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Business Ethics
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Journal of Business Ethics (2009) 90:649-659 © Springer 2010
DOI 10.1007A10551-010-0598-7
ABSTRACT. This article brings together two researchimpact of ICTs but that, so far, have remained lar-
fields in applied ethics - namely, information ethics and
gely independent. The task is made pressing by the
business ethics- which deal with the ethical impact of realisation that we live in a networked society in
information and communication technologies but that,needso of a distributed, information-based business
far, have remained largely independent. Its goal is to
ethics. This is not to say that IE and BE have not
articulate and defend an informational approach to the
been conversing for some time (see, for example,
conceptual foundation of business ethics, by using ideas
and methods developed in information ethics, in view of
Coates, 1982; Langford, 1999). It goes without
saying that the emergence of a global information
the convergence of the two fields in an increasingly
networked society. society, with its ICT-based ethical challenges, and
the growing importance of ICT-intensive and net-
worked
KEY WORDS: business agent, business process, ethical business interactions, have made academic
and practical barriers between IE and BE increas-
principles, information ethics, infosphere, networked
society, network ethics, profit ingly porous (De George, 2003, 2006). Nor does it
mean that ethicists, policy makers, lawyers, and
businesses more generally have failed to recognise
Introduction the intrinsically hybrid nature of many key ethical
issues. It is widely acknowledged that privacy,
Information and communication technologiescopyright,
(ICTs) informed consent, transparency and dis-
have profoundly changed many aspects of life, P2P, digital divide, and so forth (Ennals,
closure,
1994;
including the nature of entertainment, work, com-Mason et al, 1995; Vaccaro, 2006; Vaccaro
munication, education, health care, industrial andpro-
Madsen, 2009) can be fully understood only if
duction, business, social relations and conflicts. they are placed at the intersection between IE and
Therefore, they have had, and continue to have, a BE (Hodel et al, 1998). Rather, the exact point in
deep, widespread and increasing influence on our question is that, despite their obvious commonali-
moral lives and on contemporary ethical debates ties, overlapping interests and joint concerns (Wong,
(Floridi, 2007a, b). The goal of this article is to 2000), IE and BE have not yet converged on a
bridge two research fields in applied ethics - namely, shared, conceptual foundation of their investigations.
information ethics (henceforth IE) and business Such common roots are what I hope to disclose in
ethics (henceforth BE) - which deal with the ethical the following pages, which are structured as follows.
In section 'From information ethics to business
ethics: a methodological contribution', I shall pro-
A first version of this article was presented at 'Network Ethics:
vide an outline of IE. The focus will be intentionally
Tlte New Challenge in Business, ICT, and Education', the
limited to only those features that will be useful to
second in a series of biennial conferences on ethical issues of
technology in business, education and society, organised by the
approach BE informationally. In section 'The
Center for Ethics Business and Economics (CEBE) of the informational analysis of business', I shall develop an
Catholic University of Lisbon - FCEE, Carnegie Mellon informational analysis of business agents and pro-
University, and the University of Northern Iowa, and held at cesses. This will lead, in section 'The WHI ethical
the Catholic University of Lisbon, Portugal, June 23-25, questions: what, how and impact', to the identi-
2009.
fication of the three main ethical questions to be
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650 Luciano Floridi
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Information and Business Ethics in a Networked Society 651
(3) The nature of the environment. IE offers an infor- When 'business' is to be understood as a process, activi
mational, network-based conception of the environ- or interaction, rather than as the agent that is its sour
ment, which now includes both natural and artificial the following definition is equally unproblematic:
(synthetic, man-made) eco-systems. This is known as
infosphere. The term denotes the whole environment Business (activity)
understood informationally, that is, as constituted by - def. the provision of goods or services (2)
all informational entities (thus also including infor- to customers.
is rapidly evolving. The alert reader will notice a shift neither necessary nor sufficient to qualify something
from a semantic (the infosphere understood as a space as a business agent or process. The importance of this
of contents) to an ontological conception (the info- remarkable absence is not often appreciated in full,
sphere understood as a networked environment and I will return to it later in the article. At this stage,
populated by informational entities). (1) and (2) may seem obvious, but that is the nature
(4) Tìte nature of the moral relations and interactions. of all starting points of an adequate logical analysis:
IE supports an environmental, receiver-oriented they should be uncontroversial to the point of being
approach. It is the well-being of the receiver of the trivial. What follows immediately from (1) and (2) is
moral action that, in principle, ought to contribute to that one can define business agents as the source
the possible guidance of the agent's ethical decisions, of business activities. Wherever some provision of
and potentially constrain and orient the agent's moral goods or services to customers occurs, there we find
behaviour. The receiver of the action is placed at the a business agent, whether this is an individual selling
core of the ethical discourse, at the centre of the ethical coconut water on a beach, a school offering tuition,
network, while the 'transmitter' of any moral action or a multinational corporation refining crude oil.
