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Don Quixote and the Problem of Idealism and Realism in Business Ethics

Published online by Cambridge University Press:  23 January 2015

Sherwin Klein
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Abstract:

I discuss the characters Don Quixote and Sancho Panza and their relationship in order to understand better the place of idealistic theory and realistic practice in business ethics. The realism of Sancho Panza is required to made the idealism of Don Quixote effective. Indeed, the interaction and development of these characters can serve as a model for both the effective communication between and blending of the idealistic moral theoretician and the practical businessperson. Specifically, I argue that a quixotified Sancho Panza, as a combination of theoretical idealism and practical realism, is necessary for managerial statesmanship. I first consider the position that this concept is unrealistic. In the final section, however, I show that a number of leadership and business theorists believe that managerial statesmanship requires a quixotified Sancho Panza. I also consider the question, what helps to make a quixotic vision for business ethical, and what is its content?

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Articles
Information
Business Ethics Quarterly , Volume 8 , Issue 1 , January 1998 , pp. 43 - 63
Copyright
Copyright © Society for Business Ethics 1998

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References

Notes

1 Thomas J. Donaldson and R. Edward Freeman, Business as a Humanity (New York: Oxford University Press, 1994), p. 4.

2 Richard T. De George, “Business as a Humanity: A Contradiction in Terms?”, in Thomas J. Donaldson and R. Edward Freeman, Business as a Humanity (New York: Oxford University Press, 1994), p. 16.

3 The term “practice” is intimately related to the term “practical.” It connotes what is learned from experience (often repeated)—e.g., skills or expertise—or from action rather than from abstract theory or speculation.

4 The chivalric hero has been discussed in business ethics. James E. Chesher, for example, contrasts what he calls “the knight in shining armor and the man in the grey flannel suit.” He says, “The knight seeks to better the condition of others in the world, the entrepreneur seeks to better his own lot; the knight risks life and limb for the greater good of others, the entrepreneur risks capital (often not his own) for greater personal wealth. The knight has heart and mind turned toward the highest light, the entrepreneur is single-mindedly calculating his own advantage. In short, the knight seems to be standing on high moral ground, and everything he represents, from intention to consequence, seems opposed to the ideals of the entrepreneur” [James E. Chesher, “Business: Myth and Morality,” in Business Ethics and Common Sense, ed. Robert W. McGee (Westport: Quorum Books, 1992), p. 48].

5 The Portable Cervantes, trans. and ed. by Samuel Putnam (New York: The Viking Press, 1951), p. 202.

6 Putnam, p. 297.

7 Irving Kristol, Neo-Conservatism: The Autobiography of an Idea (New York: The Free Press, 1995), pp. 184-199.

8 Kristol, p. 184.

9 Kristol, p. 184.

10 Kristol, p. 184.

11 Indeed, some people considered to be intellectuals have preferred, in certain areas, the common sense of the “ordinary” person to the so-called wisdom of certain intellectuals— usually academics. Kristol, who is considered an intellectual, seems to agree with this view. He says, “But even today, the masses of people tend to be more ‘reasonable,’ as I would put it, in their political judgment and political expectations than are our intellectuals. The trouble is that our society is breeding more and more ‘intellectuals’ and fewer common men and women” (Kristol, p. 168).

12 In the introduction to Don Quixote de la Mancha [trans. Charles Jarvis (Oxford: Oxford University Press, 1992)], E. C. Riley suggests that the reader perceives the dignity of Don Quixote in spite of the ridicule heaped upon him. Referring to Book II of Don Quixote, he says, “Don Quixote, the would-be hero, is now received in mockery as a celebrity, yet he somehow manages to transcend the absurdity of his circumstances by preserving an essential dignity which raises him above the level of the jokers and hoaxers who go to such lengths to get a laugh out of him” (XIII).

13 Don Quixote says, “How is it possible for you to have accompanied me all this time without coming to perceive that all the things that have to do with knights-errant appear to be mad, foolish, and chimerical….Not that they are so in reality; it is simply that there are always a lot of enchanters going about among us, changing things and giving them a deceitful appearance….So, this that appears to you as a barber’s basin is for me Mambrino’s helmet, and something else to another person” (Putnam, pp. 262-263). These deceivers, he suggests, deceive others, but not our hero, about the true worth of Mambrino’s helmet.

