Moral Philosophies

Business Ethics and Value Theories

Why Ethics Matters
• Ethics consists of the standards of behavior that we hold ourselves in
our personal and professional lives
• In our personal lives, our ethics sets norms for the ways in which we
interact with family and friends.
• In our professional lives, ethics guides our interactions with
stakeholders i.e. customers, clients, colleagues, employees, and
shareholders affected by our business practices.
• What type of firm has long-term customers and employees? One
whose track record gives evidence of honest business practice
Why Ethics Matters
• Clients, customers, suppliers, investors, retailers, employees, the media, the
government, members of the surrounding community, competitors, and
even the environment are stakeholders in a business
• They are individuals and entities that affected by the business’s decisions
and business practices/functions
• Business Ethics guides the conduct by which companies and their agents
abide by the law and respect the rights of their stakeholders
• with honesty and respect
• with fairness and dignity
• So for commercial transactions and conducting business properly ethics
matters.
Acting with Integrity
• Business Ethics deals with Values, Facts, and Arguments.
• One the important Ethics for the businesses to follow is INTEGRITY
• Ethics is only one of a number of ways of making decisions for
businesses
• Business Ethics is not about scolding, moralizing, or telling people to
be nice.
• Ethics doesn’t have to be annoying or intrusive because
• Ethics is the arrangement of values guiding our aspirations and actions
Acting with Integrity
• Integrity—that is, unity between what we say and what we do—
• It is a highly valued trait.
• It is more than just consistency of character.
• Acting with integrity means we adhere strongly to a code of ethics, so
it implies trustworthiness and incorruptibility.
• Being a professional of Integrity means consistently striving to be the
best professional you can be, in all your interactions with others and
stakeholders
• Integrity allow businesses and society to function properly
Ends, Means and Character in Business
• What’s more important in Business Ethics—what you do or what
happens afterward because of what you did?
• To answer this we need to understand certain concept
• Ends related to Consequences /results
• Means related to Actions/ process/ways of doing something
• Character related to Decision Maker’s upbringing/ individual
Ends, Means and Character in Business
• The following question also related to next one that is:
• How, then, should we behave in business dealings?
• Philosophy and science help us answer this question. From philosophy,
three different perspectives help us assess whether our business
decisions are ethical on the basis of reason.
• These perspectives are called normative ethical theories and focus on
how people ought to behave in light of ethical standards.
• The first normative approach is to examine the ends, or consequences,
a decision produces in order to evaluate whether those
ends/consequences are ethical.
Moral Philosophies
• Theories explaining how one individual/businesses should behave,
includes followings that are related to
• Ends- consequences
• Utilitarianism
• Altruism
• Egoism
• Means- actions
• Deontology
• Character/Integrity- decision maker
• Virtue theory
Ends- Consequences
• People who believe Ethics should be about what happens afterward
are labeled Consequentialists.
• They don’t care so much about your act; they want to know about
the consequences.
• Since consequentialists are more worried about the outcome than the
action, the central Ethical concern is what kind of outcome should I
want?
• Traditionally, there are three kinds of answers: the utilitarian, the
altruist, and the egoist.
Utilitarianism
• Utility is name of usefulness and benefit that refer to greater good or
happiness.
• Utilitarianism is a consequentialist ethics—the outcome matters, not the act.
• The utilitarian's distinguishing belief is that we should pursue the greatest
good for the greatest number.
• So we can act in whatever way we choose—we can be generous or miserly,
honest or dishonest—but whatever we do, to get the utilitarian’s approval, the
result should be more people happier. If that is the result, then the utilitarian
needs to know nothing more to label the act ethically recommendable.
• The ethical belief that an act is recommendable if it brings the greatest good to
the greatest number, if it increases net happiness—or decreases net
unhappiness—when everyone is taken into account.
Utilitarianism
• Utilitarianism judges specific decisions by examining the decision’s
consequences/outcome/.
• Utilitarianism defines right and wrong in terms of the happiness of a
society’s members.
• Utilitarian Ethics defines an act as good when its consequences bring
the greatest good or happiness to the greatest number of people.
Utilitarianism
• Utilitarianism suggests that an ethical action is one whose
consequence achieves the greatest good for the greatest number of
people.
• So if we want to make an Ethical Business decision, we should ask
ourselves who is helped and who is harmed by it. Focusing on
consequences in this way generally does not require us to take into
account the means of achieving that particular end, however.
Utilitarianism
• Advantages • Disadvantages
• Clarity and simplicity • Subjectivity.
• Acceptability. • Quantification.
• Flexibility • Apparent injustices
• Breadth • Utilitarian monster
• Utilitarian sacrifice
Altruism
• Altruism is a consequentialist ethics- no specific acts are prohibited or
required; only outcomes matter
• An action is morally right according to the altruist, and to the ethical
theory of altruism:
• If the action’s consequences are more beneficial than unfavorable for
everyone except the person who acts. That means the actor’s
interests aren’t considered: the altruist does whatever can be done so
that others will be happier.
Altruism
• It’s common to imagine, Altruist as poverty stricken and self-
sacrificing.
