BUS305

Business Ethics
Theories of Ethics
 Revision
Let’s remember….

• Introduction to unit, learning outcomes, weekly

schedule, assessment dates, expectations

• How do Moral issues impact tourism, hospitality and

other specific industries?

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 Discussion of some fundamental ethical
questions

Where do you stand ?

• Are there any differences between moral laws and
society’s laws? What is it?
• Are some people better at “morality” than others, or is
everybody equally capable of being good?
• Does anyone have the right to tell anyone else what is
goodness and wickedness?
• Are there certain kinds of acts that are always wrong? If
so which are they?

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Discussion of some fundamental ethical
questions – where do you stand?

Personal opinion
versus
supported academic
position?

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Good fun – but is
this enough….?

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What is the bigger challenge?

Deciding what is the right thing to do?

or
Doing what we know is right?

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 Today’s agenda

Normative theories of Ethics

• Consequentialist theories
• Non-consequentialist theories

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Today’s agenda review

Normative theories of Ethics

Normative versus descriptive
A frame work for moral decision making

Consequentialist theories
Egoism, Utilitarianism

Non-consequentialist theories
Kant, Ross, Virtue theories

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 Ethics - The Central Question in
reminder!
“How are we to relate to each other in order to
ensure that our individual and collective
wellbeing is enhanced?“
- What is morally right and wrong?
- What moral principles should I employ?
- How can I justify my decisions and actions
morally?

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Normative versus Descriptive
Ethics

Normative theories of ethics

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 Ethical theories are the rules and
principles that determine right and wrong
for any given situation Crane and Matten (2010)

 What are normative ethical theories. Normative

ethical theories are those that propose to
prescribe the principles to morally correct
way of acting

 As opposed to descriptive ethical theories

which seek to describe how ethics decisions
are actually made in business
 Normative theories of Ethics
What is the purpose of normative theories
of ethics?
• informed by philosophy
• attempts to assist in determining and
providing guidelines to resolve conflicts in:
– conflicting individual interests
– conflicting interests between individual and
society
– conflicting interests between stake holders
– conflicting interests between self-interest and
environment
 How would you morally judge the
actions of these two individuals?

Two wealthy hotel owners give money to a

charity.
• One of them does it because he considers it
his duty to do so, having been fortunate in
life that others who are in desperate need.
• The other does it to get his name in the
papers and the lime light.

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 Normative theories of Ethics
Consequentialist theories:
•The consequences of ones actions are
paramount. Concerned with results and outcomes.
If the consequence is good, then the act is right,
and vice versa.
Non-consequentialist theories:
•Honouring ones duty is paramount. Concerned
with general principles and rules. They believe that
other factors are relevant to the moral assessment.

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 Consequentialist theories
1. Egoism
- consequences for self
- Read case on Firestone, pg 43.
- Egoism makes personal advantage.

2. Utilitarianism
- consequences for everyone/ group/
society
- The interest of the community is the
sum of interest of members.
- There’s also Act utilitarianism and rule
utiliarianism,
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 Egoism

•An act is morally right if, and only if, it best promotes an
agent’s long-term interests
•Adam Smith (1723 - 1790, classical capitalist economist).
Read pg 52 – interplay of self-interest and utility.
•An agent can be a single person, an organisation, a group,
or a country.
•https://www.youtube.com/watch?v=gYqrbpD
HiOQ (3mins) – political impact
•https://www.youtube.com/watch?v=W1mvcF
uiTts (5 mins) – business impact
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 Egoism
underlying principle
• An act is morally right if, and only if, it best
promotes an agent’s long-term interests

• Read case on firestone, pg 43

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 Misconceptions about Egoism
pg44
•Egoists do what they like.

Egoists will endure short-term unpleasantness for the

advancement of long-term interests

•All egoists endorse hedonism/self interest.

Egoists may hold any theory of what is good as they

have a broad view of what is ‘self-interest’ (it can be
knowledge, power, self-actualization).

•Egoists cannot promote other people’s interests.

