Business and

Economics
Ethics

Session 1

Prof. Marek Hudon

Academic Year 2016-2017

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Why business ethics? Current issues

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A few words of presentation..

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 Sources

Textbook: Velasquez, M. (2013), Business

Ethics. Concepts and Cases (International
edition), Pearson. New and cheaper edition!
Slides related to the textbook: Adapted from
Paul L. Schumann
2004 by Paul L. Schumann. All rights reserved.

A few concepts from: Wicks, A., Freeman, A.,

Werhane, P. and K. Martin (2010), Business
Ethics. A Managerial Approach, Pearson.
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 Objective of the course

Introduce core business and economics ethics

issues
Present analytical frameworks used to address
ethical dilemmas
Apply these frameworks to a few case studies
Discuss the relevance of ethical concerns in the
management of (for-profit and non-profit)
companies

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Feel free to interrupt!

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 Schedule: GeHoL!

To check
regularly!

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 Table of Content
1. Introduction to ethical issues

2. Moral principles: Core theories

3. Examples and applications (Environment,

Inequality, Prices & taxes, Social enterprises)

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 Table of Content: Session 1

1. Introduction to ethical issues

This session: Chapter 1 and 2 of Velasquez (2013)

What is Ethics?
Why Business Ethics?
Are there different levels of ethical issues?
Moral reasoning & Premises of decision-making
Basics of moral responsibility

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 A few images to start..

http://www.youtube.com/watch?v=loXqK6D6lbk (1,42) 10
 Ethics?

We live in a world full of ethical questions

Trade-offs, multiples roles
Current financial crisis, together with social and
environmental crises
Different beliefs, religions, values
And choices to be made!

What is ethics? What are the boundaries?

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 The business of weapons?

Arms manufacture Arms trade

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 Definition (1)

Simply stated, ethics refers to standards of

behavior that tell us how human beings ought
to act in the many situations in which they find
themselves as friends, parents, children,
citizens, businesspeople, teachers,
professionals, and so on Velasquez

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 Definition (2)

"Business ethics is ... The application of our

understanding of what is good and right to that
assortment of institutions, technologies,
transactions, activities, and pursuits which we
call business Velasquez

What is good / bad; right / wrong

Normative! ( descriptive morality)

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Probably no!

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Portfolio Allocation?

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 Why Business Ethics?
Why NOT?

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 Why Business Ethics?
Why NOT?
1. Different societies have different moral beliefs
No way to judge if right/ good ! (Relativism)

2. Pursuit of profits ensures maximum social

benefits (Libertarian)

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 Why NOT?
3. Responsibility?

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 Why Business Ethics?
Why NOT?
1. Different societies have different moral beliefs
No way to judge if right/ good ! (Relativism)
2. Pursuit of profits ensure maximum social
benefits (Libertarian)
3. Managers main obligation is to the company
(Neo-liberal)
4. Business ethics is limited to the law (Legalist)
5. Oxymoron (contradictory terms)? (Pessimism?)

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21
 Why Business Ethics?

Some moral principles are required if the society

is to survive
What appear to be differences in moral
principles may only be surface differences
Just because two people have different moral
beliefs doesnt mean theyre both right
Relativism produces unacceptable conclusions.
Examples:
Slavery in the United States
Treatment of Jews in Nazi Germany 22
How to classify ethical issues?

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 Examples of ethical issues

Charity & donations Pressure of managers

What do they have in common?

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Levels of ethical issues

Individual Issues
Manager put pressure on staff;
My donations

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 Examples of ethical issues

Child Labor Animal Testing

What do they have in common?

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Doing Business in Repressive Countries
(e.g. Oil in Myanmar)

DANFORD
EQUITIES 27
 Levels of ethical issues

Individual Issues
Corporate Issues
Manager put pressure on staff;
Morality of corporate culture, My donations
Child labor or animal testing policy

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 Inequality

What do they have in common?

Consumption
society
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 Three levels of ethical issues

Systemic Issues
Morality of capitalism or laws

Individual Issues
Corporate Issues
Manager put pressure on staff
Morality of corporate culture

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 For each level, ethical values suggest
two main ideas (Pogge, 2002):
Character Achievement

Good person Ethical quality of the

Admirable traits and persons deeds or
qualities ends

Means Ends
e.g. no lie e.g. lie if good
Not result
consequentialist Consequentialist
Deontology

3 traditions Source: Wicks et al.,pp. 5-8

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 Three levels of ethical issues
Character
(rationality)
Achievement
Systemic Issues
(consumption)
Morality of capitalism or laws

Character
Character
(social , green NGO)
Achievement
Achievement
(UNICORE)
Individual Issues
Corporate Issues
Manager put pressure on staff
Morality of corporate culture

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 Additional Classification:
Fisher and Lovell (2006), Chap. 2

Legal, Illegal, legal but not a legal obligation:

Good and legal but not legal obligation
Wrong and Illegal
Legal but not necessary just
Just but illegal
 Additional Classification:
Fisher and Lovell (2006), Chap. 2
Gracious, harmless

Improve social,eco., % Altruism Misuse of

Cultural or environ. power to abuse,
humiliate etc.
Business with high Distribution of
social and environ. resources But some harm
standards if rest is good?
Self-help
organis.

ADIDAS

Animal
testing
Racism activist
in police
 Moral Reasoning..
Firms should provide transparent and correct
accountancy
Moral standards/ criteria

Enron managers created structures to hide expenses

and the real financial condition of the company
Factual information

Managers behaviror was immoral

Moral judgement
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 Next week

Moral responsability

Hapiness J

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