Philosophy and Ethics

Etymology: Philo (Love) +Sophia (Wisdom)

Philosophy is the discipline concerned with questions of how one should live (ethics);
what sorts of things and what are their essential natures (metaphysics) what counts as
genuine knowledge (epistemology) and what are the correct principles of reasoning
(logic).
Areas of Philosophy
• Three Major areas of Philosophy:
1 Epistemology (The Study of Knowledge)
• 2 Metaphysics (The Study of the nature of reality)
• 3 Ethics (the Study of Morality) what is Right and Wrong in human
behavior.
• (Thought, Being, Action)
Ethics and Morality
• Ethics (Gr.) Ethos: Character, individual character of the person.
• Morality (Lt) Moralis Custom or Manner, relationships between human beings.
• Characteristics of Good/Bad
• 1 Happiness or Pleasure (Hedonism)
• 2 Excellence (Perfection)
• 3 Harmony and Creativity
Defining Ethics:
Ethics is the study of moral values and customs of a person or group. It covers the
analysis and employment of concepts such as right and wrong, good and evil, and
responsibility.
Three primary areas of Ethics:
• Normative Ethics: The study of how to determine ethical values
• Meta-Ethics: The study of the concept of Ethics
• Applied Ethics: The study of the use and application of Ethical values

Value in Morality
• Ethics is concerned with how we should live, how we should act, and the kind of
person we should be. Defining the full scope of these “SHOULDS” (Oughts) is to
give an account of all that has value or worth.
Values:
• Instrumental Value is a function of usefulness
• An object has Instrumental Value because it can be used to attain something else
of value.
• Exp. Clear air & water are valued because without them human health and well-
being jeopardized/ruined.
• Intrinsic Value: an object has intrinsic value when it is valuable in itself and is not
valued simply for its uses.
Ethics (Sources)
• Three distinct authorities invoked for good conduct:
a) The will of a deity, (Divine Morality)
b) The pattern of nature, (Natural Law)
c) The rule of reason, (Rationalism)
• When the will of a deity is the authority, obedience to divine commandments is
the accepted standard of conduct.
• If the pattern of nature is the authority, conformity to the qualities attributed to
human nature is the standard.
• When reason rules, behavior is expected to result from rational thought.

Chapter 1:
What Is Business Ethics?
Business
• Pattern of complex operations in the lives of people concerning all those functions
that govern the production, distribution, and sale of goods and services for the
benefit of the buyer and the profit of the seller.
Defining B. Ethics
• Business ethics is a form of applied ethics that examines ethical rules and
principles within a commercial context; the various moral or ethical problems that
can arise in a business setting; and any special duties or obligations that apply to
persons who are engaged in commerce.

Ethical decisions involve Business ethics:

Situations:
• Selling second-hand fridge with faulty wiring or a hidden damage.
• Purchasing something and being undercharged.
• Refuse to buy a country’s product on objection to its politics.
• Whatever alternatives a person choose involves an ethical decision. Although we
may label one alternatives ‘ethical’ or unethical’, the truth of the matter is that
ethical decisions are involved either way.
• Decision Making:
• Principles:
• (i) Age-old principle Caveat emptor (may the buyer beware),
• (ii) Principle of full disclosure.
Some Moral Dilemmas
• Dilemma: A situation that requires a choice between options that are or seem
equally unfavorable or mutually exclusive.
• Examples:
a) Developing a new perfume (Testing), you need to be sure that it will not cause
adverse reactions to people skins. One way of testing this is to experiment on
animals. Should you do this? Or should you be developing a new product at all in
this area, knowing that there are already sufficient numbers of brands already on
the market?
 b) Being worker in a company, which is ignoring safety precautions. You have
drawn the management’s attention to the problem repeatedly, but nothing has
been done. Since the problem cannot be settled with in the firm, perhaps it could
be settled by going outside. Should you “blow the whistle” by going to the press,
or should you do nothing taking the view that it is the management’s
responsibility to attend to matters of health and safety?
c) Being manager and the applicant for the job is your friend’s son. Do you do your
friend a favor and give his son preferential treatment, or should
d) Financing in an established company with bad political repute. (To invest or not
to invest)

The Nature of Business Ethics

• Two aspects of B. Ethics:
• 1) Specific situations in business where ethical controversies arise.
• Advertising, Accounting, Employee relations and Environmental Issues
• 2) Principles of behavior in business (Following a particular Ethical Theory)
• Historically B. transactions were conducted on the principle of caveat emptor.
• Recent development: Law as source for ensuring fair deal from retailer &
manufacturers. (Demand for full Disclosure)
• The Sale of Goods Act (1894) ensuring that goods are of ‘merchantable quality’.
• The Trade Descriptions Act (1968) ensuring No False Information in advertising
& packing about Goods & Services.
• The Sex Discrimination Act (1975) & Race Relations Act (1975) making sex &
color discrimination illegal.
• These all are basically impositions of moral considerations on business.

