Series Editors Brian Harvey, University of Nottingham, UK. Patricia Werhane, Loyola University of Virginia, US.A.
Editorial Board Brenda Almond, University of Hull; Hull, u.K. Antonio Argandona, lESE, Barcelona, Spain William C. Frederick, University of Pittsburgh, US.A. Georges Enderle, University of Notre Dame, U.S.A.
Norman E. Bowie, University of Minnesota, US.A. Henk van Luijk, Nijenrode, Netherlands School of Business, Breukelen, The Netherlands Horst Steinmann, University of Erlangen-Nurnberg, Nurnberg, Germany
The titles published in this series are listed at the end of this volume.
Business Ethics: Japan and the Global Economy edited by
THOMAS W. DUNFEE The Wharton School, University of Pennsylvania
and YUKIMASA NAGA Y ASU Reitaku University, Japan
SPRINGER-SCIENCE+BUSINESS MEDIA, B.V.
Library of Congress Cataloging-in-Publication Data BUSlness ethics Japan and the global economy I edited by Thomas W. Dunfee, Yukimasa Nagayasu. p. em. -- "In cooperation with the Institute of Moralogy, Kashiwa City, Japan. " ISBN 978-904814309-2 ISBN 978-94-015-8183-7 (eBook) DOI 10.1007/978-94-015-8183-7
1. Business ethicS--Japan. 2. Business ethics. I. Dunfee, Thomas W. II. Nagayasu, Yukimasa, 1941III. Series. HF53B7.B8724 1993 174' .4·0952--dc20 93-27884
Edited versions of papers given at two conferences in Japan, held in December, 1989 and September, 1991 hosted by the Japanese Institute of Moralogy with the collaboration of Reitaku University, and with sponsorship and support from the Ministry of Foreign Affairs and the Ministry of International Trade and Industry
List of Figures, Diagrams and Tables Note on the Contributors Acknowledgements
vii viii xi
Global Business Ethics and Japanese Economic Morality An Introduction and Overview (Thomas W. Dunfee, Yukimasa Nagayasu)
Business Ethics: A Japanese View (Iwao Taka)
BUSINESS ETmCS IN A GLOBAL ECONOMY
The Role of Ethics in International Business (Thomas W. Dunfee)
Globalization and Business Values in the Asian-Pacific Region (Yukimasa Nagayasu)
International Business, A Universal Morality and the Challenge of Nationalism (Norman E. Bowie)
The Language of International Corporate Ethics (Thomas Donaldson)
What is Business Ethics? (Georges Enderle)
BUSINESS, ECONOMY AND ETmCS IN JAPAN
A Japanese Perspective of the Transformation of Modern Civilizations (Haruo Naniwada)
Business Ethics in the Global Age (Ken'ichi Odawara)
The Ideals of Moralogical Management (Yukiyoshi Mochizuki)
Business Ethics and Corporate Strategy in Japan (Shunji Kobayashi)
mSTORICAL DEVELOPMENT OF MARKET MORALITY IN JAPAN
The Japanese Tradition of Economic Ethics (Yukichi Shitahodo)
The Japanese View of Business and Work (Han-Yu Chang)
Economic De,velopment and Ethics in Japan - A Historical Perspective (Tsunehiko Yui)
LIST OF FIGURES, DIAGRAMS AND TABLES
Various Kinds of Reciprocity (Yukimasa Nagayasu)
Matrix of Value-Guided Human Acting (Georges Enderle)
Problem and Action Oriented Approach (Georges Enderle)
Different Conceptions of the Good and the Idea of an Overlapping Consensus (Georges Enderle)
A Comparison of Japanese and Western Companies and Labor Unions (Ken'ichi Odawara)
NOTE ON THE CONTRIBUTORS Nonnan W. Bowie is the Elmer L. Andersen Chair in Corporate
Responsibility at the University of Minnesota. He is the author, co-author, editor or co-editor of twelve books and numerous articles in business ethics and political philosophy. He is currently chair of the Department of Strategic Management and Organization and is past Executive Secretary of the American Philosophical Association. He is past president of the Society for Business Ethics and the Society for Value Inquiry. Han-Yu Chang is Professor Emeritus of Taiwan University. His publications include A Study of British Mercantilism: 16201720 (1954), Economic Development and Income Distribution in Taiwan (1983), and A Study of Japanese Corporate Management (1989).
