ETHICS & PUBLIC

ASSOCIATIONS:
corruption in PA

McGraw-Hill/Irwin
Business Ethics: Decision-Making for Personal Integrity
& Social Responsibility Copyright © 2018 The McGraw-Hill Companies, Inc. All rights reserved.
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 Religious ethics VS.
Philosophical ethics

 Religious ethics: Explain human well-being in

religious terms.

 PHILOSOPHICAL ETHICS: Provide justifications

that must be applicable to all people regardless
of their religious.

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Bait & Switch and Cross-selling

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

1. Explain the ethical theory of utilitarianism.

2. Explain how to serve the utilitarian goal of maximizing
the overall good.
3. Explain principle-based, or deontological ethical
theory.
4. Explain the social justice theory based on the concept
of human rights and how they are relevant to business.
5. Distinguish moral rights from legal rights.
6. Describe and explain virtue-based theory of ethical
character.
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 Philosophical ethics

Ethical theories that provide a systematic answer

to the ethical questions of:

“What should to do in particular situations? And

why should we do this?”

Ethical theories thus describe the ethical behavior

and provide the reasons that explain this behavior.

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 Philosophical ethics

 Ethical theories underline the fundamentals

which guide ethical judgment from three main
perspectives:
 Consequences
 Principles
 Personal character

Ex. Arriving late to the lecture

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 Philosophical ethics
Accordingly, this chapter introduces four ethical
theories that distinguish different accepted
behavior from three perspectives to be applied
to the business field.

Utilitarianism Social justice

Deontological Virtue

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 THE ETHICAL THEORIES

 UTILITARIANISM: Directs us to decide based

on the overall consequences of our acts that
achieve “The greatest benefits for the greatest
stakeholders.”

oSOCIAL JUSTICE: Directs us to act on the

basis of respecting human rights taking fairness
as the primary social principle.

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 THE ETHICAL THEORIES

 DEONTOLOGICAL : Directs us to act on the

basis of GENERAL moral principles.

 VIRTUE ETHICS: Direct us to consider the

moral character of individuals can contribute to
the decision being taken.

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 1

UTILITARIANISM

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 UTILITARIAN ETHICS ARE
CONSEQUENTIALIST (CONSEQUENCE-
BASED) APPROACH.
Consequence/s
Agent Action
Ethical situation generally OW!
involves:

(1) a moral agent,

(2) an action or series of
actions,
Recipient
(3) consequences,
and (4) a recipient of the
consequences.

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 UTILITARIANISM: MAKING
DECISIONS BASED ON BETTER
CONSEQUENCES
 Utilitarianism has been known as a consequentialist
approach to ethics. Here, we should act in ways that
produce better consequences.

 What is meant by “better consequences”?

 Better consequences are those that promote human
well-being: the happiness, health, integrity, freedom,
respect of all the people affected.

 Utilitarianisms aim to produce better consequences

than the alternatives they are considering.
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 UTILITARIANISM: MAKING
DECISIONS BASED ON BETTER
CONSEQUENCES
 Utilitarianism is a social philosophy that is against those
who aim to benefit only a small social, economic, or
political minorities. Instead, It promotes the greatest
amount of these values for the greatest number of
people. “The greatest good for the greatest number.”
 The consequences of our actions will depend on the
specific facts of each situation. No act is ever absolutely
right or wrong in all situations; it will always depend on
the consequences.

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 CHALLENGES TO UTILITARIAN
ETHICS

 It is difficult to know everyone who will be affected by

our decisions and how they are impacted.

 Counting, measuring, comparing, and quantifying the

consequences of actions is very difficult.

 “the end does not always justify the means” however,

in the utilitarian principle “the end justifies the
means.” moving towards the legal approach to ethics

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 Nestlé suggested Stakeholder Map
Small and medium Large bottles’ Nestlé
sized bottles’ Employees Competitors
Employees

Nestlé Large bottles’

“Stockholders” Customers
Nestlé decision

Nestlé Small
and medium Small and medium
sized bottles’ sized bottles’
Suppliers Customers

Nestlé Large
bottles’ Suppliers
Government Nestlé surrounded
“taxation” Communities
(schools & hotels) 1-17
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 STAKEHOLDERS MAP
Indirect Postively Effected Direct Postively Effected
Hayat – Safi
& Siwa
Baraka Nestle
Stockholders Stockholders
Suppliers of
Large sized
bottles Employees
Large sized
(+) (+) (+) Bottles
Government
Taxation (+) (+) Customers of
Large sized
(+) Bottles

(-) Decisions
(-)
Competitors Employees
Large sized (Small &
(-) Medium Sized)
(-)
Suppliers (-) (-)
Customer
(Small &
Medium Community (Small & Medium
Sized) Employees Sized)
Families &
individuals Aquafina &
Dasani
Direct Negatively Effected
Indirect Negatively Effected

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 Results
Type of relation Number

Direct positive 3

Direct Negative 2

Indirect Positive 3

Indirect negative 3

Apparently we have the positive effects(direct and indirect) are

greater than the negative ones. On the other hand, the decision
affected individuals, terminated employees and small and medium
bottles customers.

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 2

DEONTOLOGY

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 DEONTOLOGY: AN ETHICS OF RIGHTS AND
DUTIES

Deontological ethical theory is principle-based. It

tells us that there are some GENERAL rules that
we ought to follow even if doing so prevents good
consequences from happening or even if it results
in some bad consequences.