• This is not the END of the Story…Certain Grey Areas of no public agreement and
law might seem an undue intrusion on individual Conscience. (Animal testing for
cosmetics, killing reptile for shoes, bags; selling of furs of endangered species.)
• Implementation of law itself raises ethical problems. (Exploiting ‘legal loopholes’
to gain unfair advantage over customers, suppliers, and employees.)
Questions without Answers
• One cannot arrive at one’s answer without first being puzzled about the questions.
Indeed, being puzzled is often the sign that we are making good progress.
• So…
• “ Whatever becomes of you don’t stop thinking” (Wittgenstein)

Why Be Ethical?
a) False sense of security: belief that business peoples are responsible to their
moral obligations and they are actually making business activity credible. (Cynic
attitude, a person who believes that all people are motivated by selfishness.)
b) Preventing legislation: Business people don’t want external restrictions,
prosecution and litigation (court case).
 c) A genuine concern within the business world that consumers get a fair deal
environment be protected, men & women work in acceptable working conditions.

A ‘Normative’ Enquiry
• Importance of acting ethically has no other reason than that it is wrong not to do
so. Ethics is about Norms or Standards. We can distinguish between two sense of
the word ‘normative’
a) Norms (Strong Sense) Prescriptive Sense: refers to the practical, or
action-guiding, nature of morality. Moral principals are generally put forth
as injunctions or imperatives. Commendations. Persuade someone to do
something, (x is good; do so as well) preacher & reformer’s attitude.
b) Norms (Weak Sense) Descriptive Sense: Investigating attempting to
explain or describe the world without reaching any conclusions about
whether the world is as it should be (x is good because it is a norm that is
approved of.) analyst’s attitude

Five Views of Business Ethics

Business is Business: According to this view firm’s aims are commercial rather than
ethical. The responsibility rests with the customer to inspect the offered goods and
services, or for employees to assure themselves that they will be happy with the firm
in which they decided to work. Let the customers & employees beware. (Amoral)
Results: Sacking superfluous (extra) staff, engaging in industrial espionage
(Intelligence), selling shoddy goods (badly made)
Exceptions: No Sexual harassment No Nepotistic (favors) promotion policies.

a) Act Consistently with Law:

Firm should fulfill its legal obligations,
Legislation provides baseline and Business should not bend.
Objection: Business should do more than mere conformity to law.
(Social, Environmental responsibility, Case Example: CFC)
When CFCs were found to be harmful, should not firms have stopped selling them
at once, rather than wait for legislation?

b) Good Ethics means Good Business:

Virtue & Prosperity coincide. (Coincidence theory)
Problem: Choice between existing staff levels and introducing new profitable
Technology.
Objection: Eye on profit rather than sincerity, to act selfishly,
Unethical motives; doing Right for the Wrong reason.

c) Conventional Morality:
Conventionalism, to act in accordance with the prevailing or conventional
Standards accepted by the public/society.
Objection: Conventional wisdom cannot be trusted sometimes,
 Child labor, Adulteration of Victorian time is not acceptable as “conventional”.

d) Universal Morality: maintain the same standards of ethical behavior in business

as they would in their private life. (No Difference Theory) just as our next door
neighbors would not expect us to dispose of our rubbish on to their gardens, so _
it might be argued _ we have a right to expect business companies not to pollute
the environment with discharged waste, smoke or noise.
Objection: No Difference Theory expresses fine Ideal but Business is like war,
Competition.
• But…even in a war one’s basic moral principles remain same; War zone & B.
environment can be different from that of personal life that may cause a change in
our overt behavior, but there are no reason to assume different moral principle.

• Moral law as universal: According to Kant one important characteristics of the

moral law was its universality: if something is right, it is right for all people, at all
times and in all places. Where different situation occur, a moral principle will
dictate different outcomes, but the basic principle remains the same universally.
No Compartmentalize. (Absolutism of Kant)

Why Study B. Ethics?

• Common Objection: We already know Right from Wrong.

• Answer: Business Ethics examines what fundamental presuppositions lie behind
our moral reasoning, and attempt to elucidate the meaning of ethical concepts.
• Other Objection: Ethical values are culturally determined (Conventionalism,
‘Agree to Differ’) formal study of ethics feel skeptical about its value.
• Answer: Concept of Moral Progress. (1) Moral discussion b/w people (2) people
are persuaded. (Vegetarianism, Environmental protection)

Function of B. Ethics

• To clarify one’s concepts about the meaning of moral obligations.

• To show how it is possible to hold different views on such matter, and where one
can locate the points of disagreement.
• Introduction of ‘Ethical Consumer’.
• Public & Political concerns about ethical issues cause certain professions to
formulate code of practice, to define the limits of Business activity.
• Enjoyable activity. (Intrinsic vs. extrinsic reason)

Who are the experts?

• Law givers, like Socrates (concept of justice and its relation to conducting ones
affairs in society) Moses, Solon (Greek), Hammurabi (Babylonian), Muhammad
(P.B.U.H)
• Environmentalists (Friends of the Earth, Green Peace)
• Religious and Economic concept of ‘Stewardship’. ‘How to optimize the use of
finite resources?’
• The Role of Lawyers.

The Role of the Ethical Experts

• To identify various principles of ethics that serve as a foundation for ethical
behavior.
• Having superior knowledge of the consequences of the various courses of action.
• Acquaintance with various areas of ethical concern.
• To undertake an ‘ethical audit’ of a firm.
• To be an advisor to a firm that is striving to be ethical on how to implement such
policies.