Don Quixote is called mad because he is thought to be an incurable dreamer. But is it so easy to distinguish “dreams” from reality? Peter F. Drucker suggests that when President Jimmy Carter “made establishment of Human Rights a goal of American policy and prerequisite to giving American aid,” he was ridiculed as a dreamer. “Viewed twenty years later,” Drucker says, “he may have been the realist and the dreamers are the believers in the efficacy of the Free Market” [Managing in A Time of Great Change (New York: Dutton, 1995), p. 336]. (Drucker argues that “the Free Market will not produce a functioning and growing economy unless it is embedded in a functioning civil society, with effective Human Rights a minimum requirement”—Drucker, p. 337.)

14 Benedetto Croce, “The ‘Simpatia’ of Don Quixote,” in Cervantes Across the Centuries, eds. Angel Flores and M. J. Benardete (New York: Gordian Press, 1969), p. 189.

15 Croce, p. 190.

16 Croce, p. 191. In Chapter 47, Cervantes provides clues to his views on fiction which support Croce’s interpretation. Fiction should be written so that the impossible is made to appear possible. What is difficult to believe should be entertained and be made entertaining. Therefore, the belief in narrow empiricism, which relies upon sense experience alone, should be suspended.

17 Putnam, p. 422.

18 Putnam, p. 543.

19 Putnam, p. 536.

20 Putnam, p. 539.

21 Putnam, p. 371.

22 Putnam, p. 523.

23 Putnam, p. 477.

24 The notion of a quixotified Sancho Panza was first mentioned by S. de Madariaga [‘Don Quixote’: An Introductory Essay in Psychology (Westport: Greenwood Press, reprinted 1980)]. This notion is also referred to in more recent discussions of Don Quixote. For example, A. J. Close [Miguel De Cervantes, Don Quixote (Cambridge: Cambridge University Press, 1990)], says, “Yet the relative moral stature that he [Sancho] will later assume derives not only from Teresa’s brand of self-interested caution…, but also from Don Quixote’s superior wisdom, particularly the second precept of his counsels of government: ‘Know thyself’…. Sancho’s performance in office is obviously in some sense a fulfillment of those counsels. And his reiterated preference of the soul’s welfare to the corrupting effects of climbing the greasy pole…accords with a dominant, and eventually the prevailing, preoccupation of his master in Part II. So Quixotification is an important factor in Sancho’s development…” (pp. 75-76).

25 William H. Whyte, Jr., The Organization Man (New York: Simon and Schuster, 1956).

26 Michael Maccoby, The Gamesman (New York: Simon and Schuster, 1976), p. 175.

27 Maccoby, p. 178.

28 Maccoby, p. 193.

29 Maccoby, p. 195.

30 William G. Scott and David K. Hart, Organizational America (Boston: Houghton Mifflin Co., 1979), p. 27.

31 Joseph L. Badaracco, Jr. and Allen P. Webb [“Business Ethics: A View from the Trenches,” California Management Review (Winter, 1995): 8-28] interviewed recent graduates of the Harvard MBA Program about their ethical experiences as young managers. The majority of these managers believe that in the large bureaucracies in which they work the senior executives are out of touch with “the real minds of the business” (p. 16) and thus do not exert much ethical influence; top managers, they maintain, are insulated from the daily functioning of their firms by layers upon layers of bureaucracy.

32 Roger M. D’Aprix, In Search of a Corporate Soul (New York: Amacom, 1976), p. 45.

33 Robert Jackall, Moral Mazes: The World of Corporate Managers (New York: Oxford University Press, 1988), p. 68.

34 Jackall, p. 124.

35 “Social insulation permits and encourages a lofty viewpoint that, on its face, ‘respects the dignity of workers,’ but seems devoid of the feel of the texture of workers’ lives and of the gut-level empathy that such knowledge can bring” (Jackall, p. 126).

36 Jackall, p. 46.

37 For the classical position, see, for example, Milton Friedman, “The Social Responsibility of Business is to Increase Profits,” New York Times Magazine, Sept. 13, 1970. (This article has been reprinted in a number of business ethics anthologies.)

