UNIT 2- LESSON 3

Classical Philosophies and

the Evolution of Business
Ethics
 Objectives
At the end of this lesson, the students will be
able to
❖Describe the classical philosophies of
Socrates, Plato, and Aristotle.
❖Discuss the meaning of virtue ethics
❖Trace the history of business ethics.
 In tracing the history of the
development of business ethics, we
start with the classical philosophies of
the Greeks, specifically Socrates, Plato,
and Aristotle, as well as the ancient
philosophical schools. It has evolved
from these great mind to what it is
today.
 SOCRATES
• Son of a mason and sculptor and had
practiced his father’s craft for many years.
• Born in 469 B.C
• Received ordinary Greek education, but
devoted much time in reading.
• His fame is widespread but had a very
enduring influence over Plato, his student.
• Contribute Socratic Method in effective
teaching techniques which focus on giving
students questions rather than answer
• Gregory Vlastos, a philosophy professor at
Princeton University, describe Socratic
Method as “One of the greatest achievements
of humanity” because it encourages a high
mental alertness and at the same time
upholds the virtues of sincerity, humility, and
courage.
• He believe that self-knowledge is sufficient to
achieve a good life. If knowledge can be
learned, so can virtue. Therefore virtue can be
taught. An individual should seek knowledge
because it is a means to ethical action.
• True happiness is gained by doing what is right.
• He believed that no one knowingly harm himself,
if harm comes to a person, then person must
have acted in ignorance.
• For him, knowledge is the propagation of what is
good, a virtue, or excellence; whereas ignorance
is the focus on what is bad, evil and not useful.
• In conclusion, we are responsible for what we
know and what we don’t know.
• Each one of us is responsible for our own
happiness.
 PLATO
• Born in 427 BC and raised with a noble background.
• Obtained good education in Athens and devoted mush
of his life to politics and writing poetry.
• Considered as one of socrates most brilliant pupils.
• He founded a philosophical school, the Academy which
stood from 387 BC until 86 BC.
• He wrote dialogues, a writing in the form of
conversation
• He wrote the following dialogues:
Laches- dealt with courage and charmides which
was about common sense.
 Euthyphro- it is about piety,lysis which was
about frienship
Protagoras- which taught of goodness.
The Apology and Crito- which dealt with
historical events, particularly Socrates.
The Republic- his famous work where
Socrates is the main character. It deals with
Socrates discussion on justice and its meaning to
individuals city-states.
 3 classes in the city-states
1. Rulers- are those who emerge from the
population as the most intelligent members
of the state.
2. Guardians-are those who implement peace
and order
3. Workers- are those who perform tasks to
ensure that the city states runs smoothly
This three groups should work in harmony
so that all members of the city- state will
achieve happiness and fulfilment.
 ARISTOTLE
• A greek philosopher and scientist who
developed scientific method.
• His interest was inspired by his father which is
a physician.
• He joined Plato’s academy and remained there
for 20 years .
• He founded a philosophical school named
LYCEUM, located near the shrine of Apollo
Lyceus.
Influence by Plato and the academy, Aristotle’s
earliest writings were also in the form of dialogues
such as:
• Rhetoric
• Eudemus (on the soul)
• On Philosophy
• On Prayer
• On Education
other writings includes
• The Topics
• The Analytics
It deals with logic, a study of reasoning, and
dialectic, which is a method of arguments.
 VIRTUE ETHICS
Virtue- is a term which equivalent to the greek
word arete, which means excellence.
- Human excellence in ancient Greek
philosophy did not include moral virtues. Therefore,
an excellent human should include moral virtues in
order to achieve happiness.
- the achievements of happiness is the end
goal of human life.
Virtue Ethics- is defined as a person- based ethics
which looks at the moral character of the person
carrying out a particular action.
Virtue Ethics does not focus on the following rules
but the development of good traits which will help
the person make decisions in life.
Example:
• Generosity
• Prudence
• Kindness, etc
when this character traits are developed, the
person also learns how to break bad habits like ,
• Anger
• Greed
• Boastfulness
-Virtue ethics focus on helping people become
good member of the society.
Plato as one of the advocate of Virtue Ethics
discussed in his works The Republic the key
virtues, like, wisdom, courage, temperance, and
justice
Aristotle also came up with the first description
of virtue ethics in his book Nichomachean Ethics
,when people have a good character traits, they
can also control and manage their emotions.
Plato and Aristotle are considered Virttue
Ethicians.
Plato emphasized the necessity of virtues to
achieve happiness. “ to know the good is to do
the good”. “ if one is wise, all other virtues will
follow. This is Plato’s virtue of wisdom. This
means that Plato believed that all virtues should
be united to achieve happiness.

In contrast, Aristotle was not contented with just

knowing what is good. He believed that a n
individual needs to practice virtue to be really
virtuous.
• Wisdom for Aristotle was just a way of acquiring
the virtues. He is not in favor of the unity of
virtues; if does not follow that if one is virtuous,
the individual will achieve happiness.

Virtue Ehics helps shape the individual’s character.