(the agent), is moved to its periphery. This approach Once (1) is understood on the basis of (2), it
resonates with a variety of BE's more advanced views, becomes possible to analyse (2) in relational terms:
which can be employee-, customer-, shareholder- the agent is defined in terms of the activity that
and stakeholder-centred (Agle et al, 2008). characterises it, and the activity is defined in terms of
These four features make IE and BE highly the ternary4 relation that constitutes it. To put it
compatible and invite the application of IE to the simply, we want to be able to state that x counts as a
informational analysis of BE, as we shall see in the business if and only if, if x is an agent and y is a good
next section. or service and z is a customer, then x provides y to
z. Using classic, first-order predicate logic and the
following abbreviations:
The informational analysis of business
A (x) = x is an agent
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652 Luciano Floridi
ments as business agent and customer, not vice versa. (see Figure 2). Note that this is not a Venn diagram,
Third, from (3), it is simple to obtain a customer- where the smaller unit is completely contained
centred (or receiver-centred) model, as illustrated by within the larger one, nor a 'layer' diagram, like a
Figure 1 below. cake. Rather the three sets C, D, B could be seen as
Finally, one can apply to (3) a standard reduction three doughnuts. C is like a filled doughnut. It is
theorem in predicate logic, which proves that surrounded by D, which can be imagined to be
similar to a ring doughnut (technically, a torus). In
its turn, D is surrounded by B, also shaped like a ring
doughnut. The threshold between C and D is the
relation R, and the threshold between D and B is the
relation S. We have finally obtained an accurate but
also intuitive representation, as a single object, of our
! /Customers
I /
f / ' f^i A ~ -f-~ "' ' i / /Goods and Services
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Information and Business Ethics in a Networked Society 653
This is a valuable feature. The model further high- We now have a sufficiently detailed analysis of the
lights the absence not only of profit as part of theobject whose properties need to be investigated.
definition of business (whether as an agent or as anGiven the complex, informational, networked sce-
nario represented by the whirlpool model, what are
activity it does not matter), as expected, but also of
two other aspects that have been extensively dis-the main kinds of ethical questions faced by business
cussed in the literature on business ethics: the agents? This is the key issue addressed in the next
problem of (fair) prices, which now appear to section.
be a
property of elements of D, and the nature/identity
of business agents, that is, the elements of the set B,
The WHI ethical questions:
now defined as the sources of good/services. The
model, however, still has one major limit: it is how and impact
what,
merely static. Hence, it fails to take into account the
Consider Figure 3. It seems evident that the funda-
interactions between business agents and customers
over time and within a shared, networked envi- mental questions to be addressed by an informa-
ronment. This is the last refinement that needs to be tionally modelled BE concern:
provided.
(1) What goods/services are provided?
The parameters in our dynamic model are obvi-
(2) How are they provided?
ously time (the x axis) and the number of interac-
(3) What impact do (1) and (2) have on both
tions between the various elements (the y axis). By natural and artificial environments?
placing the concentric ring models or whirlpools
(their influence on the surrounding environment Figure 4 illustrates how the questions may be
proceeds like decreasing waves), obtained above, in located in our model. Let me briefly comment on
such a 2D space, we finally reach a more accurate each of them.
description of the development of business interac- By asking (1), an ethical theory concentrates on
tions in real life, one which will suffice to explain the product and hence shows that questions
and discuss critically the analysis developed in the regarding the moral nature of the sender ('is the so
rest of the article. I shall refer to this model as the and so business agent/source morally good or evil?')
whirlpool model Figure 3 provides an illustration.are still important but can be dealt with as secondary.
Note that it is like a snapshot of a dynamic system:This is perfectly in line with mainstream ethical
the whirlpools should be imagined as constantlytheories, which consider 'good' and 'evil' as prop-
increasing and then decreasing. erties qualifying primarily actions and their out-
comes, and only secondarily their sources. We
qualify someone as mainly good or evil depending
on whether his or her actions or their effects are
mainly evil or good. Accordingly, in our model,
business agents, their states and plans, are identified
H^^oHh
as morally good or evil not in themselves, but only
in a derivative sense, that is, following the assessment
of their actions and the corresponding outcomes.
