LECTURE 3

ETHICAL THEORIES IN BUSINESS

OBJECTIVES :
After reading this chapter, you will be able to:

Carefully read scholarly debates about moral issues so as to extract

claims and evaluate the soundness of the supporting arguments
Identify, compare, explain and autonomously assess the major moral
theories and principles in the analytic tradition
Extrapolate conclusions derived in one normative domain to other
related areas
Apply abstract moral theory to particular areas of human endeavor
Critique moral theories in their application to particular problems
and domains
Develop and critically examine ones personal moral views in light
the primary ethical
traditions and competing moral theories within those traditions
Understand and appreciate alternative interpretations of historical
texts in value theory
Identify and apply major theories of aesthetics.

IMPORTANT ITEMS:

Normativity of Ethical Theories

Traditional Ethics
Contemporary Ethic

Normativity of Ethical Theories

Ethical theories can be said ethier
Descriptive or normative

Normative

Provide general
rules and principles
of behaviour

Descriptive

Describe ethical
phenomena

Ethical Theories

A descriptive approach to ethics attempts to

describe the moral systems of group or
societies. As such it involves empirical
research on individuals, groups, and societies
in order to uncover moral beliefs.

RESEARCH TOPICS COVERED BY

DECRIPTIVE ETHICS

Values
Athical ideas
Moral virtues
Wrong and right actions and behaviours
Moral system (relativism)

DISCIPLINES RELATED TO THE

STUDY OF DESCRIPTIVE ETHICS

Psychology
Biology
Sociology
Antropology
Cultural studies

Ethical theories are said to be normative if

they propose to describe the morally
correct way of acting (Crane & Matten,
2010)

Normative theories of ethics or moral theories

are meant to help us figure out what actions are
right and wrong.

Ethical theories are the rules and principles that

determine right and wrong for a given situation.
(Crane & Matten, 2010)

Normative ethical theories attempt to answer two

main questions:

1) What is the good life for men?

2) How ought men to behave

Normative ethical theories might be

interpreted as asnwers to requests for advice
on how to deal with aspects of daily living

TRADITIONAL ETHICS

Traditional ethical theories developed mainly

in Europe due to the work of many
philosophers, from ancient times until
modernity- (e.g.: Aristotle, Epicurus, Seneca,
J. Locke, A. Smith, J. Stuart-Mill)

These traditional theories have their origins in

modernism, which emerged roughly during the 18th
century Enlightenment era. Modern thinkers
strove for a rational, scientific explanation of the
world and aimed at comprehensive, inclusive,
theoretically coherent theories to explain nature,
man, and society
(Crane and Matten, 2010)

Traditional ethical theories are the normative

theories adopting an absolutist point of view on
ethics (ethical absolutism)

ETHICAL ABSOLUTISM

Ethical Absolutism There are eternal,

universally applicable moral principles to
concrete situations and contexts. Right and
wrong are objective qualities we can
rationally determine in human actions, and
so, as such, they exist outside individuals.

Traditional
Ethical Theories

NonConsequentialist

Consequentialist

Utilitarianism

Egoism

Hedonism

Deontology

Agents Virtue

Motivation/
Principles/
duties

Action

Outcomes

Consequentialist Ethical Theory

An ethical theory which bases moral judgement
on the outcomes of an action is called
Consequentialist (or Teleological).
General Principle
Of all the things a person might do at any given
moment, the morally right action is the one
with the best overall consequences (Internet
Encyclopedia of Philosophy)

Corollaries
Whether an act is right or wrong depends only
on the results of that act;
The more good consequences an act produces,
the better or more right that act is;
A person should choose the action that
maximizes good consequences
People should live so as to maximize good
consequences.

