UNIVERSITY SCHOOLS OF BUSINESS AND

A NEW BUSINESS ETHICS

It was a matter of common note before the war, when we had time to think about educational affairs, that the youngest professional school appearing in all our larger universities was the school of commerce or business administration. Except for the occasional school of journalism this was the conspicuous development in university education. After three-quarters of a century of public education in this country business seemed at last about to have its professional school, following in the wake of the ministry, law, medicine, teaching, and engineering. Education in the United States furnishes in many respects an admirable field for historical study in this, if for no other reason, that the short space of threequarters of a century has witnessed the passing of the self-trained or office-made professional man in all but the oldest of the professions. Even the self-trained minister of the old type is disappearing. It is not many years since there were persons livingperhaps there are still a few-who could remember when the country physician quite regularly acquired his professional knowledge in the office of the local practitioner and went out to cope with all the physiological ills that men are heir to with no more of intellectual equipment and professional experience than his older colleague was able to provide. There are plenty of hale and hearty men who can recall the time when schools of law were not very old, and schools of engineering were "new-fangled" innovations, while schools of education and professional teachers' colleges still struggle for distinction with the older normal school. Even yet college and university teaching, which ought to represent the top round of the profession, can be entered only through the nose-grinding graduate school and the college of hard knocks, in which the young instructor's students must perforce suffer with him. And now comes the university school of business!

We are so constituted that any innovation must justify itself before it becomes a recognized part of our established institutions.

The question may well be raised, therefore, concerning this newest university experiment whether it has justified itself and so may hope for the attainment of that degree of recognition which has been grudgingly bestowed in the past upon its earlier rivals for professional distinction. The university school of business has had to contend with one obstacle to success not met with by other professional schools, with the exception of the school of engineering. The others have been founded to give better training for occupations that were already recognized as professions and subtly distinguished from business. The university school of business has had to undertake professional training for a non-professional pursuit.

It is not impossible, however, that business may become a profession. To whatever causes we attribute it, there is apparent in the world of business the germ of a new code of ethics, upon the development of which hangs a great part of the justification of the competitive system, already threatening to become an anachronism. The thing that is new is not the existence of a code; there has always been one, but since the breakdown of the mediaeval guilds the old code has had more of the nature of honor among thieves than of a professional ethics. One distinction between the professional man and the business man, as is sometimes pointed out, is to be found in the nature of the service rendered. The professional man renders a personal service; that is, he does not produce or deal in material commodities, as the business man does. That the line between profession and business is not clearly distinguishable at many points does not alter the fact that the world draws a distinction upon this basis, a distinction that, real or unreal, is recognized both by the professional groups and by the business

A more vital distinction, however, appears in the existence of ethical codes in the various professions which have only a rudimentary counterpart in business.

The professional codes of ethics set up norms of conduct in three directions. The physician, for example, must do certain things and must not do certain others because the public welfare so demands. When an epidemic threatens, physicians are usually called upon for a vast amount of extra work for which there is little

or no remuneration. The private practice of individuals among them may even suffer materially, with consequent financial loss, but the service asked for the public good is usually given freely and without complaint. The physician, in common with other professional men, has a code of ethics consisting of standards of conduct toward the public. On the other hand, he must not take another physician's patient under any ordinary circumstances without the other's consent, even if the patient very greatly desires it, because it is not, or may seem not to be, fair to his fellowpractitioner, and he must not undercut the established price. There are, as thus illustrated, norms of conduct respecting his relations with his fellows in the craft, matters of professional honor that are at least as old as the mediaeval craft guilds and are supported by the medical associations much as the old guilds supported and enforced the codes of conduct in each trade in the mediaeval towns. There are obligations also to his patient. For example, he must not reveal any facts he may discover concerning the private life of his patient, and he must hold himself subject to call by patients at any time, no matter how great may be his personal inconvenience. There are standards of conduct here which professional honor will not let him violate. The essence of the first and third of these codes is service, while the notion of service to the public weal was one of the forces originally behind the second, though in the main it operates against the public interest.

