Management and the Primacy of Prudence

Among the virtues of Helen Alford and Michael Naughton’s Managing as if Faith Mattered is the central role that it assigns to the cardinal virtues. Furthermore, while most works in this field focus almost exclusively on justice, Alford and Naughton recognise and emphasise that possession of the first cardinal virtue, prudence, is the necessary and sufficient condition for possessing the other cardinal virtues:

Prudence is at once a virtue, that is, a mode of human effectiveness, and the condition for our acquisition and exercise of other virtues. Prudence is our power to recognize and direct our thinking and decision making to the good here and now. Without the ability to make good decisions, we cannot hope to deal fairly with others (justice) or to use wisely our affective and aggressive drives (temperance and courage) (p. 108).

The mainstream of contemporary “business ethics” has forgotten that prudence is a virtue at all. This is a consequence of the historical transformation of the virtues into “passions” or “sentiments.” While the virtues cannot conflict with one another, the passions can and often do. Prudence became egoistic and an opponent of the altruistic passions. In a paper presented at the Second World Congress of the International Society of Business, Economics, and Ethics in 2000, Eugene Heath cites Adam Smith, one of the principal deconstructors of the virtue of prudence:

Prudence, in short, when directed merely to the care of the health, of the fortune, and of the rank and reputation of the individual, though it is regarded as a most respectable and even, in some degree, as an amiable and agreeable quality, yet it never is considered as one, either of the most endearing, or of the most ennobling of the virtues. It commands a certain cold esteem, but seems not entitled to any very ardent love or admiration ¹.

Within the tradition of the cardinal virtues, however, prudence directed merely to the care of the health, fortune, rank, and reputation of the individual is not true prudence. Heath then follows Smith in contrasting prudence to the “virtue of benevolence”:

I will draw on Smith’s account of sympathy (and the sympathetic imagination) to show how personal knowledge and acquaintance are determin-ative of the kinds of moral concern typical of personal and benevolent relations; where such knowledge and acquaintance are lacking, there will be a diminished expectation of benevolence and a greater emphasis on prudence ².

Alford and Naughton, in refreshing contrast to the business ethics mainstream, do not accept  this contrast between prudence and concern for other persons: “Prudence involves engaging our whole capacity for action, emotion, and will alike, toward the common good as the controlling end in our decision making” (p. 90). And this is consistent with St. Thomas: “Since it belongs to prudence rightly to counsel, judge, and command concerning the means of obtaining a due end, it is evident that prudence regards not only the private good of the individual, but also the common good of the multitude” ³.

The modern restriction of prudence to self-regarding decisions is particularly unfortunate in the context of business management. Decision making is the most characteristic function of the manager. And prudence is the virtue of decision making. In the words of Alford and Naughton: “Prudence concerns something familiar to all managers: good decision making” (p. 90). If prudence were not concerned with the common good, managers concerned with promoting the common good would have to rely on some other virtue. Thus the dominance of justice in modern business ethics. As Alford and Naughton recognise, however, justice alone is insufficient: “Justice without prudence (organising the appropriate means) is merely an exercise in moralism, which cannot deliver on its promise” (p. 137).

Since prudence does in fact regard the common good of the multitude, St. Thomas’s detailed analysis of the first cardinal virtue can be applied to the context of managerial decision-making. Alford and Naughton write: “A prudent manager can see the big picture in all its aspects and constraints, and knows how to apply the rules in each specific situation” (p. 90). But while this is true of situations in which there are rules that can be applied, the fully prudent manager can do even more than this.

In discussing the “adjunct virtues” or “quasi-potential parts” of the virtue of prudentia, St. Thomas distinguishes between synesis and gnome. Synesis is involved in making sound judgements in situations where the rules apply. But the reason management is such a challenging and demanding profession is that there are many situations in which the rules do not apply. Although Thomas does not provide an example from business management, he alludes to one that Plato offers in a different context:

Suppose that a friend when in his right mind has deposited arms with me and he asks for them when he is not in his right mind, ought I to give them back to him? No one would say that I ought or that I should be right in doing so, any more than they would say that I ought always to speak the truth to one who is in this condition ⁴.

Although Joseph Fletcher’s version of “situation ethics” ⁵ is erroneous, prudential judgement does depend upon the situation in which it is made. Property should be returned to its rightful owner – but not always. Thomas explains that gnome enables the person who possesses it to make prudential judgements in situations where the rules do not apply:

Now it happens sometimes that something has to be done which is not covered by the common rules of actions, for instance in the case of the enemy of one’s country, when it would be wrong to give him back his deposit, or in other similar cases. Hence it is necessary to judge of such matters according to higher principles than the common laws, according to which synesis judges: and corresponding to such higher principles it is necessary to have a higher virtue of judgment, which is called gnome, and which denotes a certain discrimination in judgment” ⁶.

It is precisely this certain discrimination in judgement that distinguishes the excellent, virtuous, prudent manager from the common manager. Executives are often confronted with situations in which either the rules do not apply or there are no rules to apply. The greater the scope of their responsibility, the more frequent and more complex are such situations. Alford and Naughton recognise this. For example, after offering several steps to take in determining just wages, they add: “These steps are not a recipe for the solution of the problem of just pay. They will not create a beatific vision of ‘pay nirvana.’ They will not relieve managers of their burdens, and may even multiply them” (p. 151). No matter how many steps, rules, guidelines, or secrets of success a manager has at his disposal, achieving justice often requires the virtue of prudentia and its adjunct virtue gnome.

NOTE 

¹ Adam Smith, The Theory of Moral Sentiments (London: A. Millar, 1759), VI.i.14

² Eugene Heath, “Adam Smith on Benevolence and Commerce: A New View from an Old Guide,” Second World Congress of the International Society of Business, Economics, and Ethics, São Paulo, Brazil, 19-23 July 2000

³ Thomas Aquinas, Summa Theologica, IIa IIae, 47, 10, trans. Fathers of the English Dominican Province

⁴ Plato, Republic, 331C, trans. Benjamin Jowett

⁵ Joseph Fletcher, Situation Ethics: The New Morality (Philadelphia: Westminster, 1966)

⁶ Thomas Aquinas, Summa Theologica, IIa IIae, 51, 4