Thomas Donaldson is the John F. Connelly Professor of Business Ethics in the School of Business, Georgetown University. At Georgetown University he also holds the positions of Adjunct Professor, Department of Philosophy, and Senior Research Fellow, Kennedy Institute of Ethics. Books that he has authored or edited include: Ethics in International Business (Oxford University Press, 1989); Ethical Issues in Business, 4th Edition (Prentice-Hall Inc., 1979-92), co-edited with Patricia Werhane; Issues in Moral Philosophy (McGraw-Hill, Inc., 1986); Case Studies in Business Ethics, 3rd Edition (PrenticeHall Inc., 1984-92); and Corporations and Morality (PrenticeHall Inc., 1982). Thomas W. Dunfee is the Kolodny Professor of Social Responsibility at The Wharton School of the University of Pennsylvania. At the Wharton School, he was Chair of the Legal Studies Department from 1979-85 and 1987-91. He was President of
the American Business Law Association 1989-90, served as Editor-in-Chief of the American Business Law Journal 1975-77 and received the Distinguished Senior Faculty Award for Excellence from the ABLA in 1991. He currently is a member of the executive committees of the Society for Business Ethics and the Society for the Advancement of Socio-Economics. His research interests focus on the application of social contract theory to business ethics, corporate attorney whistle-blowing, and on developing ethical standards for global business transactions. He has written or edited over ten books and has published articles in a wide variety of journals in the fields of law, business and applied ethics. Georges Enderle is the Arthur and Mary O'Neil Professor of International Business Ethics at the University of Notre Dame, Indiana. He is author of several books including Handlungs orientierte Wirtschaftsethik, Grundlagen und Anwendungen (Action-oriented Business Ethics. Foundation and Applications: 1993) and contributing co-editor of Lexikon der Wirtschaftsethik (Encyclopedia of Business Ethics: 1993). He has written numerous articles on business ethics and is presently working on a research project on "International Business Ethics". Shunji Kobayashi is Professor at the School of commerce, Waseda University. His publications include Study of Managerial Environment (1990), and "Political Strategy of Corporations" (1992). Yukiyoshi Mochizuki is Director of Research Department, the Institute of Moralogy and Professor in the Faculty of Foreign Languages, Reitaku University. His publications include: Human Rights and Moralogy (1986), Beautiful Heart and Wonderful Life (1988), and Pleasure of Moral Practice (1990). Yukimasa Nagayasu is Professor at the International School of Economics and Business Administration, Reitaku University. He is also chief of the Economics Division of the Research Department, the Institute of Moralogy. His books include Ecology of Economic Civilization (1979), Principles of National Economy (1978), Principles of Political Economy (1981), and Cosmology of Economics (1991). ix
Haruo Naniwada (1906-1991) was Honorary President of Kanto Gakuen University. His publications include Study of Economic Sociology (1971), Philosophy of Crisis (1974), Theory of Community (1982), and Morality and Economy (1983). Ken'ichi Odawara is Professor in the Faculty of Economics, Jochi (Sophia) University and lecturer of International Relations at the University of Tokyo. His edited books include International Political and Economic Theories (1988), and The World Economy (1982). His publications include American Disease (1980), "The Competition Principles in Japanese Companies and Labor Unions" (1988), and "What Lessons Have Japan and the U.S. Learned from Previous Bilateral Effort on Energy and Environment?" (1992). Yukichi Shitahodo is Professor Emeritus of Kyoto University and Advisor of the Institute of Moralogy. His books are Independent Education in Japan (1952), Education of Social Intelligence (1957), Anthropological Study of Sontoku Ninomiya (1965), Family Education and social Morality (1968), Spiritual Awakening and Human Development (1970), Drei Prinzipien der anthropologischen Padagogik (1971), and Anthropological Study of Shoin Yoshida (1988). Iwao Taka is Assistant Professor at the International School of Economics and Business Administration, Reitaku University, and Visiting Research Fellow at The Wharton School, the University . of Pennsylvania. His publications include "J apanese History and Thought -- Based on a Philosophy of Sontoku Ninomiya --" (1990), "From Economics to Cognitive Science" (1989), "Intuitive Decision-Making and Creative Destruction" (1987), "Japanese Entrepreneurship After World War II" (1986), and An Introduction to New Principles of Management (with others) (1985). Tsunehiko Yui is Professor at Department of Business Administration, Meiji University. His publications include The Development of Japanese Business: 1600-1980 (1983), Japanese Management in Historical Perspective (1989), and History of Yasuda Financial Combines (1987).