Egoists will benefit others if, in doing so, it will

promote their long-term interests as they may prosper
others on their way of self-fulfillment..
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 Psychological Egoism

• Human beings are so constructed that

they must behave selfishly.
• Truly unselfish actions are impossible
because all actions are motivated by
self-interest.
• The only moral obligation is to
ourselves

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 Problems with Egoism
Psychological egoism is not a sound theory.
Sometimes people act for reasons that are not self-
interested, eg parents motive for their children.
Ethical egoism is not a true moral theory. Moral
standards of a society provides guidelines for
cooperative and social existence and to resolve
conflicts by appealing to a shared justification. Can
egoism perform this? Egoism misunderstands the
nature and point of morality.
Ethical egoism ignores blatant wrongs. Deception,
theft or even murder can be morally right as long as it
advances the self-interest.
Think Great Gatsby!
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 Utilitarianism key thinkers

Jeremy Bentham, 1748-1832, John Stuart Mill, 1806 - 1873,

Philosopher, social and legal Philosopher and, political economist and
reformer, advocating individual and civil servant, often described as one of
political freedom, separation of state the most influential English speaking
and church, etc. philosophers of the nineteenth century

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 Utilitarianism
- key concepts -

• We should always act to produce the

greatest possible balance of good over bad
for everyone affected by our actions’

• The greatest good for the greatest number

constitutes what is right and what is wrong.
The greatest net amount of ‘happiness’

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Six points about utiliaritiasm, pg 48
• When deciding which action produces the greatest happiness,
we must consider unhappiness and pain as well – in order to
contrast
• Actions affect people to different degree – not assuming that
everyone’s happiness is equal, we add for the net amount of
happiness.
• Actions produce different results –it may require breaking a
promise (a –ve action) to produce happiness
• Maximizing happiness considers long-run consequences.
• Not knowing the certainty of the results of an action, we must
act for the likely greatest happiness.
• When choosing action, we do not disregard our own
happiness in the calculation.
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 Utilitarianism in an
organisational context, pg 49
Utilitarianism in the orgn. provides:
1. a basis for formulating and testing policies;
2. an objective way of resolving conflicts of
self-interest
3. a flexible result-oriented approach to moral
decision-making. It helps in tailoring
decisions, policies etc

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 Critical enquiries of
Utilitarianism
1. Is utilitarianism really workable in complex
situation? Eg. Tricky to compare your level of
happiness with that of someone else.
2. Are some actions wrong, even if they produce
good? Utilitarianism can result in cheating, lying
and unfair actions.
3. Is utilitarianism unjust - unjust distribution of
‘happiness’? It only concerns itself with
producing happiness, not taking into account a
fair distribution. Some peoples happiness is
sacrificed for the greater number of happiness.

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 2 types of Utilitarianism

Act utilitarianism:
–Every time we act in any situation we ought to calculate and determine which
among all the options open to us would promote the greatest net utility or
happiness for all over short and longer term.

Rule utilitarianism - pluralistic moral code:

–Every time we obey the set of rules that, taken together, promote the greatest
utility for all. Thus, we only have to do the calculations (who has the greatest
happiness) when two rules are in conflict. (Jaszay & Dunk, 2006)

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 Revision-consequentialism
The idea that the moral worth of an action
is determined by the consequences of that
action
To make correct moral choices, we have to
have some understanding of what will
result from our choices
Usually, the "correct consequences" are
those which are most beneficial to
humanity – but different approaches weigh
up positive and negative consequences
differently
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Non-consequentialist Theories
or
Deontological ethics
(greek:duty/ obligations)

1. Kant

2. Ross

3. Virtue theory

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 Kant’s duty ethics
4 underlying principle
Good will
The categorical
imperative
Universal acceptability
Humanity as an end,
never as merely a
means
Immanuel Kant,
German philosopher
1724 - 1804

