Presentation on theme: "Introduction to Ethics"— Presentation transcript:
1 Introduction to Ethics MBA 685Chapter #2Introduction to Ethics
2 Chapter #2 Overview Introduction to business ethics Overview of ethical theoriesThinking ethically for business decision makingThe PLUS modelCombining ethical theoriesCode of Ethics
3 Nature and Significance of Ethics in Business Decision-Making Ethics: Rational examination of moral beliefs and behavior; the study of morality.Morality: Standards, conduct, and systems that provide guidance on how to act.Law: Society’s standards and values that are enforceable in court
4 Is business ethics an oxymoron? Former Supreme Court Justice Potter Stewart, “Ethics is knowing the difference between what you have a right to do and what is the right thing to do.”Is business ethics an oxymoron?
5 Overview of Ethical Theories Subjective relativismCultural relativismDivine command theoryKantianismAct utilitarianismRule utilitarianismSocial contract theory
6 Relativism versus Objectivism: Where “The Good” Exists Subjective relativismCultural relativismDivine command theoryKantianismAct utilitarianismRule utilitarianismSocial contract theoryRelativism“The Good” is insideObjectivism“The Good” is outside
7 The Workable Ethical Theories: Rational Theories Not a Workable TheoryAccording to the AuthorSubjective relativismCultural relativismDivine command theoryKantianismAct utilitarianismRule utilitarianismSocial contract theoryWorkable Theories
8 1. Subjective relativism Case forWell-meaning and intelligent people disagree on moral issuesEthical debates are disagreeable and pointlessCase againstBlurs distinction between doing what you think is right and doing what you want to doMakes no moral distinction between the actions of different peopleSR and tolerance are two different thingsDecisions may not be based on reasonNot a workable ethical theory (according to author)RelativismNo universal norms of right and wrongOne person can say “X is right,” another can say “X is wrong,” and both can be rightSubjective relativismEach person decides right and wrong for himself or herself“What’s right for you may not be right for me”
9 2. Cultural relativism Case for Case against Different social contexts demand different moral guidelinesIt is arrogant for one society to judge anotherMorality is reflected in actual behaviorCase againstBecause two societies do have different moral views doesn’t mean they ought to have different viewsDoesn’t explain how moral guidelines are determinedDoesn’t explain how guidelines evolveProvides no way out for cultures in conflictBecause many practices are acceptable does not mean any cultural practice is acceptable (many/any fallacy)Societies do, in fact, share certain core valuesOnly indirectly based on reasonNot a workable ethical theoryWhat is “right” and “wrong” depends upon a society’s actual moral guidelinesThese guidelines vary from place to place and from time to timeA particular action may be right in one society at one time and wrong in other society or at another time
11 3. Divine command theory (the virtue approach) Good actions: those aligned with God’s willBad actions: those contrary to God’s willHoly books reveal God’s will.We should use holy books as moral decision-making guides.Case forWe owe obedience to our Creator.God is all-good and all-knowing.God is the ultimate authority.Case againstDifferent holy books disagreeSociety is multicultural, secularSome moral problems not addressed in scripture“The good” ≠ “God” (equivalence fallacy)Based on obedience, not reason
12 4. Kantianism (the rights approach) Good will: the desire to do the right thingImmanuel Kant: Only thing in the world good without qualification is good will.Reason should cultivate desire to do right thing.Case forRationalProduces universal moral guidelinesTreats all persons as moral equalsWorkable ethical theoryCase againstSometimes no rule adequately characterizes an action.There is no way to resolve a conflict between rules.Kantianism allows no exceptions to moral laws.
14 Negative Versus Positive Rights Negative right (liberty right): A right that another can guarantee by leaving you alonePositive right (claim right): A right obligating others to do something on your behalf
15 Discussion QuestionsIn the following (true) scenarios on the next two slides, tell whether the people are interpreting the right being claimed as a negative right or as a positive right. Explain your choice.In each scenario, which kind of right should it be and why?
16 Scenario A:A man sued his health insurance company because it would not pay for Viagra. He argued that the insurer’s refusal to pay denied his right to a happy sex life.
17 Scenario B:Two legislators who lost reelection votes sued an organization that ran ads criticizing their right to hold office.