ACKNOWLEDGEMENTS We express our deep appreciation to Lauretta Tomasco who coordinated the entire project. Her radiant cheerfulness and unwavering competency saw us through many difficult times. Stefan Whitwell worked long hours on editing many of the chapters and we benefited from his linguistic talents. John Musero deftly edited and drafted abstracts for several chapters. Martin Rowley helped immensely with the bibliographies. Nick Harris carefully proofed the manuscript and applied his sleuthing skills in a search for hard to find citations. Jennifer and John Dunfee devoted some of their precious summer time to provide some valuable insights for the project, particularly the first chapter.
GLOBAL BUSINESS ETIllCS AND JAPANESE ECONOMIC MORALITY AN INTRODUCTION AND OVERVIEW Thomas W. Dunfee Yukimasa Nagayasu
INTRODUCTION: THE TWO CONFERENCES ON GLOBAL BUSINESS ETIllCS Japan is an important player in global markets, yet in many ways, it remains an enigma to non-Japanese. Those who deal with Japanese firms and markets need to understand its hidden economic culture, work ethic, and common sense views of business thinking. Japanese culture is the result of an integration of historical factors, including Shintoism, Buddhism, Confucianism and modern Western science and technology. This book goes beyond stereotypical approaches in applying a philosophical analysis to the Japanese economic mind. It also uses the methodologies of social contract and traditional applied business ethics as a theoretical framework for discussing cross-cultural issues in global economic transactions. A new Japanese approach of moral science, called "Moralogy", is explained. Practical proposals, such as how to internationalize the Keiretsu system, are also advanced. Almost all books of contemporary business ethics are written primarily from the viewpoint of Western culture and economy. In contrast, this book presents a multi-cultural perspective of global business ethics. Particular emphasis is given to Japanese viewpoints. A 3
primary purpose of this volume is to encourage a multi-dimensional dialogue concerning global business ethics. This book is based on a selection of the papers given at two conferences focused on ethics and the global economy hosted in Japan by the Japanese Institute of Moralogy with the collaboration of Reitaku University, and with sponsorship and support by the Ministry of Foreign Affairs and the Ministry of International Trade and Industry. An International Conference on Asian Economy and Culture on the theme "Globalization and Ethics of Economy" was held December 1-3, 1989 and featured presentations from Asian scholars. The attendance for this conference was 211,33 academics and the rest businesspeople. In September, 1991 a second conference, featuring academics from the United States, Europe and Japan, was held on the theme "Business Ethics in a Global Economy." The 1991 conference drew 136 people, with 52 coming from academia. 1989 Conference on Globalization and Ethics of Economy This conference aimed at comparing cultural and religious diversities in economic values, with a goal of finding some common aspects among them. This conference confirmed that, in spite of existing gaps, there are some fundamental common principles among the various Asian countries allowing diverse populations to communicate and conduct business. The sessions and presenters at the conference were as follows: Session 1: Encounter of Civilization and Creation of New Values Thomas W. Dunfee (The University of Pennsylvania) "The Role of Ethics in International Business" Haruo Naniwada (Kanto Gakuen University) "Destination of the Modem Civilization: Encounter, Struggle and Transformation of Civilizations" Session 2: Modem Economic Civilization and Ethics of Economy San-Guine You (Myong Ji University) "The Spirit of the Times and Historical Evidence" Iwan Jaya Azis (The University of Indonesia) "The Choice of Policies and Strategies That Can Be Evaluated From
the Moral Aspects of Development:
The Case of Indonesia"
Takashi Kobayashi (Tokyo International University) "The Present Time in World History and East Asian Cultural Zone" Yukimasa Nagayasu (Waseda University) "World Systems, Globalization, and Economic Values" Session 3: The Internationalization of Business Enterprises and Principles of Business Behavior Prasert Chittiwatanapong (Thammasat University) "Japan's Foreign Relations: Some Ethical Problems" Takeo Tsuchiya (Reitaku University) "Social Responsibility of Business Corporations in the Age of Global Economy" Ah-Keng Kau (The National University of Singapore) "Corporate Behavior in an Internationalized Business Environment: Issues and Problems" Han-Yu Chang (Tamkang University) "Business Ethos and Management Culture: A Comparative Historical Sketch for Modernization of the Asian Economy" Session 4: Asian Thought: Tradition and Innovation Il-Gon Kim (Pusan National University) "Application of Confucian Ethics to Modern Economy: A Way to Give Life to the Culture of Family Collectivism" Lae Dilokvidyarat (Chulalongkorn University) "The 'Community Culture' School of Thought in Thailand" Yukiyoshi Mochizuki (The Institute of Moralogy) "Ideals of Moralogical Management" Mohd Nazari Ismail (The University of Malaya) "Islamic Perspectives towards Economic Development and Business" Asmad Muflih Saefuddin (Ibn Khaldun Islamic University) "Islamic Economic Ethics"
