Introduction *

Defining integrity in business *

Basic definitions *

Philosophical definitions *

A business definition *

What can a BP gain from integrity? *

Will a single definition suffice? *

The application of integrity in business *

The competitive analyst’s dilemma *

Case studies *

The presence of integrity: Cypress Semiconductor *

The absence of integrity: the Campeau-Federated merger *

Conclusion *

Endnotes *

Bibliography *

Among philosophers, there seems to be unanimous agreement that integrity is a virtue. However, this level of agreement is nearly equaled by disagreement over what, exactly, the virtue of integrity entails. To quote Cheshire Calhoun, "Clearly, integrity is a virtue, but it is less clear what it is a virtue of or why we might prize it." (Calhoun, 1995)

Judging by the literature, the debate over the true meaning of integrity has been raging for some time, and it’s safe to assume that it will continue raging as long as more than one ethics exists. In this paper, I shall make no attempt to end this debate, or even to contribute to it in a general way. Rather, I’ll focus on one particular application of this controversial virtue: its role in business. I contend that, given such a limited scope, choosing a definition of the virtue for businesspersons is much more straightforward. After making this choice, I’ll examine the affect of both its presence and absence in the environment of business.

To begin my search for a business definition of integrity, I’ll begin where all good definition searches begin: the Oxford English Dictionary.

The OED first defines integrity in a functional (vs. philosophical) sense:

1. The condition of having no part or element taken away or wanting; undivided or unbroken state; material wholeness, completeness, entirety.

While this theme of completeness may at first seem more applicable to brick walls than virtues, moral wholeness, and the consistent action it implies, is in fact common to the philosophical definitions I’ll introduce later.

Perhaps more appropriately to this paper, the OED continues:

3. a. Unimpaired moral state; freedom from moral corruption; innocence, sinlessness.

Here, some rather pointed moral judgements come into play; as in some of the philosophers’ opinions, this definition requires some agreement on the exact nature of moral impairment, corruption, innocence and sin before integrity can be rigorously defined.

Probably most relevant is this:

3. b. Soundness of moral principle; the character of uncorrupted virtue, esp. in relation to truth and fair dealing; uprightness, honesty, sincerity.

This definition combines the moral judgement criteria of 3.a. with the "master virtue" concept we’ll see in some of the philosophical definitions. This concept defines integrity as a "complex of virtues" (Solomon, 1992) comprising, by definition, other virtues, such as, but not limited to, the OED’s uprightness, honesty, and sincerity.

One feature of integrity missing from the OED is that virtues are often classified as either "personal"—concerned with evaluation of the actor by himself—or "moral"—concerned with evaluation of the actor by society (also called "social" virtues)(Becker, 1998). A person espousing personal integrity, then, doesn’t care whether society recognizes that he has the virtue or not; his own knowing is all that matters. One espousing moral integrity, however, will be concerned about how his "community of reasoners" evaluates his practice of the virtue.

With the OED definitions as a base, I’ll now turn to some philosophical definitions.

First, let’s look to the chairman of the virtue ethics board: Aristotle.

In Nicomachean Ethics, Aristotle never mentions the virtue of integrity by name; instead, he refers to moral strength. This virtue is broadly concerned with doing the right thing: while the morally strong man may find pleasure in things that violate the dictates of reason, he is not driven by them; in other words, he is tempted by the immoral, but has the strength to not act upon the temptation. While we can imagine that the morally strong man would adhere to other specific virtues like honesty (in resisting the temptation to lie), Aristotle does not attach such adherence to the definition of moral strength. Instead, he embeds moral strength in a rigorously defined system of ethics to which we can turn for well-reasoned answers about morality. If we give Aristotle our curiosity and thoughtful attention, in return we will get the whole ethical enchilada (uh…gyros?). True, Aristotle’s virtue ethics require a significant commitment to the development of a specific moral character, but the way to do this is clearly defined in the context of a complete moral system, not in arbitrary lists or fuzzy statements as we shall see in some other definitions.

Moving to the most straightforward of the modern definitions of integrity, I turn to the objectivist view: "’Integrity’ is loyalty in action to one’s convictions and values" (Peikoff, 1991).

