The Place of Ethical Theory in Business Ethics

The Oxford Handbook of Business Ethics
George G. Brenkert
Print publication date: Jan 2010 Print ISBN-13: 9780195307955 Published to Oxford Handbooks Online: Jan-10 Subject: Philosophy, Social and Political Philosophy DOI: 10.1093/oxfordhb/9780195307955.001.0001
The Place of Ethical Theory in Business Ethics

Robert Audi
DOI: 10.1093/oxfordhb/9780195307955.003.0003
Abstract and Keywords

This article examines the relevance of ethical theory in business ethics. It explains the nature of ethical theory, provides an account of the leading theories, and explores the ways in which these theories form a critical resource for the treatment of practical moral problems. It discusses how theory connects to practice and provides several concrete examples of how ethical theory helps address practical problems in business ethics. It specifically illustrates how ethical theory can be helpful in analyzing the problems of whistle-blowing and affirmative action.
ethical theory, business ethics, moral problems, whistle-blowing, affirmative action
Ethical theory is a major critical resource for serious discussion of ethical problems, including those in business ethics. Why this is so will become clear once we frame an adequate conception of ethical theory and describe the scope of business ethics. I begin with a section that considers what kind of enterprise ethical theory is and what sorts of problems in business it can help address. I then proceed to explore some dimensions of ethical theory, some leading theories important for business ethics, and some concrete illustrations of the connections between ethical theory and specific problems in business ethics.
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Ethical Theory, Applied Ethics, and Business Ethics Ethical theory is the branch of inquiry concerned with understanding morality, in the wide sense in which morality is constituted by standards of right and wrong, and of the good and the bad, in human conduct.1 There are at least two senses of morality. In the objective sense, it designates sound standards of right and wrong, and we can thus speak of what morality objectively requires in employment policy and of what it objectively prohibits in advertising. In the personal sense, morality designates an individual's or group's particular standards of right and wrong, which may or may not be sound. Ethical theory is concerned mainly with morality in the objective sense, but one of its questions is what it means for objective moral standards to be realized in an individual's thought and conduct. For instance, how closely does a person's behavior have to conform to sound moral standards in order for the person to qualify as genuinely moral? We may also speak of an ethical (or moral) theory, such as utilitarianism. In common terminology, an ethical theory is a statement of standards of right and wrong and includes an account of at least their content and application to decision problems. An ethical theory need not contain answers to theoretical questions about morality, such as whether it embodies universally valid standards of conduct. Although the major proponents of an ethical theory of this sort also address such questions, there are ethical theoriesincluding those called metaethicalthat contain no endorsement of any moral standard. The latter theories will not be of primary concern here. Ethical theory is commonly contrasted with applied ethics. The latter is moral inquiry concerned with answering specific questions of right and wrong, such as whether it is wrong for employers to require blood tests to determine drug use even for employees not in certain risky occupations such as operating dangerous machines. Applied ethics seeks generality in its answers, but it does not address theoretical questions about, for instance, the meanings of highly general moral terms, the nature of moral properties, or the kinds of evidence possible for moral judgments. These questions are often grouped under the term metaethics. An ethical theory such as Kantianism or utilitarianism, however, will often have implications for specific moral questions and will imply that certain answers are sound. These theories are normative, whereas metaethics is generally conceived as nonnormative.
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Applied ethics was originally conceived as the application of one or more ethical theories or of at least of some general moral standard to specific problems of right and wrong. Now, however, the term also encompasses any kind of practical ethics, including an approach that might examine, in an intuitive and nontheoretical way, a particular question of right and wrong, such as one concerning drug testing, with no appeal to anything beyond what might be called intuitive moral sensitivity, a kind usually taken to reflect a commonsense understanding of human conduct. Practical ethics is not, however, always an application of a general moral standard. A manager's decision whether to blame an employee for losing a potentially profitable contract may be reached by reflection on the details of the case, with background ethical intuition playing the role that some people would accord to moral rules. This is not to say that the manager cannot, after the decision, formulate a rule that subsumes the case. We will here leave open the question whether every decision is an implicit application of an already presupposed rule or, by contrast, at least some rules emerge only in the light of reflection on a particular case. Business ethics may be conceived as a branch of applied ethics, parallel to legal and medical ethics. Where a legal or medical practice constitutes a business, business ethics encompasses moral questions about its business conduct, and there business ethics may overlap with legal or medical ethics. Business ethics is neither narrow nor isolated from other branches of ethics. It overlaps legal ethics, for instance, in addressing the question of the kind and extent of business leaders' obligation to follow the law of the country in which they operate. It overlaps medical ethics in addressing the question of whether an incorporated medical group, pharmaceutical company, or hospital is a business and the related question of whether it has the same kinds of ethical obligations as other businesses. Among the kinds of questions pursued in business ethics are both internal and external questions. Internal questions concern, among other things, the conduct of management toward employees under its authority: How, for instance, should one determine fair compensation, preserve privacy, and maintain a proper health insurance program? Internal questions also concern the rights of employees, most aspects of corporate governanceincluding ethics training for employeesand how to conduct research, particularly when it poses risks to persons. External questions concern, among other things, the relation of businesses to people and institutions outside them: What is the place of business in society and how does this bear on its
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responsibilities toward customers and environmental preservation? What are the standards of fair competition with other businesses? What criteria of remuneration and safety must businesses abide by, particularly when operating in countries with less stringent standards than their own, such as countries that permit the operation of sweatshops? Some external questions concern not only what roles, ethically speaking, businesses should voluntarily play in society but also what legal restrictions should be placed on their operations. There are also a multitude of questions, such as what constitutes truth in marketing, that might be conceived as mainly internal or mainly external, depending on whether their focus is on intracompany activity or on the relation between the company and other elements in society, as is the case with advertising in public media. Some of these questions will be considered below. First, however, it is important to develop a more detailed picture of ethical theory and its major concerns. Major Dimensions of Ethical Theory How ethical theory in the disciplinary sense bears on business ethics can be clarified by describing some subfields of ethical theory and articulating some of the major questions they explore. This section will not presuppose any particular ethical theory, though some theories are cited for illustration.
Moral Judgment
There is no brief way to distinguish sharply between, on the one hand, moral judgments or the oughts they commonly express and, on the other hand, aesthetic and, especially, pragmatic judgments and oughts. In the moral case, more than in the aesthetic and pragmatic case, taking the moral point of view implies receptivity to a kind of criticism. We are not taking the moral point of view in making a judgment on an action unless we meet at least three conditions. First, we must consider the effects of the action on the wellbeing of persons. Second, we must be open to being held to a standard of consistency in treating like cases alike. Third, we are aware that something serious is at stakesufficiently serious to make the emotions of guilt and shame appropriate if, with no mitigating circumstance, we err. Some of these conditions may apply to a lesser degree in aesthetic and pragmatic matters. What is it, then, that sets the moral point of view apart and indicates the broad subject matter of ethical theory?
