TRADITIONAL ETHICAL THEORIES

Business Ethics and Corporate Governance

Lecture 3

Prof Soumitra Mookherjee

 ETHICS AND MORALITY

Ethics is a set of moral principles and a code for

behavior that govern an individual’s actions
with other individuals and within society.

Morality is what people believe to be right and

good, while ethics is a critical reflection
about morality.
 LAWS

Laws – emergence due to agitation, conflict by

dramatic situations.

Laws are societal rules or regulations that are

obligatory to observe.

Laws protect the welfare and safety of society,

resolve conflicts, and are constantly evolving.
COMPARING LAW AND ETHICS

Laws are mandatory to which all citizens

must adhere or risk civil or criminal liability.

Ethics relate to morals and help us formulate

consistent and coherent decisions.
 ETHICAL THEORIES

1. Deontology (duty)

2. Consequentialism (actions)

3. Virtue Ethics/Intuition (morals and values)

 ETHICAL THEORIES

Deontology /Non consequentialism: meaning duty.

Considers that some acts are right or wrong independent of

their consequences.

Determine what is ethical and answers the question:

What should I do and why should I do it?

 ETHICAL THEORIES

Deontology – EXAMPLE

Example: A medical Practitioner believes she has a duty to

give cardiac clients detailed information on the pathology
involved in their condition even though the client has
indicated that they are not ready to hear information causing
the client distress.
 ETHICAL THEORIES
Consequentialism: Meaning end or consequence.
Actions are determined and justified by the
consequence of the act.
Consequentialists consider all the consequences/
outcomes of what they are about to do prior to
deciding a right action.
The more good consequences an act produces, the better
or more right that act
This also answers the question: What should I do
and why should I do it?
 ETHICAL THEORIES

Consequentialism: Examples

Discrimination in the Workplace: Federal law protects employees

against different forms of discrimination in the workplace.

Goal of consequence ethics, zero-tolerance for any form of

discrimination against employees protects individuals while
promoting the greater good of the workplace community
 ETHICAL THEORIES

Consequentialism: Examples
General Motors: Financial Bailout

Positive consequences: Positive consequence for the bailout is to

continue or even strengthen its business, avoid bankruptcy, and
maintain the company’s reputation with customers. 
Actual bankruptcy could be worse for its reputation among
consumers.
 ETHICAL THEORIES

VIRTUE ETHICS

Virtue Ethics: Reveals what kind of person one

ought to be, rather than what they do.

The focus is on the character (goodness) of the

person.
 ETHICAL THEORIES

VIRTUE ETHICS

Two questions when faced with a dilemma:

Behavior: What should I do?

Motivation: Why should I do it?
But Virtue Ethics Requires Rethinking Basic
Ideas
Basic concepts associated with action around virtue or
excellence:
Eudaimonia (Happiness)
Arete (Virtue or Excellence)
 Mean between extremes of excess and defect
Ethos (Character)
Perception of the wise or good human
Bouleusis (Deliberation)
Akrasia ( Incontinence or Weakness of Will)
Logos (Reasoning)
 Happiness
Many pleasure states combined with few pain states

 Happiness, for Aristotle,

A life spent fulfilling the intellectual and moral virtues.
Virtues contain their own ends.
By carrying out the moral and intellectual virtues for a
lifetime, we realize ourselves as human beings.
Happiness is a whole state of the person involving thought,
perception, habit, and emotion
 Excellence
Really conveys excellence.

The happy life is the one devoted to moral and intellectual

excellence
Do we really understand excellence in business?
Fuerstein—Manager of Maldin Mills who rebuilt plant after
a fire rather than moving it oversees

Life devoted to excellence

Cultivation of knowledge, skill, habits, perceptual modes,
and emotions that consistently hit upon excellence.
 Character
Ethos translates as character which is the seat of the virtues.

 Character is manifested through its actions.

Cowardly actions reveal a cowardly character
Responsible actions reveal a responsible character

Moral education becomes organized around building

character around these excellences: courage, responsibility,
integrity, honesty, trustworthiness
 Moral Exemplars Reveal Virtues
One becomes good by first doing good deeds.

Moral development requires guided practice