Application to Business

Prof. Seema Menon

Email:
seema.j.menon@gmail.com
 Ethics is the general term for attempts to
state or determine what is good, both for the
individual and for the society as a whole. It is
often termed the science of morality.
 Myth 1: Ethics has to do with what my feelings tell me is right or
wrong.
Analysis: Many people tend to equate ethics with their feelings. But
being ethical is clearly not a matter of following one’s feelings. A
person following his or her feelings may recoil from doing what is
right. In fact, feelings frequently deviate from what is ethical

 Myth 2: Ethics has to do with my religious beliefs.

Analysis: Ethics cannot be identified with religion. Most religions, of
course, advocate high ethical standards. Yet if ethics were confined
to religion, then ethics would apply only to religious people. But
ethics applies as much to the behaviour of the atheist as to that of
the saint. Religion can set high ethical standards and can provide
intense motivations for ethical behaviour. Ethics, however, cannot be
confined to religion nor is it the same as religion.
 Myth3: Ethics consists of standards of
behaviour that is accepted by our society.
Analysis: Being ethical is not the same as
doing“ whatever society accepts." In any
society most people accept standards that
are, in fact, ethical. But standards of
behaviour in society can deviate from what is
ethical. For eg, an entire society can become
ethically corrupt.
I) Ethics refers to well based standards of right and wrong that
prescribe what humans ought to do, usually in terms of rights,
obligations, benefits to society, fairness, or specific virtues.
In this sense, ethics means: those standards that impose the
reasonable obligations to refrain from rape, stealing, murder,
assault, slander, and fraud.
 Ethical standards also include those that enjoy virtues of honesty,

compassion, and loyalty.

 And, ethical standards include standards relating to rights, such as

the right to life, the right to freedom from injury, and the right to
privacy.
 Such standards are adequate standards of ethics because they are

supported by consistent and well founded reasons.

II) Ethics refers to the study and development of one’s ethical
standards. Ethics means then, the continuous effort of studying our
own moral beliefs and our moral conduct, and striving to ensure that
we, and the institutions we help to shape, live up to standards that
are reasonable and solidly-based.
 Therefore, Ethics is a set of principles of right conduct, a theory or

a system of moral values.

III) It is a branch of philosophy concerned with the systematic study of

human values.
 It involves the study of theories of conduct and goodness, and

of the meanings of moral terms.”

 Formal study of ethics in a serious and analytical sense began with the early
Greeks, and later Romans.
 Important Greek and Roman ethicists include the Sophists and Socrates, Palto
and Aristotle - who developed ethical naturalism
 The study of ethics was developed further by Epicurus, and by Zeno and the
stoics.
 The formal study of philosophy stagnated until the medieval era, when it
gained new strength through the writings of Maimonides, Saint Thomas
Aquinas and others. It was at this time that the debate between ethics based
on natural law and divine law gained a new importance.
 Modern Western philosophy began with the work of greats such as Thomas
Hobbes, David Hume and Immanuel Kant. Their work was followed up by the
utilitarians, Jeremy Bentham and John Stuart Mill.
 The study of analytic ethics took off with G. E. Moore and W. D. Ross,
followed by the emotivists, C. L. Stevenson and A. J. Ayer.
 Existentialism was developed by writers such as Jean Paul Sartre. Some
modern philosophers who have done serious philosophical writing on ethics
include John Rawls, Elliot N Droff and Charles Hartshorne.
 We understand ethics as a theoretical
background of morals concerned more about:
 Providing guidance for moral decisions and ethical
judgements
 Analysing and evaluating the rational usage of
moral conducts
 Understanding the meaning of moral values
 Meta-ethics – deals with understanding the
theoretical meaning and reference of moral
propositions and how their truth values (if
any) may be determined
For eg, What does right even mean?

 Descriptive Ethics – deals with

understanding what moral values people
actually abide by.
For eg, What do people think is right?
 Normative Ethics – deals with the practical
means of determining a moral course of
action.
For eg, How should people act?

 Applied Ethics – deals with how moral

outcomes can be achieved in specific
situations
For eg, How do we take moral knowledge
and put it into practice?
 Teleological Ethics – Consequence based
ethics

 Deontological Ethics – Duty based ethics

 Determination of rightness or wrongness based
on consequences

 Consequentialism - holds that an action is

morally right if the consequences are more
favourable than unfavourable. For
consequentialism, the end result determines an
action’s morality.
 Ethical Egoism
An action is moral if its consequences are
more favourable than unfavourable only to
the agent doing the action. “I should do
what’s best for me.”