38 Leonard Silk and David Vogel, Ethics and Profits: The Crisis of Confidence in American Business (New York: Simon and Schuster, 1976), p. 137.

39 Silk and Vogel, p. 209; cf. pp. 112, 233.

40 Irving Kristol, Two Cheers for Capitalism (New York: Mentor Book, 1978).

41 George C. Lodge, “The Connection between Ethics and Ideology,” Journal of Business Ethics (1982): 85-98.

42 E. F. Schumacher, Small is Beautiful: Economics as if People Mattered (New York: Perennial Library, 1973), p. 45.

43 S. Prakash Sethi, “Moving from a Socially Responsible to a Socially Accountable Corporation,” in Is The Good Corporation Dead? Social Responsibility in a Global Economy, eds. John W. Houck and Oliver F. Williams (Boston: Rowman and Littlefield Pubs., 1996), pp. 83-84.

44 Sethi, p. 86.

45 John A. Byrne, Business Week (May 9, 1994): 61.

46 Similarly, Gary Hamel and C. K. Prahalad [Competing for the Future (Boston: Harvard Business School Press, 1994)] suggest, “One of the inevitable results of downsizing is plummeting employee morale. Employees have a hard time squaring all the talk about the importance of human capital with seemingly indiscriminate cutting….What employees hear is that they’re the firm’s most valuable assets; what they know is that they’re the most expendable assets” (p. 10).

47 Byrne, p. 61.

48 Thomas J. Peters and Robert H. Waterman, Jr., In Search of Excellence: Lessons from America’s Best-Run Companies (New York: Warner Books, 1984), p. 56.

49 Peters and Waterman, p. 76.

50 Peters and Waterman, p. 75.

51 Peters and Waterman, p. 82. In the 1980s, management theories which are value driven and people oriented—and therefore potentially more accepting of a quixotified Sancho Panza—were developed by William Ouchi [Theory Z: How American Business Can Meet The Japanese Challenge (Reading: Addison-Wesley, 1981)], Richard T. Pascale and Anthony G. Athos [The Art of Japanese Management: Applications for American Executives (New York: Warner Books, 1981)], as well as Peters and Waterman and others.

52 Peters and Waterman, p. 83; see James MacGregor Burns, Leadership (New York: Harper and Row, 1978), p. 20.

53 Burns, p. 4. Edwin P. Hollander and Lynn R. Offerman [“Power and Leadership in Organizations,” in Contemporary Issues in Leadership, eds. William E. Rosenback and Robert L. Taylor, third edition (Boulder: Westview Press, 1993)], say that “Although the study of leadership has always presumed the existence of followers, their roles were viewed as essentially passive” (p. 69). They suggest that recent discussions of leadership, however, conceive of the leader-follower relationship as one of mutual influence.

54 Peters and Waterman, p. 282.

55 Peters and Waterman, p. 287.

56 Peters and Waterman, p. 288.

57 Peters and Waterman, p. 287.

58 Marshall Saskin and William E. Rosenback [“A New Leadership Paradigm,” in Contemporary Issues in Leadership, eds. William E. Rosenback and Robert L. Taylor, third edition (Boulder: Westview Press, 1993)], discuss and evaluate the development, in recent years, of Burn’s concept of transforming (or what many now call “transformational”) leadership. According to Saskin and Rosenback, Bernard M. Bass developed a measuring tool—Multifactor Leadership Questionnaire (MLQ)—for identifying specific categories and types of transformational leadership behavior. Like Bass, James M. Kouzes and Barry Z. Posner constructed a questionnaire (which the authors believe to be better than Bass’s)—the Leadership Practices Inventory (LPI)—to measure transformational leadership. The authors, then, discuss Saskin’s questionnaire—based on the work of Warren Bennis, whom I shall consider—the Leadership Behavior Questionnaire (LBQ). The authors emphasize the important point that transformational leaders are guided by moral values and their “vision is based on what the organization and followers need, not what the leader wants personally” (p. 97). With the help of transformational leaders, followers “expand and improve on their own vision,” and develop necessary leadership characteristics (p. 98). Thus, they believe that transformational leadership cannot be subsumed under, what they call, “the traditional paradigm of transaction exchange” (p. 103).

