"A business that makes nothing but money is a poor kind of business" - Henry Ford

The Uncertainty Principle and Moral Imperative in Business

by Terry Goodwin


At first glance the reader might be excused for asking what a mathematical principle, routinely applied to quantum mechanics, has to do with the more mundane world of business.

Actually, it was because I asked myself the same question that I decided it might prove an enlightening experience to examine it in conjunction with a "principle" that sprang from the philosophical works of that great Enlightenment rationalist Immanuel Kent.

Let's look at Uncertainty Principle first, and then Moral Imperative, before discussing their relevance to the business world.

But first a slight digression.  When I first studied philosophy, I came across the strangely absorbing paradox known as Xeno's Arrow.  This, in its simplest terms, stated "Let us take any example of motion, an arrow let us say in its flight.  At any given moment it either is where it is or it is where it isn't.  If it is where it is, it cannot be moving, or it wouldn't be there.  And it can't be where it isn't.  So at that moment, it is not moving.  But the same conclusion applies to every other moment of its apparent flight.  Therefore at no moment is it moving.  Therefore its apparent movement is an illusion."

In 1927, while working on the mathematical foundations of quantum mechanics at the Niels Bohr Institute in Copenhagen, Werner Heisenberg devised the Uncertainty Principle which, reduced to a very simple formula, states that when two properties of a particle, for example position and momentum, are examined simultaneously, the more precisely one is measured, the less precisely will it be possible to measure the other.

And now let's turn from the world of science to the world of ideas.  Actually, I suppose we have already touched on the latter with the introduction of Xeno's arrow, but that was merely a digression.

Immanuel Kant distinguished two different imperatives, or moral duties: one is the hypothetical imperative, the other is the categorical imperative.  The hypothetical imperative states that one activity is dependent upon the performance of another activity.  To do "X" you need to perform "Y".  If you want to make money, you need to work.  If you want to achieve an academic status, you need to study.  The categorical imperative, by contrast, is a fundamental principle of ethics.  The ethical person is the person who acts for the right reasons and with the right intentions.  Thus it is not results that count for the ethical person, but duty, i.e. imperative.

So here we have described two disciplines that are both based upon alternatives that are ostensibly in conflict, or where something has to be given up in order for something else to be achieved.  How does this apply then to business ethics?

There are two considerations here: the ethical concerns of the individual within a company, and the ethical concern of the company's own philosophy.  Employees have to behave in a way that will satisfy their own moral code while at the same time fulfil the ethical culture of the organisation that employs them. 

But there are other issues that need to be considered, both individual and corporate.  These ethical issues involve the relationships between the employer, its employees, its competitors, its customers and its suppliers.  Furthermore there are social, financial and political considerations that should not be neglected.  Is it possible to fulfil a hypothetical imperative in a business context while ignoring the categorical imperative of an ethical concern?

And here, lurking in the background, we can hear the rumblings of both Heisenberg and Kant.  Is it possible to weigh the degree of necessity of one course of action against the reaction of the other?  A very simple example - perhaps, indeed, an oversimplification - would be the dilemma  of whether to do what is right from an ethical business viewpoint while aware that it may be unlawful; or to obey the law while recognising that this would undermine the fundamental business ethic of making a profit.

The online Business Ethics magazine had this interesting comment as the introduction to a recent article:  "Educating students in corporate responsibility means making sure they think critically and recognize that ethical issues are inherent in all business decisions . . . Corporate culture must support all employees to think critically about every decision and action, every day . . . Being motivated simply to avoid prosecution is not the same as behaving ethically."

Recent problems that have concerned both consumers and politicians have related particularly to the banking and fiduciary areas and are too well-known and well-publicised to need repetition here.  Good business, despite the old adage, is not necessarily profitable business.  John Kay, writing in the Financial Times (5.11.2013) makes the point very succinctly, "Ethics are about what to do when good behaviour and profitable business are not necessarily the same thing."

A survey conducted by the American Management Association found that the single most important ethical leadership behaviour was "keeping promises".  This was followed by "encouraging open communication", "keeping employees informed", and "supporting employees who uphold ethical standards".  Leaders intending to maintain a strong ethical culture had to "walk the talk".

In respect of specific programmes and practices, a corporate code of conduct is viewed as being most important, and links to some samples of codes of conduct that have been published by some leading corporate bodies are provided below.

The World Forum for Ethics in Business is based in Brussels and conference reports for their past 8 annual conferences are available at http://www.wfeb.org/2010.html.   The American-based Consortium for Entrepreneurship Education is another good resource whose website is at http://www.entre-ed.org/_teach/ethics.htm.

There are a great many companies that take ethics very seriously and feature their code on the Internet.  A company providing  a complete Code of Ethics in 15 languages is Bombardier.  Boeing provide theirs in 10 languages.  Another is the well-known Price Waterhouse.  Links to these three are given at the foot of this article.  Our choice of the three is purely random and constitutes no judgement on the companies concerned.  Many more may be Googled from the Internet.