2.3 Different approaches to corporate governance  (Page 5/9)

The Prisoner's dilemma is discussed throughout the literature in business ethics. For a novel and insightful discussion in the context of corporate responsibility see Peter A. French, 1995 Corporate Ethics from Harcourt Brace College Publishers.

A short footnote on human nature

• One important means for classifying different approaches to corporate governance is to reflect on the associated account of human nature. This is a very complex issue but, fortunately, political philosophy provides us with some useful insights.
• Thomas Hobbes in the Leviathan presents a comprehensive psychological analysis of human nature based on seventeenth century physics. The focal point of this analysis is the human individual's unlimited pursuit of desire. Without external checks (primarily the threat of punishment imposed by a powerful sovereign) the State of Nature (where human individuals pursue self interest without external checks) is identical to a State of War . This war of all against all is "solitary, poore, nasty, brutish, and short."
• Hobbes's view has been characterized by C.B. Macphearson as "possessive individualism" which portrays the self as the possessor of its own attributes including the property acquired through its actions. This leads to a view called atomic individualism which is based on the claim that the self has its characteristics and determinate structure prior to and independently of any social interaction.
• Jean-Jacques Rousseau offers a brilliantly original criticism of Hobbes' conception of human nature in his Second Discourse, the Discourse on the Origin of Inequality . According to him, Hobbes's characterization of human nature in the State of Nature is actually a description of the human corrupted by society and the acquisition of property. "The first person who, having enclosed a plot of land, took it into his head to say this is mine and found people simple enough to believe him, was the true founder of civil society. What crimes, wars, murders, what miseries and horrors would the human race have been spared, had someone pulled up the stakes or filled in the ditch and cried out to his fellow men: "Do not listen to this imposter."" Rousseau argues that before the notion of property, the human's desire to preserve self was balanced by the social feeling of pity brought forth by the suffering of others. Only the unchecked pursuit of property (seen in terms of exclusive possession) would bring the motive of self-interest into conflict with natural pity.
• In opposition to Hobbes's atomic and individualistic self, a group of political philosophers, beginning with Aristotle, see the self as primarily social. Aristotle characterizes the human as a political animal (a being who naturally constructs a social organism called the "polus"). Sandel describes a "thick self" constructed out of familial, social and political content; this content is integrated into the core of the self. Werhane's description of this "social animal" is worth quoting in full: "In that socialization process, we develop a number of interests, roles, memberships, commitments, and values such that each individual is an historical, cultural, and social product, a pluralistic bundle of overlapping spheres of foci, a thick self or selves....[T]here is no self as precritical, transcendental subject, totally ideal spectator or dispossessed subject.
• Thus a series of views of human nature emerge that are instrumental in forming different approaches to corporate governance. Hobbes's atomistic individualism will favor the compliance approach mandated by agency theory as directors set up external checks to self-serving managers. Rousseau's more nuanced view would require structures to hold the pursuit of self-interest in check while strengthening the equally natural impulses toward socializability and cooperation. The social conception of the self would treat the corporation as an environment where managers, as stewards, recruit employees who will quickly commit to the central corporate values and then develop supporting structures and procedures to help their colleagues find meaningful work while fulfilling social, corporate objectives.