Session 5: The Globalization and Ethics of Economy Jin Du (Liaoning University) "Globalization and Economic Reform in Socialism: The Case of the Chinese Economy" Poh Ping Lee (The University of Malaya) "The Globalization of the Asian-Pacific Area: The View of a Southeast Asian Political Scientist" Kiyoshi Takase (Takasaki City College of Economics) "Modern World and Globalization: The World in the Period of Structural Change" Masataka Kosaka (Kyoto University) "Globalization in the Perspective of State, Nation and Culture" 1991 Conference on The Ethics of Business in a Global Economy: Rethinking Corporate Morals This conference focused upon the narrow but highly professional field of business ethics. This conference had three aims: 1) To find universal norms applicable and helpful in resolving business conflicts in the conduct of global business; 2) To find creative ways through which corporations can become more innovative and stronger, in order to increase their longevity; and 3) To prepare for creating an Asian-Japan Business Ethics Network. From this conference some tasks were made clear: how to develop ethical hypernorms at a crosscultural level, and how to think about the dual approaches; the positive and optimum versus the negative and minimum. This conference also had five sessions: Session 1: What is Business Ethics? Georges Enderle (The University of St. Gallen) "What is Business Ethics?" Tadao Miyakawa (Hitotsubashi University) "Social Responsibility of Business and Business Ethics" Kei Takeuchi (The University of Tokyo) "Business Ethics in Research and Development"
Session 2: Economic Systems and Business Ethics Thomas W. Dunfee (The University of Pennsylvania) "Establishing Normative Ethical Standards for Global Business Transactions" Norman E. Bowie (The University of Minnesota) "International Business, a Universal Morality and the Challenge of Nationalism" Tsunehiko Yui (Meiji University) "Value System, Ethics and Economic Development in Japan: in Historical Perspective" Yukichi Shitahodo (Kyoto University and the Institute of Moralogy) "The Japanese Tradition of Economic Ethics" Session 3: Business Ethics and Corporate Behavior Brian Harvey (European Business Ethics Network) "Business Ethics and Corporate Behavior in the United Kingdom" Takatsugu Nato (Tokyo International University) "On the Measurement and Comparisons of Social Contribution Degree by Enterprise" Moriaki Tsuchiya (The University of Tokyo) "Business Ethics of the Global Company" Shunji Kobayashi (Waseda University) "Business Ethics and Corporate Strategy in Japan" Session 4: Corporate Culture and Human Development in Business Nasaru Yoshimori (International University of Japan) "American Entrepreneurship Decline: A Perspective of BusinessGovernment Relationships" Nobuhisa Obu (Wako University) "A View on the Evaluation and Ethics of Enterprise Behavior: A Step Toward the Establishment of Behavior Standards" Patrick Mac1agan (The University of Hull) "Some Thoughts on Individuals' Moral Development in Business Organizations"
8 Session 5: Business Ethics in a Global Economy Henri-Claude de Bettignies (INSEAD) "Ethics in International Business: A European Approach" Thomas Donaldson (Georgetown University) "The Language of International Corporate Ethics" Ken'ichi Odawara (Jochi University) "Economic Ethics and the Globalization of World Economy" Norihiko Suzuki (International Christian University) "Multinational Business Ethics: An Analytical View" OVERVIEW OF THE BOOK
This book is divided into four parts. Part I contains just two chapters: this one which introduces the basic themes and outlines the coverage of the book, and Chapter 2 which provides a framework of Japanese thinking about normative issues. In this chapter, recurrent topics are noted and their treatment in various chapters is contrasted. Common viewpoints are emphasized; significant divergences commented upon. One main purpose is to provide a brief overview of each of the chapters so that the reader may selectively choose what to read. The linchpin of the book is chapter 21 written by Iwao Taka (Visiting Scholar, The Wharton School, University of Pennsylvania; Assistant Professor, Reitaku University), which introduces the religious and social normative environment of Japanese business. Taka describes the influence of Confucianism, Buddhism and traditional Japanese religions in leading to the modern Japanese view that every individual has a soul or spirit (numen) connected to the ultimate reality. A principle of equality derives from this -- every person is equal in the sense of having an equal numen. The concept of an individual numen extends to the phenomena of work and group activity. Work constitutes a means by which individuals connect to the ultimate reality
1This paper was written subsequent to the two conferences. It is included because it provides an excellent framework for understanding Japanese business morality and complements the approaches taken in this' book.