The elegance of this definition is that, like Aristotle’s, it exists inside a coherent, rigorously defined—and amazingly simple—ethical system. It provides no laundry list of arbitrary prerequisite virtues necessary for integrity to hold. To be sure, the objectivists have high expectations of those hoping to earn the "integrous" title; however, they state those expectations in a very Aristotelian way, advising the integrity candidate to consult reason and knowledge in the face of temptation: "Integrity means loyalty not to a whim or delusion, but to one’s knowledge, to the conclusions one can prove logically" (Peikoff, 1991). Of course, for the objectivist, these conclusions ultimately point back to objectivism’s metaphysical axioms [1], upon which the entire objectivist ethics is constructed. That is to say, the objectivist’s view of integrity presupposes that "one’s convictions and values" are based upon proper objectivist ethics, built up from objectivist metaphysical axioms. The objectivist does not allow the objectively vicious agent (the Nazi, the cannibal, etc) who wholeheartedly believes in the moral correctness of his vicious beliefs to be integrous.

Unlike what I’ll call the more normative [2] definition of integrity that follows, however, the objectivist view is elegant in its reliance on intellectual reflection and knowledge to provide the moral yardstick against which integrity is measured. Rather than relying on some list of virtue-prerequisites for integrity, objectivism lays down a moral groundwork and then advises us to use our brains to determine the prerequisites. Interestingly, it also allows us to change our minds in the face of new knowledge: "it is not a breach of integrity, but a moral obligation, to change one’s views if one finds that some idea he holds is wrong" (Peikoff, 1991).

In keeping with its egoistic basis, objectivism rejects the opinions of others as relevant to integrity; in order to change your convictions, you must reason through the change yourself. You may modify your views based on the input of a respected friend, but the ultimate decision is up to you; no change in conviction should result solely based on someone else’s suggestion.

In case you’re wondering about the moral vs. personal status of objectivist integrity, it, like all things objectivist, is fundamentally personal; society’s opinion is irrelevant to the objective truth that the individual discovers for himself.

Turning now to a normative definition of integrity, we’ll look at Cheshire Calhoun’s "social virtue" view.

Says Calhoun, "…integrity may be a master virtue, that is, less a virtue in its own right than a pressing into service of a host of other virtues—self-knowledge, strength of will, courage, honesty, loyalty, humility, civility, respect and self-respect" (Calhoun, 1995).

I call this approach "normative" because with it, Calhoun supplies a list of "do’s"—her "host of other virtues"—necessary for integrity to exist. While only the most diehard contextualist [3] (a Misguided Business Student, for example) would argue against virtues such as honesty and strength of will being prerequisites for integrity, others on her list are subject to debate. For example, consider the different views of loyalty held by Kant and Acquinas; or consider the objectivist view of humility: "the basic virtue of a mystical morality; it is the only virtue possible to men who have renounced the mind" (Rand, 1964). Hardly, I think, what Calhoun had in mind.

In light of this, Calhoun’s following assertion that, in pressing these prerequisite virtues into service, the actor is "trying to stand for what, in her best judgement, is worth persons’ doing," seems self-contradictory, or at least narrow-minded. First, the Kantian’s notion of integrity would require him to eschew loyalty, even to his own mother, if loyalty meant he had to lie to save her from the "Nazi at the door"; the objectivist would likely take offense at the idea that humility was necessary for her to possess integrity. Second, Calhoun refers to integrity as a "social" virtue, which is unsurprising given her view’s reliance on the prerequisite list of virtues that society must somehow agree upon for integrity to exist; however, her reference to a person’s "best judgement" in determining what’s worth doing makes it sound a lot like a personal virtue. Who’s to judge Calhoun’s integrity? The actor or society? Both, it seems, and that would seem to make it difficult to usefully define.

It is more in the spirit of virtue ethics’ teleological nature, I think, to avoid the potential for conflict such as that which is inherent in specifying lists like Calhoun’s (not to mention her contradictory judgement criteria), and instead define integrity in terms of actor-specific moral contemplation [4].

Another counter-teleological feature of Calhoun’s integrity is its acceptance that "neither ambivalence nor compromise seem inevitably to betoken lack of integrity." If one rationally defines the end he is seeking, and aligns his morals in order to achieve that end, there is no room for ambivalence; an end is an end. Likewise, there can be no compromise on moral issues; right is right. Contrast Calhoun’s approach with Objectivism’s unwillingness to "bargain about morality," regardless of the stature of the bargainer (Rand, 1964).

I turn now to Lynne McFall’s identity-based definition of integrity, which takes a completely different view of the basis of integrity than Calhoun and Rand.

