-Meaning of ethics

-Its classifications
-Law & ethics
-Ethics in the world of business

 What is ethics?
The word ethics comes from the Greek word
ethos, meaning character or custom.

Difference of ethics & morality?

Morality refers to human conduct & values.
Ethics a study of the area of morality

 Morality: The standards that an individual

or a group has about what is right and
wrong or good and evil.
Ethics: The discipline that examines ones
moral standards or the moral standards of
a society.

 Ethics denotes an academic subject, but in

everyday parlance, ethical & moral are
interchangeably used.
Ethical and moral to describe people we
consider good and actions we consider right
We interchange unethical and immoral to
describe what we consider bad people and
wrong actions.
The study of ethics concerns questions of
right & wrong, duty & obligation, & moral
responsibility.

 Ethical behaviour can vary from

one person to another; it is
relative, not absolute.
Factors influencing individual
ethics: family, peer, life
experience, personal values &
morals and situational factors.

 Consequentialists
Nonconsequentialist

 Philosophers argued that the moral

rightness of an action is determined
solely by its results. If its consequences
are good, the act is right; if they are
bad, the act is wrong.
They determine what is right by
weighing the ratio of good to bad.
Q: Consequences for whom? For
oneself or everyone affected? Answer
depends on 2 theories:
Egoism
Utilitarianism

 Thomas Hobbes & Adam Smith.

The guiding principle is an individual selfinterest.
individual can refer to single person or to
a particular group or organization;
An act is morally right if it best promotes the
individuals long-term interest, i.e. defines
right behaviour in terms of the consequences
for the individual.

 Defines right or acceptable behavior in

terms of the consequences for the
individual
Egoists believe that they should make
decisions that maximize their own selfinterest; no sacrifice or obligation are
owed to others.
In an ethical decisionmaking situation,
an egoist will probably choose the
alternative that contributes most to his or
her self-interest.

 In early 90s the Firestone Tire & Rubber

Company announced that it was discontinuing
its controversial 500 steel belted radial,
which according to a House sub committee
had been associated with fifteen deaths and
thirty one injuries. Newspaper interpreted the
Firestone announcement as an immediate
removal of the tires from the market, whereas
Firestone intended a rolling phase out

 A House subcommittee later found that Firestone

had in fact continued making the steel belted
500 radial, despite earlier media reports to the
contrary. Immediately thereafter, newspaper
reported a Firestone spokesperson as denying
that Firestone had misled the public. Asked why
Firestone had not corrected the media
misinterpretation of the companys intent, the
spokesperson said that Firestones policy was to
ask for corrections only when it was beneficial to
the company to do so i.e. when it was in the
companys self interests

 Jeremy Bentham and John Stuart Mill

(earlier thinkers to develop this theory).
Laws should be crafted so as to produce
the best consequences.
Seek consequences, but for the greatest
happiness/good of the greatest number of
people.

 Concerned with consequences, but seeks

the greatest happiness of the greatest
number of people.
Bentham- interest of community are simply
the sum of interest of its members
Utilitarian believe they should make
decisions that result in the greatest total
utility, i.e, achieve the greatest benefits for
all those affected by a decision.

 Action or practice is right if it leads to

produce the greatest possible balance of
good over bad for everyone affected by
our action.
Therefore, actions are right if they promote
the greatest human welfare, wrong if they
do not.
Maximize the good and minimize the
harm/evil.
E.g. the prison system
utilitarianism associated with social
improvement

 Right & wrong is determined not only by

the consequences of the act but because
of the nature of the action.
Bribery is unethical not because of its
consequences but because we have a duty not
to bribe; bribery is wrong by its nature,
regardless of the consequences
Breaking promise (it is wrong because of the
inherent character of the act itself apart from it
might hurt others feeling)

Nonconsequentialist Kants Ethics

 Immanuel Kant and Ronald Dworkin.

Laws should protect individual autonomy,
liberty or rights.
Universal accepted principles such as the
right of freedom, a person has the right to
choose how to live, etc.

 Focus on the rights of individuals and

on the intentions associated with a
particular behavior rather than on its
consequences.
If an act in a particular manner is suitable
to become a universal accepted
principle guiding behavior, then
committing that act is ethical.

 e.g: universal accepted principles such as

the right of freedom, a person has the
right to choose how to live
Nonconsequentialists believe that
conformity to general moral principles
determines ethicalness.