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 Kant’s Ethics
• Believes that moral rules can, in principle, be
known as a result or reason alone and are not
based on observation (ie not necessary for
scientific judgment)
• ‘The basis of obligation’ is a priori
(independent from all other factors) – moral
reasoning is not based on factual knowledge
(ie research). Reason itself is enough to reveal
basic principles of morality.
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 Goodwill and universal law of
conduct (categorical)
• What is will – it’s the capacity to act from principle. Nothing is
good in itself except goodwill
• Goodness depends on the will to make good use of them, ie
the will itself. Therefore intelligence is not good when
exercised by an evil person.
• Goodwill – contained in the notion of goodwill is the sense of
duty
• Only when acting on a sense of duty that our actions have a
moral worth (categorical imperative).
• A moral act is also depends also if we can logically will it to be
a universal law governing everyone’s conduct. (It then
becomes categorically imperative) - it commands
unconditionally.
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 Universal acceptability and
humanity as an end, not as a
means
• A moral law in Kant’s opinion is when it is
universally acceptable (one more categorical
imperative).
• We treat others as an end in themselves;
respecting others as persons and not to treat
others for ones own good (one more
categorical imperative).

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 Kant in an organisational context
1. The categorical imperative gives us firm
rules to follow in moral decision-making.
2. Kant introduces an important humanistic
dimension into business decisions. Kant
forbids self interest (egoism and utilitarism
theory).
3. Kant stresses the importance of
motivation, and of acting on principle of
moral worth(ie act upon sense of duty)
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 Critiques of Kant’s ethics pg 58
1. What has moral worth? Only a sense of duty has, not
habits, feelings emotions etc. If you help a person out of
your instinct, it is not moral worth.This is a severe point.
2. Is the categorical imperative an adequate test of right?
The rules are no exception. But Consider a persons
need to steal rather than starve.
3. What does it mean to treat people as means? It is not
often clear is people are treated as an end to
themselves or as a means to an end. Consider
prostitution – the prostitute is treated as a means to
personal gain but then she might have also freely
chosen the line of work.
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 Other non-consequentialist
perspectives
William David Ross.
Key work: The Right and the Good (1930)

• Different relationships and

circumstances generate a variety
of specific moral obligations.
• Our moral obligations are prima
facie ones (latin: literally ‘at first
W.D. Ross, Philosopher
face’ meaning on first and Oxford Professor,
1877 – 1971
examination, self-evident from
facts).
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 Prima facie obligations
• When life is at stake, it would not only be
morally permissible, but morally required, to
break a promise. (this is not acceptable at all
under Kant’s theory)
• Ross also slided with commonsense morality,
whereby prima facie obligations are obvious.
• So Ross introduced 7 types of prima facie
duties.

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 Ross’ prima facie duties
Ross believed that our moral duties could
be divided into seven basic types pg 61:
1. Duties of fidelity
2. Duties of reparation
3. Duties of gratitude
4. Duties of justice
5. Duties of beneficence
6. Duties of self-improvement
7. Duties not to injure others
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 Non-consequentialism in an
organisational context

Non consequentialism weights various factors and

consideration, which sometimes can be conflicting – ie
shareholders, employees etc
Orgns have their own legitimate goals to pursue.
Contrary to utiliarism, it does not have to mean
enhancing non the general welfare.
Non consequentialism stresses the importance of
moral rights, particularly human rights, in its business
deliberations.

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 Critical enquiries of non-
consequentialism

• How well justified are these principles and

rights? What is obvious in one culture or at
one time in history may turn out to be
different or false.
• Can non-consequentialism satisfactorily
handle conflicting rights and principles?

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Limits of traditional theories
• Too abstract ?
• Too reductionist ?
• Too objective and elitist ?
• Too impersonal ?
• Too rational and codified ?
• Too imperialist ?
Virtue Theory

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 Virtue Ethics

Greek philosophers
Socrates
Plato (Dialogues)
Aristotle (Nichomachean
Ethics)
• Concern for character and
the moral habits of citizens
• Citizens with good quality
character make a society Aristotle

(384 BC – 322 BC)

flourish
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 Virtue Theory

Reflects upon the quality of the person:

• Generosity
• Honesty
• Courage
• Compassion
• Integrity
• Benevolence
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Today’s agenda review

Normative theories of Ethics

Normative versus descriptive
A frame work for moral decision making

Consequentialist theories
Egoism, Utilitarianism

Non-consequentialist theories
Kant, Ross, Virtue theories

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