I think McFall’s view is best summed up in the following quote:

Unless corrupted by philosophy, we all have things we think we would never do, under any imaginable circumstances, whatever we may give to survival or pleasure, power and the approval of strangers; some part of ourselves beyond which we will not retreat, some weakness however prevalent in others that we will not tolerate in ourselves. And if we do that thing, betray that weakness, we are not the persons we thought; there is nothing left that we may even in spite refer to as I.

I think it is in this sense that some commitments must be unconditional: they are conditions of continuing as ourselves.

It seems that McFall has handily dismissed both Calhoun’s prerequisite list and Rand’s reliance on a deep, rationally derived ethics and replaced it with a virtually unassailable appeal to personal commitment.

This definition might be considered even more foundational (i.e. lacking criteria that are dependent on a specific philosophy) than Rand’s; after much analysis, in fact, McFall asserts near the end of her article that "every morality is, fundamentally, a personal morality." This presentation dissociates integrity from both Calhoun’s list and Rand’s ethics, but elsewhere stipulates that integrity is granted with "social strings attached," and that in order to practice it, the actor must be integrous about principles that society deems reasonable; integrity is thus both personal—defined by the individual—and "moral" or social—accommodating society. This definition is attractive from a contextualist point of view as it allows anyone with strongly held beliefs—as long as they are reasonable—to have integrity. Unfortunately, without an agreed-upon meaning for "reasonable," we find ourselves in a bind similar to that provided by Calhoun: the exact meaning of integrity is open to broad interpretation, depending on the philosophical bent of the interpreter.

McFall closes with a quandary that illustrates this. As the Captain of a ship, she must choose between saving either a pair of drowning strangers on one side of the boat or her husband on the other. Whichever choice she makes, she concludes, she would not be morally blameworthy. Contrast this to the objectivist view that, should she risk her life to save the strangers, she would be committing an immoral act, since she would be valuing someone else’s life above her own, even though that person supplied her with no value in return. If she failed to go after her husband (assuming she claimed to love him), she would actually be violating her own integrity—either by lying about her actual love for him, or by failing to be loyal to her value of love. (Rand, 1964)

In the discussion so far, I have concentrated mainly on the differences in the various views of integrity; they also, however, share a great deal of common ground. In this analysis I’ll stick to the mentioned modern philosophers, since they share the broadest areas of clear overlap. Points of intersection between Peikoff/Rand, Calhoun, and McFall include:

• Standing up for principles—This is the fundamental precept behind every definition presented (for purposes of overlap, I’m not requiring that those principals be defined). The objectivists state it simply as loyalty to one’s values; for Calhoun it is standing for what is worth doing; for McFall, it is sticking to one’s principles in order to maintain one’s identity.
• Conditional honesty—All three authors hold honesty as a prerequisite for integrity. Calhoun explicitly states it; McFall refers to Taylor’s (1981) statement of it; Peikoff implies it by the loyalty to principle that his integrity requires. Likewise, all three accept dishonesty when it’s required to, as Peikoff put it, "protect one’s values from criminals." For him, this may be the kidnapper seeking one’s child; for McFall, it’s the Nazi seeking the Jew; for Calhoun, it would be the potential destroyer of what one stands for.
• Consistency—This goes back to the undividedness of the functional definition of integrity. Rand describes it in terms of unbreachable convictions; Calhoun’s definition encompasses Harry Frankfort’s "non-wontonness;" and a complex definition of coherence is thoroughly treated by McFall in her identity-based approach.
• Willingness to bear unpleasant consequences—Carrying out the above three precepts is often not easy. For Peikoff, "neither one’s own feelings nor those of others" must prevent it; Calhoun speaks of internal and public obstacles; McFall uses unpleasant consequences to refute bases for integrity that offer no possibility of its loss.

So it seems that, as individuals, we have a plethora of integrities from which to choose (the three above represent only a fraction of the available research). Realistically, each of us will do so based upon her own personal philosophy, and more often than not, personal integrity will combine elements of several popular definitions with some components of our own invention.

But what about integrity in business? Does the somewhat standardized nature of business allow us to pick or assemble a specific "best" definition of business integrity?

To answer this, we must look at both what a businessperson (BP) can gain from the virtue of integrity, and whether we can accept a single definition of integrity for BPs in the face of so much disagreement over the general definition.