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Certain notions are, in their normal uses, intrinsically moral. Consider a judgment about justice. Judgments and decisions applying this notion represent the moral point of view. Similarly, we can plausibly say that acts such as cheating, defrauding, and exploiting people are paradigms of what is morally wrong; hence, to judge such an act to be wrong is to make a moral judgment. The judgment that an act is one of cheating implies wrongdoing by providing a criterial ground for it, the kind of ground whose relevance must be acknowledged by anyone who adequately understands the judgment.2 One approach to understanding the moral point of view depends on finding moral terms. A wider approach proceeds, as in the examples just given, with reference to grounds of moral judgment. Moral judgments and decisions commonly employ the concepts of what is right or wrong or of what we ought or ought not to do, or of what is fair or unfair, just or unjust. There are, as already noted, nonmoral senses of right and wrong, for instance, senses applicable from the point of view of selfinterest. This point of view in particular needs comment in connection with understanding business ethics. Not only is selfinterest different from the moral point of view; the latter is to be understood as a point of view capable of conflicting with that of self interest and even the wider point of view of prudence. In many business decisions there is no conflict, but there may be, as in the greedy pursuit of profits.3 I have presupposed that the point that we ought not to do injustices can serve as a model for understanding the notion of the moral ought. To determine precisely what counts as an injustice one must make a moral determination. One can do this from the point of view of a particular ethical theory, but there is a core notion of injustice recognizable without presupposing any particular theory. Consider a judge who fines one company $50,000 for pollution of a river and a second company $100,000 for it, where the only differences are in what part of town they dumped their effluent and in the judge's friendship with the management of one but not the other. This is not a controversial case; it is the kind of uncontroversial example that anchors the concept of justice that competing theories seek to analyze. The same holds for other moral notions, such as being an act of reparation or of making amends for injuring someone, andto shift to descriptions of characterfor being virtuous or vicious. We can identify moral judgments and decisions in part in terms of nonmoral grounds for themfacts in one commonsense meaning of the term. The idea is roughly that
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descriptive factual judgments, such as that one person lied to another, broke a promise to a customer, or allowed a lethal gas to escape and burn people, often tell us that a judgment of moral wrongdoing is being made. These descriptive judgments are not normativethey are not, for instance, moral in content or evaluative, though they are a basis for moral judgments and in that sense not morally neutral. This distinction is a very important matter when it comes to explaining and justifying moral judgmentsfor example, that a business ought to compensate someone for an injury or ought not to have lied about who released gas into the air. Their grounding in descriptive facts is perhaps the major reason for their objectivity and universal applicability. Let us consider some of the crucial domains of descriptive factual grounds. One pertinent domain of (nonmoral) facts is that of bodily harms and injuries. Typical examples would be killing, raping, burning, and beating. Calling the facts in question nonmoral needs comment. The point is the narrow one that, like the fact that the judge gave different fines for the same offense, they are not moral in content: determining them does not require using moral or other normative concepts. But they are moral in upshot: they are by their very nature the kinds of facts that are criterial evidence for moral judgment. It is a very important fact about ethics (a fact recognized by virtually all ethical theories) that moral judgments can be justified and even known on the basis of facts to which we have access by observation and scientific investigation. Indeed, sound moral judgments may be considered anchored in descriptive facts in a way that yields objectivity of a kind that makes them acceptable across different cultures. There are domains besides harming and injury in which factual affirmations enable us to identify moral judgments and moral decisions and to determine that they represent the moral point of view. One is veracity. A judgment that an act is wrong because it is a lie is a moral judgment. It has moral content in calling the act wrong. Similarly for fidelity to one's word: a judgment that an act is obligatory because it is the keeping of a promise is also moral. The same holds for a judgment that a deed ought to be done because otherwise a person who can be saved will die. Moral judgments, then, are normative judgments with roughly the content that an action or kind of action ought, or ought not, to be performed. Sound moral judgments are justifiable on the basis of correct identifications of morally relevant facts, such as that someone lied to stockholders or poisoned a stream. Ethical theory is concerned with the nature of these judgments
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and their interconnections. Particular normative ethical theories demand action identified in relation to the facts they take to be morally relevant. For instance, utilitarianism is concerned with the consequences of actions for pleasure and pain. Sound moral judgments are anchored in facts accessible to observation or scientific inquiry, and this anchoring is the main basis of objectivity in moral judgment.
Metaphysical Dimensions of Ethical Theory

The metaphysics of ethics is concerned with whether there is any moral reality: whether there are in fact properties such as being obligatory or being wrong or being good. Moral realists hold that there are in fact such properties; antirealists deny that there are. The previous discussion has not presupposed realism but is written in a way that suggests that it is highly plausible. Some readers may wonder why antirealism is plausible enough to need mention. The reason, as many in business fields who are social scientists know, is that empirical testability is a standard requirement for scientific acceptability or, on a view still influentialof making sense at all in assertions intended to be true. An underlying motivation for the testability requirement has been memorably expressed by Wilfrid Sellars: Science is the measure of all things, of what is that it is and of what is not that it is not.4 If this is so, then any moral properties there are must be empiricalthat is, ascertainable by scientific means. Common sense and ordinary language appear to favor realism, at least in the form in which it says simply that there are such properties as being obligatory and being wrong that acts may have in virtue of having the descriptive properties of being promised and being lies. This simple realism leaves open whether ascriptions of moral properties are empirically verifiable. Clearly they are empirically evidenceable, since the descriptive properties that justify them are accessible to observation and scientific inquiry. A point that apparently gives support to moral realism is that in many languages one can say that a person did not know that an action was wrong, that someone did not see that an action was obligatory, and that it is true that someone did wrong. I am aware of no natural language in which some equivalent of these statements is not considered to have a clear meaning, and those who reject realism must explain why such terms as true have a different meaning than in ascriptions of descriptive properties. It has
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been argued that to speak of truth here is only to express something, not to ascribe a property. Moral language is here said to be expressive rather than factual, prescriptive rather than descriptive, or emotive rather than truth valued.5 The widest term for these positions is noncognitivism, so called because it denies that moral statements express anything cognizable in the way objects of cognitiontruths and falsehoodsdo. This is not the place to establish the cognitive status of the ethical, and even the best developed antirealist positions make room for some kind of objectivity. Even if one thinks that calling the cheating of employees wrong is expressive, rather than descriptive, one is likely to grant that people have reasons for taking this attitude and that they should hold the same negative attitude in any precisely parallel case. It can turn out that the relevant reasons, such as that children will starve if the company does not provide emergency flood assistance, are the same kinds of reasons realists would adduce for the same judgment. Thus, for those whose criteria for realism in a body of discourse are so strict as to require a belief in antirealism, business ethics can be pursued without further addressing this question. Realism is simply not a requirement for wellordered discussion of moral questions in business ethics. This point is especially important for those who think that objectivity in moral judgments can be achieved only if they are reducible to descriptive empirical judgments. Objectivity reaches beyond the empirical.
