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8/12/2019 Lecture 2 - Ethical Theories of Business Ethics
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Lecture 2:
Theories & Principles of Business Ethics
Business Ethics
BUS 4023
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Ethical Theories
Ethical theories are the rules and principles thatdetermine right and wrong for any given Situation concepts such as good and evil, right and wrong, virtueand vice, justice and crime, etc. Major branches of ethicsinclude:
1. Meta-ethics
2. Normative ethics
3. Applied ethics
4. Moral psychology - how moral capacity or moral
agency develops and what its nature is;5. Descriptive ethics - what moral values people
actually abide by.
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1. Meta-ethics
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Concerns the theoretical meaning of moralpropositions and how their truth values may be
determined.
Divided into cognitivism and non-cognitivism:-
a) Cognitivismis seen as the claim that when we talkabout right and wrong, we are talking about matters offact.
b) Non-cognitivismis the claim that when we judge
something as right or wrong, this is neither true norfalse. We may be only expressing our emotionalfeelings about these things.
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Cognitivism vs Non-Cognitivism
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COGNITIVISMthere are objective moral truthswhich can be known. Hence statements of moral
belief can be true or false
NON-COGNITIVISMobjective assessment of moraltruth is not possible. It is all subjective
Cognitive(moral judgements can
be known)
Non-cognitive(moral judgements cannot
be known)
META-ETHICS
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2. Normative Ethics
Ethical theories that propose to prescribe the morally
correct way of acting.
Categories:a) Consequentialist ethics:the moral judgment in
these theories is based on the intended outcomes, the
aims, or the goals of a certain action.
b) Non- Consequentialist ethics:start from reasoning
about the individuals rights and duties.
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2. Normative Ethics
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Motivation
/Principles Action Outcomes
Source: Crane & Matten (2004)
Non-consequentialism Consequentialism
Ethics of Duties (Deontology)
Ethics of Right & Justice
Utilitarianism
Hedonism/Egoism
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2. Normative Ethics
2.1 Non-consequentialism
a) Deontology
'Duty Based' Ethics
Argues that decisions should be made considering
the factors of one's duties and other's rights.
Deontologistsdeny that what ultimately matters is an
action's consequences.
They claim that what matters is the kind of action it is.
What matters is doing our duty.
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Some deontological theoriesinclude:
Immanuel Kant's Categorical Imperative Kant claims that all our actions should be judged
according to a rule he calls the Categorical
Imperative.
First Version: "Act only according to that maxim [i.e.,
rule] whereby you can at the same time will that it
become a universal law.
Ms. Sheela often takes credit for the work done by hersubordinates
Second Version: "Act in such a way that you treat
humanity, whether in your own person or in theperson of another, always at the same time as an end
and never simply as a means."
Mr. Chua is trying to decide whether or not to choose aninterviewee based on physical characteristics. He mustask himself whether he will be willing to have an employerreject him based on his physical characteristics.
2. Normative Ethics
http://en.wikipedia.org/wiki/Consequentialismhttp://au.youtube.com/watch?v=79hOZdh4PkQ&feature=relatedhttp://en.wikipedia.org/wiki/Consequentialism8/12/2019 Lecture 2 - Ethical Theories of Business Ethics
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John Locke - Natural rights are certain basic,
important, inalienable entitlements that should
be respected and protected in every singleaction-rights to life, freedom, and property.
Justice can be defined as the simultaneouslyfair treatment of individuals in a given situation
with the result that everybody gets what they
deserve
2. Normative Ethics
b) Ethics of Right & Justice
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The Concept of a Right
Right= an individuals entitlementto something.
Legal right= An entitlement that derives from a legal
system that permits or empowers a person to act in a
specified way or that requires others to act in certain ways
toward that person.
Moral (or human) rights= rights that all human beingseverywhere possess to an equal extent simply by virtue of
being human beings.
Legal rightsconfer entitlements only where the
particular legal system is in force. Moral rightsconfer entitlements to all persons
regardlessof their legal system.
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Rights & DutiesMoral rights / human rights:
Human beings of every nationality possess to anequal extent simply by virtue of being humanbeings.
All human beings are permitted/empowered to do
something (the right to get education) or areentitled to have something donefor them (theduty of the government to provide schools &universities).
Prohibitions/requirements on othersthat enablethe individual to pursue certain interests oractivities. Ie: the right not to be tortured.
These rights create duties of others towards an
individual.
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Rights & Duties
Moral Duties (moral judgments):
(1) Moral duties other people have toward thatperson (positive rights/must be done).
Ie: child-parents, consumer-company
(2) Provide individuals with autonomy andequality in the free pursuitof their interests.
(3) Justifying ones actions and for invoking theprotectionor aid of others (negative rights/must not be dome).
Ie: child-parents, consumer-company
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Aristotle (384322 B.C.) divided the
concept of justice into three types:
Distributive justice
Retributive justice
Compensatory justice
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2. Normative Ethics
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Distributive Justice
Divides benefits/burdens among individuals
Requires that equals be treated as equals
Question: what principle should govern thedistribution of benefits and burdens?
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Equality (egalitarians) Need
Effort Productivity
Ability
2. Normative Ethics
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Retributive Justice
Concerned with retribution or punishment when
someone has committed a crime or
a wrong-doing
The punishment must fit the crime
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2. Normative Ethics
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Compensatory Justice
Concerned with what kind of compensationsomeone should receive for a wrong done tohim or her
The compensation should be in proportion to thedamage someone has received
The greater the damage, the greater thecompensation should be
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2. Normative Ethics
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2. Normative Ethics
2.2 Consequentialism
c) Utilitarianism
Utilitarianism holds that an action is right if it leads to the most
happinessfor the greatest number of persons
The Basis of Utilitarianism: ask what has intrinsic value
and assess the consequences of an action in terms of
intrinsically valuable things.
