Business Ethics: A European Review

A framework for organizational virtue: the interrelationship of mission, culture and leadership
J.ThomasWhetstonen
Introduction
At a recent Forum on Ethical Leadership at The American College, host Jim Mitchell emphasized the importance of creating the right culture in business organizations. He concluded the sessions by declaring, I believe that every employee deserves the opportunity to do meaningful work that is fullling and challenging. Creating the kind of culture where every employee can contribute to the mission has a huge payoff in terms of productivity and all the stakeholders win (Duska 2004: 40). This involves making substantial progress toward what Goodpaster (2000) calls a practical culture of ethical awareness. It requires a leader to consider the role of the culture in the organization and the relationships within the culture. These elements are intertwined; the culture, being organized by the mission and an essential factor in its accomplishment, is a primary concern of the organizations leaders. How can an ethical culture be created within an organization? This article presents a virtue-based approach as a conceptual framework for doing so. It offers the three closely interrelated aspects of mission, culture and leadership as components for a model of an ethical organization. The model does not go so far as to specify the virtues needed by people in any particular organization or any generalized list of policies and procedures,
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because virtues are essentially contextual. But, as mission, culture and leadership are management concepts, being part of the language readily understood and used by managements and employees, they can facilitate understanding, at least analogically, and practical application of the three complementary theories of a tripartite ethic (teleological via mission or telos, deontological via culture, and virtue via leadership). Based on the model, a particular organization can then proceed to identify what particular character virtues its individual managers should adopt as aspirations and what values, policies and procedures are best suited for its own situation. Before elaborating on the mission-culture-leadership interrelationships, this paper introduces the theory of personal virtue. It then addresses why and how virtue-based concepts can be used in designing structures at the organizational level. Even if a business organization, as a collective of morally responsible human agents, is not itself ontologically a human person with a humans mind, conscience or will, one can still consider the organization metaphorically as potentially a virtuous organization.

Virtue
Virtue ethics is essentially concerned with the moral character of a human person, his or her virtues or vices, and what these dispositions have to do with personal behaviour. Virtues are

Associate Professor of Business and Philosophy, Montreat College, Montreat, NC, USA.

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instrumental in the sense that they allowing one to act and live according to ones values, the contextual means to a good end. Having a good moral character suggests the presence of virtues or moral excellences and the absence, or at least the suppression, of vices. The dispositions of character termed virtue are benecial to personal actors and to those others affected by their acts. Together they motivate, guide and correct moral deliberation and behaviour. Character is never fully formed and settled, but is in a life-long process of development. Foot (2001) revives the ancient philosophic concept that there is a close relation between human happiness, or eudemonia, and virtue. The understanding of human goodness depends on the nature of the human species. Eudemonism is a system of ethics that bases moral obligation on the likelihood of actions producing happiness. Applying this to a business situation, eudemonia involves questions about the meaning of work and the meaning of life that entail an analysis of why we are here, what we should be doing, and what makes us happy, and the meanings discovered by individuals and manufactured by the culture (Ciulla 2000: 208). However, the very concept of virtue is controversial. According to Gilbert Harman (2000, 2003) and John Doris (2002), much of what is taken as character is in fact because of specic social settings that reinforce virtuous conduct; people mistakenly point to character virtues or vices as causative because of the fundamental attribution error. Clergy act like clergy because they are surrounded by other clergy (and parishioners) who expect them to act like clergy. Criminals act like criminals because they associate with other criminals. Defending virtue ethics, Solomon (2003) agrees that social pressures do matter. This gives reason to insist upon sound ethical policies and rigorous ethical enforcement in corporations and in the business community more generally. Nevertheless, a person can resist pressures, even at great sacrice, to compromise good ethics, depending on the severity of the situation and circumstances. Character is vulnerable to the environment but it also is a bulwark against the environment (Solomon 2003: 46). This