Epistemology
Epistemology is concerned with the nature of knowledge and justification. Scarcely anyone doubts that we have knowledge in logic and mathematics (which are not empirical disciplines), but ethics is another matter. Ethical skeptics hold that we do not have moral knowledge or, if they are strongly skeptical, that we also lack justification for moral claims. The commonsense view is that we sometimes achieve both, as in our judgments that the dictators who perpetrated the atrocities of the twentieth century did wrong. A great deal must be said to defend common sense here, and this is not the place to say it. I shall simply presuppose that at least some moral judgments are justified. Empiricism implies that only testable claims or those that are true in virtue of certain relations of ideas can be known or justifiably believed. The main contrasting view in epistemology is rationalism, understood as the position that reasonour rational capacityreveals substantive truths. Versions
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of rationalism have been held by Plato, Aquinas, Clarke, and, in twentieth century ethics, W. D. Ross, Thomas Nagel, and others.6 The epistemological aspects of ethical theory bear more directly on business ethics than the metaphysical aspects. For moral empiricists, there will be a sense that ethical claims may be established by empirical information such as facts about the impact of an action on the material wellbeing of persons. This information will be central for utilitarians. For moral rationalists, empirical information will also be essential, but it will not play the same role. Adequate reflection of a qualitative and often intuitive kind will be central for justification of moral decisions. Specifically, rational reflection will supply the general principles underlying moral judgments and decisions, but their application will require appraising facts pertinent to the circumstances. Consider veracity. For moral empiricists the obligation not to lie is based on empirical facts, such as facts about the negative consequences of lying. For moral rationalists this obligation is knowable by reflectiona priori, in one terminologythough whether it is overriding in a given case will depend on facts such as whether an innocent person will die if a lie is not told. Although rationalists in moral epistemology maintain that moral principles can be known through pure reason or some form of rational reflection, they commonly grant that the obligations these principles express may conflict. Hence they do not hold that the application of the principles in specific cases yields a decision independent of facts about those particular cases. Methodologically, there is something neutral among empiricism, rationalism, and indeed antirealism, and also applicable to questions of business ethics. It is theoretical method. This is a general method of building and rebuilding theories while raising questions, hypothesizing, comparing, and evaluating hypotheses in relation to data, revising theories in the light of the comparisons and evaluations, and adopting theories through assessing competing accounts of the same or similar problems. An element in this method is the attempt to achieve reflective equilibrium: a kind of integration between one's general beliefs and one's judgments concerning the kinds of cases they apply to.7 A plausible principle for determining raises in salary may, for instance, be compared with intuitions about what certain specific employees deserve. These intuitions may force one to revise the principle. One might then compare the revised principle with a new case and revise it yet again. Hypothetical cases may also play a role in refining a principle. There also may be competing principlessay, those concerning how much should be given to shareholders. Theoretical method, with the search for reflective equilibrium as a part of the method,
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may help one to improve principles already in place or to discover new ones needed for new challenges. The aim is to achieve a combination of plausible ethical judgments in specific cases and a coherent framework of principles that justifies them.
Moral Psychology
Ethical theory often considers questions about the psychology of human agents, particularly as it bears on our capacity to act on moral judgments and on the kind and degree of responsibility we have for our actions. Let us consider these two areas in turn. Since antiquity, moral philosophers have debated the question whether holding moral judgments entails being motivated to act accordingly. The view that it does is often called motivational internalism. It is so called because its central idea is that some degree of motivation is internal to the holding of a moral judgment, as with judgments that one (morally) must do something. Sometimes this view is associated with moral rationalism, on the ground that, in ascribing motivational power to reasonwhich is assumed to be represented by the moral judgments in questionit expresses the wider scope attributed to reason by rationalists by contrast with empiricists. But nonrationalists can hold motivational internalism (as David Hume did), and it seems best to consider internalism to be neutral on epistemological matters. Motivational internalism has some important implications for business ethics. It reinforces the view that actions speak louder than words. It implies that those who claim to hold moral principles and moral judgments, but do not act accordingly, must either be seen as motivated but hindered or be liable to suspicion of insincerity or of selfdeceptionitself a sometimes blameworthy condition. They are at the very least properly subject to being challenged to explain why they failed to act accordingly. This is one way motivational internalism bears on moral assessment. Motivational internalism also bears on moral instruction, including the kind possible in the ethics programs of business schools and companies: if it is true, then in educating the intellect we to some extent direct the will. Even if the moral judgments people hold do not entail enough motivation to produce action in accordance with them, they must, on a defensible motivational internalism, produce some motivation and will thereby assist whatever other motivation people have to be moral, such as a desire to be prudent. Everyday experience, however, shows sufficient
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disparity between people's apparent moral beliefs and their actions to suggest that moral instruction aloneeven when it produces morally sound beliefscannot be the only ethical incentive in business or any other domain. This is one reason for the importance of ethical climate in a companya notion that is best understood in terms of moral and social psychology. Moral psychology also concerns the conditions for moral responsibility. One widely accepted result of analysis is that weakness of willconceived as action against one's better judgmentdoes not entail mental compulsion. This implies that such weakness is not excusatory or even (necessarily) mitigatory. A fund manager may judge that an insider trade is wrong but, out of greed, do it. The irresistible deed here is not at all like action under a coercive threat of death. Another implication of a sound moral psychology is that selfdeception, rationalization, and other possible sources of unconscious motivation are not necessarily excusatory. Unconscious hatred can and must be resisted. In these matters, among others, moral psychology can both help to refine moral judgment and expand the scope of our understanding of moral responsibility. Doing that can help in articulating a company's ethics code, devising an ethics training program for all who work in it, and in deciding who to judge those who act wrongly.
Conceptual Analysis of Important Notions

There is a central activity that ethical theorists engage in regardless of their views in epistemology or metaphysics. They make explicit and clarify the concepts and judgments to be examined. This is crucial for both ethics and empirical inquiry. Some examples of morally important results of conceptual analysis will illustrate its value in business contexts. 1. Veracity. What is the difference between lying and deceiving? The question in the abstract is theoretical, but how we answer it may determine what kind of business we may and may not do. An advertisement, for instance, may deceive without lying (since it says nothing false) and people may lie without deceiving (since a lie need not be believed). Is some deception, then, permissible? And does the answer depend on still other notions needing analysis, such as those of normal or reasonable consumers? A related notion is being deceptive. This notion applies to both persons and their statements and independently of whether they succeed in producing false belief. This also differs from lying, although lying normally implies an attempt to be deceptive. Clarification of
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these concepts is central to ethical accounts of advertising and marketing. 2. Improper influence. Must gifts in business become bribes when their value rises to a certain level? The question for ethical theory here is what distinguishes an attempted bribe from an actual bribe given by one person to another with an understanding concerning a payoff. No gift necessarily produces an actual bribe, but some kinds of gift giving are reasonably taken as attempted bribes. It does not follow, however, that as a gift becomes more valuable, it automatically becomes an attempted bribe. These points should make it clear that a great deal of conceptual sorting is needed to determine ethical standards for gift giving in business. For example, there are many forms of undue influence, which is a central issue in the area of corporate campaign contributions and lobbying. 3. Equal treatment. Equal treatment of persons is commonly considered a requirement of justice. The question for ethical theory is what equal treatment means if vast differences exist in, for example, compensation. One answer is proportionate equality. What variables, however, are crucial for determining the proportions? A major one is productivity. But is that, in business, just a monetary variable? And are there not other variables, such as the degree of importance of an employee for the survival of a company? The determination of these variables and their proper weighting are challenges to ethical analysis in business, and different normative ethical theories in business ethics give different answers. Discussion of compensation of CEOs is but one of many examples. Are these issues purely linguistic? Language is important, and its proper use is a major source of evidence, but concepts need not be taken to be peculiar to any given language. A linguistic issuein the sense of one concerning the correct analysis of terms in a natural languageis not about mere words. Often the issue concerns the meaning of underlying concepts. Anyone lacking in linguistic competence and basic concepts will need help in being understood when addressing ethical questions and will be in a poor position to contribute to the articulation and promotion of high ethical standards in the company. Consider criticism vs. harassment, warnings vs. threats, incentives vs. temptations, and ambition vs. opportunismall are
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significant concepts in business ethics. Ethical conduct in business requires distinguishing these, and managers who want to create an ethical climate should be articulate about the differences.
