Business Ethics Chapter 6

7/26/2019 Business Ethics Chapter 6

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Part ThreeThe Decision-

MakingProcess

Chapter 6:

Individual Factors:Moral Philosophiesand Values


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The specific principles or values peopleuse to decide right from wrong

Person-specific Guidelines for determining how to settle

conflicts and optimize mutual benefit

Provide direction in formulating strategies

and resolving ethical issues

No single moral philosophy is accepted byeveryone


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except for use as permitted in a license distributed with a certain product or serv ice or otherwise on a password- protected website for classroom use.

Adam Smith

The father of free market capitalism

Developed the idea of the invisible hand

Milton Friedman Markets reward or punish for unethical conduct

without the need for government regulation

Currently the dominant form of capitalism

The U.S. is exporting the idea of freemarket capitalism to other countries

Free markets may not solve all problems


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Economic systems allocate resources/products

Influenced by, and directly influence

Individuals actions and beliefs (morals)

Society (laws) as a whole

Depend on individuals coming together and

sharing philosophies Creates values, trust and expectations, allowing the

system to work


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Economic value orientation: Values thatcan be quantified by monetary means

If an act produces value, accept it as ethical

Idealism: Places special value on ideas andideals as products of the mind

Positive correlation to ethical decision-making

Realism: The view that an external worldexists independent of our perceptions

Everyone is guided by self-interest

Negative correlation to ethical decision-making


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Monists believe that only one thing isintrinsically good

Hedonism: Pleasure is the ultimate good

Qualitative hedonism Quantitative hedonism

Pluralists believe that no one thing isintrinsically good

Instrumentalists reject the ideas that Ends can be separated from the means

Ends, purposes, or outcomes are intrinsically goodin and of themselves


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Goodness theories: Focus on the end resultof actions and the goodness or happiness

created by them Obligation theories: Emphasize the means

and motives by which actions are justified

Divided into two categories Teleology

Deontology


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Considers acts as morally right oracceptable if they produce a desired result

Pleasure, knowledge, career growth, realization ofself interest, utility, wealth or even fame

Theological philosophies assess the moral

worth of a behavior by looking at theconsequences, so these theories are oftenreferred to as Consequentialism


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Two important teleological philosophies areegoism and utilitarianism

Egoism defines right or acceptable behaviorin terms of consequences to the individual

Maximizes personal interests

Enlightened egoists: Take a long-term

perspective and allow for the well-being ofothers though their own self-interests remainparamount


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Utilitarianism seeks the greatest good

for the greatest number of people Rule utilitarians: Determine behavior

based on principles designed to promote thegreatest utility

Act utilitarians: Examine a specific actionitself; not the rules governing it


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Moral philosophies focusing on the rightsof individuals and on the intentionsassociated with a particular behavior

Believe individuals have certain absolute rights

Believe compliance with stable moral principles

defines ethicalness Sometimes referred to as nonconsequentialism,

a system of ethics based on respect for persons


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Contemporary deontology

Categorical Imperative Immanuel Kant Ethical acts can be viewed by everyone and the

rationale behind the act is suitable as a universalprinciple

Rule deontologists: Conformity to generalmoral principles determines ethicalness

Act deontologists: Actions are the properbasis on which to judge morality


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Individuals and groups derive definitionsof ethical behavior subjectively fromexperience

Descriptive relativism: Relates toobservations of other cultures

Metaethical relativism: Proposes peoplesee situations from their own perspectives

No objective way of resolving ethical disputesbetween different value systems and individuals

Normative relativism: Assumes onepersons opinion is as good as anothers


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Ethical behavior follows conventionalmoral standards and compares behavioragainst a standard good moral character

Can be summarized as Good corporate ethics programs encourage

individual virtue and integrity

The virtues associated with appropriate conduct

form a good person The ultimate purpose is to serve the public good

The well-being of the community goes togetherwith individual excellence




Fair treatment and due reward inaccordance with ethical or legal standards

Distributive justice: An evaluation of theresults of a business relationship

Procedural justice: Considers the processesand activities that produce desired outcomes

Interactional justice: Based on relationshipsbetween organizational members, includingemployees and managers




Individuals use different moralphilosophies for personal decisions thanthey use for work-related decisions

Two things may explain this behavior

Pressures for workplace success differ from thegoals and pressures in outside life

Morale character may change to becomecompatible with the work environment

Moral philosophies must be assessed ona continuum




Consists of six stages

1. Punishment and obedience

2. Individual instrumental purpose andexchange

3. Mutual interpersonal expectations,relationships, and conformity

4. Social system and conscience maintenance5. Prior rights, social contract, or utility

6. Universal ethical principles




Reduced to three levels of ethical concern

1. Concern with immediate interests andrewards and punishments

2. Concern with right as expected by the largersociety or some significant reference group

3. Seeing beyond norms, laws, and theauthority of groups or individuals




Shows that individuals can change their valuesthrough moral development

Supports managements development ofemployees moral principles

However, the three hit theory says

Kohlberg used questionable research methods

His theory contradicts basic moral philosophy

His theory, while reliable, may not be valid




Illegal acts committed for personal and/ororganizational gain by abusing the trust andauthority associated with a given position

White collar criminals are educated people inpositions of power and respectability

The financial sector has a high level of WCCs

WCCs are increasing steadily

Technology allows WCCs to be committed at alllevels, not just the top levels of management

Resulting in increased government efforts todetect and punish WCCs




Patterns of activities become institutionalizedand may encourage unethical behaviors

Undecided employees go along with themajority, whether ethical or unethical

WCCs increase after economic recessions

Some businesspeople may have inherentlycriminal personalities, corporate psychopaths


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Top InternetFraud Complaints


Source: IC 3 , Internet Complaint Center 2011 Internet Crime Report ,http://www.ic3.gov/media/annualreport/2011_ic3report.pdf (accessed April 25, 2013).


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Common Justifications forWhite Collar Crimes


Source: Adapted from Daniel J. Curran and Claire M. Renzetti, Theories of Crime (Needham Heights, MA: Allyn & Bacon, 1994).

1. Denial of responsibility. (Everyone can, with varying degrees ofplausibility, point the finger at someone else.)

2. Denial of injury. (White-collar criminals often never meet or interact with thosewho are harmed by their actions.)

3. Denial of the victim. (The offender is playing tit-for-tat and claims to beresponding to a prior offense inflicted by the supposed victim.)

4. Condemnation of the condemners. (Executives dispute the legitimacy of the lawsunder which they are charged, or impugn the motives of the prosecutors who enforcethem.)

5. Appeal to a higher authority. (I did it for my family remains a popular excuse.)

6. Everyone else is doing it. (Because of the highly competitive marketplace, certainpressures exist to perform that may drive people to break the law.)

7. Entitlement. (Criminals simply deny the authority of the laws they have broken.)


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C L i All i ht d M t b i d d d li t d i h l i t

Most unethical behavior is not for personalgain, but to meet performance goals

Rewards for performance goals and corporateculture in general are the most importantdrivers of ethical decision making

Equipping employees with skills that allow themto understand and resolve ethical dilemmas willhelp them make good decisions

Documents

Business Ethics Chapter 6