Ethical Theory and Business

Chapter Two

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 The language of ethics
• Fairness • Principle
• Justice • Consequence
• Rights • Integrity
• Obligation • Personal Autonomy
• Equality
• Greed
• Ego

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 Relativism, Cultural and Moral
Norman Bowie
• Cultural Relativism
– Different cultures
have ideas about
ethical behavior
• Moral (ethical)
Relativism
– What is “really right
or wrong” is
completely
determined by the
culture in which a
person lives

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 CRITICISM OF MORAL RELATIVISM

• A culture thinking something is moral does not make

it moral (slavery)
• It is not consistent with moral language which tends
to be absolute
• All cultures tend to believe in universal principles
• There are no separate cultures (Bosnia, Somalia,
Cambodia)
• Cultural traditions are bounded by physical laws
(outlawing sex)

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 Dealing with ethical and cultural
relativism
• The counter-point to relativism is:
something is wrong since there is a wide
variety of other beliefs and values
contrary to the action. As an example
sexual harassment is wrong because it is
contrary to: people should be treated
with equal respect, people should be
free from coercion and threats, self-
respect is good, loss of dignity is
harmful.
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• Remember:
– “Accepting a deplorable situation as least harmful
of the alternatives is not the same as accepting it
as ethically valid.”
– “Tolerating diverse opinions and values is not the
same as ethical relativism.

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 Utilitarianism – Consequentialist
Hobbes, Hume, Adam Smith, Bentham, John Stuart Mills

• Can determine if act is good or bad based on

the outcome (consequences of the act)
• Maximizing the overall good – “greatest good
for the greatest number”
• Constructed as a counter-point to
authoritarian policies that aimed to benefit
the political elite. Thus the foundation of
representative democracy.

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 Other Utilitarian perspectives
• Happiness is the ultimate good
• Utilitarians judge action not as happiness of
the individual but the general or overall good
• Happiness is beyond the physical (hedonism)
but also experiences of social and intellectual
pleasure (Betham)

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 The Utilitarian Calculus
• Educated citizenry with freedom to pursue
their own ends who make decisions through
majority-rule democracy = a society that
maximizes the happiness for the greatest
number of people

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 Preference Utilitarianism – The
foundation for market economies
• Because of limited resources people must rank
order their wants.
• They then enter the market and are free to
bargain in an open, free and competitive
market environment.
• Thus competition among rational and self-
interested individuals will continuously work
to promote the greatest overall good

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 The Hedonist Calculus
• How do we quantify pleasure?
• Gross national product

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 The Utilitarian doctrines in business
• Deregulation of private industry
• Protection of personal property rights
• Allow for free exchange of goods and services
• Encourage competition
• “Allow the invisible hand of the market to
work (Adam Smith)
• This even allows people to take risks and thus
make more
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 Deontological (Duty)
• We will not use people as a means to an end
• Individuals have rights that should not be
sacrificed simply to produce a net increase in
the collective good – ethical rights which are
basic to all individuals
• We have duties ( also defined as obligations,
commitments or responsibilities)

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 KANT’S CATEGORICAL IMPERATIVE

• UNIVERSAL PRINCIPLE
– A person should act that
the principle of one’s act
could become a universal
law of human action in a
world in which one would
hope to live.
– A person should treat
other people as having
intrinsic value, and not
merely as a means to
achieve one’s end.
– People should not be
treated as objects but as
subjects

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 Rights Talk
• Want is a psychological state of the individual
• Wants get translated into interest work for
that person’s benefit and are connected to
what is good for the person
• Right are so important to well being of the
individual that they should not be sacrificed to
increase the overall good.
• Right override the collective will

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 Basic Human Rights
• Freedom to make our own choices
• Equal treatment (or consideration)

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 Virtue Ethics
• Ethics requires us, at least at times, to act for
the well-being of others. It asks to define the
virtues that lead to a life that is full, satisfying ,
meaningful, enriched and worthy.
• This is called “character” and is the emotional
(affective) side of humans.
• Character is shaped while young by parents,
schools, church, friends, and society. As
adults it is modifies by workplace

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