Ethics and Religion

One other dimension of ethical theory needs mention: the issue of autonomy of ethics in relation to religion. Many ethical works are written from a religious point of view, and many concrete moral judgments are influenced by religion. A question in ethical theory is whether ethics has some kind of evidential dependence on religion. Consider the question whether moral knowledgesay, that lying is (with certain exceptions) wrongrequires knowing any religious truth. This does not seem so. To say this is not to claim (as some would) that we can know moral truths even if there are no theological or religious truths. The point is theologically neutral on this matter. It is that knowledge of moral truths does not depend on knowledge of God or of religious truths. This view that moral knowledge is possible independently of religion is not antireligious, and indeed it has often been held by religiously committed philosophers and by theologians. A person's ethics, in business or any other realm, may be enriched by reflection on religious texts and traditions, and secular ethical reflection can enhance one's understanding of religious texts and traditions. Many religious traditions, for instance, give a special place to the Golden Rule. Each tradition interprets the rule in the light of its own scriptures and practices.8 The related question for ethical theory is whether treating others as we would have them treat us implies, for example, an endorsement of good treatment, or of some kind of equal treatment, or of what one would rationally want for oneself. It is possible for religiously committed people in business ethics to benefit on either side, the perspective of ethical theory or that of religion, from reflection on the other. This does not entail that there is always complementarity between any plausible ethical position and any given religious viewpoint, but such complementarity is often possible and commonly achieved. Major Ethical Theories as Resources in Business Ethics So far our focus has been on ethical theory in the disciplinary sense, as used mainly by philosophers. Ethical theory of this kind has often been
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presented in the form of specific comprehensive positions in ethics spanning both normative ethics and metaethics. Four kinds of historically important, comprehensive ethical theories have received widespread attention in business ethics. These four are described below, with reference to the kinds of resources they provide for business ethics.
Virtue Ethics
The central demand of virtue theories is that one concentrate on being a person of good charactera virtuous person. Honesty, fairness, fidelity, and beneficence are important moral virtues, and they empower their possessor to make and adhere to sound ethical decisions. For a virtue ethics, agents and their traits, as opposed to rules of action, are morally basic: we are, for instance, to understand what it is to behave justly through studying the nature and tendencies of the just person, not the other way around. We do not construct a notion of just deeds as those that treat people equally, and then, on that basis, define a just person as one who characteristically does deeds of this sort. For virtue ethics, as commonly understood, moral traits of character are ethically more basic than moral acts.9 Here, in ordinary life as in business, role models are crucial for moral learning. Everyone can be a role model for others, but virtue ethics particularly calls on management and other business leaders to model good character and conduct. For Aristotle, as for many later virtue theorists, the person of practical wisdom is the chief role model in ethicssuch people exemplify many of the moral virtues and also tend to be good advisers in ethical decisions. They are prudent and insightful, as well as morally upright. If, however, we take traits as ethically more basic than acts, we must ask: How does a virtue theory tell us what to do? Ethics largely concerns conduct. How do we determine what counts as, for instance, being just or beneficent? Virtue ethics has resources for answering this question. For instance, Aristotle calls virtue a state that decides, consisting of a mean, the mean relative to us, which is defined by reason. It is a mean between two vices, one of excess and one of deficiency.10 Consider beneficence. If, relative to my resources, I am selfish and ignore others' needs, this is a deficiency; if I give so much at once that I am prevented from providing much better things for others later, I am excessive. Good ethical decisions, on this view, are seen in the light of such comparisons.11
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The term mean suggests a kind of kind of weighting that virtue ethicists, and indeed virtually all ethical theorists, take to be unavailable in ethics. One case might be the kind in which there is already a quantitative baseline. If you already have an employee whose monetary compensation is n and you are hiring one who is in every way comparable, then the relevant mean calls for equality of compensation. Suppose, however, that you are determining bonuses. Now you may have no such beacon. Still, some figures will be clearly too high, others clearly too low. Moreover, virtue ethics would have us not only avoid extremes but also formulate the general standards of virtue by which we are to judge. The manager should want to be, for example, just, generous, and prudent; in employees, virtuous managers look for virtues such as productivity, cooperativeness, and beneficence toward coworkers and customers. These refinements in the perspective of judgment, together with progressive elimination of what is too much or too little, can lead to good judgments. The judgments may, as in this case, be financial, but virtue bears on nonmoral decisions as well as moral ones. Plainly, such financial decisions as determinations of bonuses also have a moral aspect.
Kantian Ethics
A contrasting ethical theory centers on rules, and this kind of theory is even more prominent than virtue ethics in contemporary discussions of business ethics. Many business ethicists are substantially guided by the master principle of Immanuel Kant, a principle called the Categorical Imperative. In one formulation, it says that we are always to act in such a way that we can rationally will the principle we are acting on to be a universal law: So act as if the maxim of your action [that is, the principle of conduct underlying the action] were to become through your will a universal law of nature.12 Thus, I should not mislead potential buyers in an advertisement I can legally publish if I could not rationally will the universality of the practicesay, when I am the victim. We would not want to universalize, and thus live by, the callous principle that one should mislead others when this is legal and will be profitable. Kant also gave a less abstract formulation of the Categorical Imperative: Act so that you use humanity, as much in your own person as in the person of every other, always at the same time as an end and never merely as a means.13 The requirement is that we always treat persons never merely as means, but also as ends in themselves. In part, the imperative seems to say: never use people, as in manipulating them by deceptive advertising. Instead, respect them.
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Treating people as ends clearly requires (nonselfishly) caring about their good. They matter as persons, and one must to some extent act for their sake whether or not one benefits from it. This formulation applies to oneself as well as others. It requires a kind of respect for persons, and this includes selfrespect. If we take Kant's two formulations together (and he considered them equivalent), then apparently we must not only treat persons as ends but equally so. Everyone matters and matters equally.14 The Kantian approach has at least a twofold emphasis. The universalizability principle calls on us both to act on principle and to be willing to apply our principle in any relevantly similar situation, including one in which we are on the receiving end of the decision in question. This has obvious application to determining compensation in employment, but the variables that go into such a decision are often numerous, and it should not be thought that formulating the rules that account for one's actual decision is easy. Just as one can follow rules of linguistic usage without being readily able to formulate them, one can follow a moral principle yet find difficulty formulating it with precision. The effort to do so, however, is often both morally desirable and economically rewarding. Managerial judgments, whether in rewarding merit or in punishing violations, are precedential, and both clarity in the ethical climate of a business and incentives toward ethical conduct are often well served by articulating the rules guiding managerial decision. The second Kantian formulation of the Categorical Imperative is, in emphasis at least, very different: it says that no one is to be treated merely as a means to someone else's ends and, positively, that people are to be treated with respect for their value as persons (as ends in themselves). Exploitive treatment, as in sending employees on dangerous missions without adequate warning and their proper consent is thus ruled out. Creating a climate of respect is essential for ethical business, and the good of all stakeholders must be given due weight.
