

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directive for behavior: it is binding on everyone because each rational being acknowledges an obligation to follow reason (Copleston, 1994; Denise et al., 2002). Several contemporary scholars have championed the resurgence of virtue/character ethics, foremost among them being Elizabeth Anscombe, particularly through her essay, “Modern Moral Philosophy,” and Alasdair MacIntyre through his all-important book, After Virtue. MacIntyre is viewed as one of its most prominent proponents and defines virtue as acquired human qualities that enable persons to achieve the “good” in their chosen profession. Virtue ethics has likewise seen a renaissance with popular writers, such as William J. Bennett and his The Book of Virtues (Pakaluk and Cheffers, 2011; MacIntyre, 1984; Murphy, 1999; Card, 2004). In a later section, we shall present both praises of and critiques of MacIntyre’s resurrecting Aristotelian virtue ethics. One criticism of scholarly work in virtue ethics is its lack of recognition of virtues in other than Western cultures, e.g., Asian and African perspectives. In any case, we know of Confucian ethical principles in Chinese society. Also, as a moral philosopher, Mencius was similar to Aristotle on philosophical anthropology and moral psychology. Like Aristotle, Mencius thought that human beings have a uniquely exalted nature which may be fulfilled by developing moral character. Mencius, in addition, also thought that the right is discovered through reasoning by analogy, which is reasoning which seeks the most coherent set of moral judgments (Ryan, 1998). Definition of Virtue and Dimensions of Virtue Ethics Virtue may be defined as follows: “The virtue of a kind of thing is an enduring trait which places it in good condition and enables it to carry out its distinctive work well. The word ‘virtue’ represents what the classical philosophers meant by the Greek term aretê (άρετή) and the Latin term virtus. Classically, a virtue is a strength or excellence. A virtue strengthens, improves, and perfects that which has it. This meaning is evident in the Latin term, which comes from the word for ‘man’, vir. In Latin, a virtue is literally the same as ‘manliness’” (Pakaluk and Cheffers, 2011, p. 82). As said above, virtue means strength, the capacity to do, and to a certain extent, ability or proficiency. Thanks to it, man develops a working faculty: he acts and he acts well. Thus, not only is virtue not an obstacle to the good act—to the act that produces results, that “delivers” — but it is in fact its necessary and sufficient condition. To have virtue in general is to have knowhow (Gomez, 1992). It follows then that any virtue constitutes an exaltation, an empowering of human nature and it is the source of personal activity. In what refers to acquired virtues —those acquired naturally by the uniform and uninterrupted repetition of the same acts— their seed is naturally in man. This seed is developed and defended against the disordered instincts. Hence, virtue, contrary to what the Stoics thought, is susceptible to increase, but this is to be understood not as 5

