University of Missouri Professor and Author Talks About Moral Restraint
By Chris Fawson, Dr. Vernon Maughan Buehler and MaRee C. Buehler Endowed Professor
In September 2012 the Huntsman School of Business hosted University of Missouri Professor David Rose, a distinguished scholar and author of the recent book “The Moral Foundation of Economic Behavior.” In his book and his presentations on campus, Professor Rose emphasized how “duty-based moral restraint” is the foundation of a great society.
David Rose argues for "duty-based moral restraint."
During a seminar, organized by the Huntsman School MBA association, Dr. Rose explained that business schools should reassess how they teach business ethics. In particular, he showed how focusing on outcomes is not a useful foundation for trust or cooperation. Instead, he claimed that trust and cooperation are based on a person’s commitment to a fundamental morality. Of particular interest to Huntsman students was how Professor Rose's emphasis on duty reflects Jon Huntsman's example of basing his business practices on a moral foundation.
In his book "Winners Never Cheat,” Mr. Huntsman shared a story about finalizing the sale of a 40% stake in a division of his company with a handshake. Due to some unforeseen challenges, the buyer was not able to finalize the purchase for several months — a time in which the Huntsman assets significantly increased in value. While the buyer offered to renegotiate the sale price based on the increased value, Mr. Huntsman insisted on the original price that was sealed with his handshake. Mr. Huntsman concluded that, legally, he could have captured the profit for himself — but in so doing, his reputation for fair dealing would have been diminished, and he was not willing to engage in any activity that tarnished his reputation or his integrity.
“I never had to wrestle with my conscience or look over my shoulder,” he wrote, ”My word was my bond."
Univeristy of Missouri Professor David Rose Speaks to faculty and students.
Photos by Donna Barry
Similarly, Professor Rose asserts in his book that, "Since even carefully written contracts cannot anticipate every possible contingency, moral prohibitions reduce the risk of using contracts by eliminating the fear that an unforeseen event will produce windfall benefits or costs that will not be shared equally because the event confers a bargaining advantage to the other party or parties. Those who obey the overarching moral prohibition against behaving opportunistically in any way will always endeavor to abide not only by the letter of the contract, but also by the spirit of the contract.”
In his afternoon seminar with faculty and students, Dr. Rose explained the importance of a society being filled with “unconditionally trustworthy individuals.” He asserted that the moral foundation of economic behavior is to decide to be unconditionally trustworthy. Choosing to always obey moral principles, according to Rose, is what makes capitalism possible and is the prerequisite for the honorable practice of business.
At the Huntsman School we are committed to better understand the moral aspects of economic behavior. It is an important part of the legacy passed to us in the lifelong example of our benefactor, Jon M. Huntsman. Dr. David Rose’s visit this week provoked a more thoughtful consideration of principle-based behavior and ethical leadership.