Let’s look at the points of agreement among our cited philosophers, and how the BP can gain from each:

• Standing up for principles—Assuming that his principles align with his own and the business’s goals (an assumption we shall treat in the next section), integrity can provide the BP with both personal moral satisfaction and moral guidance in achieving the business’s goals.
• Conditional honesty—Principle-based integrity will keep the BP consistently honest with her superiors, colleagues, subordinates, customers and suppliers. From people of most philosophical persuasions, this will earn her trust and respect, which may, in turn, simplify negotiations, improve productivity, perhaps even get her a raise. Integrity will also serve as a consistent and principled guide as to what circumstances call for suspension of honesty. For example, the BP may be tempted to lie to a supplier he can’t pay in time, but the integrous BP won’t; in the long term, this will earn the respect of the supplier and may even lead to more lenient financing terms. If the BP lies and gets caught, on the other hand, his company could face legal action.
• Consistency—As with honesty, consistency will improve interpersonal relationships. Coworkers will trust the consistent BP with more important tasks, for example.
• Willingness to bear unpleasant consequences—BPs are faced with this prospect often. For example, assuming the BP’s goal is to stay in business, layoffs may be necessary to keep the company running. Laying people off is never pleasant, but in order to maintain her integrity, the BP would do it.

In addition to these benefits, research has shown that integrity:

• Can be correlated to job performance and is negatively correlated to counterproductive behaviors in BPs (Ones, 1993).
• Is a key trait in effective business leaders (Kirkpatrick, 1991).
• Is a key determinant of trust in organizations (Hosmer, 1995).

We also find that traditional business ethics requires the BP, when facing an ethical quandary, to either defer to a superior or to step outside of her business role and adopt the persona of a temporary ethicist, deciding the proper course based on some externally-supplied principle (Dobson, 1997).

Neither course is truly integrous. Turning your ethical decisions over to a superior not only short-circuits your opportunity to stand up for your principles; looking at it from the perspective of a virtue ethicist, it robs you of the chance to nurture your own eudaimonia.

Stepping outside of your professional role can reasonably be described as disintegrous: on its face, it is a systematically imposed, purposeful fracturing of your identity as a professional. This practice would seem to oppose the cultivation of virtuous moral character and, in fact, replace it with the cultivation of a fundamentally schizophrenic, situation-dependent, morally fractured character.

In light of all of this, the case in favor of integrity for businesspersons seems strong.

If integrity is good for BPs, what entitles them to a set definition of it when philosophers can’t agree on one for themselves?

An all-encompassing, ideal definition of the virtue of integrity for businesspersons will probably prove as illusive as a general definition on which both Peikoff and Calhoun could agree. However, given that the business environment is a specialized case with known requirements, I assert that a functional definition will be easier to agree upon in its context.

Since integrity presupposes adherence to principle, it follows that any definition of integrity (whether general or intended for business) must rely upon some specific ethical system to supply the principles. This is the most fundamental point of disagreement among current definitions; examining just the definitions put forth above, we find a hopeless disconnect between the underlying principles to be upheld, and this disconnect is one of the issues that prevents the three definitions from being fully compatible.

However, these definitions are representative of the diversity of ethical thought among individual philosophers—a heterogeneous bunch who often possess divergent opinions about right and wrong, and who, in fact, we expect to argue about it. Businesspersons, on the other hand, have a generally easier time agreeing on what’s right in business: making money.

Simply defining an ethics so that it facilitated the accumulation of profits, however, would likely result in a corrupt ethics; after all, the proverbial bank robber aims for much the same goal.

Fortunately, unlike the bank robber, businesses are incented to avoid immorality. Of course, it is tempting to argue that businesses should, like individuals, do the right thing because it is the right thing to do; in fact, an interesting separate exercise would be to develop a business-specific teleological ethics.

But more pragmatically (and briefly), in order to function, businesses must interact with other entities: customers, suppliers, regulators, partners, employees, etc. Most businesses are dependent in some way upon long-term relationships with these other entities. An obvious example is the customer: sell him a bad widget, and next time he will buy his widget from someone else; he may also encourage his friends to do the same [5]. Pay your suppliers late often enough, and they may stop supplying you—or impose monetary penalties—or cut a deal with your competitor. Lie to the regulators and you risk having to transfer even a larger portion of your profits to the state. Cheat your partner and you run the risk that at some point he’ll find out and end the relationship—or, if his ethics are more akin to yours, perhaps cheat you back. Undercompensate or overwork your employees and they will go work someplace else.