is a great benet of virtue ethics that character makes the difference, although not all of the difference, regarding ethical behaviour. Ethical structures in the cultural milieu and persons of good character are both needed. Indeed, character traits can conict and can be applied differently in different situations and cultural surroundings. Solomon (2003: 52) favours the interpretation that character is both cultivated and maintained through the dynamic interaction of individuals and groups in their environment and they in turn develop those virtues (and vices) that in turn motivate them to remain in the situations in which their virtues are supported, reinforced, and not threatened. Philippa Foot (2001) offers a thoughtful counter to purely naturalistic, deterministic arguments used against virtue, such as those of Harman and Doris. She understands that the nature of a virtue is, in that so far as someone possesses it, his actions are good; which is to say he acts well. Foot contends that there is no criterion for practical rationality that is not derived from that of goodness of the will; thus Kant was right in saying that moral goodness was goodness of the will. He went wrong, however, in thinking that an abstract idea of practical reason applicable to rational beings as such could take us all the way to anything like our own moral code (Foot 2001: 14). For human beings the teaching and following of morality is something necessary (Foot 2001: 17). The facts that moral action is rational action and that human beings are creatures with the power to recognize reasons for action and to act on them in no way precludes recognition of the part played by sentiments such as (negatively) shame and revulsion or (positively) sympathy, self-respect and pride in motivating human virtue (Foot 2001: 24). However, an Aristotelian virtue ethic is inadequate on a stand-alone basis. The concept of eudemonia can be difcult and obscure: a virtue ethic, because it is developed in the context of a culture and tradition, is susceptible to cultural relativism, and different virtues can send conicting signals, such as needing to lie to remain loyal to ones legitimate authority. Even some proponents of virtue ethics agree on its inadequacy in
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helping the management to make actual decisions ethically (see Whetstone 2003). Moore (2002) observes that even philosophers have given up on using modern virtue ethics, suggesting an effort to rediscover craftsmanship, requiring the exercise of virtue in community in order to attain those internal goods that are available (Moore 2005). Boatright (1995) suggests that Solomons (1992) Aristotelian approach needs to be supplemented with a set of rights grounded in human nature. More generally, a virtue ethic needs more than a telos that organizes the set of virtues into a concept of the good. It needs to be combined with constraining deontological principles of right and wrong behaviour. For a business organization, a framework approach grounded in a consensual understanding and commitment to a good telos and constrained by sound ethical principles can be used by the right leadership to establish a culture worthy of aspiration (Whetstone 2001, 2003). A virtue framework needs the complementary constraint of a deontological act-oriented attention to objective moral principles as well as a good telos that organizes enabling character dispositions. Virtue ethics is best applied within a comprehensive tripartite theory combining a focus on cognitive decision making (a principled act orientation) with the deliberate development of the moral character of actors toward a good end (a process orientation). As Larmore (1987) suggests, the perspectives of act-oriented ethics theories and of virtue are best viewed as additive; moral knowledge is to be applied with the most delicate and sensitive judgement. For practising managers, if not for philosophers of competing theoretical camps, the key issue is not which theory is superior, but the ultimately consequential results of personal moral development and of grounding of moral decision making. No virtue formulation eliminates the risk of relativism since virtues are contextual to the culture of the organization, but this risk can be constrained by incorporation of objective principles (Donaldson & Dunfees (1999) notion of hypernorms is one intriguing approach) to provide grounding for moral decision making with phronesis. While incorporating the need to analyse individual acts,
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a virtue perspective can provide a learning process toward the development of the motivational dispositions of humans to act ethically within a community. The normative aim is to move toward the telos of a good organization.