By asking (2), the same ethical theory addresses
the moral nature of the process that leads to a par-
ticular output. Whereas question (1) concerns the
nature of the elements of the set D, question (2)
concerns the nature of the relation 5 between
B and D.
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654 Luciano Floridi
"Customers
^irJyrjf^Çsffii^^ II IDO
themselves, have on
Pragmatically, insofarthe networked
as the processes of motivating,
within which fostering,
the causing or preventing agents
business new conducts are oper
with their customers. concerned, we need to identify ways in which the
Depending on how one answers questions (1)- performance of the system may be successfully
(3), there follows a different ethical evaluation of the affected. In other words, we need to identify the
business agent under investigation. However, if one main points where normative pressure can be exer-
wishes to modify that agent's behaviour, the WHI cised with some hope for success. Such points are
questions are of little help. They might signal that three (or a combination of them) since, ideally,
something needs to be done, but they cannot help in normative pressure should be exercisable on each of
achieving the required modifications. For such a the three sets constituting the model (see Figure 4).
pragmatic goal, the whirlpool model needs to (1) Educational pressure on C. One might exercise
identify what one may call the right points of nor- pressure on the system by educating or informing
mative pressure, the topic of the next section. customers about the answers to the WHI questions.
The availability, accessibility and transparency of
more and better information about
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Information and Business Ethics in a Networked Society 655
(2) Prescriptive pressure on D. The system may also Consider the tobacco industry and more specifi-
be influenced by indicating what goods / services oughtcally the cigarette business. B is represented by
to be (of course both positively and negatively). This
tobacco companies, which send (i.e., produce and sell)
often means identifying requirements, specifications goods in D, let us say cigarettes, which are received
or standards that ought to be satisfied by the pro-(i.e., bought) by C, individual customers. Answers to
vided goods/services. We shall see that quality cer- the three WHI ethical questions are well known and
tification and control, as well as the indication of do not have to be rehearsed here. What about the
what features goods/services should or should notnormative pressure points and the State's interven-
have, can be not only an ethical but also a legal issue.
tion? Through taxation, the setting of age limits, the
(3) Proscriptive pressure on B. Finally, business agentsindication of non-smoking areas or the constraint on
may be influenced directly, through moral (or legal,
advertising forms and targets, the State exercises an
see below) proscriptions about what ought not to be done.external control on the system which is not, in and
of itself, of a moral nature, but that has the function
As anticipated, in each of the previous three cases
pressure can be exercised not only morally, but alsoof facilitating moral behaviour. There is nothing
legally. The point is worth clarifying. So far, we have intrinsically right or wrong, morally speaking, in
analysed the ethical business system as if only twosmoking a cigarette in a cinema. By making it illegal,
types of agents were involved in the network, however, the State makes it easier to give up a bad
businesses, interpreted as senders, and customers,habit, to prevent fire hazards, to diminish passive
interpreted as receivers. The State (and by this smoking
I and so forth, and these effects have a
mean to refer to any entity with the legal power and morally positive value, insofar as they are good for
legitimacy to impose its decisions on the wholethe system in general and its individual receivers in
whirlpool system, at least in principle) represents aparticular. Smoking is unhealthy, can easily become
third set of agents. Ideally, by issuing laws, imposing an addiction and hence a moral vice, and the State
sanctions or disincentives and offering rewards orseeks to make the choice of smoking more difficult
incentives, the State is expected to play the role of
and responsible, without infringing individual lib-
facilitator, regulator and referee of the communica-erties. The same applies to wine, beer and spirits. It
tion system. Thus, the role of a liberal State in a should really apply to other recreational drugs as
modern democracy is proscriptive and proactive when itwell, such as cannabis. Next, by making it com-
comes to the behaviour of business agents: it focuses
pulsory to provide health information regarding
on what business agents should not do (the legalsmoking - e.g., health education in schools, docu-
don'ts) and on incentives to facilitate specific mentaries on TV, or health warnings on cigarette
behaviours which are morally good or beneficial to
packets - the State exercises direct moral pressure on
the whole system or society. However, the rolethe system through the Education of C, one of
the normative pressure point discussed above. In
becomes prescriptive and reactive when the goods or
services provided are concerned: the liberal Stateterms of prescriptions, the second pressure point,
legislates on what they ought to be (the legal dos) consider the ethical choice of producing only self-
and on the sanctions that might be imposed, if such extinguishing cigarettes (available since the 30s).