These relationships provide a very strong argument in favor of business ethics in general, and integrity in the application of those ethics in particular. Beyond the philosophical arguments that can be made for integrity in the application of ethics, businesses again face pragmatic incentives: the entities they deal with generally practice some form of ethics, and they talk to each other. If I treat one group of employees well and another poorly, I run the risk that the well-treated group’s ethics will make them sympathetic to the poorly-treated group (on a societal scale, such behavior is evident in non-minority support for the civil rights movement). If I abuse my customers, they may convince another company that treats them better to enter the market and compete with me.

I think this brief digression is sufficient, for my purposes, to illustrate the business profitability of both ethics in general and integrity in particular.

We are finally ready to select a definition of integrity for the businessperson.

Looking beyond the overlapping items in the three definitions outlined above, we find that the objectivist approach appears to be the simplest and most self contained. Unlike the definitions of McFall and Calhoun, it does not require us to:

• Accept an arbitrary list of prerequisite virtues;
• Reconcile a personal vs. social/moral definition;
• Supply our own external ethical system that somehow fits into the authors’ partial ethical framework.

Besides these features, objectivism is attractive because:

• It provides probably the most profit-driven system of ethics in existence. Indeed, profit and virtue are inseparable to the objectivist; according to Francisco d’Anconia in Atlas Shrugged, "The words ‘to make money’ hold the essence of human morality." (Rand, 1957)
• Integrity is one of its central virtues.
• Its definition avoids the ambiguity and contradictions present in McFall’s and Calhoun’s.

While I believe that the objectivist approach to integrity is the most sound, not only of those few examined here but in general as well, I recognize that there are many other ethical systems that can be applied to business. However, a comprehensive treatment of each one is obviously beyond the scope of this paper, so I’ll proceed using objectivism.

Now that we have a definition of integrity for businesspersons, let’s examine some cases that demonstrate the impact of its presence and absence. First we’ll look at a hypothetical; then, we’ll examine integrity in a couple real-world cases.

To illustrate the potential complexity of business quandaries, I’ll focus on a common and fairly straightforward example: gathering competitive intelligence.

Competitive analysts are thought of by some to be "corporate spies;" their job is to gather information on their company’s competitors. The exact methods they use to do this vary from industry to industry, but generally include interviewing customers, interviewing competitors if possible, consulting third-party research, consulting competitive literature, examining a competitor’s product firsthand, and sometimes even searching through the competitor’s trash.

Since competitors in any industry tend to hire people with similar skillsets, workers often leave one company to go to work for its competitor. Is a friend and former coworker, now employed by a competitor, fair game for the gathering of competitive information?

Consider the case of Vic, a competitive analyst for Concave Computer Corporation, who meets his friend and former coworker Craig for drinks. Craig now works at Concave’s competitor Superior Graphics Inc.

His judgement loosened by several drinks, Craig begins talking about his project: a secret future product of strategic importance to Superior. Superior has been pummeling Concave in the market for the last year, and from the little Vic has been able to learn about the new product, it will allow them to continue to do so. Concave’s profitability—and in fact, it’s ability to continue as a going concern—depend on its ability to effectively respond to Superior’s new product.

If Concave goes under, thousands of jobs and hundreds of millions of dollars of invested capital will be lost; furthermore, hundreds of customers will find themselves with worthless equipment, for which no service or upgrade path is available. So serious is the disparity in performance between Concave’s and Superior’s products that there’s a greater than 50% chance this will in fact happen within a couple years of Superior’s next release. On the other hand, given how far behind they are, if Concave can learn enough about Superior’s plans to respond, the best they can hope for is a marginally profitable second-place position in the market.

Vic has three choices: 1. He can tell Craig to shut up; 2. He can listen passively, taking what Craig gives him but not soliciting more; or 3. He can actively egg Craig on, taking advantage of the situation to collect as much data as possible.

What should Vic do?

First, Vic must decide his ethical allegiance: is it to himself or to the company?

Objectivism’s definition of integrity—"loyalty in action to one’s convictions and values"—makes this easy: it is clearly to himself. Therefore even if Concave’s credo is "profit over morality", Vic is not bound to it.

To decide between the three choices given, Vic must next evaluate his objectivist convictions.