Virtue at the organizational level

But should the theoretical perspective of virtue be applied at the level of the organization? Is it reasonable to consider how a virtue ethics perspective might be benecial in conceptualizing how a corporation, or any organization of people assembled for some collective aim, could act as a responsible moral entity? Organizations do inuence the conduct of their members, including ethical aspects of their conduct (Trevino & Weaver 2003). The moral climate and context and social interactions not only communicate values and moral norms but also are at least part of the process forming the characters, internal virtues and vices, of people in the organizations (MacIntyre 1985, Solomon 1992, Etzioni 1996). The good society and the moral characters of the individuals in the society are interactive inuences. Moreover, the organizational purpose, the telos of an Aristotelian ethic, needs to be agreed upon by a consensus of the organization prior to implementing the structural policies that can move the organization toward coordinated achievement. Institutional purpose is critical for focusing and differentiating an institution (Sternberg 2000). Virtues can provide a linkage between the levels of the individual and his society, allowing one to t within the social organization and excel in it. Virtues are essential moral attributes of individuals and also represent the excellencies that the social organization requires (see Solomon 1992). Ethics is as much an organizational issue as a personal issue (Paine 1994), and vice versa. Whereas an organization of virtuous people is not enough to guarantee virtuous organizational decisions, and whereas organizational structures are instrumentally necessary, the moral characters of managers, the people who make decisions, matter as well. Structure is subordinate, although

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important, to the presence of a virtuous organizational telos sought consensually by managers of character educated in a principle-based understanding of the content of morality, ones with experienced and wise capacity for moral judgement, ones knowing and committed to what is right and what is wrong in the cultural context. Organizational virtues are best not thought of as generalized behavioural characteristics, but ones derived in conjunction with and in support of an overarching telos and applied by maturing moral agents, led by the example of committed moral leaders. Can a theoretical virtue framework be operationalized within contemporary organizations? Reection on virtue ethics to some might seem rather subjective, elusive, or spongy, as compared with the critical study of decisions and structures (May 1987: 692), but this is not necessarily the case. Dyck & Kleysen (2001), while stating that the particular virtues chosen were not critical in the design of their investigation, nevertheless offer empirical evidence that Aristotles virtues are amenable to operationalization, reliable observation and meaningful description of contemporary managerial behaviour. Virtue language is at least as conceptually useful as Mintzbergs (1971) interpersonal, informational and decisional roles and Fayols (1949) functions of planning, organizing and controlling. Dyck & Kleysen conclude that virtue theory can potentially change the understanding of what management means. Moreover, the appropriate virtues need not emerge by deduction from the armchair. Ethnographic eld research in the USA (see Whetstone 2003; also see the doctoral dissertation of Carter Crockett (2005a) assessing the extent of virtue orientation of ve Scottish oil consultants) has found that within a contemporary organization, virtue language is uently used by its managers, that virtue language is important in dening individual managerial excellence within the organizations culture and that a normative set of managerial virtues can be identied and prioritized within a particular organizational context. The virtue framework approach needs further conceptual development and testing, but it can be implemented.

Does a corporation have moral responsibility?

