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Friday 23 June 2017

Philosophical Underpinnings of Business Ethics

“A woman goes into a shop
- she buys a bag of sugar and pays with a hundred dollar bill, the shopkeeper isn’t best pleased to have to break a hundred dollar bill
– after she has left he notices that the hundred dollar bill is really two hundred dollar bills stuck together because they are so new
 – he has a real ethical dilemma …...
…...Should he share the hundred with his partner?”
Henny Youngman 1950

What is Moral Philosophy?
n  Moral Philosophy (Ethics) involves reasoning about questions concerning morality
n  Moral philosophy attempts to discover the extent to which moral rules are justified

What are morals?
n  Sets of rules that we ought, or think we ought, to obey to `do good’.
n  Guide to what is ‘right’ or ‘wrong’
n  Note that `doing good’ is not always the same as `doing right’

We can now look at three types of ethical reasoning
n  A) Teleology
n  B) Deontology
n  C) Virtue Ethics
n  D) Rights-Based Approaches

A) Teleology
(from Greek teleos - a goal )
n  Examine the logical consequences of having and following those beliefs
n  Actions have no instrinsic ethical character - they are morally right if they produce a desirable result
n  Often called “Consequentialism” as a result

TWO KEY COMPONENTS - Egoism and Utilitarianism
n  1. EGOISM
n  Derivation of modern concept of ethics in the west is pragmatic
n  Hobbes’ Social Contract - in the absence of a social contract life would be ‘nasty brutish and short’
n  action is deemed right/acceptable if consequences of the act benefit the individual
n  Adam Smith 1723-1790
n  Self-interest =Foundation Of Prosperity
n  Sub-division= Enlightened Egoism
n  Long-term View
n  Code Of Ethics/Conduct

2. UTILITARIANISM
n  Jeremy Bentham 1748-1832
n  act is justifiable if it attempts to achieve the greatest good for the greatest number
n  John Stuart Mill 1806-1873 “greatest happiness principle”
n  Actions are right in proportion to their tendency to promote happiness or absence of pain, and wrong insofar as they tend to produce pain or displeasure

How easy is it to measure “greatest good” or “happiness”?
n  cost-benefit analysis
n  Aspirin/paracetomol/heroin/ thalidomide other drugs – are toxins or are abused but they bring benefits which we accept as being more useful than the ill effects

Distinction Between ‘Act’ And ‘Rule’ Utilitarianism
n  Act Utilitarianism = assesses each act for the good it produces
n  perform the act that in the circumstances produces the greatest good - when you have a dilemma about how to act
n  Rule utilitarianism = acts evaluated in terms of their consistency with other established rules for promoting the greatest good
n  person breaking the rule must be able to justify it
n  There is currently a discussion about torture and whether in torturing a potential terrorist to establish the whereabouts of a bomb falls into this category

Mercy killing/ assisted suicide
n  under rule utilitarianism any killing would be considered wrong. The rule that murder is wrong and illegal may be seen to be generally for the greater good.
n  under act utilitarianism mercy killing may be acceptable. Some might consider relief from pain in an old person to be a “greater good” . Some people would argue that all killing is wrong and that the rule should obtain. (See deontology below.)

B) Deontology
n  “Many people profess to believe that acting morally, or as we ought to act ,involves the self conscious acceptance of some (quite specific) constraints on our pursuit of our own interests and on our pursuit of the general good. Though these people do not regard the furtherance of our own interests or the pursuit of the general good as ignoble ends …they believe that neither can be regarded as providing us with morally sufficient reason to take action. Those who hold such a view believe that there are certain sorts of acts that are wrong in themselves, and thus morally unacceptable means to pursue any ends, even ends that are morally admirable or morally obligatory. Philosophers call such views ‘deontological’ (from the Greek deon meaning duty)”
n  Davis N Contemporary Deontology Ch.17 in Singer, P. A Companion to Ethics Blackwell Oxford 1997
n  This embodies the idea that the right precedes the good in moral actions.

Immanuel Kant 1724-1804
n  humans are rational and autonomous
n  humans should judge morality of actions by ensuring compliance with ‘categorical imperative’
n  “Act only according to that maxim by which you can at the same time will that it should become a universal law.” (Kant (1785) Foundations of the Metaphysics of Morals)
n  Judge the morality of an action by universalising it
n  So can a lie be morally supportable?
n  World made up of liars unsupportable

n  “The formula of the end in itself” (Kant)
“Which demands that we treat ‘humanity in your own person or the person of any other never simply as a means but always at the same time as and end’
“Kant makes use of the traditional Christian rhetoric and of Rousseau’s conception of the social contract to formulate the image of a ‘Kingdom of ends’ where each is simultaneously legislator and bound by law, where each is autonomous, on condition what is legislated  is respect for others. For Kant as for Rousseau, to be autonomous is no mere matter of wilfulness or independence from others or from social conventions; it is to have the mode of self-control that takes account of others’ like moral status. To be Kantianly autonomous is to act morally.”
O’Neil ,O Ch 14 in Singer, P. A Companion to Ethics  Blackwell Oxford 1997

C) VIRTUE ETHICS
n  Focus on integrity of moral actor rather than on the moral act itself. Virtues are not rules.
n  Origins with Aristotle
n  He defined a virtue as a character trait which manifests itself in habitual action ie in practice
n  This character trait must be essential to live well

What are some virtues?
n  Benevolence, compassion, courage, courtesy, dependability, friendliness, honesty, loyalty, moderation, self-control and toleration
n  Aristotle also includes pride and shame - on the basis that we should be proud of our achievements and properly shamed by our failings
n  Aristotle also included justice as virtue

Aristotle’s Golden Mean
n  Avoid extremes – aim for golden mean between 2 vices eg bravery lies between cowardice and recklessness

How do Virtue Ethics apply to the business world?
n  Solomon (1992) Ethics and Excellence:
n  “The bottom line of the Aristotelian approach to business ethics is that we have to get away from `bottom line’ thinking and conceive of business as an essential part of the good life, living well, getting along with others, having a sense of self-respect, and being a part of something one can be proud of.”
n  Solomon finds that character traits that lead to success in life are also essential preconditions in the business world:
n  “honest advertising”
n  “truth in lending”

D) Rights-based Approaches

n  Examples given by Mellahi (2010):
n  Free speech
n  Freedom of association
n  To form and join trade unions
n  Right to liberty
n  Right to vote
n  How far are these universal?

Rights and duties
n  Where one person has a right then society or other people have duties eg if an individual has a right to free speech government has a duty not to persecute someone for what they say
n  Writers like Nozick (1984) say utilitarianism fails to take account of this

John Rawls
n  Utility might be maximised but some might be seriously disadvantaged eg minority ethnic groups, women, the poor, the disabled, those with learning difficulties
n  A “just” society is one where violations of rights are minimised
n  What are the rights and duties of companies? We will revisit this when talk about stakeholders

A Process for making ethical business decisions
n  1. Summarise situation/ dilemma
n  2. List alternative options and the  consequences of each option for all stakeholders? Support for/against those options?
n  3.            Analysis stage
n  corporate/individual values?
n  rightness of actions (deontology) or desirability of outcomes (teleology)? These approaches may counter-balance each other
n  4. Choice
n  business decisions have to be taken

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