18 5. Act UtilitarianismJeremy Bentham and John Stuart Mill, 19th centuryThe best ethical course of action is the one that brings the greatest good for the greatest numberAn action is good if it benefits someoneAn action is bad if it harms someoneUtility: tendency of an object to produce happiness or prevent unhappiness for an individual or a communityHappiness = advantage = benefit = good = pleasureUnhappiness = disadvantage = cost = evil = painPrinciple of Utility (The Greatest Happiness Principle)An action is right (or wrong) to the extent that it increases (or decreases) the total happiness of the affected parties.
19 Act utilitarianism - Continued Act utilitarianism applies Principle of Utility to individual actionsAct utilitarianismAdd up change in happiness of all affected beingsSum > 0, action is goodSum < 0, action is badCase forFocuses on happinessDown-to-earth (practical)ComprehensiveWorkable ethical theoryCase againstUnclear whom to include in calculationsToo much workIgnores our innate sense of dutySusceptible to the problem of moral luck
20 6. Rule utilitarianismWe ought to adopt moral rules which, if followed by everyone, will lead to the greatest increase in total happinessRule utilitarianism applies Principle of Utility to moral rulesCase forCompared to act utilitarianism, it is easier to perform the utilitarian calculus.Not every moral decision requires performing utilitarian calculus.Moral rules survive exceptional situationsAvoids the problem of moral luckWorkable ethical theoryCase againstAll consequences must be measured on a single scale.Utilitarianism ignores the problem of an unjust distribution of good consequences.Utilitarianism does not always mean “the greatest good of the greatest number”That requires a principle of justiceWhat happens when a conflict arises between the Principle of Utility and a principle of justice?
21 7. Social contract theory (The Common Good Approach) Thomas Hobbes“State of nature”We implicitly accept a social contractEstablishment of moral rules to govern relations among citizensGovernment capable of enforcing these rulesJean-Jacques RousseauIn ideal society, no one above rulesThat prevents society from enacting bad rulesCase forFramed in language of rightsExplains why people act in self-interest without common agreementProvides clear analysis of certain citizen/government problemsWorkable ethical theoryCase againstNo one signed contractSome actions have multiple characterizationsConflicting rights problemMay unjustly treat people who cannot uphold contract
22 Thinking Ethically for Business Decision Making How exactly should we think through an ethical issue?What questions should we ask?What factors should we consider?The first step is obvious but not always easy:GET THE FACTS!Primary/Direct StakeholdersSecondary/Indirect Stakeholders
23 Basic Business Decision Making Model Step 1: Define the problemStep 2: Identify alternativesStep 3: Evaluate the alternativesStep 4: Make the decisionStep 5: Implement the decisionStep 6: Evaluate the decision
24 Example of an Ethical Filter: The PLUS Model P = Policies Is it consistent with my organization's policies, procedures and guidelines?L= Legal Is it acceptable under the applicable laws and regulations?U = Universal Does it conform to the universal principles/values my organization has adopted?S= Self Does it satisfy my personal definition of right, good and fair?
25 Six Steps to Ethical Decision Making Using the PLUS Model Step 1: Define the problem PLUSStep 2: Identify alternativesStep 3: Evaluate the alternatives PLUSStep 4: Make the decisionStep 5: Implement the decisionStep 6: Evaluate the decision PLUSEthicalFilters
26 Using Multiple Theories for Ethical Problem Solving What moral rights do the affected parties have, and which course of action best respects those rights?What benefits and what harms will each course of action produce, and which alternative will lead to the best overall consequence?Which course of action treats everyone the same, except where there is a morally justifiable reason not to, and does not show favoritism or discrimination?Which course of action advances the common good?Which course of action develops moral virtues?Other ApproachesThe Legality TestThe Golden Rule TestThe Light of Day Test
27 Codes of Ethics (Ethics Codes, Ethics Policies, Core Values, Integrity Policies, etc.) Formal statement of ethical principles and rules of conductUnited Technologies –http://www.utc.com/responsibility/ethics/index.htmJMU CoB Faculty Integrity Policy -JMU Finance Code of Ethics -Advice from the Ethics Office of Texas Instruments -
28 Copyright All Rights Reserved Copyright 2008 by Theresa B. Flaherty, Ph.D. No part of these materials may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without the express written consent of Dr. Theresa B. Flaherty.