UTILITARIANISM

An action is morally right if it results in the

greatest amount of good/happiness for the
greatest amount of people affected by the
action (Crane & Matten, 2010)

After assessing as best we can the likely results of

each action, not just in the short term but in the
long run as well, we are to choose the course of
conduct that brings about the greatest net
happiness (Shaw, 2011)

From an utilitarian point of view, GOOD/HAPPINESS

may be understood as:
Freedom
Knowledge
Life Pleasure
Political Rights

MAIN COROLLARIES

The rightness or wrongness of an action is separated from

the goodness or badness of the agent (worth of action
worth of agent)

The right moral action is the one that maximizes the good

The general principle of utility does not provide a rule to

decide on the moral worth of an action in face of actual
consequences and foreseen consequences, except that we
should do what we have most reason to believe will bring
about the best consequences of the known available
alternatives

Act Utilitarianism
The measure of the value of an act is the amount
by which it increases general utility or happiness.
An act is to be preferred to its alternatives
according to the extent of the increase it achieves,
compared to the extent the alternatives would
achieve. An action is thus good or bad in proportion
to the amount it increases (or diminishes) general
happiness, compared to the amount that could have
been achieved by acting differently. Act
utilitarianism is distinctive not only in the stress on
utility, but in the fact that each individual action is
the primary object of ethical evaluation.

Rule Utilitarianism
It maintains that the correct principles of right
and wrong are those that would maximize
happiness if society adopted them. Rule
utilitarianism applies the utilitarian standard not
directly to individual actions but rather to the
choice of the moral principles that are to guide
individual action. (Shaw, 2011)

Egoism
The doctrine according to which the correct moral
action is the one that meets the self-interest of
individuals.
Main Corollary
The most important moral principle is the principle
of self-interest, personal advantage or gain

Moral egoism is based on psychological egoism,

behaviour according is to motivated which by all
human self-interest (=welfare, well-being).

Self-interest is understood as either:

ones desire (self-regarding / not selfregarding) or
Possession of states independently of being desired
(virtue, knowledge, peace)

Moral egoists do not necessarily claim

That all people should be egoists and act
egoistically (=every individual should pursue selfinterest)

That seeking pleasure, doing harm to others,

behaving disonestly and so on are good things in
themselves but only as far as doing so brings us any
kind of personal advantage.

Hedonism
The doctrine that pleasure is the sole good. () Men not only in
fact seek pleasure, but further they ought to do so since
pleasure alone is good. () (Popkin & Stroll, 1956)
Main Corollaries
To say "all pleasure is intrinsically good" is not to say "all
pleasure is good, simply.

" Though pleasure is the only intrinsically and ultimate good, it is

not the only thing desirable, other things are desirable at least
as a means to something (peace, money, education)

Some pleasures are not good because they lead to pain instead
of pleasure (taking drugs, getting drunk, making fun of other
people)

Non-consequentialist Ethical Theory

Any ethical theory which bases moral judgement
not on the outcomes (consequences) of an action
but on its principle (intrinsic properties) or on the
agents character.

Nonconsequentialis
t

Deantology

Agents virtue

Deontology

An ethical theory which bases moral judgement on

the moral principle (duty) underlying the action,
and thus the actions intrinsic features, is called
Deontological.

Main Corollaries

Morality is a matter of duty, compliance to a moral law

Whether something is right or wrong doesnt depend
on its consequences
Actions are right or wrong in themselves
We have duties regarding our own actions
The ethical theories proposed by I. Kant and W. D. Ross
are called a deontological philosophies because they
assume the moral value of an action to depend on the
agents intention relative to it (namely, complying to
the moral principle) rather than its consequences.

Kant believed that moral reasoning is not based on factual

knowledge and that the results of our actions do not determine
whether they are right or wrong. (Shaw, 2011)

According to Kant, human action is motivated either by reason or

happiness

So, morality depends either on reason or happiness

Happiness is conditional because it differs from individual to

individual and it can be either good or bad

Reason alone is universal, thus unconditional, so morality must be

based on reason in order to become truly universal

Kant named this moral universal reason the Good Will (= the
power of rational moral choice)

The Good Will is good because it motivates us to act out of duty,

not of inclination, desire or personal interest/gain

The Good Will makes us act according to the moral law, and in
order to know it we must check if it conforms to the Categorical
Imperative.