an addition of degree to degree, but always as a more profound participation of the subject in the virtue. This participation is proportionate to the frequency and to the intensity of the acts, but it is deepened in the soul only when the virtuous activity reaches and surpasses the intensity of the habit. Virtue, even if it reaches the maximum intensity, can never go to the extreme; it can neither be excessive nor defective: (in medio stat virtus). This is Aristotle’s famous doctrine of virtue as a “mean.” This implies that acting virtuously means hitting that right and appropriate intermediate place between two extremes. To say that one should do what is intermediate, in this sense, is the same as to say “nothing in excess”, because a deficiency can always be described as an excess of restraint or caution: for example, the person who has the depressed zest for the pleasures of the table may be described as going to excess in abstaining (Pakaluk and Cheffers, 2011; Lanza and Palazzini, 1961). Considering the multiplicity of the powers of the soul and the specific plurality of objects toward which the activity of the virtues can be directed, the virtues acquired in man are diverse. Some of these have deserved to be particularly marked out as cardinal, because of the particular importance and difficulty of their specific matter: prudence, understood as the habit of right judgment in the action to be performed; justice, which is concerned with the observance of perfect equality in relationships with one’s neighbor; temperance, which is ordained to moderating the more vehement appetites; fortitude, which is directed to maintaining the firmness of spirit in the greater dangers that threaten man. The other natural virtues are connected to one or other of the cardinal virtues by a certain similarity with them. To prudence are joined the habits that dispose the intellect to choose the means more adapted to the end and to interpreting the spirit of the law. To justice are attached religion, piety, gratitude, truth, affability, liberality, punitive justice, and equity; to fortitude are attached magnanimity, patience, perseverance; to temperance are joined meekness, clemency, and humility (Lanza and Palazzini, 1961). For Aristotle, moral virtue is intimately related with right reason, for it is right reason which points out the extremes of defect and excess that have to be avoided in order to attain the just mean. Right reason in turn is acquired through prudence, the criterion or norm for which is the judgment of “a wise and prudent man.” Whence we understand Aristotle’s definition of moral virtue as “a disposition to choose, consisting essentially in a mean relatively to us determined by a rule, i.e., the rule by which a practically wise man would determine it.”. Virtue, then, is a disposition, a disposition to choose according to a rule, namely, the rule by which a truly virtuous man possessed of moral insight would choose. Aristotle regarded the possession of practical wisdom, the ability to see what is the right thing to do in the circumstances, as essential to the truly virtuous man, and he attaches much more value to the moral judgments of the enlightened conscience than to any a priori and merely theoretical conclusions. This may seem somewhat naïve, but it must be remembered that, for Aristotle, the prudent man will be the man who sees what is truly good for a man in any set of circumstances: he is not required to enter upon any academic preserve, but to see what truly befits human nature in those circumstances (Yarza, 1994; Pakaluk, 2005; Copleston, 1993). 6

Virtue ethics, of the Aristotelian type, has six major dimensions that distinguish it from other ethical theories (Murphy, 1999): (1) the focus in virtue ethics is on the person and his/her character traits, not on a particular decision or principle; (2) virtues are good habits and are learned by practicing; (3) appropriate virtues are discovered by witnessing and imitating behavior; to become virtuous, one must see others practicing good habits; (4) persons seek the “ethic of the mean”; (5) virtues should be examined within a “community” setting; and (6) aspirations are key motivators in virtue ethics. With respect to the third dimension, it is hard to find and achieve the mean, because our emotions affect our perceptions. Someone who tends to fear things too much will actually perceive them as being more fearful than they are, so his fear will seem to him to be perfectly appropriate. He will not be aware that his fear is excessive. A variety of techniques are necessary in dealing with our desires and achieving the mean. We have to know our bad tendencies and correct for them. We have to rely on the example of good people similar to us. We have to use objective standards as much as possible (Pakaluk and Cheffers, 2011). V. Successes and Challenges of teaching Virtue Ethics in UP Catholic professors in secular universities are able to draw richly from natural moral philosophy material, a chief reference for which is Aristotelian Ethics. Concretely, a discussion of his Virtue Ethics, as expounded by St Thomas Aquinas, is helpful and meaningful. They can and should, likewise, produce prolific research in this area. A challenge they are typically confronted with, especially in business schools where post-graduate students are trained largely empirically, is to empiricize on ethics, for instance, by administering surveys, statistically analyzing such surveys, and coming up with scales or inventories. With the resurgence in recent times of the interest in aretaic or virtue ethics, especially that found in Aristotle’s ethical doctrine, ethics literature has come to propose virtue theory as one which unites the descriptive and the normative, yet insists upon doing so in the pursuit of a purpose unlike that proposed by the other theoretical systems. The theory of virtue addresses the question ‘What is the purpose of business?’: it provides a recipe by which any organization can define its own purposeful existence. By so doing, Aristotelian virtue is just as focused on outcomes as consequentialism, and as concerned with the act itself as non-consequentialist theory, and places high value on pure motives like Kantianism. Specifically, for Aristotle, character development is an inevitable outcome of the act. In addition, his system places tremendous weight upon the act because life itself is an energeia or activity of performing various acts (Koehn, 1995; Crockett, 2005) A consequent challenge, however, is to make Virtue Ethics ‘concrete’ or ‘non-vague’ in one’s ethics teaching. How does one convince students, for instance, that managers or management students need or need to know about specific virtues? A first step in this process is to show, via extant empirical research, that scholars are studying and developing virtues inventories or scales to survey potential respondents on several aspects of virtues, for example, which virtues respondents believe to be important, or which virtues they observe their superiors to possess. 7

