Business Ethics & CSR

Naeem ASHRAF
Spring, 2015
LUMS
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Grades Breakup

Class Participation: 10%

Attendance & Punctuality: 5%
Assignments: 10%
Quizzes: 20 % (4: N-1)[ 2 announced]
Mid-Term Examination: 30%
Project / Term Paper: 25%

Moral relativism

Business and Ethical Relativism

Ethical or moral relativism
The theory that there are no ethical standards that are
absolutely true and that apply or should be applied to
the companies and people of all societies.

Objections to ethical relativism

Some moral standards are found in all societies.

Moral differences do not logically imply relativism.
Relativism has incoherent consequences.
Relativism privileges whatever moral standards are
widely accepted in a society.
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Integrative Social Contracts Theory

Hypernorms
Apply to people in all societies (human rights
principles, principles of justice)

Microsocial norms
Apply only in specific societies and differ from one
society to another (common wife- Tibet;
accompany with male relative SA)

Hypernorms take priority, reject Microsocial

norms if it contradicts or violates hypernorms
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Moral Reasoning

Ethics and Reasoning*

Moral reasoning
Moral development
Moral behavior and its impediments

Moral responsibility and blame

* Unless specified otherwise, all definitions and example are quoted from Velasquez Manuel G.,2012. Business Ethics:
Concepts & Cases., PHI New Delhi

Moral Reasoning
The reasoning process by which human
behaviors, institutions, or policies are judged to
be in accordance with or in violation of moral
standards.
Moral reasoning involves
The moral standards by which we evaluate things
Information about what is being evaluated
A moral judgment about what is being evaluated

Moral reasoning should: be logical, rely on

evidence, and be consistent
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Cognitive Moral Development

Level one: Pre-conventional stages
Punishment & obedience orientation
Instrumental & relative orientation

Level two: Conventional stages

Interpersonal concordance orientation
Law & order orientation

Level three: Postconventional stages

Social contract orientation
Universal moral principles orientation
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Cognitive Moral Development

Level One: Pre-conventional Stages
1. Punishment and Obedience Orientation - At this
stage, the physical consequences of an act wholly
determine the goodness or badness of that act. The
child's reasons for doing the right thing are to avoid
punishment or defer to the superior physical power
of authorities. There is little awareness that others
have needs similar to ones own.
2. Instrument and Relativity Orientation- At this stage,
right actions become those that can serve as
instruments for satisfying the childs own needs or
the needs of those for whom the child cares.
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Cognitive Moral Development

Level Two: Conventional Stages
1. Interpersonal Concordance Orientation - Good
behavior at this early conventional stage is living to
the expectations of those for whom one feels loyalty,
affection, and trust, such as family and friends. Right
action is conformity to what is generally expected in
one's role as a good son, daughter, brother, friend,
and so on.
2. Law and Order Orientation - Right and wrong at this
more mature conventional stage now come to be
determined by loyalty to one's own larger nation or
surrounding society. Laws are to be upheld except
where they conflict with other fixed social duties.
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Cognitive Moral Development

Level Three: Post-conventional, Autonomous, or
Principled Stages
1. Social Contract Orientation - At this first postconventional stage, the person becomes aware that
people hold a variety of conflicting personal views
and opinions and emphasizes fair ways of reaching
consensus by agreement, contract, and due process.
2. Universal Ethical Principles Orientation - At this
final stage, right action comes to be defined in terms
of moral principles chosen because of their logical
comprehensiveness, universality, and consistency.
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Four Steps Leading to Ethical Behavior

Recognize a situation is an ethical situation

Judging what the ethical course of action is
Deciding to do the ethical course of action
Carrying out the decision.

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Four Steps Leading to Ethical Behavior

Step One: Recognizing a situation is an ethical
situation.
Requires framing it as one that requires ethical
reasoning
Situation is likely to be seen as ethical when:
involves serious harm that is concentrated, likely, proximate,
imminent, and potentially violates our moral standards

Obstacles to recognizing a situation:

Euphemistic labeling, justifying our actions, advantageous
comparisons, displacement of responsibility, diffusion of
responsibility, distorting the harm, and dehumanization, and
attribution of blame.

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Four Steps Leading to Ethical Behavior

Step Two: Judging what the ethical course of
action is requires:
Moral reasoning that applies our moral standards
to the information we have about a situation
Realizing that information about a situation may
be distorted by biased theories about the world,
about others, and about oneself

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Four Steps Leading to Ethical Behavior

Step Three: Deciding to do what is right can be
influenced by:
Organizational culture
Moral seduction

Step Three: Carrying out ones decision can be

influenced by:
Ones strength/weakness of will
Ones belief about the locus of control of ones
actions
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Morality and Emotions

Ethics is not just a matter of logic, reasoning,
and cognition.
Emotions and feelings (guilt, shame,
compassion, empathy etc.) also play major
role

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Unconscious Moral Decision Making

It comprises most of our decisions
Made by the brains X-system using stored
prototypes to automatically and unconsciously
identify what it perceives and what it should
do

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Haidt, J. 2001. The emotional dog and its rational tail: A social intuitionist approach to moral judgment, Psychological Review, 108, 814-834

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Unconscious Moral Decision Making

Prototypes and rationality
The brains use of prototypes is similar in casuistry
or precedents in common law which are both
rational processes
This similarity implies the use of prototypes is also
a rational process
Conscious reasoning can also correct and shape
our prototypes.

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Cultural Influences and Intuition

Prototypes can be shaped by hardwired
moral intuitions, as well as by conscious moral
reasoning and cultural influences.
Hardwired intuitions seems to include: incest
is wrong; harming by action is worse than
harming by omission; harming as a means to a
goal is worse than harming as a foreseen side
effect; harming by physical contact is worse
than harming without physical contact.
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Conscious Moral Reasoning

Conscious moral reasoning is used in new,
strange, or unusual situations for which the
brain has no matching prototypes
Consists of the consciousness,logical but slow
processes of brains C-system
Evaluates how reasonable or unreasonable are
our institutions, our culture beliefs, and the
norms stored in our prototypes.
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Three stage model

Structural and cultural properties objectively shape the
situations that agents confront involuntarily, and inter alia
possess generative powers of constraint and enablement in
relation to
Subjects own constellations of concerns, as subjectively
defined in relation to the three orders of natural reality:
nature, practice and the social.
Courses of action are produced through the reflexive
deliberations of subjects who subjectively determine their
practical projects in relation to their objective circumstances
Archer, M. S. (2007:17). Making our Way through the World: Human Reflexivity and Social Mobility (First ed.).
Cambridge University Press.

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THANKS !

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