Thinking Makes It So: The Foundations of a Theory of Business Ethics in Acquisition

Thinking Makes It So: The Foundations of a Theory of Business Ethics in Acquisition

Paul Newall (Royal Navy, UK)
DOI: 10.4018/978-1-5225-0599-0.ch016
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This chapter explores the literature associated with business ethics and acquisition, applying a philosophical perspective to the literature on business ethics and on procurement ethics in particular. After discussing the standard ethical theories of consequentialism, deontology and virtue ethics, these normative approaches are then contrasted with descriptive, empirical studies. Both are applied to the context of Defence acquisition. It is argued that the employment of normative approaches as a default in Defence is flawed and is unlikely to provide any foundation for a theory of business ethics in acquisition. Instead, more attention needs to be paid to how ethics actually function in organisations, particularly in supporting relations and narratives of power. As a conceptual paper, based on only literature review and philosophical argument, the conclusions need to be subjected to further scrutiny and, if possible, empirical investigation.
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What is the role of ethics in Defence acquisition? Suppose that two acquisition agents want a capability programme they are involved with to succeed. One intends to deliberately ignore public sector processes and behave in whatever way necessary to achieve her aim, but she does not understand acquisition as well as she believes and the programme succeeds in spite of her. Meanwhile, another follows the processes and delivers the programme but accidentally commits a serious violation of procurement law (adapted from Bazerman & Tenbrunsel, 2011). Is it right that we tend to want to judge the second agent more harshly than the first, perhaps because we are motivated to overlook unethical behaviour if it suits us?

Now change the scenario: this time, both agents behave unethically yet succeed in delivering their programmes. However, a random audit of programme governance selects the second programme and the agent is discovered to have behaved unethically. By construction, there is no difference between the two agents; one was just unlucky enough to be caught (adapted from Michaelson, 2008). Nevertheless, this grants an important role in ethics to luck, which can be extremely problematic (Nagel, 1993): for example, if we accept that organisations are too complex to be controlled in detail, how can we hold acquisition agents to account if the success or failure of their work is in significant measure due to chance?

Suppose instead that an acquisition agent deliberately distorts the anticipated cost of a programme, which then doubles. However, the agent’s aim was to better satisfy the end user, who is eventually provided with a capability that delivers a battle-winning edge and saves lives on operations. Was the conspiracy unethical? Did it become ethical when the ends justified the means but not before?

Finally, consider another story: this time, an acquisition agent is corrupted into giving, or deliberately chooses to give preferential treatment to, a ‘British’ company. This action benefits the UK economy overall, in particular the sustainment of engineering skills across the country. Should this be called unethical? The answer may change depending on different ethical perspectives, but this time the agent could argue that the question is also one of strategy; and anyway, who cares about European procurement law if British jobs are secured?

These examples, although hypothetical, suggest that any answer to the question, ‘what counts as unethical in Defence acquisition?’, will not be straightforward. The procurement and support of military capabilities is undertaken in at least two contexts: the large but limited context of business, spanning the public and private sectors, and the wider context of society, of which business and defence are parts. Both have ethics associated with them: the ethics that should inform how people conduct themselves in business – hence business ethics – and the ethics that advise how everyone should behave in society. Should Defence acquisition be guided by the ethics of the society it operates within when typically, its activities span national borders (Saini, 2010)? Should it be bound by theories of business ethics or is the acquisition context unique, such that it requires a new theory of acquisition ethics?

This chapter explores the Defence context from different ethical perspectives to attempt to understand what can or cannot be said about a theory of business ethics in acquisition. It situates the issue by arguing that existing approaches fail, particularly traditional normative theories of ethics. In focusing on the UK, it makes explicit reference to the policy context of Defence Reform and the ethical issues surrounding the delegation of power to individual Services, notably poor behaviours and a loss of coherence, all related to principal-agent problems.

It is argued, firstly, that normative ethics is easily overwhelmed by the detail of specific contexts. While philosophers may be capable of addressing this criticism, it is unlikely that acquisition agents will. This is illustrated through thought experiments that initially appear easy to interpret but soon contradict our intuitions. Normative theories are shown to share this difficulty and to conflict with the ordinary behaviours expected in Defence acquisition, an assessment that is then extended to theories of business ethics, notably the principal-agent problem.

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