VI. Operationalizing Virtue Ethics through development of a Virtue Ethics Scale This is what the author has set out to do in her research and teaching: to share preliminary results of an exploratory attempt at generating a virtue ethics scale for Philippine managers, using the initial listing of Shanahan and Hyman (2003) and Chun (2005). The survey questionnaire consisting of 34 virtues was administered to a convenience sample of 141 postgraduate business and finance students who are managers in Philippine companies. The questionnaire sought to elicit from the respondents which of the virtues listed they felt their superiors possessed. Ethics scales or inventories enable us to classify people according to their beliefs about the criteria they use to make ethical decisions, or the ethicality of those decisions. Some of the virtue ethics literature suggests augmenting teleological and deontological ethics scales with a virtue ethics scale which can cause us to be aware of the virtuous qualities of businesspeople and managers. At a more theoretical level, inspecting virtues allows us to understand them in conjunction with the practices in which they are developed, the narrative of the tradition to which these practices belong and the social institutions which they are fostered within (Shanahan and Hyman, 2003; Dawson & Bartholomew, 2003). On Table 1 are summarized the virtue scale items found in the empirical virtue ethics literature. The Virtue Ethical Character Scale (VECS) of Chun (2005) resulted in 6 virtue dimensions and 24 items. However, the VECS is an organizational virtue scale: it assumed that a personal ethical system can be transferred or attributed to organizations. Since the premise of the study by this author is that the virtues perspective allows us to discuss the strengths or weaknesses of the character of the individual person, then the scale of Shanahan and Hyman (2003) was selected for purposes of this paper. Their study resulted in an initial listing of 34 virtues of individuals in firms (see Appendix 1) as a result of focus group discussions and questionnaire pretests. They based themselves on Solomon (1999) who provides a workable listing of business virtues. After submitting responses to factor analysis, the six resulting factors were: empathy, Protestant work ethic, piety, respect, reliability, and incorruptibility.

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Table 1: Virtue Scale items in the literature Author

Level

Character traits

Solomon (1992)

Individual

Honesty, fairness, trust, toughness, friendliness, honor, loyalty, shame, sincerity, courage, reliability, trustworthiness, benevolence, sensitivity, helpfulness, cooperativeness, civility, decency, modesty, openness, cheerfulness, amiability, tolerance, reasonableness, tactfulness, witness, gracefulness, liveliness, magnanimity, persistence, prudence, resourcefulness, coolheadedness, warmth, hospitality

Reidenbach and Robin (1990)

Individual

Broad-based moral equity dimension (Fair, Just, Acceptable, Morally right); Relativistic dimension (Traditionally acceptable, Culturally acceptable); Contractualism dimension (Does not violate an unspoken promise, Does not violate an unwritten contract).

Murphy (1999)

Individual

Integrity, fairness, trust, respect, empathy.

Shanahan & Hyman (2003)

Individual

Empathy, Protestant work ethic, Piety, Respect, Reliability, and Incorruptibility

Chun (2005)

Organizational Integrity (Honest, Sincere, Socially-Responsible, Trustworthy); Empathy (Concerned, Reassuring, Supportive, Sympathetic); Courage (Ambitious, Achievement-oriented, Leading, Competent); Warmth (Friendly, Open, Pleasant, Straightforward); Zeal (Exciting, Innovative, Imaginative, Spirited); Conscientiousness (Reliable, Hardworking, Proud, Secure)

VII. Preliminary results of a Virtue Ethics survey among Philippine managers The survey questionnaire consisting of the 34 virtues of Shanahan and Hyman (2003) was administered to a convenience sample of 141 postgraduate business and finance students who are managers in Philippine companies. The questionnaire sought to elicit from the respondents which of the virtues listed they felt their superiors possessed. The format was a Likert-type scale where the responses to each item or trait ranged from strongly agree to strongly disagree. The responses were submitted to factor analysis, which is a multivariate statistical method that identifies the underlying dimensions to represent the different variables or items on the questionnaire. Factor analysis is a statistical technique that helps in the discovery of information in complex arrays of inter-correlated data. In other words, factor analysis is a way of condensing the information from the original variables into a smaller set of variates or factors with a minimum loss of information. In the current study, factor analysis revealed latent factors defining the virtues which the respondents from those Philippine firms felt their superiors possessed (Hair, 1998; Moberg, 1999). A series of factor analyses and reliability tests were performed until an acceptable reliability coefficient of at least .60 and measure of sampling adequacy (appropriateness of 9