The CI is imperative because it is a command. It commands us to

exercise our wills in a particular way, not to perform some
action or other.

The CI is categorical in virtue of applying to us unconditionally,

or simply because we possess rational wills, without reference
to any ends that we might or might not have. It does not apply
to us on the condition that we have antecedently adopted some
goal for ourselves.

KANTS CATEGORICAL
IMPERATIVE

Formula of Universal Law: "Act as if the

maxim of your action were to secure through
your will a universal law of nature"
Formula of Humanity: "Act so that you treat
humanity, whether in your own person or
that of another, always as an end and never
as a means only"
Formula of Autonomy: Act as if you were
through your maxims a law making member
of a kingdom of ends."

According to W. D. Ross, there are several prima facie duties

that we can use to determine what, concretely, we ought to do.

A prima facie duty is a duty that is obligatory other things equal,

that is, unless it is overridden by another duty or duties. Where
there is a prima facie duty to do something, there is at least a
fairly strong moral reason in favor of doing it.

An example of a prima facie duty is the duty to keep promises.

"Unless stronger moral considerations override, one ought to
keep a promise made.

By contrast with prima facie duties, our actual or concrete duty

is the duty we should perform in the particular situation of
choice. Whatever one's actual duty is, one is morally bound to
perform it.

Rosss Prima Facie Duties (The Right and the Good,

1930)
Fidelity: obligation to keep a promise
Reparation: obligation to repair the harm
Gratitude: obligation to recognize a granted benefit
and express it
Justice: obligation to fairly distribute the good
Beneficence: obligation to do good to someone
Self-improvement: obligation to make yourself a
better person
Non-maleficence: obligation to not harm anyone

THE AGENTS VIRTUE

According to a Virtue Theory, the central

moral concept is that of the morally good
character or morally good disposition. It
analyzes the rightness or wrongness of
individual choices indirectly in terms of the
character or dispositions of the agent making
the choices

Virtue ethics contends that morally correct actions

are those undertaken by actors with virtuous
characters. Therefore, the formation of a virtuous
character is the first step towards morally correct
behaviour. (Crane & Matten, 2010)

MAIN COROLLARIES

Moral virtue is simply a matter of performing

well in the function of being human Practice
is very important to achieve excellence The
motivation for being good is not based in a
divine legislator or a set of moral laws but
rather in the same kind of perception of
excellence that might be found in anything
else that exists to perform a function

We can only be held responsible for actions we

perform voluntarily and not for cases involving
physical compulsion or ignorance.

The best measure of moral judgment is choice,

because choice is made voluntarily by means of
rational deliberation.

People always choose to aim at the good, but

theyre often ignorant of what is good and so aim at
some apparent good instead, which is in fact a vice.

ARISTOTLE (384 BCE 322 BCE)

"So it follows, since virtue of character itself

is a mean state and always concerned with
pleasures and pains, while vice lies in excess
and deficiency, and has to do with the same
things as virtue, that virtue is the state of
the character which chooses the mean,
relative to us in things pleasant and
unpleasant"

(Eudemian Ethics, Book II, Chapter 10)

Virtue is, in a moral sense, a product of habit

Virtue is a mean state or a middle ground between two
other states, one involving excess and the other
deficiency
The middle ground that virtue encompasses is
representative of an individual's ideas of pleasure and
pain
A portion of this is inherited naturally and another
portion is expectation towards punishment.

According to Aristotle's ethical theory, the virtuous

person exhibits the joint excellence of reason and
of character. The virtuous person not only knows
what the good thing to do is, she is also emotionally
attached to it. In addition, these two excellences,
or virtues, are intimately connected, so that the
one cannot be had without the other.
(http://ndpr.nd.edu/news/24181-the-virtue-ofaristotle-s-ethics/)

CONTEMPORARY ETHICS

Contemporary ethical theories and approaches

developed mainly in the western world from early
20th century on

These new approaches to ethical thinking and

theorizing mirror changes in how people think
about societies and their relations with
cultural/intellectual achievements, such as
philosophical thinking..