Utilitarianism
It is sometimes said that whereas Aristotle's ethics is a virtue ethics, Kant's is a rule ethics. (Kant's is also sometimes called an ethics of duty.) There is a point in this contrast, but it must not be taken to imply that practitioners of one must always differ with practitioners of the other in concrete ethical judgments on cases. The same holds for a quite different kind of rule ethics, one suggested by the question: what good are rules unless they contribute to our wellbeingthat is, unless (above all) following them enhances human
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happiness and reduces human suffering? This kind of concern leads to utilitarianism, the position of Jeremy Bentham and John Stuart Mill. For Mill, the central requirement of ethics is roughly this: choose that act from among your options which is best from the twin points of view of increasing human happiness and reducing human suffering (an ethically permissible act may be such by increasing happiness or decreasing suffering or both). In Mill's words: The creed which accepts as the foundation of morals utility holds that actions are right in proportion as they tend to promote happiness, wrong as they tend to produce the reverse of happiness. By happiness is intended pleasure, and the absence of pain.15 If one act produces more happiness than another, it is preferable, other things being equal. If the first also produces suffering, other things are not equal. Ideally, our actions would be doubly good, as in providing good jobs for unemployed poor people. We would be producing pleasure and reducing suffering. The ethical aim for action is to find options second to none in total value, understood in terms of happiness. For instance, lying causes suffering, at least in the long run, and truthfulness contributes, over time, to our well beingroughly, how well off we are from the point of view of happiness as the positive element and suffering as the negative one. Mill argued similarly in support of other morally required conduct, such as fairness in dealing with others and noninterference with other people's conduct.16 From the point of view of ethical theory, utilitarianism has advantages of a kind that are appealing to many businesspeople. It is empirical, in the sense that the question whether an act is right is answerable in terms of its predictable consequences for happiness and unhappiness. This makes it correspondingly objective and as quantitative as one can be about measurements of pleasure and pain and the probabilities of producing them. Many ethical theories have noted, however, that pleasure and pain are difficult to measure and that the task of predicting their consequences is complex, especially if one tries to take account of an indefinitely long future. One response to this problem is to take the maximization of happiness standard to apply not to individual acts but to rules of action. For this rule utilitarianism, such everyday rules as those requiring promise keeping and veracity are often endorsed as normally giving good moral guidance. Their internalization by actors is what rule utilitarianism calls for. In business ethics, then, utilitarians can claim to have a method that enables them to bring empirical techniques to bear on ethical decisions much as
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they bear on costbenefit analysis in purely economic decisions aimed at maximizing profit. However, consider the difficulty of deciding when a working mine is sufficiently safe to permit sending miners into it. How should one weight the unhappiness value of an accidental death? One would need to take account of the expected value of the otherwise remaining life, as well as the suffering caused by loss and grief. Less dramatically, is one to pay one employee more than another because, although they are equal in productivity and other professional variables, one is healthy and single, the other is the sole support of three children, and we can find no further basis of a differentiation in happiness value? Here one might have a rule of justice calling for equal treatment, but cases like these raise the question whether such rules are actually supported by the overall maximization aim. The literature on utilitarianism is enormous, and here we can only note some of the advantages and disadvantages of giving it a major role in business decisions.17
Commonsense Intuitionism
A rule theory need not have a master principle. Many writers in ethics hold a pluralistic, multiplerule view that categorizes our basic obligations. W. D. Ross did so by considering the kinds of grounds on which moral obligations rest; for instance, making a promise to help you review an inventory statement is a ground of an obligation to do it, and damaging someone's computer in delivery is a ground of an obligation to make reparations. For Ross, the basic prima facie obligationsroughly, obligations that constitute our overall obligation when there is no at least equally strong conflicting obligationinclude obligations to (1) keep promises, (2) act justly, (3) express gratitude for services rendered, and (4) do good deeds toward others. Ross also stressed (in the same chapter) the obligations to (5) avoid injuring others, (6) make reparations for wrongdoing, (7) avoid lying, and (more positively) (8) improve oneself. He considered it intuitively clear and even selfevident that we have these eight obligations: you can see that we do by simply engaging in sufficiently clear and deep reflectiona kind of intuitive thinkingon the moral concepts in question in relation to representative applications of them to actual or hypothetical acts.18 Hence the name intuitionism for the position that morality is to be conceived in terms of the principles expressing these commonly recognized obligations.19 Ross thought that in at least the majority of cases in which two or more prima facie obligations conflict, we need practical wisdom (wisdom in human affairs) to determine which is final, that is, which obligation is, all
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things considered, the one we ought to fulfill, as opposed to our prima facie obligation, our obligation relative to the moral grounds in the situation. Our final obligation is what we ought to do in the end, and it will be the same as our prima facie obligation if no other such obligation of equal weight should conflict. Consider two cases in which most businesspeople would agree on the resolution, regardless of their orienting theories among those considered. If I promise to deliver a new computer to you and this turns out to be so expensive, owing to bad weather and shipping costs, that I would make no profit, this promissory obligation overrides my obligation to protect my profit. Similarly, if a computer is damaged in shipment, I may face a choice between replacement and equally costly repairs, but it would be wrong to hold the buyer responsible. These ethical preferences would often be intuitive and readily apparent to a person of practical wisdom, but they might also be justifiable by one or more ethical theories. There is, then, both an Aristotelian element in Ross's common sense ethics and an openness to theoretical justifications of intuitive moral judgments. Practical wisdom is what Aristotle took to be essential in determining what kinds of acts express virtue; and Ross thought, as Aristotle may have, that sometimes it is intuitive, or even obvious, which of two conflicting obligations takes precedence. Saving a dying person may be quite obviously a stronger obligation than keeping a promise to help harvest corn. That the morally right choice is obvious does not prevent its being explained by, for instance, a Kantian categorical imperative. By contrast, the choice of one good candidate over another good one to fill an important position may rarely be obviously right. Here morality counsels humilityand the constant retrospective selfscrutiny that helps us both to rectify past mistakes and to avoid future errors. But even in difficult cases like this one may still be able to findand to defend to higher managementgood resolution with the help of an ethical theory. Given a conscientious use of practical wisdom and appeals to a morality that we all commonly share, do we really need an ethical theory at all? And if we do, must it be highlevel as are virtue ethics, Kantianism, and utilitarianism, or may it be more nearly groundlevel, as with the kinds of everyday moral generalizations Ross thought morally sufficient? Arguably, people are guided by one or another kind of highlevel theory even if they are unaware of it. Be that as it may, there is wide agreement on this point: an act that is rightincluding the mental act of deciding to do something is not just brutely right, it is right in virtue of being, say, an equal division of profits, a keeping of a promise, a relieving of suffering, or an expression
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of respectfulness. The reference here is to groundsgrounds that represent verifiable descriptive facts. These grounds represent the things ethical theorists have stressed: equal treatment in Kantian ethics, promise making in commonsense intuitionism, reduction of suffering in utilitarianism, and, in virtue ethics, acting from virtue. Ethical decisions by any conscientious and morally committed person tend to be guided by taking account of grounds of these sorts. This brings us to the role of ethical theory in making such decisions. Ethical decisions are precedential: if we (morally) ought to do a certain deed in circumstances C, then we ought to do the same type of thing in exactly similar circumstances orto take the more common casein relevantly similar ones. A conscientious ethical decision, then, implies a rule that calls for the same act in circumstances that are at least relevantly similar. Kant's universalizability idea partly rests on, and calls attention to, this important point. Utilitarianism is in part an attempt to summarize the kinds of grounds that matter under the broad welfarist headings of pleasure and pain. Commonsense pluralism of the sort embraced by Ross provides a wider account of such grounds. Virtue ethics indicates connections between such grounds and right action as those connections are seen in the light of such virtues of character as justice, fidelity, and sincerity. All conscientious people are ground guided in making moral decisions. Often, they are influenced by one or another kind of theory in deciding what the relevant grounds are and what action they call for. Ethical theories help one to find and articulate grounds, to justify decisions by appeal to them, and to generalize from good decisions to rules that can guide future conduct and facilitate good decisions in the future. A special merit of commonsense pluralism is that it provides a practical and readily applicable meeting ground for people whose theoretical orientations may be quite different. The principles Ross formulated are common in the moral education of many cultures: (1) they describe much of the ethical conduct of the virtuous; (2) they are theorems rationalized by Kant's central principles; (3) they are widely and plausibly thought to promote human wellbeing; and (4) they operate on the basis of familiar empirically accessible grounds for action. Some Illustrative Problems in Business Ethics Some illustrations of the practical uses of ethical theory in business ethics will help clarify the more theoretical matters discussed so far. The importance of virtue ethics, utilitarianism, Kantian ethics, and commonsense
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intuitionism will be presupposed, but it should be clear that other views might have similar applications to the problems in question.