 Ethical Altruism
An action is moral if its consequences are
more favourable than unfavourable to
everyone except the agent. “I should do what
is best for others.”
 Ethical Relativism
According to this theory ethics and moral rules
cannot be universally or objectively true for all
people at all times. Moral right and wrong is always
relative to a particular culture and particular time
and that no absolute system of ethics can be known
to be true for all time.
For eg, Slavery is a good example of ethical
relativism. Repeatedly the value of a human being is
determined by a combination of social preferences
and patterns, experience, emotions, and “rules” that
seemed to bring about the most benefit.
 Utilitarianism – is a normative ethical theory.
◦ Moral worth of an action is determined solely by its
consequences
◦ What makes an action right or wrong is the good or evil
that is produced by the act
◦ Action is right if it produces the best possible balance of
good consequences over bad consequences for all parties
affected
◦ It involves the consideration of alternatives and how they
affect all parties concerned
 Utilitarianism was originally proposed in 18th century

England by Jeremy Bentham and others and later fine –

tuned by John Stuart Mill
 Involves the following steps
◦ Determining the alternative actions that are available
in any specific decision situation

◦ Estimating the costs and benefits that a given action

would produce for parties affected by the action

◦ Choosing the alternative that produces the greatest

sum of utility or least amount of disutility
 Not always possible to calculate utility or to analyse massive
amounts of information

 Ignores distribution of good – is it uniformly distributed or

favours specific groups?

 No common definition of what is ‘good’?

 Assumes that all can be measured in a common numerical scale

 Action that produces the greatest balance of value for the

greatest number of people. What about the minority?
Ex: What if society decides that it is in the best interest of the
public to deny health insurance to those testing positive for
AIDS?
 It is a theory of duty or moral obligation.
 “Right and Wrong” are determined according to duty
– not what you do but why you do it
 One of the most important implications of
deontology is that a person’s behaviour can be
wrong even if it results in the best possible
outcome, and an act can be righteous even if it
results in a negative outcome.
 In contrast to consequentialism, a philosophy
famous for its claim that the ends justify the means,
deontology insists that “how” people accomplish
their goals is usually (or always) more important
than “what” people accomplish.
 For eg, telling lies or breaking a promise are
intrinsically wrong, regardless of the consequences.
 Kant’s theory of ethics is deontological meaning that
it is concerned with the morality of duty. If focuses
on the morality of actions and disregards the
consequences of an action. It is absolute since the
morality of an action takes no regard of the situation
it is in.

 The categorical imperative: The categorical

imperative helps us to know which actions are
obligatory and which are forbidden. Hypothetical
imperatives are conditional: ‘If I want x then I must
do y’. These imperatives are not moral. For Kant, the
only moral imperatives were categorical: ‘I ought to
do x”, with no reference to desires or needs.
 There are three categorical imperatives.

◦ The universal law – All moral statements should be general laws,

which apply to everyone under and circumstances. There should
be no occasion under which an exception is made.
◦ Treat humans as ends in themselves – Kant argues that you should
never treat people as a means to some end. People should always
be treated as ends in themselves. This promotes equality.
◦ Act as if you live in a kingdom of ends – Kant assumed that all
rational agents were able to deduce whether an argument was
moral or not through reason alone and so, all rational humans
should be able to conclude the same moral laws.

 Kant sought to create a framework by which one could discover

which moral statements were true and which were false.
 Universality – it counters the natural temptation to make
exceptions for ourselves or to apply double standards

 The categorical imperative prohibits acts which would

commonly be thought immoral such as theft, murder and
sexual abuse

 Kant makes a distinction between duty and inclination.

 He corrects the utilitarian approach that punishment of the

innocent can be justified if the majority benefit.

 Kant gives humans intrinsic worth meaning that they can no

longer be used as a means to an end. This promotes equality.
 Kant’s refusal to allow exceptions to a maxim is
incompatible with modern politics. In war, the sacrifice of
the few for the many is necessary. Kant does not allow
this.

 Does not lend itself to precise method for decision making

 Difficult to think of all humanity each time a decision has

to be made

 Places greater emphasis on the welfare of every person,

but does not really draw a line

 Hard to resolve conflicts when criteria has to treat

everyone equally – decisions typically involve conflicts of
interests
 You are the CEO of a company contemplating
closing a plant in a city in Ohio. Your options are:

◦ Close the plant and relocate/fire employees

◦ Keep the plant and continue operations

 Questions
◦ Using utilitarianism, discuss how you reach a decision
and which decision?
◦ Using Kantian ethics, discuss rationale and which
decision makes sense?
◦ What are some problems with either approach?
 Managers confront facts and values when
making decisions
 Good and evil are not always clear-cut
 Knowledge of consequences are limited
 Existence of multiple constituencies conflicts

of interest
 Multiple constituencies can also use ethical

arguments to justify their position

 Nature of ethical problems

◦ Ethical standards change over time

◦ Human reasoning is imperfect
◦ Ethical standards and principles are not always
adequate to resolve conflicts

 Which theory should be used?

◦ Each approach has strengths and weaknesses

◦ Need to look at situation and apply best
analysis/judgment