Beyond Moral Education: Why Managers Must Learn to Take “Order Responsibility”
By Ingo Pies and Thomas Lange

From Moral Appeals to Institutional Responsibility

In times of deep societal transformation—climate change, technological disruption, geopolitical volatility—companies are increasingly called upon to “take a stand.” Whether on sustainability, AI ethics, or democracy itself, managers are expected to lead with values.

Yet this moralization of business life, however well-intentioned, can easily become paralyzing. Endless appeals to “do the right thing” often fail to guide concrete action. What we need is not more moral exhortation, but more institutional competence.

Managers today must go beyond personal virtue ethics. They must learn how to design and sustain the rules of the game—the institutional frameworks that make responsible action possible in the first place. We call this capacity order responsibility.

The Market Economy’s Societal Mandate

In a functioning market economy, business serves society through three core functions:

1. Efficiency – meeting needs through competitive value creation.
2. Innovation – fostering progress through creative rivalry.
3. Welfare diffusion – sharing the fruits of progress through better products, lower prices, higher wages, and improved working conditions.

As Ludwig von Mises and Franz Böhm emphasized, these functions depend on a public “license to operate.” Legality alone is no longer enough; legitimacy matters.

When trust in business erodes, the legitimacy of the market economy itself is at risk. That is why managers must help renew this trust—not by moralizing, but by strengthening the order that channels self-interest toward the common good.

Three Levels of Managerial Responsibility

Hence, modern management unfolds on three interconnected levels:

1. Decision-making (Optimization Responsibility) – Managers make everyday trade-offs, balancing costs, risks, and opportunities within given rules.
2. Governance (Steering Responsibility) – Managers help shape those rules: internal policies, industry standards, or even laws that set fair incentives.
3. Discourse (Enlightenment Responsibility) – Managers engage in public dialogue, building understanding, dispelling moral confusion, and defending the legitimacy of the market system.

Figure 1: The Three Levels of Responsibility

Order responsibility—comprising the governance and discourse levels—is about actively co-designing the conditions under which business can remain both profitable and socially accepted.

Why Order Responsibility Matters More Than Ever

The old division of labour—politics as rule-setter, business as rule-follower—is breaking down. Globalization, digitalization, and social media blur boundaries between markets and societies. Under these conditions, societal acceptance becomes a scarce resource. Compliance is no longer sufficient; companies must earn their legitimacy every day.

This shift demands two new core competencies:

• Steering Competence – the ability to co-create effective institutional arrangements that align business incentives with societal goals.
• Enlightenment Competence – the ability to clarify public debates, identify shared interests, and communicate reason-based trust.

Together, these skills form the backbone of leadership in the 21st century: the capacity not just to comply with rules, but to contribute to the systems that make responsible business possible.

From “Good People” to “Good Managers”

Classical business ethics focuses on the virtues of individuals—on making people “better.” But in a complex global system, personal virtue is not enough. We need better institutions, not just better intentions.

The true task of management education is therefore not to produce “better people”, but to develop people into better managers—those capable of optimization, governance, and enlightenment.

To keep the market economy, legitimate and vibrant, managers must step into their broader civic role: as architects of trust and stewards of order.

About the Authors:

Prof. Dr. Ingo Pies is Professor of Economic Ethics at Martin Luther University Halle-Wittenberg.
Dr. Thomas Lange is Managing Director at Achleitner Ventures.

This blog post is originally based on Discussion Paper 2025-12, Martin Luther University Halle-Wittenberg.