applying factor analysis) of at least .50 (Hair, 1998) were obtained. Based on the factor analysis of the responses to the 34 items on the survey questionnaire, the resulting virtue or trait factors are as presented on Table 2 viz.: (1) care and concern, (2) competence, (3) ambition, and (4) superiority. Only 29 out of the total 34 trait items loaded onto the final four factors.

Factor (Description) Care and concern

Competence Ambition Superiority

Table 2 Managerial Virtue Factors Items/Variables loading onto the Factor Sympathetic, sincere, respectful, pleasant, reassuring, reliable, socially-responsible, generous, supportive, concern, secure, friendly, spirited, open, honesty, exciting Innovative, leading, mature, competent, intelligent, reliable, confident Ambitious, aggressive, controlling Superior, proud, straightforward

Reliability (Cronbach’s Alpha) results are as shown on Table 3. Cronbach's α (alpha) is a coefficient of reliability. Cronbach's alpha will generally increase as the intercorrelations among items increase, and is thus known as an internal consistency estimate of reliability of scores. Cronbach's alpha is widely believed to indirectly indicate the degree to which a set of items measures a single unidimensional latent construct. As a rule of thumb, professionals require a reliability of 0.70 or higher before they will use an instrument (Hair, 1998). Given that all the α’s for all the resulting factors exceed 0.70, then we can rely on the instrument used in this study. Table 3 Reliability (Cronbach’s Alpha) Results No. of items Cronbach’s alpha 16 .944

Factor Factor 1 (“Care and concern”) Factor 2 (“Competence”) Factor 3 (“Ambition”) Factor 4 (“Superiority”)

7 3 3

.895 .772 .747

The four resulting virtue factors compare more or less with the virtue listings generated in the literature. One can say that “Care and concern” is analogous to “empathy” and “respect”; and “competence” seems akin to “integrity”, “trust”, and “reliability” in the literature (Shanahan and Hyman, 2003; Murphy, 1999). “Ambition” and “pride” appear on the workable listing of virtues by Solomon (1999); these, along with “superiority”, warrant further discussion below. In Aristotelian virtue ethics, we have seen the category of cardinal virtues, so called because of the particular importance and difficulty of their specific matter. The other natural virtues are connected to one or other of these cardinal virtues by a certain similarity to them. To temperance are joined meekness, clemency, and humility; to courage are attached magnanimity, patience, and perseverance. Our first virtue factor, then, can be likened to the parts of temperance, as care and concern involves a variety of virtues including sympathy, respect, friendliness and social responsibility. Some of the items loading onto care and concern, though, theoretically belong to the cardinal virtue of courage, which is directed to maintaining the firmness of spirit in the greater dangers that threaten man. Generosity and reliability, for instance, loaded onto this factor. While it continues to be debatable whether and to what extent 10