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 DEONTOLOGY: AN ETHICS OF RIGHTS
AND DUTIES
What MORAL RULES should we follow?
• The country (generic) rules : an established standard
or regulations governing the citizen behavior as in the constitution.
• The Company’s Rules : which are derived from various
institutions in which we participate (as listed in the company
handbook entitled work regulations).
• Role-based rules : (as in the job description)
• Professional rules: ex. Generally Accepted Accounting Principles
(GAAP)

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 Legal Responsibilities vs.
Ethical (Moral) Responsibilities

• The law provides a very important guide to ethical

decision making, but legal norms and ethical or moral
norms are not identical nor do they always agree.
• Much good work gets done by ethics officers, but it is
fair to say that much of this focuses on legal issues.
• So we need to state that “Doing things right (legal)
doesn’t mean doing right things (moral)”.

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 DISTINGUISHING BETWEEN MORAL RIGHTS
AND LEGAL RIGHTS
LEGAL
• Legal rights may be granted
on the basis of legal rules.
• Legal rights might also arise
from contractual agreements.
MORAL
• Moral rights establish the
basic moral framework for
legal environment itself, and
more specifically for any
contracts that are negotiated
within business.
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 The civil service law
“CS law”
• Cs law consists of a list of regulations that organises the employees /
employers relationship in the governmental associations launched by the
Egyptian government (the ministry of planning).

• Recently, items constituting the CS law had been discussed in detailed in

the Egyptian parliament that refused the current law draft by majority.

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 The civil service law
On of the hottest topic being discussed was how the
immediate supervisors can appraise and compensate the
employees’ performance. In this context, the law draft
prepared by the governors includes the list of regulations
that organise and control the process of appraising and
compensating employees performance. However, most of
the parliament members doubted the such regulations and
accordingly they refused the law draft.

From the Deontological point of

view, How would you judge whether
or not the refusing the civil service
law was ethical decision?
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 3

SOCIAL JUSTICE

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 SOCIAL JUSTICE: HUMAN RIGHTS AND
DUTIES

• According to the social justice perspective, there is an

essentially one fundamental ethical principle that we should
follow which is “Respecting the dignity of each individual
human being” in the stakeholders’ map.
• KANT claimed that respecting human dignity could be
practiced through treating each person as end in themselves
and never only as means to our own ends.
• Social justice theory focus on minorities rather than majorities
(as in the utilitarianism)

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 SOCIAL JUSTICE: HUMAN RIGHTS AND
DUTIES

A fair decision is an impartial decision.

Do you agree? (Always?)

Apply the social justice

assumptions to judge the decision
ethicality in Xerox, Siemens, and
Nestle cases.

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 Nestlé suggested Stakeholder Map
Small and medium Large bottles’ Nestlé
sized bottles’ Employees Competitors
Employees

Nestlé Large bottles’

“Stockholders” Customers
Nestlé decision

Nestlé Small
and medium Small and medium
sized bottles’ sized bottles’
Suppliers Customers

Nestlé Large
bottles’ Suppliers
Government Nestlé surrounded
“taxation” Communities
(schools & hotels) 1-30
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 4

VIRTUE ETHICS

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 VIRTUE ETHICS: MAKING DECISIONS BASED ON
INTEGRITY AND CHARACTER

• Virtue Ethics is a tradition within philosophical ethics that

seeks a full and detailed description of those character
traits, or virtues, that would constitute a good and full
human life.
• An ethics of virtue shifts the focus from questions about
what a person should do, to a focus on who that person is.
• Implicit in this distinction is the recognition that our
identity as a person is constituted in part by our wants,
beliefs, values and attitudes.
• The self is identical to a person’s most fundamental and
enduring dispositions, attitudes, values, and beliefs.

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 Virtue Ethics

In other words, you might consider someone you

believe to be virtuous and ask yourself what that
person would do in this situation.
What would a virtuous person do?
Virtuous = Good, Kind, Clean, Decent, Pure…etc
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 A Schema of Ethical Theories (Summary)

Individual stakeholders

Virtue ethics Social Justice ethics

Making individual Decisions based on Making Decisions focusing on
Ethical Integrity & Character individuals' social principles and
human rights
Moral principles Social Principle

Deontological ethics Utilitarianism ethics

Making organization Decisions based Making organization Decisions based
on moral Principles and regulations on Ethical Consequences

Institutional stakeholders
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 Siemens

Siemens is a multi-national firm producing electrical

and electronic products in 190 countries around the
world employing 450,000 people.

Siemens UK base in Berkshire employs about half of

Siemens’ UK workforce serving more than 100 sites and
generating over £3 billion annually revenues.

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 Siemens

Siemens UK administration has to decide its production

mix that maximises its market share and profitability. It
offers the full collection of goods and services divided
into two sectors.

The Primary sector includes electrical and electronic

products for personal use ranging from toasters to
personal computers. Otherwise, the Secondary sector
includes soft and hardware products that facilitate
essential public and private services such as
transportation, farming, banking and healthcare services.

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 Siemens

Based on latest statistics, 40% of Siemens UK

revenues are derived from the primary sector and 60%
from the secondary.

The Sales were declined in the primary sector due to a

sever competition from Chinese products that depends
mainly on the price. This is in addition to increasing the
cost and the price of the secondary sector products.

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 Siemens

Responding to consumer demand in the market, the

administration of the UK subsidiary decided to substitute
services with goods to reach (40 : 60) instead of (50 : 50).
In some cases, Siemens combines products and
services in major projects such as hearing aids and MRI
scanners to support hospitals.

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SIEMENS primary products

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 SIEMENS Secondary products
MRI scanners

Hearing Aids

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SIEMENS TRAIN Offshore wind farm 1-40
The stakeholders map

However, responding to such new trends led to

downsizing employees in primary sector
substituting them with more suitable new staff for
delivering the secondary products.

After reading the Siemens case, you need to list the

stakeholders and draw the stakeholders map….

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Thank you

Tarek Ali 1-42