Before proceeding to a discussion of a virtue-based organizational model, especially one designed for a chartered corporation, the reader may object that the very subject of the separate moral responsibility of such a collective, non-biological entity is controversial (see French 1979, Hessen 1979, Donaldson 1982, Goodpaster & Matthews 1982, Freeman 1984, Werhane 1985, May 1987, Rafalko 1989, Danley 1990, Pfeiffer 1995, Phillips 1995, Velazquez 2003 for various viewpoints). Further, there is dispute about whether a corporation has one purpose (Friedman 1970), several purposes (regarding various stakeholders, Freeman 1984), or none (Keeley 1988, Sollars 2002). The latter issue is relevant for any management organizing for corporate social responsibility, but is beyond the scope of this article, which recommends neither a specic organizational telos nor an approach to social responsibility. However, the issue of the moral standing of a corporation is raised briey because of the deliberate moral focus of the internal organizational virtue framework this paper proposes. Velasquez (2003), while admitting that many (e.g. Donaldson 1982, French 1984, Rafalko 1989, Phillips 1995) support the view that corporate organizations are morally responsible for their actions (a collectivist view), vehemently argues that a corporate organization is not ontologically a separate moral agent (an individualist view). Collectivists argue that properties of the corporate organization are not reducible to the properties of its members, and corporate organizations have properties that cannot be attributed to their members, so the corporate organization is a real individual entity distinct from its members. Corporations do engage in moral actions that are not attributable to individual members. If no individual is responsible for the action and the corporation engages in the moral action, who does have responsibility? Velasquez (2003) says no one. Individual members of an organization are always causally responsible for any corporate act, and any attributions of intentions to corporations are always either descriptive or prescriptive
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attributions of as if intentionality. A corporation (which is not really a human person with a conscious mind, beliefs and intentions of will) acts only through its employees and ofcers, who are in actuality responsible for what the corporate organization does. According to Velasquezs individualist view, the intentions that we attribute to groups are metaphorical rather than literal. Corporations can be treated as beings with moral responsibility, but only if done so metaphorically rather than philosophically. Without taking sides in the individualist collectivist debate, one can nevertheless take the metaphorical approach of envisioning (rather than reifying) the corporation as a morally responsible actor. The personication of corporations, while ontologically problematic, is a way society has recently come to attribute moral responsibility to such collectives (e.g. see Paine 2003). While is does not imply ought, the very fact that the language of personal responsibility is applied to corporations, coupled with the insights possible from a virtue framework perspective, at least suggests that the idea of a virtuous organization can be a useful metaphor, one that can inform management thinking about what organizational components are needed for enhancing ethical practice. More specically, the ethos of the organization can perhaps better be understood, inuenced and developed from the perspective of an ethical culture metaphor. The board and management might better be able to envision and communicate a description of the kind of organization they desire, a normative model of an ethical organization. The virtuous organization metaphor could be used to dene the values, the normative intent, of policies and procedures and the intended ways for achieving them if understood in the virtuesbased context of pursuit of an overall organizational mission or telos. This article recommends that the management of a particular organization can focus on the three closely interrelated components, organizational mission or telos, organizational culture and leadership, as useful metaphors for formulating a tripartite framework for its organization. This framework can guide application, at least analogically, of the three complementary theories of a
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tripartite ethic (teleological via mission or telos, deontological via culture and virtue via leadership). The organizations management can refer to the framework as it identies what character virtues its individual managers should adopt as aspirations and what values, policies and procedures are best suited for its own situation. Discussion of each of the three intermediary components and the nature of their interrelationships follows.

Mission
Personal ethics asks: For what is the virtuous person striving? At the organizational level, one asks what is the telos, the normative mission or purpose, for the organization that requires virtuous implementation by its members? For the individual manager, the telos can be I want to do what my job description says I should do (see Gowler & Legge 1983) or whatever the boss says, that is what is right for me (see Jackall 1988). But is there not a wiser, less cynical and less bureaucratic response? One of the main features of human existence is the capacity to rise above conditions, including such travesties as concentration camps (and terrorist atrocities), and to transcend them (Frankl 1962: 13). The proper telos can provide the motivation to overcome: He who has a why to live for can bear with almost any how (Frankl 1962: 76). Dening mission or purpose is the rst obligation for the senior management of an organization (Walton 1988: 206). This should be done based on the set of beliefs on which it premises all its policies and actions (Watson 1963). Management must communicate these beliefs and adhere to them faithfully in making and implementing all decisions, even if changes in technology, competition or other factors require a change in everything else about the organization. The core of an integrity-based management (Paine 1994) is an abiding requirement, even a benchmark, of ethical excellence. IBMs Thomas Watson expresses this view as follows:
In other words, the basic philosophy, spirit, and drive of an organization have far more to do with its relative achievements than do technological or

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economic resources, organizational structure, innovation, and timing. All these things weigh heavily in success. But they are, I think, transcended by how strongly people in the organization believe in its basic precepts and how faithfully they carry them out. (Watson 1963: 56)