and therefore has value in and of itself. Groups have their own numen, seen as superior to that of individual members. Obligations to comply with group norms are emphasized through statements of tatemae or formal rule. When members resist tatemae they do so through assertions and gestures called honne or real motives. In the social dimension, Taka notes that the normative environment may be envisioned as a set of four concentric circles representing (1) family, (2) fellows or close associates, (3) the nation of Japan and (4) the world. Different ethical rules govern in the four circles as follows: (1) filial piety, (2) long-term give-and-take relations, (3) a combination of open competition and long-term-give-and-take and (4) open competition. Corporations fit into the same framework with vertical keirets'; being representative of the family circle and horizontal keiretsu operating within the fellows circle. The question of access to keiretsu arrangements is a controversial issue in Japanese global trade. Taka emphasizes that understanding and adopting the ethical rules of long-term give-and-take is critical for acceptance into the fellows circles of Japanese corporations. Managers tend to view the inner circles as operation bases supported by cooperative behavior while the outer bases are seen as battlegrounds of intense competition. Taka suggests that the logic of the religious normative environment causes Japanese managers to be critical of the strict division of labor that occurs in some U.S. firms, and of the attitudes of some managers that certain jobs (e.g. housekeeping, assembly line work) are inferior or, at the least, beneath them as individuals. Similarly, the logic of the social dimension is the basis for the recent criticism by Japanese of U.S. executive compensation policies, hostile takeovers and the use of mass layoffs as a corporate strategy. Japanese firms also have shortcomings under Japanese normative standards. The discriminatory restrictions faced by female workers in Japan violates the principle that everyone has an equal numen. Further, the emphasis on work results in heavy pressures to put in long hours and to comply with social conventions. Those who do not go along face the possibility of severe criticism. In extreme cases, this may lead to karoshi (death by work). Further, individual
Keiretsu are closely connected firms that work cooperatively toward common goals. Vertical Keiretsu are combinations of suppliers (including service firms such as banks and insurance companies), manufacturers and distributors; whereas, firms associated in an horizontal keiretsu operate at the same level of the marketing structure. 2
10 employees are unlikely to question whether the decisions of the group are ethical.
Part II: Business Ethics in a Global Economy Part II focuses on general issues of morality in a global economy and seeks criteria for making normative judgments about controversial practices in international trade. A central, recurring question is how business practices are to be judged when they directly implicate two or more societies with contrasting ideas about what constitutes proper business behavior? Underlying the arguments presented in this part is the ultimate issue of whether there is a discoverable, universal morality relevant to global business transactions. In chapter 3, Thomas Dunfee (Kolodny Professor of Social Responsibility at The Wharton School, University of Pennsylvania) applies a contractarian analysis arguing that there is an unwritten, malleable social contract existing at the level of international trade which provides a central core of moral practices for international trade. He then extends the argument to identify a set of rule of thumb principles which provide substance to the social contract for practicing global managers. In chapter 4, Yukimasa Nagayasu (formerly Professor, The School of Social Science, Waseda University; Chief, Economics Division, Research Department, The Institute of Moralogy; Professor, Reitaku University) identifies key trends in the global political economy which have significance for business ethics at the international level. Economic forces appear to be coming to dominate over politics; yet, at the same time there is increasing recognition of interdependence and the need for reciprocity in trade relations. This, in turn, is changing the way in which business ethics is viewed, with increasing rejection of more narrow, short-term profit-making viewpoints. Nagayasu emphasizes benevolence as an important factor for relating to this emerging environment. In chapter 5, Norman Bowie (Elmer L. Anderson Chairholder in Corporate Responsibility, The University of Minnesota, a leading figure in business ethics in the United States) picks up on a major theme of the conferences and develops a rousing defense of a universal morality working from a Kantian perspective. Bowie argues that so long as there is free and open competition at the global level, rational managers will be constrained to act honestly, eschew bribery and become trustworthy. In addition, these forces will ultimately cause a decrease in discrimination based on taste and/or misinformation.
