Chapter 1:

• What is business ethics?

o Business ethics involves providing reasons for how things ought to be in the
economic world – the process of determining what is right and what is wrong.
o It requires:
1. Arranging values to guide decisions – your set of priorities about what’s
worth seeking and protecting.
2. Understanding the facts – the main facts needed to understand the
situation so as to undertake an informed reasoning process.
3. Constructing arguments – given the facts and your values, construct
arguments that result in determining how things ought to be.
o Well-developed arguments invite counter-arguments. These counter-arguments
typically dispute the argument through attacking the:
1. Values,
2. Facts, and
3. Reasoning.
• The Place of Business Ethics:
o Distinguishing morality, ethics and metaethics:
1. Morals – the direct rules we ought to follow (rules).
2. Ethics – the reasoning process that produces our morals (making of
rules).
3. Metaethics – theoretical discussions about right and wrong – like where
do ethics come from? (the origin of the process and the rules)
o Normative ethics versus descriptive ethics:
1. Normative ethics: concerns how people ought to act – how they ought to
reason and made decisions.
2. Descriptive ethics: concerns how people actually act – how they actually
reason and make decisions.
o Ethics versus other forms of decision making:
1. We make decisions based on ethics, but we can also make decisions based
on:
• The law - The law results from decisions of legislators,
interpretations of judges, and enforcement of police officers.
Ethical conclusions result from applied values and arguments.
• Prudence (practicality) – being cautious when making decisions
out of concern for your own well-being.
• Religion
• Authority figures
• Peer pressure – strong urge to conform to peers.
• Custom – tradition and habit.
• Conscience – your inner feeling of guilt.
Many of these are related to and interplay with ethics when making
decisions.
 o History and Ethics:
1. Platonic ethics – there is a systematic, general understanding of what is
right and what is wrong, which would allow us to clearly resolve every
specific ethical dilemma.
2. Aristotelian ethics – deals with the idea of virtues – will be discussed in
detail later.
3. John Locke – freedom maximization – everybody should be free to do
whatever they want as a starting point, except when you impinge on
somebody else’s freedom.
4. Immanuel Kant – deontology – determining what is right through
focusing on the act or method itself regardless of the outcomes.
5. John Stuart Mill – utilitarianism – determining what is right through
focusing on the effects or outcomes of different actions.
6. Friedrich Nietzche – cultural relativism - ideas of right and wrong are
things that exist within particular communities and nations and within
a particular time frame.
o The Historical Development of Business Ethics:
1. Origin in the 1970s as a response to ethical scandals, and by 1980 unified
business ethics courses were provided by universities.
2. By mid-1990s, the field reached maturity.
• University classes were widespread, a core set of ideas, approaches,
and debates had been established as central to the subject, and
professional societies and publications advanced research in the
field.
3. The development of business ethics was seen as a response to increasing
public awareness of problems associated with modern economic
activity, especially on environmental and financial fronts.
4. It addresses both large scale and personal ethical issues.
• Is Business Ethics Necessary?
o At the boundaries of the question about whether business ethics is necessary,
there are conflicting and extreme perceptions of the business world:
1. Business needs policing because it is a dirty enterprise featuring people
who get ahead by being selfish liars.
2. Successful businesses work well to enrich society, and business ethicists
are interfering and annoying scolds threatening to ruin our economic
welfare.
o Regardless of whether you hold this view or that view, business ethics is inevitable
– it is unavoidable because values guide our decisions and actions, and when
you decide on what to do or which action to take based on your values, you are
engaging in ethics, whether you are consciously aware that you are doing it or not.
o Business ethics expands beyond its applicability in business or professional lives
– it also applies to our personal lives.
o Institutional business ethics versus personal business ethics:
 1. Institutional business ethics – business ethics as it applies to the
organization itself – its codes of conduct, policies, and actions in terms of
the organization’s ethical dilemmas.
2. Personal business ethics – business ethics as it applies to and is
experienced by individuals in their day-to-day lives.
• Overview of the Business Ethics Workshop:
o Three clusters of chapters:
1. First cluster develops and explains the main theories guiding thought in
business ethics.
2. Second cluster investigates personal business ethics - applying the tools of
ethical reasoning to personal decisions in organizations.
3. Third cluster considers institutional business ethics – applying the tools of
ethical reasoning to general issues involving corporations, work
environments, and the actions they take.
Chapter 2:

• The Means Justify the Ends versus the Ends Justify the Means:
o Means: the method, action, or system; Ends: the results, effects, or outcomes.
o Means more important than ends – actions or rules followed more important
than consequences.
o Ends more important than means – consequences more important than the
action or rules followed.
o Most people actually prioritize one or the other depending on the situation.
• Perennial Duties:
o Duties – rules that tell us what we ought to do. It is our responsibility to know
and follow these rules.
o Duties to ourselves:
▪ Duty to develop our abilities and talents – abilities and talents come
with the duty to develop them.
▪ Duty to do ourselves no harm – we have a responsibility to maintain
ourselves healthily in the world.
o Duties to others:
▪ Avoid wronging others – the duty not to harm others in any way.
▪ Honesty - the duty to tell the truth and not leave anything important out.
▪ Respect others - the duty to treat others as equals in human terms.
▪ Beneficence - the duty to promote the welfare of others.
▪ Gratitude - the duty to thank and remember those who help us.
▪ Fidelity - the duty to keep our promises and hold up our end of
agreements.
▪ Reparation - the duty to compensate others when we harm them.
▪ Fairness – the duty to treat equals equally and unequals unequally.
o Fairness:
 ▪ Fairness is:
• Treating equals equally, and,
• Treating unequals unequally.
▪ Rawlsian Fairness:
• Veil of ignorance – If we make the rules without knowing what
our place in society will be, we will achieve a fair society.
o Balancing the duties – duties may conflict or contradict with one another. We
typically weigh the various duties and choose which ones pull harder or make
the strongest demands.
o Where do duties come from?
▪ Nature of the universe – they exist just like laws of physics do, and we
just discover and understand them using our reasoning.
▪ Humanity – the sense of right and wrong is inherent in us as humans.
o Advantages and Drawbacks of an ethics based on Duties?
▪ Advantage – simplicity – they are easy to understand and follow.
▪ Disadvantages – duties pull against each other, so which should we
prioritize? Also, not considering consequences at all will lead to bad
ones.
• Immanuel Kant: The Duties of the Categorical Imperative:
o Kant believed that a theory of duties was the right approach to ethical
problems.
o He believed that rules that we should follow are determined through the
categorical imperative.
o Categorical Imperative versus a Hypothetical Imperative:
▪ Categorical imperative is something that you need to do all the time,
irrespective of your goals or desires.
▪ Hypothetical imperative is something that you need to do if you want to
achieve a specific result.
o First version of the categorical imperative – the consistency principle:
▪ Act in such a way that the rule for your action could be universalized –
imagine that everyone did it all the time!
▪ If you can’t imagine everyone doing it all the time – it isn’t
universalizable.
▪ Your actions should be governed by rules that apply to everyone –
that can be universalized.
▪ Objections – difficult to live by.
o Second version of the categorical imperative – the dignity principle:
▪ Act in such a way so that you treat people as ends in themselves, not as
means to your ends.
▪ If you are treating people as means – then you are not following the
dignity principle.
▪ Treat others with respect and as holding value in themselves – treat
people as ends.
 ▪ Objections – difficult as to how it will actually work.

Case 1:

Cheaters

KDCP is Karen Dillard’s company specialized in preparing students to ace the Scholastic Aptitude
Test. At least some of the paying students received a solid testing-day advantage: besides teaching
the typical tips and pointers, KDCP acquired stolen SAT tests and used them in their training
sessions. It’s unclear how many of the questions that students practiced on subsequently turned up
on the SATs they took, but some certainly did. The company that produces the SAT, the College
Board, cried foul and took KDCP to court. The lawsuit fell into the category of copyright
infringement, but the real meat of the claim was that KDCP helped kids cheat, they got caught,
and now they should pay.

The College Board’s case was very strong. After KDCP accepted the cold reality that they were
going to get hammered, they agreed to a settlement offer from the College Board that included this
provision: KDCP would provide $400,000 worth of free SAT prep classes to high schoolers who
couldn’t afford to pay the bill themselves.

How do we discuss this case from a means-based point of view?

Case 2:

In Mexico City, police salaries are extremely low. They live decently enough, though, by adding
bribes (mordidas in Spanish) to their wages. During a typical week they pull in bribe money that
more or less equals their monthly salary. All the locals know how it works, especially when it
comes to the most avid collectors, the traffic cops. In the standard procedure, the officer pulls a
car over, takes out his codebook, walks up, and hands it to the driver. Ostensibly, he’s allowing
confirmation that the law actually prohibits whatever was done. This is what actually happens: the
driver slips about fifty pesos (a little under five dollars) into the book, closes it, hands it back, and
is free to go. The practice is so routine that frequently the procedure is abbreviated and participants
don’t even bother trying to hide the payoff or going through the codebook pantomime. They may
approach the officer’s patrol car and directly drop the money onto the guy’s lap. Or they may stay
in their own car and just hand cash out to be directly pocketed. Regardless, the transaction is
smooth and efficient.

Despite the bribery’s efficiency and its penetration to society’s core, not everyone in Mexico City
is happy with the constant mordidas. According to a story in the city’s largest circulation daily, a
mayor in one of the suburbs decided to take a lonely stand against the informal police action.
Since all the police are in on it, he couldn’t resort to an Untouchables-styled internal affairs
operation. And since all the citizens considered the payoffs perfectly normal, he couldn’t appeal
to them for help either. Really, he was left with only one choice. To interrupt the habit, he made
traffic tickets illegal. His suburb became a free driving zone where anybody could do whatever
they wanted in their car and the police couldn’t respond. A lot happened after that, but there’s no
doubt that the payoffs stopped.

Are Bribes considered ethical in this case or not – discuss this based on means based theories?