Objectivism’s key virtue is rationality, so Vic might be tempted to think through the situation rationally and see where that takes him; as explained above, the logical conclusion of his obtaining Craig’s secrets is Concave remaining in business; the logical conclusion of his not obtaining them is bankruptcy. Since Vic’s job makes him happy, and objectivism dictates that happiness is the only moral purpose of man’s life (Rand, 1957), he should conclude that integrity requires him to gather as much information as possible from Craig.

However, this analysis too hastily dispenses with the other objectivist virtues that derive from rationality, namely independence, honesty, justice, productiveness and pride (integrity is on the list too, but since Vic’s goal is to properly apply it, he must examine the others).

Independence is the most relevant objectivist virtue to Vic’s situation. To quote Rand, speaking through Howard Roark:

Everything [man] needs has to be produced. And here man faces his basic alternative: he can survive in only one of two ways—by the independent work of his own mind or as a parasite fed by the minds of others. The creator originates. The parasite borrows. (Rand, 1971)

Vic might rationalize this admonition away by arguing that basic research is necessary for his job, and that this is inherently the work of others, yet little could be accomplished in modern business without building on the work of others; even Roark, as an architect, did not invent reinforced concrete or the elevator or the idea of a foundation. Vic will have to independently work on the information he gets from Craig in order to make it usable to his business, just like Roark works with other men’s architectural innovations to further innovate in his designs. In fact, Vic might argue, integrity requires him to use Craig’s information so that he can pursue the virtue of productiveness.

But is Vic productively adding value to basic research—or violating his friend’s trust? Craig’s conversation can be compared to accidentally dropping a hundred-dollar bill in Vic’s house and never realizing it. Vic can certainly benefit from keeping the money; most of us, however, would give it back. The objectivist would do so because he recognizes that the money is Craig’s property, to which Craig has exclusive rights unless he explicitly forfeits them. In this sense, Vic keeping the money would amount to theft. Craig’s words are no different, except that Vic can’t "give them back"; once he hears them, it will be very difficult to avoid allowing them to affect his job in some way. Therefore, in order to act with integrity, Vic must stop Craig at the first indication that he is starting to give away secrets.

United States law requires businesses to strive for profit and also dictates thousands of improper ways of doing this. What no law can provide, however, is an ethical system—or the integrity to uphold it—which will guide the businessperson in the application of these laws. It’s not surprising, then, that the business world provides plenty of examples of both the application of integrity and the lack thereof. An examination of one of each follows.

In April of 1996, T.J. Rodgers, president and CEO of Cypress Semiconductor, received a letter from Sister Doris Gormley of the Sisters of St. Francis, a Philadelphia convent. Sister Gormley, the order’s director of corporate social responsibility, was writing to inform Rodgers that the sisters would vote their 7,000 shares of Cypress stock (which were part of a retirement fund) against Rodgers’ proposed slate of directors, on the grounds that Cypress’s board should reflect the "equality of the sexes, races, and ethnic groups." Cypress’s board has no women or minority members.

Like our friend Vic, Rodgers faced three possible courses of action: 1. He could change the makeup of the board to suit Sister Gormley; 2. He could ignore the letter, as did all the other CEOs that received it (it was a form letter that the sisters routinely sent to companies with board compositions they didn’t approve of); or 3. He could take a stand in defense of his ethics.

Rodgers chose the last option, and wrote a 6-page, single-spaced response defending his practice and questioning the morality of choosing directors based on "investors’ racial and gender preferences." The letter was subsequently printed in numerous business journals (Cypress, 1996).

I don’t know whether or not Rodgers is an objectivist, but his response to Sister Gormley makes it quite clear that he is a man of both clearly-thought-out ethics and integrity.

Rodgers’ explanation of the makeup of his board centers around what is necessary to provide value to shareholders. To do this, he says, the company must be well managed by an experienced board—and like it or not, given the selection criteria he must use to build that board, his potential pool of candidates consists almost entirely of middle-aged white men.

This is an extremely controversial thing for the president of a large corporation to say to a shareholder, and the shareholder’s status as a nun only makes Rodgers look like even more of a jerk. But besides standing up to a nun and a shareholder that he deemed immoral, Rodgers risked alienating a large portion of the public and even of his other shareholders by taking a principled stand against the broadly popular concepts of political correctness and quotaism.