Supplementing his argument with support from Adam Smith, Bowie optimistically sees free and open global competition as a force for world peace, causing war to become in Kant's terms, too destructive, expensive and economically irrational. Bowie ultimately tempers his optimism, however, by worrying that nationalistic influences on economic competition may be destructive, using examples from the trade war between the United States and Japan and the changing reactions of United States citizens toward Japanese investment in the United States. Thomas Donaldson (John Connelly Professor of Business Ethics, Georgetown University and the leading proponent of a contractarian approach to business ethics) focuses in chapter 6 on a different dimension of the universalism/relativism debate: the implications of the great diversity of moral claims and language across cultures. Donaldson identifies six different languages of ethics: (1) virtue and vice, (2) self perfection through self-control, (3) maximization of human welfare, (4) avoidance of human harm, (5) rights/duties and (6) social contract. Languages which identify perfectionistic as opposed to minimalistic standards present great difficulty when attempts are made to relate them to the decisions of global business firms. Similarly, those whose focus is psycho-centered are awkward to apply to corporations which have, at most, a decidedly non-human psychology. Donaldson concludes that languages based on rights/duties, avoidance of harm and social contracts are more suited to understanding international corporate ethics than ones based in virtue, self control and maximization of human happiness. Chapter 7, written by Georges Enderle (Arthur and Mary O'Neil Professor of International Business Ethics at the University of Notre Dame, Indiana) closes Part II. Enderle comments on the emerging academic field of applied business ethics. He discusses the relationship between ethics and economics and notes that the new field must focus on the process of integrating ethics into business decisionmaking. Enderle advocates a "New Practice" in which there is recognition of the true overlapping nature of economics and ethics, and also of pluralism. Enderle suggests that solutions to the difficult problems of business ethics can be found in the domain of overlapping consensus.
Part III: Business, Economy and Ethics in Japan Part III involves a more specific focus on economics and ethics in Japan. The four chapters of Part III provide background and
12 examples for the analysis developed by Taka in chapter 2. The difficulties with using certain moral languages as noted by Donaldson are dramatized in chapter 8 by the late Haruo Naniwada (Honorary President, Kanto Gakuen University). Naniwada argues that viable economic systems must emphasize both freedom and justice, and therefore that the logic of the "real economy" is based on a trilogy of liberty, social equality and true community. In reaching this conclusion, Naniwada rejects rationalism as a speculative logic whose major shortcoming is that it arrogantly assumes that the world exists as its theory predicts. But in offering a solution to this problem, Naniwada encounters a problem of language. No existing concepts or terminology adequately capture the point he wishes to make. His solution is to coin his own term "allelonomy". Allelonomy describes a principle of mutual dependence, identifying that the very existence of one thing is dependent upon the existence of another. Ken'ichi Odawara (Professor, Faculty of Economics, Sophia University, Lecturer of International Relations, University of Tokyo) focuses on differing perspectives concerning labor and human resource management that exist in Japan and the West. In chapter 9,Odawara contrasts the approaches taken by U.S. and Japanese firms in dealing with periods of losses or reduced profitability. These differing approaches are seen as influencing the basic nature of labor relations in the two countries. Odawara concludes that the Japanese system is ethically superior in this dimension. The work of Chikuro Hiroike, founder of the Institutes of Moralogy and author of A Treatise on Moral Science published in four volumes in 1928, is discussed in chapter 10 by Yukiyoshi Mochizuki (Director, Research Department, The Institute of Moralogy; Professor of Foreign Languages, Reitaku University). As a means of bridging East and West and enhancing the chances of world peace, Chikuro Hiroike sought a Supreme Morality through study of the great sages, including Buddha, Christ, Confucius, Socrates and works of Japanese mythology. Mochizuki describes Hiroike's creation of moralogy, a scientific study of morals based upon realizing the happiness of individuals and the cultivation of human character. Stress is placed upon the unification of morality and economy, so that moralogical management emphasizes character capital, the recognition and observance of duty. "Character comes first, not money" is a key theme for companies managed in a manner compatible with moralogy. An important obligation is the development of the character of employees, a mission seen as more important than short-term profitability. Each employee should unify knowledge and virtue and constantly seek to advance their knowledge and ability. These ideals are then extended