Without an objective sense of meaning and purpose, business management is merely a practice, a sterile process. This is not a new insight but nevertheless continues to be true. When this is overlooked, scandals such as those involving Enron, WorldCom, Parmalat and HealthSouth are often the consequence. In a cultural approach to management and organization ethics, the leader may inuence the behaviour of his or her followers through socialization, forming and using an organizational culture to establish the ethos of the organization. But it is ultimately subjective to maintain that the good is mediated to man through a developing social culture (ODonovan 1986: 73). For moral substance, the process must be oriented according to a telos, and it is critically important whether the organizations telos is good or bad. Normative ethicists can ignore or subordinate this point. This may be one of the reasons Starks negative assessment of the relevance of much ethics theory in the commercial marketplace (1993) received nods of agreement from some business practitioners, although his comments seemed to offend academics writing on business ethics (e.g. see Duska 1993). The virtue-based framework, explicitly incorporating the need for attention to a consensual mission, is offered as a constructive response for managements committed to developing an organization with an ethical culture.

Culture
Organizational culture is the characteristic spirit and belief of an organization, demonstrated in the norms and values that are generally held about the way people should behave and treat one another, the nature of the working relationships that should be developed and the attitudes to change (Torrington & Hall 1991: 106). Like morale in the military, organizational culture is the great

invisible force that decides the difference between success and failure and serves as the key to organizational change, productivity, effectiveness, control, innovation and communication (Feldman 2002). Hampden-Turner (1992: 1) observes that in the world of increasingly at companies and sophisticated knowledge-based products, the control and understanding of an organizations corporate culture is a key responsibility of leaders, as well as a vital tool of management if it is to encourage high performance and maintain shareholder value. The ethical leader is called upon to promote and expect the right practice of good values and discourage the ever-present pressures to practice the bad. Although useful for assessing the extent that organizations inuence the ethical behaviour of employees (Peterson 2002), descriptive ethical climate approaches (e.g., the models offered by Victor & Cullen 1988) do not provide enough normative direction concerning the inuence of organizations on the ethical conduct of their employees. A virtue-based orientation, administered with a well-understood, consensual commitment to a mission, can normatively ground the organizational culture characteristics. However, this does not suggest that there is some generic list of organizational characteristics or virtues that are universally appropriate. Virtues are contextual, appropriate for disposing behaviour toward a telos, but only according to the tradition and specic cultural context of the particular organization. Lists of virtues (such as proposed by Maitland 1997 and Solomon 1999, for business in general, and by Murphy 1999, for marketing) can be helpful guides, but must be carefully assessed and perhaps adjusted to a particular context. At the risk of seeming too general and abstract, this article deliberately avoids going too far in recommending specic cultural characteristics or individual and organizational virtues, which are best considered as unique to the particular organization. A management needs to consider what characteristics are appropriate and how they can be developed, but only as suited to its own cultural milieu and mission. How can the management develop an ethical organizational culture? One promising approach
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is that described by Paine (1994). Referring to several positive organizations as examples, she proposes what she terms an integrity strategy as being more successful in developing an ethical organizational culture than what she terms compliance strategies. While she does not use the term telos, this is implied by her stress that decision making at every level of the organization should be formulated, implemented and assessed in light of a consensual commitment to ethical concerns. An integrity strategy is implemented and enforced throughout the organization as an integral part of decision making, as the focus of structural development, including budgeting, training, communication and compensation. A unifying teleological focus and principle-based explication of ethical criteria are basic and give substantive guidance for actual day-to-day decision making. A more ethical culture can then result. Within a particular cultural context, a management needs to consider what virtues and organizational characteristics are needed to develop a substantive process. Indeed, particularized substantive consideration should help management and employees to understand and rene their mission. For example, the management might start with the cultural requirement for honesty as an individual virtue and a collective commitment. In the Aristotelian sense, honesty can be viewed as a golden mean between the vice manifest in chronic deception, lying and misrepresentation and the opposing vice of untactful na vety, total honesty projected without reasonable and sensible restraint. Empirical research (Whetstone 2003) ranks honesty as the highest of the required manager virtues in a grocery chain, whereas the dishonest manager is considered the worst, most vicious, of all. The related virtue of trust is also highly rated, widely acclaimed as being essential for right and good ethics. Businesses are built on a foundation of trust in the free enterprise system (Richardson & McCord 2004); thus, trust is also an essential attribute of an ethical organizational culture. Lack of trust is dysfunctional for the team, the rm and the economic system. There is a deep, darker side of the relationship value of trust, however. Trust involves a sense of
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mutual agreement on purpose or ends, together with a working consensus on the means and practices guiding behaviours. Mutual agreement, even when reached, however, may not always be directed toward a good end or goal. Trust is instrumentally necessary for a gang of thieves as well as for a coterie of angels. Even when a worthy end is accepted by all, there may be signicant differences regarding acceptable means. For example, a college faculty might agree that improving student retention is critically important, but disagree with the administration that going softer on grading is the way to accomplish this end. The examples above are included to illustrate the type of thinking a management might well engage in applying the overall virtue-based framework. But this is a job that is truly meaningful when conducted for its particular cultural milieu. The general point is to suggest that the overall organizational culture needs to exhibit both teleological and behavioural characteristics, thereby helping to set norms and values and organizing the virtues desired of managers. It comprises the distinctive way different societies standardize and ritualize morally approved behaviour and the methods used to condemn disapproved conduct (Walton 1988: 45). Providing meaning, culture encompasses both moral language and a socially constructed moral control system. The values of the culture, as expressed in terms of both ideal and actual behaviour, dene virtue and vice and set the general moral tone of the community (Walton 1988: 44). Normative standards rarely produce feelings of obligation only on the basis of their logic, but need reinforcement through social relationships and interactive verbal communication. And socialization and cultural norms need to be guided by a good telos. The primary catalyst and driving force for developing the process is the organizations leaders.

