Business Ethics

Consequentialist versus Nonconsequentialist TheoriesNormative 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 TheoriesTwo most important and conflicting consequentialist theories: egoism and utilitarianismNonconsequentialist 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.

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

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

Misconceptions about EgoismThe eat, drink, and be merry syndromeThat all egoists endorse hedonismThat egoists cannot act honestly, be gracious and helpful, or promote others interestsHowever: (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 self-interest requires furthering others interests, too.

Psychological EgoismHuman beings are inherently selfishEven self-sacrifice can have selfish motives, such as avoiding guilt

Problems with EgoismPsychological 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)

UtilitarianismOne 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 pleasureJeremy Bentham and John Stewart Mill are known as utilitarian philosophers of the late 18th and 19th century.Community vs. the individual issuesPleasure equates happiness and is the ultimate value

Six Points about UtilitarianismNet worth of happiness Actions affect people to varying degrees one needs to look at their net worth for allAlmost anything can be morally right depending on the circumstancesMaximize happiness in the long runExpected total happiness needs to be as great as possible and likelyOur own pleasure enters the equation equally

Utilitarianism in an Organizational ContextClear basis for formulating and testing policies no blind acceptance of rules and principlesObjective and attractive way of resolving conflicts of self-interest contrasting with egoism, by focusing on the general goodFlexible, result-oriented approach to moral decision-making, instead of labeling actions as inherently right or wrong

Critical Inquiries about UtilitarianismIs 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 UtilityBoth self-interest and utility play (or should play) important roles in organizational decisionsThe 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 EthicsImmanuel Kant: German philosopher of the 18th century, with nonconsequentialist approachMoral reasoning is not based on factual knowledgeThe results of our actions do not determine whether they are right or wrongThe 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 WillAccording to Kant, nothing is good in itself except good willIntelligence is not good, if its used by an evil personOnly when we act from duty does our action have moral worth. The short-changed customer example

The Categorical ImperativeAccording to Kant, reason alone can yield a moral law, without empirical evidence regarding consequencesAn absolute moral truth has to be internally consistent and free from internal contradictionKants 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 TheoryUniversal acceptability: Something can be embraced as moral law only if all other rational beings can also embrace itHumanity 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 imperativeAn action is right only of the agent would be willing to be so treated were the positions of the parties reversedOne must always act so as to treat other people as ends in themselves

Kant in an Organizational ContextThe 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 endsImportance 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 EthicsWhat 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 ContextNon-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 goalNonconsequentialism stresses the importance of moral rights and human rights, which place constraints in what the organization can do

Critical Inquiries of NonconsequentialismHow well justified are these nonconsequentialist principles and moral rights?Can nonconsequentialists satisfactorily handle conflicting rights and principles?

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

A Synthesis in Moral Decision-MakingMoral judgments should be logical and based on facts and sound moral principlesParticipants in moral discussions should agree about the relevant factsSpelling out of the moral principles to which different people are appealing, even implicitlyReluctance to defend our moral decisions in public is almost always a warning sign

Obligations, Ideals, EffectsOpen minded and reflective discussion can contribute to significant progress in moral issuesIdentify possibly conflicting obligations ideals and effects and then determine where emphasis should lieWhen moral obligations conflict, choose the stronger oneWhen 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

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