into a stakeholder concept of a duty to operate firms in a manner consistent with a principle of triadic justice and equality. In conducting business, the businessperson should always seek to insure that benefits are appropriately spread among self, the other party to the transaction and third parties. Diversity is to be tolerated, allowing for co-prosperity. Ultimately, the prosperity of a corporation depends upon the morality of its managers. Thus, the universal ideals are reduced to the everyday actions of business managers and firms. Part III closes with Chapter 11, written by Shunji Kobayashi (Professor, School of Commerce, Waseda University). Kobayashi takes a practical, modern approach in emphasizing that business firms must take care to operate within the range of social acceptance. He sees the Japanese social consciousness as based upon the community and the relationships among individuals. Kobayashi discusses the current efforts toward developing a system of corporate philanthropy in Japan as actions consistent with these themes. Part IV: Historical Development of Market Morality in Japan Part IV combines three chapters which together survey the historical development of market morality in Japan. The work and conclusions of Chikuro Hiroike are further described in chapter 12, by Yukichi Shitahodo (Professor Emeritus, Kyoto University; Advisor to the Institute of Moralogy), who places the writings into their historical context. Shitahodo discusses the economic ethics of Sontoku Ninomiya which stressed the merger of self-interest and of community responsibility. Subsequently, Eiichi Shibusawa, influenced by the Analects of Confucius, derived an approach to economic ethics based upon a parallel concept of justice and profit. In chapter 13, Han-Yu Chang (Professor of Business Administration, Tamkang University; Professor Emeritus, Taiwan University) takes a historical approach to the ideal of occupation or work. He traces attitudes toward work in both medieval Europe and in Japan. In both societies, attitudes evolved toward a more positive view of work as a calling and as activity essential to social order. Chang traces changes in viewpoints in Japan through the writings of Seisan Suzuki, Baigan Ishida and Eiichi Shibusawa. The influences of Buddhist practice, Confucian concepts and the samurai spirit produced an orientation toward work which recognized the unity of morality and economy ,a sense of social responsibility and an emphasis on the importance of education and learning. Out of these perspectives emerged the view of a company as a life community.
14 Tsunehiko Yui (Professor, Department of Business Administration, Meiji University) is the author of chapter 14. Yui identifies and contrasts the values and ethics of merchants and business leaders in three major periods of Japanese development: the feudal Tokugawa period (1750-1867), the Meiji Restoration (1868-1912), and the post World War II period (1945-1980). Yui concludes that through all of three periods dedication to duty, group cohesion and harmony remained central, even as Japan evolved in response to changing times and circumstances. Even today, as concern about individual rights and stakeholder interests increases, group solidarity remains paramount in Japan. THE ROLE OF ETHICS IN A RAPIDLY CHANGING GLOBAL ECONOMY
A dominant theme of this book is that powerful forces are at work bringing about significant changes in the ways in which global corporations, nation states and regional trading blocs inter- relate. Pundits and prognosticators notwithstanding, the overall trend of these changes remains ambiguous in important respects. Clashing political forces pull toward fragmentation in Eastern Europe and the former Soviet Union; while the need for economic coordination brings other nations and groups closer together in ever more administratively powerful regional trading blocs. Increasing economic interdependence is accompanied by increasing calls for political autonomy and independence. The world environment is stressed by the competing forces of integration and fragmentation. What are the moral implications of global economic interdependence? In a world in which the performance of the Japanese stock market and the decisions of the German government concerning interest rates may have as great an impact on the United States as its own domestic economic policies, in which decisions about plant safety or environmental protection may literally affect millions around the globe; it is vital that business leaders and managers think seriously about the moral implications of global business activities. Decisions made by business firms can have impacts far beyond national boundaries. Corruption, environmental degradation and product and workplace hazards can all be added to the list of exportable goods and services in international trade. Private firms have the capacity to sell high technology or weapons to unstable despots and thereby have the power to influence dramatically prospects for world peace.