Leadership
What is leadership and who is a leader? Social scientists have sought answers in terms of the characteristics (skills, personalities and moral

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character) of the leader, the situational behaviour of the leader, and the vision and objectives of the leader. In the case of a at organization, all the leader can really do is manage the culture of the place where the work is done, extol the vision of the completed whole and the performance standards needed to attain this, and manage the extremely subtle communications needed for harmonious working of the organization (HampdenTurner 1992: 8). An organizations leaders potentially control the most powerful means for embedding and reinforcing culture. According to Schein, the primary mechanisms are as follows: (1) what leaders pay attention to, measure and control; (2) leader reactions to critical incidents and organizational crises; (3) deliberate role modelling; (4) criteria for allocation of rewards and status; and (5) criteria for recruitment, selection, promotion, retirement and excommunication. Changing elements of the culture itself requires willingness by the manager to be concerned for the organization above and beyond the self, to communicate dedication or commitment to the group above and beyond self-interest (Schein 1985: 323). Leadership is therefore best understood as a moral endeavour. Not only must the leader competently set forth a clear vision and purpose for followers, she should also honour their rights while fullling her corresponding responsibilities in a principled manner. Because she does possess the potential for wielding great power over the organization, the leader must strive to use it skillfully, while constraining its use according to a strong character of moral integrity committed to sound ethical principles. Establishing and maintaining trust is essential for the ethical organization, and as stated by Max De Pree, long-time CEO of Herman Miller, Inc., leadership is barren and hollow when it does not have integrity at its core (Banks & Ledbetter 2004: 9). The improvement of ethical behaviour is served by awareness of the culture and requires character in the leader. What the leader most needs is insight into the ways in which culture can aid or hinder the fulllment of the organizations mission and the intervention skills to make desired changes happen (Schein 1985: 320). May (1987)