59 Ronald A. Heifetz, Leadership Without Easy Answers (Cambridge: Belknap Press of Harvard University Press, 1994), p. 18.

60 Heifetz, p. 22.

61 Heifetz, pp. 22-23.

62 Bennis says, “The ultimate morality of bureaucracy is the amorality of segmented acts.” Warren Bennis, Why Leaders Can’t Lead: The Unconscious Conspiracy Continues (San Francisco: Jossey-Bass Pubs., 1989), p. 95.

63 Warren Bennis, On Becoming A Leader (Reading: Addison-Wesley, 1989), p. 192. Joseph L. Badaracco, Jr. and Richard R. Ellsworth emphasize “compelling vision,” as does Bennis. They also suggest the need for a quixotified Sancho Panza. Ideals run the risk of being irrelevant unless they are “translated into action” [Joseph L. Badaracco, Jr. and Richard R. Ellsworth, Leadership and the Quest for Integrity (Boston: Harvard Business School Press, 1989), p. 109].

In Why Leaders Can’t Lead, Bennis distinguishes, as others have, between leaders and managers. “Leaders are people who do the right thing; managers are people who do things right” (p. 18). Good managers are good technicians, while “leaders manage attention through a compelling vision that brings others to a place they have not been before” (p. 19). The vision is made compelling by being made vivid and concrete, e.g., by some metaphor(s) or model.

64 Bennis, Why Leaders Can’t Lead, p. 109.

65 Bennis, Why Leaders Can’t Lead, p. 110.

66 Noel M. Tichy and Mary Anne Devanna, The Transformational Leader (New York: John Wiley and Sons, 1986), p. 138.

67 Tichy and Devanna say, “Vision implies the ability to picture some future state and to be able to describe the state to others so that they begin to share the dream” (p. 138).

68 Burt Nanus, Visionary Leadership: Creating a Compelling Sense of Direction for Your Corporation (San Francisco: Jossey Boss Pubs., 1992), p. 10.

69 Nanus, p. 24.

70 Nanus, pp. 28-29.

71 However, John P. Kotter [“What Leaders Really Do,” in Contemporary Issues in Leadership, eds. William E. Rosenback and Robert L. Taylor, third edition (Boulder: Westview Press, 1993)], maintains that while managers are supposed to cope with complexity, leadership, by contrast, deals with change (p. 27). Nonetheless, he too emphasizes the importance for leadership of vision, values, dealing with people’s basic needs, courage, and the integrity and trustworthiness of the leader.

72 Bennis, Why Leaders Can’t Lead, pp. 23-24.

73 Nanus, p. 25.

74 Badaracco and Ellsworth, p. 70.

75 Badaracco and Ellsworth, p. 201.

76 Badaracco and Ellsworth, p. 201.

77 Badaracco and Ellsworth, p. 201.

78 Peters and Waterman blame the so-called rational model of management for denigrating the importance of values, de-emphasizing people and overemphasizing financial analysis. In a statement reminiscent of Maccoby, they say that “the exclusively analytic approach run wild leads to an abstract, heartless philosophy” (Peters and Waterman, p. 45). Although “rational” managers think that they are eminently practical, they are in reality perversely quixotic. They incorporate the “ivory tower” thinking of Don Quixote without his concern for noble or “beautiful” values. Thus, they adopt what is most objectionable in Don Quixote and de-emphasize what is most valuable.

79 Rabindra N. Kanungo and Manuel Mendonca [Ethical Dimensions of Leadership (Thousand Oaks: Sage Publications, Inc., 1996)], in the context of transformational leadership, consider the question of whether or not leaders have an ethical imperative “to improve their followers for reasons that go well beyond the pragmatic considerations of the ‘bottom line’” (p. 70). They argue, correctly I think, that work is more than a means for earning a living; it is essential to self-development, the development of society, and human dignity. “This vision of the values of human work,” they say, “is often blurred, if not gravely distorted, when work is viewed in terms of social exchange theory, as a commodity that is sold by the employee in return for wages and benefits, and the employer, by virtue of his or her ownership of capital, assumes the right to regard employees as instruments in the production process” (pp. 70-71). They argue that transformational leadership entails an ethical value that does not exist for transactional leadership.