Affirmative Action
Affirmative action is, roughly speaking, giving preferential treatment to members of a group identified by a characteristic not normally a qualification for doing the job in question. Gender and ethnicity are the main cases discussed in business ethics. Affirmative action comes in degrees. Among the importantly different degrees revealed by ethical analysis are (1) extra effort to bring the preferred group into the applicant pool, say to maximize female applications; (2) giving hiring preference when other things are equal in terms of qualifications; and (3) giving preference when a member of a nonpreferred class is perceptibly (but not substantially) better qualified. The two most important rationales for affirmative action are that (1) it is needed, for some period of time, to compensate for past discrimination against the designated group (a rationale defensible by appeal to some of the commonsense intuitive principles or on Kantian lines) and (2) that it is beneficial for society as a whole (a rationale most readily defensible on utilitarian lines or by some nonutilitarian principle of beneficence). Consider African Americans whose ancestors were slaves and who may themselves have been victims of discrimination. It may be argued that there is an obligation of reparation owed to them, at least by government on behalf of society. The obligation of reparation, in general, is one Ross stressed. Fulfilling it here may also be considered a requirement of treating the persons in question as ends, in the sense required by Kant's categorical imperative. As to the social benefit argument, this may be supported by utilitarian considerations or even by appeal to the obligation of beneficence applied at the level of society as a whole. From the point of view of virtue ethics, both the character traits of benevolence and justice may be appealed to in support of an affirmative action policy: goodness toward others requires helping those at socioeconomically low levels, and justice toward those disadvantaged by wrongdoing calls for compensatory action. Both the reparation and the social benefit argument are controversial, and there is a huge literature on affirmative action. The aim here is to show some of the ways in which the major theories might be brought to bear on the issue. The major ethical theories may, however, also be appealed to in challenging policies of affirmative action. Both the Kantian emphasis on universalizability
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and the commonsense principle of justice, for instance, call attention to the other side of the issue: equal opportunity. People commonly claim rights to it and argue that it requires assessing persons solely on their merits for the position in question. Rights of equal opportunity, many say, outweigh affirmative action considerations. These writers usually hold that there is no right to affirmative action and that even a right of reparation for wrongdoing could be satisfied by measures other than employment preference, say by enriched early childhood education programs, with some preference for the group owed the reparations. At the same time, since rights are not absolutean important point of ethical theory that must here be assumed without argumenta case for some degree of affirmative action could still be made, at least in societies like that of the United States today. But what degree of affirmative action and for how long? This problem is of the kind that Ross thought called for practical wisdom. Practical wisdom, however, may be significantly assisted by theory. Consider the requirements of justice and their bearing on affirmative action. Presumably, hiring preference is given only when other things are equal in terms of qualifications. Under this policy, no one should suffer the prima facie injustice of having someone less qualified preferred. It is true that there would not be perfect equality of opportunity, but do we have a right to have a prospective employer choose arbitrarily between us and someone equally qualified, so that our chance is equally good? An employer might claim a right in such cases to choose on other criteria within a morally acceptable range, including beneficence toward a member of a historically disadvantaged group. Both utilitarian and virtue ethical criteria may be helpful here. When the relevant details are clear, it may also help to frame a principle for deciding such cases and to consider, as Kantians would, whether whatever policy is considered is rationally universalizable. Suppose that a good case can be made for affirmative action that calls for preference for a minority candidate whose qualifications for performing the job are not quite equal to those of the best majority candidate, though they are very close. Utilitarian considerations (among others) suggest an appeal to the economic value of diversity: the claim is that at least many businesses tend to succeed better when their workforce matches, in gender and ethnic proportionality, the population in which it operates. In a sense, this makes minority status a kind of economic merit. If the diversity argument is economically sound, does giving it some weight create a policy that would do an injustice to certain applicants or at least
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fail to treat them as ends? Is the argument truly a justification of some level of affirmative action, or is it a rationalization for violations of the equal opportunity standard? The answer is perhaps not obvious, but the question is an important one that ethical theory can at least help us clarify and think through.
WhistleBlowing
In mining, construction, engineering, security firms, and industrial manufacture there are sometimes failures to maintain adequate safety conditions. Employees may face the question whether to blow the whistle, that is, go to authorities higher in the business, or outside the business, or to the press or some other (usually outside) person(s) in order to rectify the wrong in question. The question can be difficult because blowing the whistle can harm other employees and even destroy the company, yet not doing so can lead to accidents or, on the economic side, loss of jobs for employees and suppliers and, for stockholders, loss of vast sums of money. Employees who discover serious wrongs will likely face conflicts of obligationsconflicts between obligations of fidelity to coworkers, who will likely be hurt by damage to the company, and to people, such as customers or stockholders, who will be harmed if nothing is done. Suppose that tunnels in a mine are not sufficiently secured against collapse, with the result that there is a significant chance of a caveinone that neither good judgment nor the law would tolerate if it should come to light. Given the obligation of fidelity to coworkers and to one's company, one might favor a priority of internal resolution principle: it says that a reasonable attempt to solve the problem should be made through internal channels if there is a significant chance of success. But suppose nothing is done in response. It will take courage to go above one's supervisor. But what if it turns out that no one within the company is at all likely to solve the problem? It may be hard to determine this, but there have been cases in which it is clear that the top management is corrupt or at least unwilling to correct a wrong. This appears to have been the case with Enron and with WorldCom, though the circumstances at both were complicated. In the mining case, the miner (or other employee) may, and perhaps ethically must, blow the whistle. This case illustrates the relevance of probability calculations in ethics. There is always some chance of disasters in mining. One question is what
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constitutes an acceptable risk. It also may matter which ethical theory, if any, guides us. A utilitarian calculation is one route to an answer, but for cases like whistleblowing a Kantian universalizability principle may be more pertinent: all concerned, from the mine operator to the person considering blowing the whistle, should ask whether the risk is one we could knowingly and rationally take or let our friends take. If the answer is negative, that person morally should take some action. Suppose that, as has often happened, there is an inadequate attempt at remedy within the company. From the point of view of a pluralism of moral norms, several obligations are relevant: the obligations of fidelity to coworkers, of justice, of beneficence, and of noninjury must be considered. It is clearly reasonable to minimize harm to the company, but the need to protect innocent people also looms large, and prevention of injury and injustice may together require blowing the whistle. Another ethical question about whistleblowing is how to state the appropriate degree of protection to provide for those who do it. One approach is a utilitarian calculation in which we compare, say, the good of strong protections against firings or prosecutions against the bad effect of the likelihood of false charges that would come with this system. Another approach is to appeal to the principle of noninjury (nonmaleficence), which calls for abstaining from injuring or harming others. This would imply that a truthful, judicious whistleblower should have protection, but penalties should be assessed against those who make false charges, especially if they are negligently or quite detectably false. The results of these two approaches might or might not coincide, but they differ in their central focus. Other approaches to whistleblowing might also be used (as chapter 19 in this volume makes clear). Any approach should be tested by framing the principles it leads to and testing them against actual and hypothetical cases on which a clear intuitive judgment can be made. This procedure is usable in any field, and the attempt to achieve what was above called reflective equilibrium is an important goal in arriving at operating standards to govern whistleblowing.