legislation is not respected. The State's interventionThis could be a moral choice of the producers,
in the network is usually hugely influential, as it addsinstead of becoming a proactive legal requirement
a third dimension: the system acquires not only
brought about by some legislation, as it is already the
ethical norms but also legal rules or laws, and hence
case in several American states, such as New York,
corresponding incentives, disincentives, prohibitions
Massachusetts and California, and it might soon
and sanctions (Nelson, 2006). Of course, ethicalhappen in the EU. After all, burning cigarettes are
norms aim at inviting endorsement, whereas legalamong the main causes of fires. Finally, in terms of
rules seek to enforce compliance. The former are proscriptions, Joe Camel' provides an illustrative
example. In 1987, RJR created Joe Camel as the
supposed to foster moral behaviour, the latter might
be entirely neutral about it. How does this third
mascot for the brand of Camel cigarettes. In 1991,
dimension affect our model? An example will helpthe American Medical Association reported that
to clarify the issue. the campaign had been particularly popular among
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656 Luciano Floridi
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Information and Business Ethics in a Networked Society 657
animals may pursue sexual pleasure only for its ownbetween morally good or evil businesses. For prof
sake or, in the case of humans, for mental reasons as is ethically blind: it rewards any business that pursu
well. All this, however, should not blind us to the it successfully. Profit would still be a good thing
fact that sexual intercourse has a reproductivebusiness even if the business were that of tradin
function. slaves. The ethical question is addressed once w
So far we have established that profit is neither part move to (b). What is the business, for which profit i
of the essence nor the function of business. Recall indeed a good thing, good for? The answer m
that we are trying to understand on which moral arguably come from a consideration of the cont
principles a business could be ethically evaluated.bution made by the business in question to t
Now, our opponent has a further reply. Let us admitnetwork in which it is embedded, its overall env
that the distinction between essence, function andronment, by which I mean not just its physical
goal of a business is sound. Profit might be trans-natural habitat, but ultimately the whole ecosyst
formed into the teleological goal of a business, that is, affected by that business, by its practices and it
into its purpose or mission. A morally good businessproducts or, in the informational vocabulary of I
would then be one that takes due care of its goal -the region of the infosphere that is affected by that
being profitable - in view of the advantage that thisbusiness. Of course, (b) can be answered pure
brings for its shareholders. Here, we find the mostfactually, by arguing that profit is what business
dangerous mistake, because it is the least visible. First, good for. In this case, there is no circularity bu
let me clarify a final point about the function of rather mere consistency. The problem is not logic
business. Above, we assumed that profit could playbut conceptual: we are still failing to touch upon t
such a role. We conceded this only for the sake of moral question. Profit is good for business a
argument. Our opponent has now reinterpretedbusiness is good for profit. The ethical blindness
profit as playing the role of a business' goal. This has still there, as we are still unable to distingui
left empty the role of function. We know from (1)between a morally good and a morally evil busine
and (2) that the function of business is to provide In order to provide such a normative evaluation,
goods and services to customers. Like the knifeneed to address (b) in such a way as to step into t
before, the more successful a business is, in providing realm of ethical principles. We need to decide wh
goods or services to its customers, the better it is a business is morally good for. This is the deepe
functionally speaking. Notice, however, that ourontological question that really matters, ethicall
opponent is still waiting for an answer to his objec-speaking, and it is one that, following IE, can
tion that profit might be the purpose orientating the addressed from a receiver-oriented perspective.
function. This requires one further distinction. From the receiver-oriented perspective supporte
It is a fact that most, if not all, businesses haveby IE, business is the art of matching supply an
profit as their main, if not only, ostensible goal. This demand and, in so doing, fostering human flour
fact, however, should not mislead us into thinkingishing and avoiding wastefulness. By wastefulnes
that we have finally hit upon the foundation for anmean any kind of destruction, corruption, pollution a
ethical evaluation. Consider the difference between: depletion of (parts of) reality, that is, any form
impoverishment on the side of the receivers of t
(a) what is good for x; and business activities. It follows that a business agent
(b) what x is good for. increasingly morally good the more successful it is i
implementing the following environmental prin
We are interested in the case in which
ples, mediated by a more abstract and inclusi
x = business. Following (a), profit is certainly what
analysis provided by IE:
is good for business. Without it, business can much
less easily grow in size, develop in quality and
1. wastefulness ought not to be caused in th
flourish as a rewarding and successful enterprise worldfor
(the infosphere)
the people involved. Yet this is a factual remark,
2. wastefulness ought to be prevented in th
similar to what we said above about the sharp knife.
world (the infosphere)
3. wastefulness ought to be removed from the
Profit, in this sense, still does not draw any difference
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658 Luciano Floridi
Conclusion
Acknowledgements
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Information and Business Ethics in a Networked Society 659
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