observes that the limitless goal of maximizing prot (an external measure) imposes a pressure of ever more on business leaders. It makes a social good out of the vice of avarice (see Moore 2005). Other stakeholders should count as well. Just as organizations can be perceived according to a wide variety of images or perspectives (Morgan 1986), so it is the case with leadership. The plethora of leadership guidebooks, often listing the secrets to successful leadership, collectively casts doubt on the universal validity of any generic approach. A leader can benet from approaching his task from multiple analytical perspectives. Several thoughtful ones that can t within a virtue-based framework are described below. In the mature organization, culture, leadership and mission are interwoven, with culture dening what is thought to be leadership, what is heroic and what is sinful behaviour, and how authority and power are to be allocated and managed (Schein 1985: 321). This suggests the need for a normative view of leadership that emphasizes the relational, that the leader is a person in relationship with followers. Especially in larger organizations, the establishment as well as the application of culture-embedding mechanisms often must be widely dispersed among subordinate and local leaders. A clear, well-disseminated overall telos and the values evolving in the culture are essential for guiding the complex, interrelated process. Unless leaders commit to what Ciulla (2004) calls genuine empowerment, this process cannot be expected to work well. Not only is full delegation of decision-making authority required, but also a mutual understanding and commitment to the telos and basic values forming the culture, keys in transformational leadership (Burns 1978). May (1987) deduces some of the virtues central to business leadership. A business leader must possess not simply the three traditional virtues of industry, honesty and integrity, or the secondary cooperative virtues that make one artful in acting in concert with others, but also, substantively and preeminently, public spiritedness (May 1987: 694). These virtues are required for a covenantal ethic, one that concentrates on those obligations that arise in relationships between several parties or
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stakeholders that are deep-going, responsive and reciprocal. Robert Greenleaf (1977) offers servant leadership as a worthy paradigm for implementing an ethic within an organization. A servant leader puts his primary emphasis on the needs and desires of followers rather than on his own ambitions. The preferred methods are persuasion and example as opposed to command and control. According to Johnson (2001: 136), the advantages of servant leadership are its altruism, simplicity and self-awareness. The servant leader has a moral sense of concern for others, reducing the complexity engendered by putting personal desires in conict with those of followers. This requires reective thinking, or moral imagination (Werhane 1999), grounded in a sensitive awareness of himself and of the followers. A criticism is that a servant leader can be too subject to manipulation by followers (Bowie 2000: 13). Servant leadership is not suitable for all situations or all leaders. Nevertheless, a leader with exceptionally strong character can persevere by seeing and embracing the power of responsible relationships among all stakeholder groups (Smith 1995) in order to build a good community, one that can be virtue-based. Because of the need to establish and maintain trust, a leader needs subordinates to share his or her basic view of the appropriate manner of conduct for their respective assignments. A pragmatic, goal-oriented leader might trust more the subordinate who will go along than one who out of religious or other moral principles might have qualms or objections to what the leader believes is necessary for the job. Ethical integrity in the superior-subordinate relationship is fostered when the subordinate has the personal integrity and the relational support to question or even challenge the boss, rather than honing to whatever the boss says is right (essentially the Nuremberg defence). For his part, the leader should refrain from the 30,000 foot defence recently attributed to former Enron and WorldCom Chairmen/CEOs, claiming they were too far above the day-to-day actions of their subordinates and thus not responsible for their unethical acts. In summary, the manager as leader needs to know where he or she is going and that this is the
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right objective the appropriate mission or telos. But this is not enough. He must take responsibility to work within the organization in the right way, with moral integrity according to principled obligations. Being willing to act in faith, he must believe the mission is achievable and uphold its viability, especially to those who are anxious. He must operate sincerely according to the character of the mission. If it puts customers rst, he must ensure that the organization does this; if it is committed to producing quality products and providing exemplary service, he must ensure that the culture embraces values and methods necessary to do this and has the necessary structural and resource support. This requires moulding and monitoring the culture as it inuences behaviour and outcomes, understanding how it reexively interacts with the person who he or she is, whether as a leader or as a follower or as both. However, even the best model involves risk in the world, which is far from perfect. A set of efcient instrumental characteristics could be applied by a visionary charismatic or transformational leader, such as Adolf Hitler, to establish a vicious community. An ethical culture can be used to create an efcient criminal organization business or political or ecclesiastical. Before adopting any cultural characteristics, consensus is required on the most appropriate organizing telos in order to avert the moral hazard of a misplaced one. The result needs to incorporate and be constrained by people of virtuous character who apply appropriate moral decision criteria at all levels. Virtuous leadership can then succeed in implementing a principled virtue-based organizational ethic.

