Evaluating Business Ethics:

Cotemporary Ethical Theories

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The role of ethical theory

Two extreme positions (De George 1999

Ethical absolutism ! claims there are eternal" universally applica#le moral principles$
%ight an& wrong are o#'ective (ualities that can #e rationally &etermine& Tra&itional ethical theories

Ethical relativism ! claims morality is context &epen&ent an& su#'ective

There are no universal right an& wrongs that can #e rationally &etermine& Contemporary ethical theories

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Tra&itional ethical theories Major normative theories in business ethics

Egoism Utilitarianism Ethics of duties Rights and justice Immanuel ant John !oc"e John Ra#ls Rights Contributors Adam Smith Jeremy Bentham John Stuart Mill Collecti%e #elfare

$ocus

Indi%idual desires or interests Ma'imi(ation of desires/self interest

&uties

Rules

Act/rule utilitarianism

Categorical im)erati%e

Res)ect for human beings Man is a being that is distinguished by dignity

Conce)t of Man as an actor #ith Man is controlled by Man is a rational human beings limited "no#ledge a%oidance of )ain moral actor and objecti%es and gain of )leasure (hedonist) *y)e Conse+uentialist Conse+uentialist ,onconse+uentialist

,on-conse+uentialist

Source: Crane and Matten (2004) Figure 3.2, page 80

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*tilitarianism

+ccor&ing to utilitarianism" an action is morally right if it results in the greatest amount of goo& for the greatest amount of people affecte& #y the action
,greatest happiness principle Cost.#enefit analysis 2
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*tilitarianism (/
Example of a utilitarian analysis
Action - : doing the deal .leasure .roduct manager *hai &ealer Success; bonus .ain Bad conscience .leasure /ood conscience .ain !oss of a good deal Action 2 : not doing the deal

/ood deal

!oss of a good deal Search for a ne# customer in Euro)e !imited )ros)ects for children Hard #or" ,o hard #or" ,o chance of *ime to )lay and go school education to school Search for other sources of income .otentially forced to do other, more )ainful #or" !oss of economic su))ort

.arents

Secure the familys income $eeling of being needed, being gro#n u); a))ro%al of )arents; $amily is able to su))ort her

Children

/randmother

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0imits of *tilitarianism

1u#'ectivity
0e& to refinement of theory
+ct utilitarianism %ule utilitarianism

2ro#lems with (uantification Distri#ution of utility

2

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Act utilitarianism loo3s to single actions an& #ases the moral 'u&gement on the amount of pleasure an& the amount of pain this single action causes$ Rule utilitarianism loo3s at classes of action an& as3 whether the un&erlying principles of an action pro&uce more pleasure than pain for society in the long run$

+ct. an& %ule. *tilitarianism

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Ethics of &uties

Categorical Imperative (4ant

5axim 1: Consistency +ct only accor&ing to that maxim #y which you can at the same time will that it shoul& #ecome a universal law$ 5axim /: Human Dignity +ct so that you treat humanity" whether in your own person or in that of another" always as an en& an& never as a means only$ 5axim 6: Universality +ct only so that the will through its maxims coul& regar& itself at the same time as 2 Higher Education universally lawgiving$

2ro#lems with ethics of &uties

! ! *n&ervaluing outcomes Complexity 5isplace& optimism7

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Ethics of rights an& 'ustice

Natural rights are certain #asic" important" inaliena#le entitlements that shoul& #e respecte& an& protecte& in every single action$
1trongly #ase& in western view of morality

ustice can #e &efine& as the simultaneously fair treatment of in&ivi&uals in a given situation with the result that every#o&y gets what they &eserve 2 Higher Education
8air proce&ures (proce&ural 'ustice

9ohn %awls,Theory of 9ustice1$Each person is to have an e(ual right to the most extensive total system of #asic li#erties compati#le with a similar system of li#erty for all$ /$1ocial an& economic ine(ualities are to #e arrange& so that they are #oth:
a$to the greatest #enefit of the least a&vantage&: an& #$attache& to offices an& positions open to all un&er con&itions of fair e(uality of opportunity$

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Too Too Too Too Too

0imits of tra&itional theories

a#stract re&uctionist o#'ective an& elitist impersonal rational an& co&ifie&

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Contemporary ethical theories

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;irtue ethics
!irtue ethicsconten&s that morally correct actions are those un&erta3en #y actors with virtuous characters$ Therefore" the formation of a virtuous character is the first step towar&s morally correct #ehaviour

+c(uire& traits
<ntellectual virtues 5oral virtues 2
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8eminist ethics
"eminist ethics is an approach that prioriti=es empathy" harmonious an& healthy social relationships" care for one another" an& avoi&ance of harm a#ove a#stract principles

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8eminist ethics Contrasting gen#er$base# vie%s of business ethics

View of human
2
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Discourse ethics
&iscourse ethics aims to solve ethical conflicts #y provi&ing a process of norm generation through rational reflection on the real.life experiences of all relevant participants *ltimate goal of ethical issues in #usiness shoul& #e the peaceful settlement of conflicts (1teinmann an& 0hr" 199> Different parties in a conflict shoul& sit together an& engage in a #iscourse a#out the settlement of the conflict" an& ultimately provi&e a situation that is accepta#le to all
,i&eal &iscourse- criteria (?a#ermas

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2ostmo&ern perspectives on #usiness ethics

'ostmo#ern ethicsis an approach that locates morality #eyon& the sphere of rationality in an emotional ,moral impulse- towar&s others$ <t encourages in&ivi&ual actors to (uestion every&ay practices an& rules" an& to listen to an& follow their emotions" inner convictions an& ,gut feelings- a#out what they thin3 is right an& wrong in a particular inci&ent of &ecision.ma3ing$ 2 Higher Education

 2ostmo&ern #usiness ethics emphasises (Gustafson" /AAA:/1

?olistic approach Examples rather than principles ,Thin3 local" act local 2reliminary character

2ostmo&ern #usiness ethics

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1ummary
Towar&s a pragmatic use of ethical theory7

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The value of ethical theories in solving ethical &ilemmas in #usiness

Ethical dilemm businea in ss

Prism of ethical the ories

Variety of norma tive conside rat in solvin ions g the ethic al dilemma

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2luralism7
Crane an& 5atten (/AA> argue that for the practical purpose of ma3ing effective &ecisions in #usiness: Bot suggest one theory or one approach as the #est or true view of a moral &ilemma 1uggest that all these theoretical approaches throw light from &ifferent angles on one an& same pro#lem
Complementary rather than mutually exclusive

+&vocate position of pluralism

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Consi&erations in ma3ing ethical &ecisions: summary of 3ey insights from ethical theories

Consideratio One o!n intere t

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Continued
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Consi&erations in ma3ing ethical &ecisions: summary of 3ey insights from ethical theories (/

Consideratio Mora$ c#aracter

2
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