Session 4

Since the last time we met

Andrea Rosal Mourns Death of Newborn Daughter
http://bulatlat.com/main/2014/05/18/andrea-rosal-mourns-death-of-2-day-old-daught
er
/
9/11 Memorial Museum's gift shop sparks outrage with some families
http://edition.cnn.com/2014/05/19/us/9-11-memorial-museum-gift-shop/index.html?
hpt=hp_t3
The guy who tried to rig gold prices and cost his bank $44 million
http://money.cnn.com/2014/05/23/investing/barclays-gold-rigging/index.html?
hpt=ibu_c2
eBay faces investigations over massive data breach
http://www.bbc.com/news/technology-27539799

Why should there be ethics in business?

What does ethics mean? What is it not?
What is the role of culture? What is
cultures relationship with ethics?

Approaches to
Ethics

 You are a salesman and you have a

product that everyone wants to buy.
When you open your shop a horde of
buyers descends on it and creates
chaos. Will you allow the chaos to
persist?

 You want order to prevail over your selling what

can you do to achieve that?
Now that everyone is lined up, you conclude
that there will be enough products for everyone
who wants to buy. You observe that there are
elderly folk who are having a difficult time lining
up so you make a separate and faster line for
the elderly. Is this wrong?

 Now you have two lines, you see your

brother and sister lined up in the regular
line. You fight the urge to move them up
the line and instead let them stay where
they are. Why is this right?

 You discover that your product is crap..

You do not tell the buyers however and
soon some of them discover harmful
effects from its use. Good or bad?
You also continue to sell the product.
Anything wrong with this?

Approaches to ethics

Utilitarianism
Rights
Justice and fairness
Care
Virtue

The Utilitarian Approach

Some ethicists emphasize that the ethical action is
the one that provides the most good or does the
least harm, or, to put it another way, maximizes
benefits and lessens harm.
The utilitarian approach deals with consequences;
consequences
it tries both to increase the good done and to
reduce the possible harm.

Basic Insights of Utilitarianism

The purpose of morality is to make the
world a better place.
Morality is about producing good
consequences, not having good
intentions
We should do whatever will bring the
most benefit (i.e., intrinsic value) to all
of humanity.

 Was Niccolo Machiavelli

therefore correct in saying that
the ends justify the means?

Act-Utilitarian Principle:
An action is right if and only if the sum total of utilities
produced by that act is greater than the sum total of
utilities produced by any other act the agent could
have performed in its place.
The right action is the one that will produce the
greatest net benefits or the lowest net costs (when all
alternatives have only net costs).
Utilitarianism is a consequentialist approach to ethics.

Rule-Utilitarian Principle:
Follow those rules that, in light of experience, promote
the general good, i.e. the greatest good for the
greatest number, or produce the greatest net benefits.
A moral rule is correct if and only if the sum total of
utilities produced if everyone were to follow that rule is
greater than the sum total of utilities produced if
everyone were to follow some alternative rule.

An Example
Imagine the following scenario. A prominent and
much-loved leader has been rushed to the hospital,
grievously wounded by an assassins bullet. He
needs a heart and lung transplant immediately to
survive. No suitable donors are available, but there is
a homeless person in the emergency room who is
being kept alive on a respirator, who probably has
only a few days to live, and who is a perfect donor.
Without the transplant, the leader will die; the
homeless person will die in a few days anyway.
Security at the hospital is very well controlled. The
transplant team could hasten the death of the
homeless person and carry out the transplant without
the public ever knowing that they killed the homeless
person for his organs. What should they do?

 For rule utilitarians, this is an easy choice. No one

could approve a general rule that lets hospitals kill
patients for their organs when they are going to die
anyway. The consequences of adopting such a general
rule would be highly negative and would certainly
undermine public trust in the medical establishment.
For act utilitarians, the situation is more complex. If
secrecy were guaranteed, the overall consequences
might be such that in this particular instance greater
utility is produced by hastening the death of the
homeless person and using his organs for the
transplant.

 We often speak of utilitarian solutions in a

disparaging tone, but in fact utilitarianism is a
demanding moral position that often asks us
to put aside self-interest for the sake of the
whole.
Utilitarianism is a morally demanding position
for two reasons:
It always asks us to do the most, to maximize
utility, not to do the minimum.
It asks us to set aside personal interest.