80 My view of a quixotified Sancho Panza as business leader and its connection with a craftsmanship model has certain similarities to the position of Robert Greenleaf [Servant Leadership: A Journey into the Nature of Legitimate Power and Greatness (New York: Paulist Press, 1977). Greenleaf says, “The servant-leader is servant first [a natural servant]….It begins with the natural feeling that one wants to serve, to serve first” (p. 13). He tells us that this position is opposed to starting with a leader first view (one whose primary drives are often power and wealth). People who are servants first are empathetic and therefore are particularly sensitive to people’s needs; they will persevere more than people who are leaders first in developing the best way of fulfilling others’ needs. Moreover, a natural servant automatically listens first. My position is similar in that we start with Sancho first to create a Sancho-leader. But a quixotified Sancho Panza is not quite the type of servant that Greenleaf has in mind—he is more worldly and realistic. Which is preferable? I think that businesspeople, in the main, agree with Cervantes’s picture of the world. It would seem, then, that we require a Sancho-type servant to deal with it. But Sancho must be transformed by Don Quixote. Sancho does not become squire for noble reasons—he desires wealth, power, and adventure and is somewhat roguish. Yet, he transcends these goals (while understanding them) by gaining admiration for Don Quixote; thus, he learns to be more idealistic and wise. I think that the complexity and the combination of idealism and common sense realism of a Cervantian servant-leader fits better with business than does the more spiritualized version Greenleaf presents. Greenleaf’s servant-leader, however, is certainly admirable.

For our purposes, it is also important to mention the connection Greenleaf makes between servant leadership and what he calls a new business ethic. He suggests that a business should exist “as much to provide meaningful work to a person as it exists to provide a product or service to the customer” (p. 142). Business leaders should focus on developing unrealized potential and the satisfaction derived from personal achievement. This business ethic relates servant leadership and a “striving for excellence” as my view connects a quixotified Sancho Panza and a craftsmanship ethic, i.e., the craftsmanship ideal should be at the core of the businessperson’s (as servant-leader) vision.

81 A good example of such a managerial statesman is Thomas Watson of IBM. Like any good statesman, he thought about the basic values that should guide his organization and emphasized those which truly have intrinsic worth. Above all, having concern for his workers, he encouraged them to develop their abilities; this, he believed, would help them to enjoy and take pride in their work. It would also help them to take pride in the firm. Thus the interests of the workers would coincide with those of the firm. Quality products and services are, of course, the keynotes of such a company.

82 Moreover, in Liberation Management [Liberation Management: Necessary Disorganization for the Nanosecond Nineties (New York: Alfred A. Knopf, 1992)], he ends his preface on a quixotic note: “I’ve allowed myself the unalloyed pleasure of enjoying the mess of market economics powered by lunatics and dreamers, by failure more than success” (p. XXXIV).

83 Peters, Liberation Management, p. 529.

84 Peters, Liberation Management, p. 550.

85 Peters, Liberation Management, p. 532.

86 Peters, Liberation Management, p. 532. He also discusses other mittelstand companies such as Trumpf Industries. Again, the emphasis is on product excellence. In an interesting discussion, Peters talks about the balance between theoretical knowledge and practical workmanship which characterizes the German apprenticeship system. Constantly working with the necessary materials (to understand how best to work with them) is as important as the theoretical ideas; it is “the backbone of Germany’s ability to build quality products” (p. 544).

In his The Pursuit of Wow [Tom Peters, The Pursuit of Wow: Every Person’s Guide to Topsy-Turvy Times (New York: Random House, Vintage Books, 1994)], he begins by saying, “As of this second, quit doing less-than-excellent work” (p. 1). He suggests that excellence is not everything, but it is basic. Nonetheless, when he discusses ethics (pp. 86-87), he does not connect it with the pursuit of excellence or quality.

87 He says, “Effective leadership empowers an organization to maximize its contribution to the well-being of its members and the larger society of which it is a part” (Nanus, p. 10).

88 Badaracco and Ellsworth, p. 99.

89 “They [the CEOs] believed that the widely accepted conflict between high ethical values and economic performance was, in the long term, a false dichotomy” (Badaracco and Ellsworth, p. 100).