Advertising and the Ethics of Creating Desire

Advertising succeeds only if adequate desire exists on the part of consumers. The ethical appraisal of advertising requires conceptual analysis, and it benefits from moral psychology. To begin with motivation, three important kinds of desire should be considered. The main division is between need
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based desire and nonneedbased desire. But what is need? We here require a further distinction. Needs are relative to some state or outcome for which the needed thing is essential. Food and shelter are needed for survival; an allterrain vehicle is needed for certain kinds of recreation or for war. The respect of others is needed for a good life. A good life is not definable in biological terms and can be the object of ethical needs and of desires an ethical person would have. For example, that people need the respect of others is an ethical statement. A plausible ethical theory can help us to determine what human beings need. In the virtue ethical tradition since Aristotle, the notion of human flourishing has been used to describe a pattern of human existence in which what is sometimes called the human good is realized. A broad guideline is that, from the moral point of view, people need to flourish. They need to develop and use their talents, to enjoy social interaction, and to express themselves intellectually and spiritually. Ethical theorists who give rights a central place tend to agree that there is a basic human right to an opportunity to flourish.20 What level of support this right requires businesses to give to their employees and other stakeholdersand what it requires governments to provide for citizensare difficult questions. No ethical theory of the basic kinds we have considered gives a precise answer, but no answer that is not defensible in relation to some general moral grounds is likely to succeed. Needbased desires of either biological or ethical kinds are natural for human beings and are ethically proper targets of advertising and marketing. Whether needbased or not, desires met by marketing divide into two kinds: those existing antecedently to marketingespecially advertisingand those created by it. A desire for a good night's sleep is need based and antecedent to advertising; a desire for a particular kind of sleeping pill may well not be antecedent to advertising. A desire for a powerful allterrain vehicle for recreational use is (generally) not need based. It may or may not be created by advertising. Is it ethical for a business to create it and sell such products? Is doing so unjustifiably manipulativea way of treating people merely as means or at least not as ends? It would be a mistake to claim that creating and meeting desires that are not need based is always unethical. Many things that make life enjoyable are not needed either biologically or for ethical reasons. However, one could market cigarettes to minors or otherwise create desires for something harmful that is not needed. Here one would violate the obligation of noninjury. One could also create desires that have disproportionate strength. They are
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disproportionate in that, though not themselves need based, they come to outweigh needbased desires. This would apply to desires for hard drugs that are not medically needed but create a chemical dependency. People who want to enter the business world have choices, and businesses themselves have latitude regarding what they will create or market. Here it is important to ask what kind of person one wants to be, as virtue ethics demands of us, and to have a good understanding of what is called for in business conduct by one or another answer. Given a manufacturing or marketing plan, we should be able to explore how it bears on the promotion of human good, which in turn requires distinguishing between need based desires and other desires, and between evoking desire for what advances wellbeing and manipulatively evoking desires that simply lead to consumption and, like excessive energy consumption, to harms. Connected with this is the difference between persuading potential customers with arguments based on their needs and manipulating them with images and information that produce consumption by evoking nonneedbased desires. Conclusions Ethical theory is often developed purely metaethically in a way that is neutral on substantive moral questions. It is also frequently represented by a variety of welldeveloped positions that include both metaethical and normative ethical components. These positions include virtue, Kantian, utilitarian, and commonsense theories. These theories either contain or can be readily integrated with positions in epistemology and metaphysics, moral psychology, and philosophical theology. These theories center on certain kinds of descriptive factual grounds for ethical decision, such as promises made, harms done to persons, or consequences for human happiness. All require conceptual analysis for their interpretation and application. In some cases of ethical decision, these theories lead one in different directions; in others, they converge in support of a decision or resolution, even if for quite different reasons. None makes ethical decisions in complicated cases easy. But the theories agree in recognizing a wide range of human conduct in which ethics provides helpful answers. In the majority of business decisions, it is clear that, negatively, harms, lies, and broken promises are to be avoided and that, positively, the welfare of human beings is to be promoted. Where hard cases require decisions that are controversial, ethical theory enables us to explain their basis, frame tentative principles that support the decisions, and critically compare the cases with other cases
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that fall under the principles and may confirm them or, in some instances, lead us to revise them. This use of ethical theory reduces the chance of error, facilitates nonviolent resolution of disagreement, sets a precedent for dealing with problems that will likely arise, and provides a basis for better procedures and decisions in the future.21
Suggested Reading
Aquinas, Thomas. Disputed Questions on the Virtues. Edited by E. M. Atkins and Thomas Williams. Cambridge: Cambridge University Press, 2005. Find This Resource Worldcat Google Preview Aristotle. Nicomachean Ethics. Edited by Roger Crisp. Cambridge: Cambridge University Press, 2002. Find This Resource Worldcat Google Preview Audi, Robert. The Good in the Right: A Theory of Intuition and Intrinsic Value. Princeton, N.J.: Princeton University Press, 2004. Find This Resource Worldcat Google Preview Bowie, Norman E. Business Ethics: A Kantian Perspective. Oxford: Blackwell, 1999. Find This Resource Worldcat Google Preview Dunfee, Thomas W., and Thomas Donaldson. Social Contract Approaches to Business Ethics: Bridging the IsOught Gap. In A Companion to Business Ethics. Edited by Robert E. Frederick, 3855. Oxford: Blackwell, 2002. Find This Resource Worldcat
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Google Preview
Gert, Bernard. Common Morality. Oxford: Oxford University Press, 2004. Find This Resource Worldcat Google Preview Gibbard, Allan. Wise Choices, Apt Feelings. Cambridge, Mass.: Harvard University Press, 1990. Find This Resource Worldcat Google Preview Harman, Gilbert, and Judith Jarvis Thomson. Moral Relativism and Moral Objectivity. Oxford: Basil Blackwell, 1996. Find This Resource Worldcat Google Preview Hooker, Brad. Ideal Code, Real World. Oxford: Oxford University Press, 2000. Find This Resource Worldcat Google Preview Hume, David. A Treatise of Human Nature. Edited by David Fate Norton and Mary J. Norton. Oxford: Clarendon Press, 2007. Find This Resource Worldcat Google Preview Kant, Immanuel. Groundwork of the Metaphysics of Morals. Translated by Allen Wood. New Haven, Conn.: Yale University Press, 2002. Find This Resource Worldcat Google Preview