His letter even includes damning arguments against other forms of irrational business. For example, he condemns so-called "ethical mutual funds" by demonstrating, using real dollars, their inferior return, and its ultimate impact on wealth and people’s lives. He goes on to expose the real societal damage that would be caused by a bill then before congress that would provide tax subsidies to "responsible corporations."

While it is clear from Rodgers’ beliefs that integrity required him to reject the Sister’s suggestion, did it require him to outline his reasons, and to do so in a public letter?

I assert that objectivist ethics do require this. According to Ayn Rand, "One must never fail to pronounce moral judgement" (italics hers). She follows this with "one must make one’s moral evaluation known to others, when it is rationally appropriate to do so" (Rand, 1964). Rodgers knew that the nuns had sent their letter to other companies; he knew the widespread acceptance of its views in general society and even in government and in many businesses; and he could safely assume that his silence may be interpreted as an inability to articulate a response, or even as cowardice or sanction. An objectivist’s view of integrity, then, required him to speak out.

In 1987, Canadian retail mogul Robert Campeau set his sights on Bloomingdale’s, then the most profitable department store in the U.S. He initiated a hostile takeover bid against Bloomingdale’s parent, Federated Department Stores, which developed into a bidding war between Campeau Corp. and Macy’s. As Campeau and Macy’s bid up Federated’s price, its uncertain future crippled operations and resulted in an exodus of managers, lowering its value.

Near the end of the war, Campeau offered to cede victory to Macy’s, if Macy’s would agree to sell him Bloomingdale’s. They didn’t, and in retaliation, Campeau submitted a bid that Macy’s wouldn’t match even to save face. Campeau acquired Federated, but the burden of the debt he incurred to do it, coupled with the diminished value of what he got, caused him to declare bankruptcy less than three years later (Bazerman, 1992).

Did Campeau act with integrity?

From the objectivist point of view this is a good case, because it clearly demonstrates the ambiguity of non-objectivist approaches to integrity.

For example, the Aristotelian virtue ethicist might argue that Campeau demonstrated integrity by upholding the virtues of honor and high-mindedness. On the other hand, the Aristotelian might also argue that he lacked integrity, citing vanity and over-ambition.

Calhoun might argue integrity based on strength of will and courage; she might argue against it based on lack of humility and civility.

The objectivist view, however, is unambiguous: Campeau lacked integrity because he violated rationality, that Holy Grail of objectivist virtues (Peikoff, 1991).

While determining the value of a business is not entirely straightforward, every business’s purchase price can reach a point at which the vast majority of businesspersons, based on independent analyses of several valuation methods, will objectively agree that buying it would be irrational. Campeau’s bidding war drove Federated’s price far beyond that point. To make good on his offer, he then had to incur levels of debt that, by similar objective business measures, were equally irrational. This entire exercise was clearly not in the best interests of his shareholders, and the only possible explanation for his behavior was that he was on a personal crusade to win what he saw as a war of egos against his counterpart at Macy’s.

Which leads us to the potential objections against this line of reasoning from those who don’t understand objectivism. Objectivism, they may argue, is fundamentally egoistic—so how could Campeau go wrong by being egoistic? The problem, of course, is one of semantics: Campeau was being egotistic, not egoistic.

Others might consider Campeau to be exhibiting pride—an objectivist virtue. But objectivist pride is "the commitment to achieve one’s own moral perfection" (Peikoff, 1991). Objectivist pride requires one to grapple with moral issues using only logic, which produces "a conviction of his power to deal with reality and achieve his goals." It has nothing to do with personal vendettas against competitors and everything to do with careful contemplation of moral issues—including one’s responsibility to his stockholders.

Still others might inquire about Rand’s "virtue of selfishness" (Rand, 1964), pointing out that if Campeau was anything in this deal, he was selfish. But objectivist selfishness is simply "concern with one’s own interests," and in the bidding war, Campeau was acting as the CEO of a public company, having voluntarily contracted with its shareholders to make them money; therefore his self-interests in this role were defined by the shareholders’ interests—and no rational case can be made that his behavior was in their interests.

The task of defining integrity is impossible in absence of ethical context, and this implies that there will be as many different definitions as there are systems of ethics.

Viewing integrity from the eyes of the businessperson, however, offers a concrete situational context that can make the selection of an ethical system more straightforward, thus easing the task of defining integrity. While many ethical systems may be considered workable in business, I believe objectivism provides an ideal ethics for the businessperson, and with this ethics comes a rigorous, easily applied definition of integrity.

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