 The Ford Pinto

Expected Costs (with fuel tank
bladder)
$11 x12.5 million = $137.5M

Expected Costs of not installing

the bladder
(180 burn deaths x $200,000) + (180
injuries x $67,000) + (2100 vehicles x
$700) = $49.15M

What about Toyota?

Knew about its acceleration
problem as early as 2002.
Did not issue a recall until
2009.
16 deaths and 243 injuries.

Criticisms
of Utilitarianism

Responsibility
Utilitarianism suggests that we are responsible for
all the consequences of our choices.
The problem is that sometimes we can foresee
consequences of other peoples actions that are
taken in response to our own acts. Are we
responsible for those actions, even though we dont
choose them or approve of them?

Intentions
Utilitarianism is concerned almost
exclusively about consequences, not
intentions.
Intentions may matter in morally
assessing an agent, even if they dont
matter in terms of guiding action.

Who does the

calculating?
Typically, the count differs depending on who
does the counting.
This could lead to serious deficiencies in the
analysis.

Who is included?
When we consider the issue of consequences,
we must ask who is included within that circle.

Those in our own group (group egoism)

Those in our own country (nationalism)
Those who share our skin color (racism)
All human beings (humanism or speciesism?)
All sentient beings

Should utilitarianism also acknowledge the

pain and suffering of animals, of the ecology?
Should it not restrict the calculus just to human
beings?

What are the costs and benefits

of the following:

Traffic in Metro Manila

Overseas employment
Conditional Cash Transfer

 Have you seen or

experienced utilitarianism
employed in your work?

Risk Management

Risk management is the identification, assessment, and prioritization of risks

(defined in ISO 31000 as the effect of uncertainty on objectives, whether positive
or negative) followed by coordinated and economical application of resources to
minimize, monitor, and control the probability and/or impact of unfortunate events
or to maximize the realization of opportunities. Risks can come from uncertainty in
financial markets, project failures (at any phase in design, development,
production, or sustainment life-cycles), legal liabilities, credit risk, accidents, natural
causes and disasters as well as deliberate attack from an adversary, or events of
uncertain or unpredictable root-cause. Several risk management standards have
been developed including the Project Management Institute, the National Institute
of Standards and Technology, actuarial societies, and ISO standards. Methods,
definitions and goals vary widely according to whether the risk management
method is in the context of project management, security, engineering, industrial
processes, financial portfolios, actuarial assessments, or public health and safety.

Risk Management

Define the relevant risks in the risk universe;

Determine the: 1. probability and 2. severity;
Identify strategies to manage the risk
The strategies to manage risk typically include
transferring the risk to another party, avoiding the
risk, reducing the negative effect or probability of the
risk, or even accepting some or all of the potential or
actual consequences of a particular risk.

Moral Imagination
Moral imagination includes an awareness of the
various dimensions embedded in a particular
situationin particular, the moral and ethical ones.
It entails the ability to understand ones situation
from a number of perspectives. Moral imagination
enables managers to recognize a set of options
that may not be obvious from within the
overarching organizational framework; evaluate
these options from a moral point of view; and
actualize them.

 Moral imagination is the ability to discover

and evaluate possibilities within a
particular set of circumstances by
questioning and expanding ones operative
mental framework. In managerial moral
decision making, moral imagination entails
perceiving the norms, social roles, and
relationships entwined in any situation.

ABC Manufacturing produces steel cabinets and other office furniture. It has
been in existence for 25 years, starting out as a small single-proprietorship by
its owner, Mr. Garcia. As it expanded, it raised more capital by incorporating.
Mr. Garcia is now retired and management of the company has been turned
over to his eldest son, Junior who is the president and CEO. Lately, however,
business has been very slow due to the low demand for cabinets since people
now use digital storage and cloud technology for filing.
ABC Manufacturing has a work force of 250 workers. About 10 are supervisors
while the rest are rank and file employees working on the production line.
About 50 of these employees have been hired as furniture makers to respond
to the growing demand of office furniture that would accommodate modular
personal computer- oriented cubicles. Mr. Junior leads the management team
of about 7 people. There is a union of rank and file employees led by Mr. Sapul
and they are in the process of negotiating a new CBA with management. Some
of the union members/ employees have been with the company since the start
of the business. Some employees were hired only recently, though.
Management now wants to reduce the workforce in order to cut costs. It wants
to do so ethically, however. What steps or actions should Mr. Junior and the
rest of the management undertake to do this? Explain your actions.

 For next week, access and read the

following:
a.Universal Declaration on Human Rights
b.Article III of the 1987 Philippine
Constitution