Instrumental Value- a thing has only instrumental value if it
is only valuable for what it may get you, e.g., money
Intrinsic Value- a thing has intrinsic value if you value it for
itself,
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Utilitarianism
Actions and policies should be evaluatedon the basis of the benefits and coststheywill impose on society
Benefits (utilities):monetary, pleasures,health, lives, satisfactions, knowledge,happiness.
Costs:monetary, sickness, death,ignorance, unhappiness.
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UtilitarianismAn action is right from an ethical point of view if:
(1) Utilities: the sum total of utilitiesproduced by
an action is greater than the sum total of utilitiesproduced by any other act/s, provided theaction would be required by those moral rulesthat are correct. (Class attendance)
(2) Cost-Benefit Analysis: desirability of investingin a project depends on the present and futureeconomic benefits outweighingpresent andfuture economic costs. (Training &
Development)(3) Efficient: produces a desired outputwith the
lowest resource input, produces greatestbenefits at the lowest costs.(conservation,
maximisation)
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d) Hedonism/Egoism, which holds that an action is
right if it maximizespleasureamongst people.
Personal egoists: Pursue their own self-interest but donot make the universal claim that all individuals shoulddo the same.
Impersonal egoists: Claim that the pursuit of ones self-interest should motivate everyones behavior.
Egoists do not necessarily care only about pursuing
pleasure (hedonism) or behave dishonestly andmaliciously toward others.
Egoists can assist others if doing so promotes their ownadvantage.
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2. Normative ethics
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3. Applied Ethics
How do we take moral knowledgeand put it intopractice? Virtue, values, moral obligation
Concerns how moral outcomescan be achieved in
specific situations.Decision making
It argues that moral correctness evolves similarly to
scientific knowledge: socially over the course of many
lifetimes. Thus, we should prioritize social reform over
concern with consequences, individual virtue or duty
(although these may be worthwhile concerns, provided
social reform is also addressed).
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4. Moral Psychology
A field of study in both philosophy and psychology.
Moral behaviorsare typically the product of multiplelevels of moral functioning, energized by:
The "hotter" levels of intuition, emotion, and behavioral
virtue/vice. The "cooler" levels of values, reasoning, and willpower,
while still important, are proposed to be secondary .
The "Moral Foundations Theory" of psychologistJonathan Haidt examines the way morality variesbetween cultures and identifies five fundamental moralvalues shared to a greater or lesser degree by differentsocieties and individuals. According to Haidt, these are:care for others, fairness, loyalty, authority and purity.
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5. Descriptive Ethics
comparative ethics.
study of people's beliefs about morality.
a form of research into the attitudes of individuals
or groups of people.
aim is to uncover people's beliefs about such
things as values, which actions are right and
wrong, and which characteristics of moral agents are
virtuous.
investigate people's ethical ideals or what actions
societies condemn or punish in law or politics.
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5. Descriptive Ethics
Observers often note the moral and ethical diversitybetween individuals and human cultures, and point tothis diversity as supporting the theory that right andwrong are not absolute but relative.
Most commonly, morality is seen as relative to culture orrelative to each individual.
Throughout human history, it has not been possible tofind consensus on a single moral code.
This is often taken to support the thesis that morality is asocial construct
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Stages of Moral Development
Stage 1: Pre-conventional
1. Sticking to rules to avoid punishment
2. Following rules only when doing so is in yourimmediate interest. (Follow the rule, fulfill classattendance)
Stage 2: Conventional
3. Living up to what is expected by people close toyou. (Friends, parents)
4. Maintaining conventional order by fulfillingobligations to which you have agreed.
5. Descriptive Ethics
Kohlberg: Theory of moral development
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Stage 3: Principled
5. Valuing rights of others and upholding absolute
values and rights regardless of the opinion of themajority.
6. Following self chosen ethical principals even if they
violate the law (punctuality)
5. Descriptive Ethics
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Importance of Kohlbergs Theory:
Shows individuals can change or improve their moral
development Supports managements development of employees
moral principles
The best way to improve employees business ethics is
to provide training for cognitive moral development.
5. Descriptive Ethics
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6. Virtue Eth ics
Virtue Ethics- An ethics of virtue is based
on the idea that a morally right act insome situation that calls for a moral
decision is what a virtuous person would
do in that situation. There are certaincharacteristics which are virtues. People
possessing these virtues is what makes
one moral, one's actions are a reflection oftheir inner morality. Inherited.
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7. Ethics of Care
Emphasizes caring for the concrete well being of
those near us.
(1) Ethics need to be impartial. (fair,justice n equal)
(2) Emphasizes preserving and nurturing concrete
valuable relationships.Communitarian Ethics: communities and communalrelationships as having fundamental value that shouldbe preserved/maintained.
(3) Says we should care for those dependentonand related to us.
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Tak Nak
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Malaysian Context
The Malaysian government is spending
millions of ringgit every year creating
awareness on the Tak Nak campaign.
Adversely, there are numerous tobaccomanufacturers which have been allowed to
operate and sell their products in
Malaysia.Evaluate this scenario using ethics of
utilitarianism
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Review and Discussion Question
1. Explain the differences between the
Cognitivismand Non-Cognitivism.
2. Explain the differences between the
Consequentialismand Non-
Consequentialism Ethics.
3. Describe THREE (3)categories of justice.
4. Describe with explanations, Kohlberg's
stages of Moral Development with
examples.