Adoption of a virtue-based framework by management

The virtue-based framework is a theoretical, normative model for an organization. Will or could the management of a real world organization in todays competitive global market economy actually adopt it? Carter Crockett (2005b), based on his recent doctoral studies of virtue in Scottish oil industry consulting companies,

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suggests that entrepreneurial ventures represent the optimal target for introducing an Aristotelian paradigm for contemporary organizations. Entrepreneurship represents a potential catalyst for this paradigm precisely because it operates in a context that is less marked by the competing interests, bureaucracies, empiricism and competitive pressures of their more established counterparts. Who, if not the entrepreneur, is ideally suited to wield this process of revolutionary change? Prospects for adoption by an established organization are more problematic. Dennis Bakke in his Joy at Work (2005), while not employing virtue language, describes how he tried to lead AES, a large energy company he co-founded and eventually headed as CEO, based on his belief that moral values are ends in themselves, being an integral part of the human experience and thus of daily work. However, Crockett is pessimistic about adoption of a virtue-based framework by any established multinational corporation. Such radical reorientation is too great a challenge even for the virtuous leader of an established corporation. Organizations need to be communities of virtuous purpose; it takes more than a great leader to make them so. However, there is reason for hope in the changing social and cultural environment of the 21st century. Expectations for business, in spite of, and perhaps even in reaction to, the recent spate of major organizational scandals, are increasing among workers, consumers, citizens and shareholders. Obeying the law, even if itself is a challenge, is no longer the moral minimum. Marc Gunther, in his book Faith and Fortune (2004), presents extensive, although anecdotal, case evidence of American company leaders seeking to reform their corporate cultures according to spiritual values or according to a sense of social responsibility, believing that good business, with a purpose going beyond generating prots lawfully, is essential for long-run survival. Lynn Sharpe Paine (2003) observes that society in recent years has started to endow the corporation with a moral personality. This is not a question of metaphysics but of pragmatics . . . a society cannot survive, let alone thrive, if it exempts its

most inuential and pervasive institutions from all notions of morality (Paine 2003: 97). Corporate organizations are now expected:
To conduct themselves as moral actors as responsible agents that carry out their business within a moral framework. As such, they are expected to adhere to basic ethical principles, exercise moral judgment in carrying out their affairs, accept responsibility for their deeds and misdeeds, be responsive to the needs and interests of others, and manage their own values and commitments. (Paine 2003: x)

Conclusion
Society is increasingly attributing prescriptive intentionality, even if only metaphorically in terms of ontology, to managements who do run organizations whose activities have moral impact on the global community. The interrelated aspects of mission, organizational culture and leadership are offered as intermediary components of a virtuebased framework for an ethical organization. Adopting this perspective could help a management understand purposefully, organize and lead its organization toward a better mission implemented within a supportive cultural context. The claims for the model must be qualied, however. The model is theoretical; its deductions are reasoned but unveried empirically. Further research and testing is thus needed. The focus is internal, presenting a simple theoretical deductive model for describing how interrelating the internal organizational components of mission, culture and leadership suggests a logical paradigm for establishing an organization promoting ethical practice by its members. This article does not propose this as the only way to conceptualize the organization and its culture, nor does it address how a corporation is to address the external issue of its social responsibility or how it should dene its corporate identity. Indeed, what an organization is, its ethos, does dispose its managements moral stance and behaviours regarding its stakeholders. These should be vital concerns for future theoretical development. Further renement of
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the virtue-based framework can be expected when research on these topics is addressed.

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