environment and culture influence the development of character traits, we shall here limit ourselves to saying that, given our specific sample of Philippine managers, empathy and conscientiousness seem to turn up as important virtues (Lanza and Palazzini, 1961; Solomon, 1999; Moberg, 1999). Regarding “ambition”, “pride” and “superiority” turning up as virtues in the results, the literature tells us of the recent addition of these “virtues” among the preferred marketing and business virtues. “Ambition” is defined as “getting ahead and being tenacious”, while “pride” refers to holding one’s head high or being admired by others. Their classification as “virtues” seems to be a departure from the classic list of virtues according to Aristotle (see Table 4), as classic Greek philosophy would list meekness and modesty as true virtues, while vanity and shamelessness would be “vices” (Moberg, 1999; Solomon, 1999; Shanahan and Hyman, 2003). While this might be explained away by some evidence of the mutability of virtues due to development by heredity and environmental influence, a cultural and historical explanation of these new business virtues might be in order. In an empirical organizational virtue study, the proud virtue seems to be particularly important for employee (self) satisfaction and customers who have high involvement with the organization, like customers of non-profit organizations or university students (Chun, 2005). A possible explanation of the emergence of the proud virtue in business is the egoism paradigm due to consequentialist ethics, which has emphasized maximization of shareholder wealth as an organizational purpose and pursuit of self-interested desires and interests as an individual purpose in businesses. Given the stress on competitive individuals, rational outcomes, and efficiency in such egoism paradigm (Crockett, 2005), the classic definition of the virtue courage may have taken on the nuance of “confident achievement” of business outcomes. In fact, research shows that definitions of certain virtues have changed to suit or explicate better the business circumstances, as for example, the virtue courage having modified its definition to ‘success in achieving the desired outcome and effort by the agent’ (Chun, 2005). An alternate explanation of the ambition and superiority traits turning up in the Philippine results could be the specific culture of Philippine firms or Filipino managers. Local studies of corporate culture show that paternalism is a dominant characteristic of Philippine companies. Whatever the case, a further validation of the scale might be necessary. VIII. Future directions in empirical virtue ethics research The preliminary virtue ethics scale developed here will need further validation. It would likewise be interesting to develop a normative scale, i.e., an inventory questionnaire that elicits desirable character traits of managers. On a cross-cultural level, there is need for scale revalidation efforts in multi-country (multinational) settings. In addition, a fuller inventory of virtues containing the broader spectrum of character traits found in as much of the ethics scale literature as possible would be of great value to the empirical literature on virtue ethics. Another empirical demand on business and finance professors is to undertake research studies that would show that the possession of the elicited desirable character traits or virtues leads to ―or at least is correlated with― successful organizational performance (financial or otherwise). Examples of non-financial outcomes that can be correlated are: employee and customer satisfaction, loyalty, retention and differentiation, etc. Further work in this area can contribute a great deal to research on Corporate Social Performance (CSP), and thus be a step 11

towards showing that firms which pursue ethically-driven strategies can realize a greater profit potential than those firms which currently use profit-driven strategies; All told, operationalizing virtue ethics teaching through the development of virtue ethics scales as was done by the author shows that it is indeed possible to augment teleological and deontological ethics scales with extended empirical work in virtue ethics which could help push the strategic role of the virtue ethics theory especially in a secular institution. ---------References Card, Robert F. (2004), “Pure Aretaic Ethics and Character,” The Journal of Value Inquiry, 38: 473-484. Chun, Rosa (2005), “Ethical Character and Virtue of Organizations: An Empirical Assessment and Strategic Implications,” Journal of Business Ethics, 57: 269-284. Copleston, Frederick (1993), A History of Philosophy: Vol. I: Greece and Rome, Image Books, Doubleday, New York. Copleston, Frederick (1993), A History of Philosophy: Vol. II: Medieval Philosophy, Image Books, Doubleday, New York. Copleston, Frederick (1994), A History of Philosophy: Vol. V: Modern Philosophy. The British Philosophers from Hobbes to Hume, Image Books, Doubleday, New York. Crockett, Carter (2005), “The Cultural Paradigm of Virtue,” Journal of Business Ethics, 62: 191208. Dawson, David and Craig Bartholomew (2003), “Virtues, Managers and Business People: Finding a Place for MacIntyre in a Business Context,” Journal of Business Ethics, Vol. 48(2): 127-138. Denise, Theodore C., Nicholas P. White, and Sheldon P. Peterfreund (2002), Great Traditions in Ethics, 10th Ed. Wadsworth/Thomson Learning, California. Dobson, John (1997), “Ethics in Finance II,” Financial Analysts Journal, 53(1), 15-26. Gomez, Raphael (1992), What’s Right or Wrong in Business? Sinag-tala Publishers, Manila. Hair, J. F., Anderson, R. E., Tatham, R. L., & Black, W. C. (1998). Multivariate data analysis. Prentice-Hall International, Inc., New Jersey. James, Channelle and Cathryne Schmitz (2011), “Transforming Sustainability Education: Ethics, Leadership, Community Engagement, and Social Entrepreneurship,” International Journal of Business and Social Science, 2(5): 1-7. Koehn, Daryl (1995), “A Role for Virtue Ethics in the Analysis of Business Practice,” Business Ethics Quarterly, 5(3), 533-539. Lanza, Antonio and Pietro Palazzini (1961), General Moral Theology, Daughters of St. Paul, Boston. 12