One criticism of virtue is that decisions are also
based on the rational and critical thinking. However
Virtue Ehics is still a popular theory which has bee
the foundation for the development of the moral
standards of society.
 History of Business Ethics
Ethics has its simple application in the ten
commandments found in the bible. Many ethical
Practices found in the Holy Scriptures which
includes honesty, stewardship, and truthfulness.
Aside from the moral teaching of the catholic
church, other religions have their own
interpretations of ethics w/c have guided
people’s behavior, including business
transactions.
 Early Years
Business Ethics has been recognized for
thousands of years dating back to the time of
Aristotle.
❖Aristotle discussed economic activities and
emphasized the native consequences of
greed, which he described as the “ unnatural
use of one’s capabilities in the pursuit of
wealth for its own sake.” He also had the first
recorded definition of the term fair treatment
in all parties of any transactions.
❖ John Locke’s key Philosophy on the defense of
property as a natural right also helped build the
foundation of business ethics.
❖ Adam Smith explained that the common good is
associated with six psychological motives and that each
individual has to produce for the common good with
values such as prosperity, prudence, reason, sentiment,
and promoting the happiness of mankind.
❖ John Stuart Mill (1863), Immanuel Kant (1899), G.W.F.
Hegel (1820) wrote about distributive justice and
fairness. Distributive justice can be equated to Adams’s
equity theory. Employees believe that whatever they
contribute to the organizations should be
commensurate to what they will receive as outcomes.
❖John Rawls propagated the Difference
Principles. The principle emphasizes equality
in society, though it allows inequality in the
distribution of goods and services only if it will
benefit the lower class in a society. This
principle holds that each person has a set of
equal basi rights and all are given equal
opportunity regardless of positions occupied.
The greatest beneficiary of equality of
opportunity are the least members of society.
 New Generation Ethics
• In 1973, the first managerial textbook in
business ethics was business Ethics by Frank
Chapman Sharp and Philip D. Fox. It
distinguishes between right and wrong
transactions common in business
organizations. The book pointed out that
ethics and law are not the same. Some of the
issues in the book include fair trade practices
and dishonest selling and advertising.
• In 1960’s, there was wide interest in the business
ethics and it emerged as an academic field in the
1970’s. several textbook writers followed followed
sharp and fox such as Norman Bowie, Thomas
Donaldson and Patricia Werhane, Richard De George
and Manuel Vasquez. Most of their books deal with
ethical reasoning.
• One of the ethical decision making models was
developed by Haunt and Vitell in 1986. It discusses
how an individual is prompted by a situation and
eventually recognizes its ethical content. Ethical
decisions are based on the characteristics of the
individual such as religion, personal values, and
strength of moral character. The culture of the
organization can influence ethical decision.
• Ferell and Gresham (1985), Trevino (1986), and
Jones (1991) also contributed ethical decisions
models w/c emphasize that co- employees and
peers are most influential I ethical decisions.
Ferell and Fraedrich published another book on
business ethics in 1990. it defines the ethical
stadards to be followed in the business
organizations. Five years later, Katherine Nelson
and Linda K. Trevino wrote a book which
addresses ethical decision making , the ethical
problems encountered by managers, and how
they can comply ethically and legally from a
managerial point of view.
• Business ethics was taught in educational
institutions through the establishment of
centers of business ethics. Bentley University’s
center for business Ethics pioneered on
activities that supported business ethics and
research.
• Socrates, Plato, and Aristotle are the
prominent Greek Philosophers who have
contributed to the development of the
concept of business ethics.
• Business ethics has been recognized for
thousands of years dating back to the time of
Aristotle.
• Virtue Ethics is person-based rather than
action-based ethical theory. It focuses more
on the moral character of people in carrying
out a particular action.
• The Contributors to the emergence of
business ethics include John Locke,John Stuart
Mil, Immanuel Kant, G.W.F Hegel
• John Rawls propagated the difference
Principle while the first book on ethics was
published by Sharp and Fox
• Hunt and Vitell, Ferrell and Gresham, Trevino,
and Jones developed ethical decision model.
• The defense industry initiative on Business
Ethics and conduct had a big impact on
business ethics in the 80’s
• The views of the three Greek Philosophers can be
linked together, Plato was a profound advocate of
Socrates, his mentor. The Socratic view of Plato was
founded on his belief that knowledge is a virtue.
Knowing the right thing to do leads automatically to
doing the right thing. For Aristotle, to know what was
right was not enough. There should be a choice to act
in the right manner. It means that a person should
habitually do what is good.
• For Socrates and Plato, Wisdom is the basic virtue and
it can unify all the other virtues. For Aristotle, Wisdom
is a goal that can only be achieved with effort and if
there is a choice on the person to think and act wisely.
All the other virtues are not achievable at this time.
 Assignment
• Answer the following questions based on
ethical issues on Mattel, the toy maker.
1. What do you think was the lesson learned by
Mattel in this incident?
2. What was the response of Mattel to the
problem on lead- contaminated toys?
 Self- Examination
• Assess yourself and relate this statement to
yourself:

“ Virtue Ethics does not focus on the rules to

follow but the development of good traits which
will help the person make decisions in life.