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Mill, John Stuart. Utilitarianism. Edited by George Sher. Indianapolis, Ind.: Hackett, 1979. Find This Resource Worldcat Google Preview Nagel, Thomas. The View from Nowhere. Oxford: Oxford University Press, 1986. Find This Resource Worldcat Google Preview Nozick, Robert. Anarchy, State and Utopia. New York: Basic Books, 1974. Find This Resource Worldcat Google Preview Parfit, Derek. Reasons and Persons. Oxford: Oxford University Press, 1984. Find This Resource Worldcat Google Preview Rawls, John. A Theory of Justice. Cambridge, Mass.: Harvard University Press, 1971. Find This Resource Worldcat Google Preview Ross, W. D. The Right and the Good. Oxford: Oxford University Press, 1930. Find This Resource Worldcat Google Preview Scanlon, T. M. What We Owe to Each Other. Cambridge, Mass.: Harvard University Press, 1998. Find This Resource
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Worldcat Google Preview
Swanton, Christine. Virtue Ethics: A Pluralistic View. Oxford: Oxford University Press, 2003. Find This Resource Worldcat Google Preview
Notes:
(8.) For an indication of how the Golden Rule is formulated in many different religious traditionsAfrican as well as Western and Easternsee Patrick E. Murphy et al., Ethical Marketing (Upper Saddle River, N.J.: Pearson/Prentice Hall, 2005), 36. (9.) Aristotle described just acts as the kind that a just person would perform; a just person is not to be defined as one who performs just acts. He took moral traits of character to be ethically more basic than moral acts. He said, regarding types of acts that are right, Actions are called just or temperate when they are the sort that a just or temperate person would do (Nicomachean Ethics, 1105b5ff). It is virtues such as justice and temperance rather than acts that are ethically basic for Aristotle: Virtue makes us aim at the right target, and practical wisdom makes us use the right means (1144a). (1.) The domain of the right and the wrong is called deontic, that of the good and the bad axiological, but I will not use these terms and will instead speak of what is right, wrong, obligatory (wrong not to do), and permissible (not wrong to do, though not necessarily obligatory), and of what is good as an end (good in itself) as opposed to good as a means (instrumentally). (2.) The difference between a judgment that is moral in content and one that is moral in force is essential for showing that moral judgments have criteria of application not themselves dependent on prior moral judgment. If you give $20 for an item selling for $12 and are (intentionally) shortchanged by receiving $7 in change, it is a simple verifiable fact that you are cheated. There are moral uses of cheat, but the point here is that we can specify the moral point of view in part by finding terms with nonmoral content whose application entails the applicability of a moral judgment. Some would call
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cheating a thick moral concept, presumably on the ground that it has definite content selfevidently entailing a prima facie wrong. (3.) Kenneth Goodpaster analyzes various excessive pursuits of profit and other goals under the heading of teleopathy, Conscience and Corporate Culture (Oxford: Blackwell, 2007), 28. (4.) This is from Sellars's paper Empiricism and the Philosophy of Mind, in his Science, Perception and Reality (London: Routledge and Kegan Paul, 1963), 173 (originally published in Minnesota Studies in the Philosophy of Science 1, 1956). (5.) For a major recent statement of noncognitivism with references to earlier writers in this tradition see Allan Gibbard, Wise Choices, Apt Feelings (Cambridge, Mass.: Harvard University Press, 1990). (6.) Ross is a prominent defender of the view that certain basic principles are selfevident. He suggests that people who have a certain mental maturity and reflect sufficiently can know them in the way we know rules of inference in logic. See W. D. Ross, The Right and the Good (Oxford: Oxford University Press, 1930), 29. Supporting theory is given by Thomas Nagel, The View from Nowhere (Oxford: Oxford University Press, 1986). (7.) John Rawls, A Theory of Justice (Cambridge, Mass.: Harvard University Press, 1971) is largely responsible for giving reflective equilibrium prominence in ethical theorizing; see, especially, 4851. There is now a large literature on it, and the method has been claimed by both people who think justification for beliefs and judgments comes chiefly from coherence among them and those who think it comes chiefly from their grounding in experience or reason taken to provide evidence for beliefs and judgments. Rawls is also a major proponent of a contractualist approach to understanding social justice. For a short statement of how such an approach bears on business ethics see Thomas W. Dunfee and Thomas Donaldson, Social Contract Approaches to Business Ethics: Bridging the IsOught Gap, in A Companion to Business Ethics, ed. Robert E. Frederick (Oxford: Blackwell, 2002), 3855. (10.) Aristotle, Nicomachean Ethics, ed. Roger Crisp (Cambridge: Cambridge University Press, 2002), 1107a14. (11.) For discussion of virtue ethics in the business domain, with applications to many problems treated in this volume, see Robert C. Solomon, Ethics and
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Excellence: Cooperation and Integrity in Business (Oxford: Oxford University Press, 1992). Also instructive for business ethics is Edwin Hartman, Can't We Teach Character? An Aristotelian Answer, Academy of Management Learning and Education 5 (2006): 6881. (12.) Immanuel Kant, Groundwork of the Metaphysics of Morals, trans. Allen Wood (New Haven, Conn.: Yale University Press, 2002), 38, sec. 422. Kant apparently has rational universalizability in mind in this and the other universalizability formulations of the Categorical Imperative. There is a large literature on how he should be interpreted, but nothing highly controversial about his view will be presupposed here. (13.) Ibid., 4647, sec. 429. (14.) A account of Kantian ethics in business is provided by Norman E. Bowie, Business Ethics: A Kantian Perspective (Oxford: Blackwell, 1999). A shorter statement of his view is his A Kantian Approach to Business Ethics, in A Companion to Business Ethics, ed. Robert E. Frederick (Oxford: Blackwell Publishers, 2002), 316. (15.) John Stuart Mill, Utilitarianism, ed. George Sher (Indianapolis: Hackett, 1979). (16.) Utilitarianism is popularly formulated as the position that for an act to be morally right is for it to produce the greatest good for the greatest number. This misrepresents the view. Utilitarians are concerned above all to maximize the good. Some ways to produce good for all concerned, such as providing education for all children, are quantitatively better than others because of how many people they help; but the idea that doing good for more people rather than less is not a basic concern of utilitarianism and is not appropriate to defining the position. For instance, if providing public parks only in poor communities would produce more good than providing them equally to a whole population (where this entails their being of lower quality), the former, narrower distribution would be preferred. (17.) For critical explication and an analytical treatment of utilitarianism, see my Can Utilitarianism Be Distributive? Business Ethics Quarterly 17 (4) (2007): 593611. (18.) See W. D. Ross, The Right and the Good, 2134.
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(19.) For clarification, modification, and extension of Ross's position, see Robert Audi, The Good in the Right: A Theory of Intuition and Intrinsic Value (Princeton, N.J.: Princeton University Press, 2004), 4079, which proposes a Kantian intuitionism, an integration between the Rossian, commonsense pluralist approach and a version of the categorical imperative. Clearly, an ethical theory may draw on elements in more than one of the four major kinds of positions introduced in section 2, and my statement argues for an integrated view with advantages over Kant's and Ross's positions. (20.) It is difficult to say what constitutes a moral right. On the most plausible understandings of the notion, rights do not exhaust oughts, and hence are not the entire basis of moral standards. (21.) Acknowledgments: For many helpful comments on earlier versions of this essay or parts of it, I thank my colleagues Georges Enderle and Patrick E. Murphy and, especially, the editors of this volume.
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The Place of Ethical Theory in Business Ethics

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The Oxford Handbook of Business Ethics