MacIntyre, Alasdair (1984), After Virtue, 2nd Ed. University of Notre Dame Press, Indiana. Malline, Christine. Corporate Governance. __________ Moberg, Dennis J. (1999), “The Big Five and Organizational Virtue,” Business Ethics Quarterly, 9(2), 245-272. Murphy, Patrick E. (1999), “Character and Virtue Ethics in International Marketing: An Agenda for Managers, Researchers and Educators,” Journal of Business Ethics, Vol. 18, No. 1. pp. 107-124. Pakaluk, Michael (2005), Aristotle’s Nicomachean Ethics: An Introduction, Cambridge University Press, Cambridge. Pakaluk, Michael and Mark Cheffers (2011), Accounting Ethics…And the Near Collapse of the World’s Financial System. Allen David Press, Massachusetts. Racelis, Aliza D. (2010), “Relationship between Employee Perceptions of Corporate Ethics and Organizational Culture: An Exploratory Study,” Asia Pacific Management Review, Vol. 15, No. 2, pp. 251-260. Racelis, Aliza D. (2008), “Corporate Ethical Culture: An Exploratory Descriptive Survey of Philippine Companies,” Paper presented at the 8th International Conference on Philippine Studies (8th ICOPHIL), Manila, Philippines, July 2008. Reidenbach, R.E. and D.P.Robin (1990), “Toward the Development of a Multidimensional Scale for Improving Evaluations of Business Ethics,” Journal of Business Ethics, Volume 9, No. 8. pp. 639-653. Ryan, James A. (1998), “Moral philosophy and moral psychology in Mencius,” Asian Philosophy, 8(1). 47-65. Saranyana, Joseph (1996), History of Medieval Philosophy, Sinag-tala Publishers, Manila. Shanahan, Kevin J. and Michael R. Hyman (2003), “The Development of a Virtue Ethics Scale,” Journal of Business Ethics, Vol. 42, No. 2. pp. 197-208 Solomon, Robert C. (1999), A Better Way To Think About Business, Oxford University Press, New York. Solomon, Robert C. (2003), “Victim of Circumstances? A Defense of Virtue Ethics in Business,” Business Ethics Quarterly, Vol. 13, No. 1. pp. 43-62. Tirole, Jean. Industrial Organization. __________ Villegas, Bernardo M. (2011), Positive Dimensions of Population Growth, Center for Research and Communication, Pasig City. Walker, David M. (2005), “Reclaiming public trust in the wake of recent corporate accountability failures,” International Journal of Disclosure and Governance, Vol. 2, No. 3. Yarza, Ignatius (1994), History of Ancient Philosophy, Sinag-tala Publishers, Manila.

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APPENDIX 1 Virtue Ethics Inventory (Shanahan and Hyman) 1

Achievement-oriented

18

Leading

2

Aggressive

19

Mature

3

Ambitious

20

Open

4

Attractive

21

Proud

5

Competent

22

Pleasant

6

Concerned

23

Reassuring

7

Confident

24

Reliable

8

Controlling

25

Respectful

9

Intelligent

26

Socially-responsible

10

Exciting

27

Secure

11

Friendly

28

Sincere

12

Generous

29

Spirited

13

Hardworking

30

Straightforward

14

Honest

31

Superior

15

Imaginative

32

Supportive

16

Independent

33

Sympathetic

17

Innovative

34

Trustworthy

---------Bio: Dr. Aliza Racelis obtained an Accountancy degree from the University of the Philippines, earned an MBA from the National University of Singapore (NUS) and has a PhD in Business from the University of the Philippines. Since coming back from her MBA at NUS, she's been teaching at the Department of Accounting & Finance of the University of the Philippines Business School. Apart from Management Accounting, she specializes in Corporate Governance & Business Ethics.

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