The threefold professional code has no parallel in business. Its germ can be found, but it is not even moderately well developed except at one point, where conduct toward competitors has been partially defined. The business man of a generation ago had practically no code of conduct toward the public, or at best only the rudiments of one. Even the code respecting competitors was in a low state of observance. Toward the customer the doctrine of caveat emptor was unscrupulously applied. The buyer had no rights outside the law which the seller was bound to respect. It is probable that to the typical clergyman and physician, and perhaps the typical lawyer and engineer, the quality of the service he performs looms up almost if not quite as large as the size of the income received. The genuine pleasure of the surgeon at the

successful outcome of a difficult operation seems many times to have no relation to the size of his fee. A difficult task well done carries its own reward, and the result, in the professions, is a genuine service to the patient or client and usually to the public. Popular suspicion, to be sure, points the finger of doubt at the lawyer, sometimes at the physician, and even on occasion at the clergyman, but the code is there, and the failure of individuals in these professions to adhere to it when they place financial return above the rendering of service appears the more conspicuous and is the more condemned because of the code. The professional man is taught from the very beginning of his professional training that his business, as well as his duty, is the service of the public. The business man is taught in the school of hard experience that his business is to sell goods. Even the manufacturer finds the selling end of his business regulating, if not dominating, his entire business policy. It is usually necessary to serve the public, in some measure at least, in order to sell goods, but the important thing is the selling. Of course the ultimate object is a profit from the sale, not the selling, but the end is held to justify the means, and selling becomes confused with service.' Business, in its ordinary meaning, is far from being a profession, not merely because it usually deals with material goods rather than with the performance of personal services, but even more because it lacks the ethical codes of service that distinguish the professions.

We must not be misled at this point by the existence of the service departments that have been established in recent years under various titles, principally among those who sell to retailers. These may seem to indicate that service is an ultimate factor, but no one seriously pretends that these are for the purpose of serving retailers better for any important reason except that of protecting the business of those who maintain the service. It is necessary that retailers should not be oversold too often or too much, nor

1 Service to the customer is, of course, not always equivalent to serving the public. It is recognized that some businesses may serve the individual against the public interest. But it is hardly likely that the business man whose code is the timeworn apology, "business is business," will take much thought concerning the public interest until he first learns to honor the elemental professional proprieties concerning conduct toward a patient, client, or customer.

allowed to fail if failure is easily prevented, because the business of the wholesaler or manufacturer may suffer in consequence; that is, service is secondary to selling. This will be found upon examination to be the relation between service and selling throughout the business world.

The business man is not wholly to blame for his weakness in ethical standards. The professional man, because he does supply a personal service, sees with greater ease the result of his service upon his patient or client and his relation through the service to the common weal. The business man sells to customers often unknown, frequently unseen, with whose personal welfare he is out of contact. Or he falls back upon the primitive instincts of the huntsman and warrior. Selling is a game, or a battle, in which you best your opponent, the customer, to as great an extent as you can. Even if the business man is in personal contact with the customer the game is likely to be paramount. If the game is not the dominating factor, the profit is, so let the buyer beware; service becomes a distinctly minor factor. The business man has relations paralleling those of the professional man. He has relations with his customers as individuals, with the public at large, and with his competitors. The difference is that the code of the professions is in the main the code of service, while the code of business is that of the battle and the game, a game with few rules to regulate the conduct of the players and no umpire. A few individuals transcend it, but the majority do not.

Business ethics is the result then of a system of private profit, appealing as it does to the propensities of the self-preservative and developmental group of instincts, strongest of all instincts in every form of conscious life from the lowest up to man, and of the instincts of the game, which rank but little higher in the scale of development and only a little lower than these in the intensity of their motivating power. But this is not the whole of the story. There is that in us which leads us, when circumstances are not too unpropitious, to seek to do well any task we have in hand. The motivating factor here is the instinct of workmanship. This is the instinct of which Thorstein Veblen writes that "it occupies the interest with practical expedients, ways and means, devices and contrivances of efficiency