 According to Kant, the clerk who returns

the ten dollar to the customer is doing the
right thing. But if his action is motivated by
self interests (perhaps if he wants to get a
reputation for honesty) then it does not
have moral worth
If the clerk does the right thing out of
instinct, habit or sympathy for the other
reason, then the act still does not have
moral worth.
Only if it is done out of sense of duty does
the clerks action have moral value.

 Is utilitarianism really workable?

Suppose a dying woman has asked you to
promise to send RM50,000 under her bed to
her brother. She dies without anyone
knowing of the money & the promise that
you made. Now, you know that her brother
is a spendthrift & a drunkard. If the money
delivered to him, it would be wasted. At the
same time, an orphanage in your town
needs such a sum to improve its
recreational facilities, something that would
provide happiness to many children.
Discuss your answer according to utilitarian
grounds. Give your comment whether you agree or
disagree with this view.

 The government may appropriate

private property for public use, usually
with compensation to the owner. Thus,
the govt may legally purchase your
house & land from you to widen a
highway, even if you dont want to sell
the house. The public interest is served
at your expense. Is this just? Comment
based on utilitarianism.

THINK!
An airplane manufacturer has spent a great
deal of money developing a new airplane. The
company badly needs cash because it is
financially overextended. If it does not get
some large orders soon, it will have to close
down part of its operation. Doing that will put
several thousand workers out of jobs. The
result will be disastrous not only for the workers
but also for the town in which they live.

 The president of the company has been

trying to interest the government of a foreign
country in a large purchase. He learns that
one of the key governmental ministers in
charge of making the final decision is
heavily in debt because of gambling. He
quietly contacts that minister and offers him
$1 million in cash if he awards the contract
for five planes to his firm. The money is paid
and the contract is awarded.

 The president argues that his action is

justifiable because the business, the
workers jobs and the town were all saved,
the minister was able to pay his debts and
the foreign country received the planes it
needed. The good produced he argues is
greater than any harm done by the
payment to the minister. Is he correct?

The relationship
between law & morality
is a complex one.
Their relationship can
be presented as follows:

MORALITY

LAW

 The shaded area represents the area of

common ground where law enforces
morality; but the size of the shaded area
is constantly changing.
The legality of an action does not
guarantee that the action is morally right.
Conformity with law is not sufficient for
moral conduct; nonconformity with law
is not necessarily immoral.

 Law undoubtedly reflects changes in a

societys outlook, in its view of right &
wrong, good & bad. But it is a mistake
to see law as sufficient to establish the
moral standards that should guide the
individual & group conduct.

 Why does law insufficient to establish

the moral standard in the world of
business?
(1) The law is inappropriate for regulating
certain aspects of business activity for not
everything that is immoral is illegal.
Murder, fraud?
Cheating?

 (2) The law is often slow to develop in new

areas of concern.
(3) The law itself often employs moral
concepts which are not precisely defined.
E.g. good faith, fiduciary duty, etc.

 (4) The law is often unsettled, so whether

some course of action is legal must be
decided by the courts. In making decisions,
the courts are guided by moral
considerations.
(5) The law is an inefficient instrument as
some practical aspects are unnoticed.

 There are still good reasons for using

the law as a guide for moral action:
(1) the law embodies many of our common
moral beliefs & is often an adequate guide
to right action.
There is scarcely an ethical issues in business
that had not been addressed by the legislature
& courts.

 (2) the law provides a clearly defined

set of rules.
Morality alone could never regulate
business activities.
Eg. Law for the sale of property.

(3) The law consists of enforceable

rules that apply to everyone.
Everyone play by the same rules.

 (4) the law represents a consensus

arrived at thru long experience &
extensive deliberation.
Eg. The morality of advertising tobacco
products - different moral views.

(5) The law is not wholly impartial.

Business executives vs consumer
protection, issues of worker health &
safety, the environment, etc.

 Generally, legislatures & the courts are

reluctant to intervene in ordinary
business decisions unless significant
rights & interests are at stake.
The law is inappropriate for regulating
certain aspects of business activity for not
everything that is immoral is illegal.
Murder, fraud?
Cheating?

 Many factors may influence law;

morality is one of them.
Moral values social values law

Law on abortion, child marriage,

child labour, etc.
Generally, morality is not ignored while
making the law because the law
cannot be against the will of the
people.

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 Some people hold that the law is all that

is morally required in business. The
motto is, if it is legal, then it is morally
okay. Do you agree with this
statement? Why or why not?

 Law & ethics are closely related, both

reflecting moral judgments. However
they are fundamentally different".
Do you agree with the above
statement? Discuss.