Business Ethics

Consequentialist versus Nonconsequentialist Theories

Normative theories suggest a principle or principles for the distinction between right and wrong actions and are of two kinds: (1) Consequentialist theories: the moral rightness of an action is determined exclusively by its likely results (2) Nonconsequentialist (or deontological) theories: right and wrong are determined by more than the possible consequences of an action

Consequentialist versus Nonconsequentialist Theories

Two most important and conflicting consequentialist theories: egoism and utilitarianism Nonconsequentialist theories argue that the morality of an action depends not only on its results but on the nature or character of the act itself. Even if an act may produce more good than bad, it may still be wrong according to nonconsequentialists.

Egoism

Egoism equates morality to self-interest and act is morally right if it promotes the interests of an agent be that a person or an organization Personal egoism: no reference of what others should do Impersonal egoism: everyone should let selfinterest guide his or her conduct

I dont need such a big office as this. My ego does.

Misconceptions about Egoism

The eat, drink, and be merry syndrome That all egoists endorse hedonism That egoists cannot act honestly, be gracious and helpful, or promote others interests However: (1) according to egoism, even painful experiences may be necessary for long-term interests; (2) there is a broader view of what constitutes self-interest, such as knowledge and self-actualization; (3) promoting ones selfinterest requires furthering others interests, too.

Psychological Egoism

Human beings are inherently selfish Even self-sacrifice can have selfish motives, such as avoiding guilt

Problems with Egoism

Psychological egoism is a debatable theory (it can always be claimed that there are selfish motivations in everything we do) Ethical egoism is not really a moral theory at all (misunderstands the point of morality and cannot help in conflict-solving) Ethical egoism ignores blatant wrongs (e.g. murder in the cause of self-interest)

Utilitarianism

One should always act to produce the greatest balance of good over bad for everyone affected by our actions Here, by good we mean happiness or pleasure Jeremy Bentham and John Stewart Mill are known as utilitarian philosophers of the late 18th and 19th century. Community vs. the individual issues Pleasure equates happiness and is the ultimate value

Six Points about Utilitarianism

Net worth of happiness Actions affect people to varying degrees one needs to look at their net worth for all Almost anything can be morally right depending on the circumstances Maximize happiness in the long run Expected total happiness needs to be as great as possible and likely Our own pleasure enters the equation equally

Utilitarianism in an Organizational Context

Clear basis for formulating and testing policies no blind acceptance of rules and principles Objective and attractive way of resolving conflicts of self-interest contrasting with egoism, by focusing on the general good Flexible, result-oriented approach to moral decision-making, instead of labeling actions as inherently right or wrong

Critical Inquiries about Utilitarianism

Is utilitarianism really workable? (Are there accurate ways to measure ones happiness?) Are some actions wrong, even if they produce good? (Is there an inherently immoral conduct? The boys pay case) Is utilitarianism unjust? (How is happiness distributed among people? The right of the eminent domain)

The Interplay between Self-Interest and Utility

Both self-interest and utility play (or should play) important roles in organizational decisions The Wealth of Nations by Adam Smith (1776) Business practice is egoistic; Adam Smith, however, believed that it is also utilitarian as pursuing ones self-interest promotes the good of society

Kants Ethics

Immanuel Kant: German philosopher of the 18th century, with nonconsequentialist approach Moral reasoning is not based on factual knowledge The results of our actions do not determine whether they are right or wrong The basis of obligation must not be sought in human nature, [nor] in the circumstances of the world. It is a priori, and a result of reason alone

Good Will

According to Kant, nothing is good in itself except good will Intelligence is not good, if its used by an evil person Only when we act from duty does our action have moral worth. The short-changed customer example

The Categorical Imperative

According to Kant, reason alone can yield a moral law, without empirical evidence regarding consequences An absolute moral truth has to be internally consistent and free from internal contradiction Kants categorical imperative: One should always act in such a way that one can will the maxim (or subjective principle) of our action to become a universal law. The promise-breaking example

Universal Acceptability and Humanity as an End in Kants Theory

Universal acceptability: Something can be embraced as moral law only if all other rational beings can also embrace it Humanity as an end: As rational creatures we should always treat other rational creatures as ends in themselves, never as means (Organizational implications: churning stock and medical experiments on patients)

Two alternative reformulations of the categorical imperative

An action is right only of the agent would be willing to be so treated were the positions of the parties reversed One must always act so as to treat other people as ends in themselves

Kant in an Organizational Context

The categorical imperative provides firm rules in moral decision-making, irrespective of circumstances or results, without exceptions (e.g. lying or exposing workers to health risks) Humanistic dimension: Humans can never be treated as means to ends Importance of motivation and acting on principle: Doing the right thing is not enough; an action has moral worth only if done from a sense of duty

Critical Enquiries of Kants Ethics

What has moral worth? Is the categorical imperative an adequate test of right? What does it mean to treat people as means?

Nonconsequentialism in an Organizational Context

Non-Kantian nonconsequentialism stresses that moral decision-making involves the weighing of different moral factors and considerations. Rival and conflicting obligations in an organization. Organization has its own legitimate goals to pursue. General welfare is not a continuous goal Nonconsequentialism stresses the importance of moral rights and human rights, which place constraints in what the organization can do

Critical Inquiries of Nonconsequentialism

How well justified are these nonconsequentialist principles and moral rights? Can nonconsequentialists satisfactorily handle conflicting rights and principles?

The Optimal Moral Code

Rule utilitarians believe that optimal moral code will not consist of just one rule to maximize happiness Application of the utilitarian standard not directly to individual actions but to the choice of moral principles that are to guide individual action Critics: Should rules be violated to maximize happiness? Are rights to be treated as fundamental and independent moral factors?

A Synthesis in Moral Decision-Making

Moral judgments should be logical and based on facts and sound moral principles Participants in moral discussions should agree about the relevant facts Spelling out of the moral principles to which different people are appealing, even implicitly Reluctance to defend our moral decisions in public is almost always a warning sign

Obligations, Ideals, Effects

Open minded and reflective discussion can contribute to significant progress in moral issues Identify possibly conflicting obligations ideals and effects and then determine where emphasis should lie When moral obligations conflict, choose the stronger one When ideals conflict with obligations or among themselves, honor the most important one When rival actions will have different results, choose the action that produces the greater good or the lesser harm