Since scientists and philosophers started criticizing

modernist views on knowledge, scientific, universal
truths, and human progress based on reason, the
path was open to alternative ways of thinking about
ethics

Traditional ethics have been considered:

Too abstract, objective and impersonal
Too rational
Too reductionist
Too imperialist

Postmodern
Ethics

Ethical
Relativism

Analytical
Ethics

Others
Contemporary
Ethical
Theories

ETHICAL RELATIVISM

The theory according to which right and

wrong are determined by what ones society
says is right and wrong. ()

For the ethical relativist there is no absolute

ethical standard independent of cultural
context, no criterion of right and wrong by
which to judge other than that of particular
societies. In short, what morality requires is
relative to society. (Shaw, 2011)

Ethical relativism is the theory that holds that

morality is relative to the norms of one's culture. That
is, whether an action is right or wrong depends on the
moral norms of the society in which it is practiced.
The same action may be morally right in one society
but be morally wrong in another. () The only moral
standards against which a society's practices can be
judged are its own. If ethical relativism is correct,
there can be no common framework for resolving
moral disputes or for reaching agreement on ethical
matters among members of different societies.

(http://www.scu.edu/ethics/practicing/decision/ethi
calrelativism.html)

Some problems with ethical relativism:

It undermines any moral criticism of the practices of
other societies as long as their actions conform to their
own standards;

There is no such thing as ethical progress: although

moralities can change, they cannot get better or
worse;

It makes no sense for people to criticize principles or

practices accepted by their own society; whatever a
society takes to be right really is right for it; reformers
or minorities can never be right in moral matters
(Shaw, 2011)

POSTMODERN ETHICS

Postmodern ethics is an approach that

locates morality beyond the sphere of
rationality in an emotional moral impulse
towards others. It encourages individual
actors to question everyday practices and
rules, and to listen to and follow their
emotions, inner convictions, and gut
feelings about what they think is right and
wrong in a particular situation. (Crane &
Matten, 2010)

Postmodern ethics emphasize the following in terms

of ethical reasoning and analysis:
I.

II.

III.
IV.

Holistic approach: in ethical judgement and

decision making, there is no separation between
private and professional realms
Examples rather than principles: ethical reasoning
is not embodied in rules and principles but in
peoples experiences, narratives and inner
convictions
Think local, act local: ethics is about local rules
applicable to single issues and contexts
Preliminary character: since ethical decisions go far
beyond rationality, ethical reasoning is a constant
learning process

Analytical Ethics

Analytical approaches to ethics have concentrated on

meta-ethics. They tend () not to answer moral questions
or to address substantive moral problems directly but
rather to be concerned with the status of ethical
judgements and the character of moral reasoning.

A term for any analysis of moral concepts, but as a

distinct approach it starts with G. E. Moore 's Principia
Ethica (1913). It claims that the fundamental task of ethics
is not to discuss substantive moral questions and to seek
solutions for them, but rather to examine the meaning of
moral terms such as good, duty, right, ought and
to make them as clear and precise as possible.

It then evolved into the linguistic analysis of

moral judgments, their types and their
functions. This development was represented
by Ayer 's account of morality, Stevenson 's
emotivism , and Hare 's prescriptivism

Another dimension of analytic ethics is to examine

moral reasoning and the basis for distinguishing
moral judgments from other value judgments. This
is represented especially in the work of Stephen
Toulmin. Analytic ethics can be viewed as
synonymous with metaethics . In the 1960s, as the
distinction between metaethics and normative
ethics came into question, analytic ethics as a
distinctive approach also lost favor. Many moral
philosophers now believe that ethics should
investigate both moral terms and moral questions.