Adam Smith on Management Ethics: Then and Now

The paper concedes that Smith was as a pioneering contributor to debate on management ethics. The paper here traces management ethics in three regards: (1) managerial behaviour unintentionally yielding mutual gains outcomes for society; (2) law-following behaviour of managers reflecting intentional passive, ethical behaviour of manager; (3) managers creating ethical capital inside market exchange, this reflecting intentional active, ethical behaviour of managers. Smith relegated the latter from his program. In this respect I update Smith’s historic contribution to debate on management ethics, with a view to contemporary developments on many markets where we can witness management ethics inside market processes. Throughout the paper, I connect to economic theory, i.e. Smith’s Wealth of Nations but not behavioural ethical theory, which may see itself put in opposition to Smith from the outset. I view economic reconstruction and economic updates of Smith’s management ethics as essential to set out viable pathways for contemporary management ethics programs.