Final Exam Review – Ethics

Ethical Dilemmas

• True Ethical Dilemma: A person must do what he or she feels is right

• The choice is not dictated by law or direct negative consequences.
• People act on personal beliefs, motivations, etc
• Deception (Operation Fortitude).
o Some lies are better than others
o World war two versus lying on a loan application form.

Utilitarianism

• Decisions tend to benefit the greatest number of possible people or harm the fewest
• Ex: Risk Management and cost benefit analysis
• Critics: approach is too mechanical, and ethical decision-making cannot be judged on the basis
of outcomes.
• Steps:
o Identify ethical dilemma
o Determine Utility
o Determine Largest Stakeholders
o Benefit and cost analysis (most benefit)
• Should people make decisions based on perceived outcomes or must the person make choice
for more “pure” reasons. (choice)

Deontological

• Focus on the reasons decisions are made in the first place

• Good and moral reasons
• The ends do not justify the means
• Immanuel Kant (Deontological Ethics)
o Highest justification for an action is to act out of sense of duty or obligations.
o Categorical imperatives
§ Rights
§ Justice
o Universal rules of conduct
o One such rule is unique human dignity
§ Does not include animal dignity
§ Human beings are unique based on their ability to create and follow a system of
ethics.
§ Human beings should not be exploited or treated as a means to an end.
• Critics:
o Sometimes Kantian approach cannot apply to real world applications
§ Such as in war or selling products that are dangerous but have a high demand
and are legal.
 o Emotion is not relevant
§ Many good deeds will remain undone if Kant’s duty ethics is observed –
emotions are important motivating factors.

Shareholder Model – In view of a Corporation

• Focus on solely shareholder interests

• Leans towards utilitarianism – maximizes shareholder interests
• Dodge versus Ford case
• Milton Friedman supports this model as long the corporation complies with the law, and makes
as much money as possible for the shareholders
• As long the actions are legal then it is fair game.

Stakeholder model

• Leans towards deontological

• Considers the interests of various groups including
o Employees
o Customers
o Supplies
o Communities
o Society/Environment
• Shareholder interests collide with the other stakeholders.
o U à as long the benefits is towards the greater number of people then it is fair game.
o D à Categorical imperatives – decisions for the right reasons in line with human dignity.
• The stakeholder model emphasizes that corporations must participate more fully in society.
• Ethical executives must take care of a range of stakeholders.
• Even if a company makes less profit for shareholders, it should pay decent wages and support
charitable causes (it is the right thing to do – Kantian).
• Scenarios: Plant closing down (employees, communities), dangerous products (Customers)

Advertising

• Advertising protected under freedom of speech (charter of rights and freedoms).

• Best case scenario ads, quickly flashed fine print, using fear to sell, celebrity endorsements,
marketing unhealthy food to children, children and violent video games.

Environmental issues

• Laws tend to set minimum standards

• Most companies today act just above the minimum standards but below the best behavior
• Kantian would say companies have an ethical to do more for global warming, minimizing their
carbon footprint, reducing greenhouse gases, protecting endangered species and renewable
energy.
Overseas working conditions

• Millions of overseas workers make goods for sale in Canada/USA work in very poor conditions
• Legal for the substandard employee standards in those country but do companies owe a duty to
improve the conditions for foreign workers they impact (Kantian) or just follow the law and
benefit the majority being the consumers and shareholders (Utility).