• When you live for everyone else as the altruist does, it’s no surprise that you
can end up in pretty bad shape. You might get lucky and run into another
altruist like yourself, but if you don’t, there’s not going to be anyone
particularly dedicated to your wellbeing. On the positive side there’s nobility
to the idea of dedicating everything to everyone else, but the plain truth is
not many of us would choose to live like a dedicated person to other wholly.
• A suffering life may be an effect of altruism, but it’s not a
requirement. Living for others doesn’t mean you live poorly, only that
there’s no guarantee you’ll live well. You might, however, live well.
Altruism
• The Critical Element at the heart of altruism: it’s not about suffering or
sacrificing; it’s about making clear-eyed decisions about the best way to
make as many others as happy as possible.
• Altruism is a variety of selflessness
• Altruist may sacrifice themselves for all kinds of other reasons. For
example, a soldier may die in combat, but that’s not altruism; that’s
loyalty: it’s not sacrificing for everyone else but for a particular nation.
The fireman may lose his life rescuing a victim, but this is because he’s
doing his job, not because he’s decided to live for the sake of others. All
altruists, finally, are selfless, but not all those who sacrifice themselves
are altruists
Altruism
• Altruism connects with businesses in three basic ways.
• There can be Altruists who use normal, profit-driven business
operations to do good.
• There can be Altruistic companies that do good by employing non-
altruistic workers.
• There can be Altruistic organizations composed of altruistic
individuals.
Altruism
• Advantages • Disadvantages
• Clarity and simplicity • Uncertainty about the happiness
• Acceptability. of others
• Flexibility • Shortchanging yourself.
Egoism
• Egoism defines ethically good as any act that raises the actor’s overall
happiness (or decreases unhappiness) without counting anyone else’s
increased or diminished happiness.
• Egoism does not mean ignoring the existence and welfare of others,
though they are not necessarily advocated either.
• Though egoists act in the name of their own happiness, others may
benefit.
Egoism
• Ethical egoism: whatever action serves my self-interest is also the
morally right action. What’s good for me in the sense that it gives me
pleasure and happiness is also good in the sense that it’s the morally
right thing to do.
• The belief that an action is morally right if the action’s consequences are
more beneficial than unfavorable for the person who acts.
• Ethical egoism mirrors altruism: If I’m an altruist, I believe that actions
ought to heighten the happiness of others in the world, and what
happens to me is irrelevant. If I’m an egoist, I believe that actions ought
to heighten my happiness, and what happens to others is irrelevant.
Egoism
• When we hear the word egoist, an ugly profile typically comes to mind: self-
centered, untrustworthy, pitiless, and callous with respect to others.
• If you’re out to maximize your own happiness in the world, you might find that
helping others is the shortest and fastest path to what you want. This is a very
important point. Egoists aren’t against other people, they’re for themselves, and if
helping others works for them, that’s what they’ll do
• The belief that benefitting others—acting to increase their happiness—can serve
the egoist’s self-interest just as much as the egoist’s acts directly in favor of him or
herself.
• An agreement made between people to act in certain ways not because the acts
are themselves good or bad, but because the rules for action are mutually
beneficial.
Egoism
• Where egoism means putting your welfare above others’, selfishness
is the refusal to see beyond yourself.
• because working with others cooperatively can be an excellent way to
satisfy their own desires, they may not be at all selfish; they may be
just the egoism
• Egoists believe that We don’t help others because we ought to: we
help them because it can make sense when, ultimately, we only want
to help ourselves.
• Egoism, like altruism, is a consequentialist ethics: the ends justify the
means
Egoism
• In business ethics, the force of marketplace competition that encourages or
even requires individuals who want to make money to make the lives of
others better in the process.
• The same mixed success can be attributed to businesses acting only for their
own welfare, only for profit
• Egoist has the belief that businesses out in the world trying to do well for
themselves tend to do good for others too
• It is believed that everyone should practice ethical of egoism because it’s the
most reasonable of the ethical theories, the one a perfectly rational person
would choose. The belief that we’re all necessarily egoists; it’s an
inescapable part of what it means to be human.
Egoism
• Advantages • Disagreement
• Clarity and simplicity • Egoism isn’t ethics.
• Practicality • Egoism ignores blatant wrongs
• Sincerity
• Unintended consequences.
Means- Actions
• The second approach does examine the means, or actions, we use to carry
out a business decision.
• An example of this approach is deontology:
• which essentially suggests that it is the means that lend nobility to the
ends.
• Deontology contends that each of us owes certain duties to others (Deon
is a Greek word for duty or obligation) and that certain universal rules
apply to every situation and bind us to these duties. In this view, whether
our actions are ethical depends only on whether we adhere to these rules.
Thus, the means we use is the primary determinant of ethical conduct.
Deontology
• It Focuses on the preservation of individual rights and on the
intentions associated with a particular behavior rather than on its
consequences.
• Deontologists believe that individuals have certain absolute rights: •
Freedom of conscience • Freedom of consent • Freedom of privacy •
Freedom of speech.
• This theory hold that actions are the proper basis on which to judge
morality or ethicalness.
• It requires that a person use equity, fairness, and impartiality when
making and enforcing decisions
Deontology
• a normative ethical theory suggesting that an ethical decision requires
us to observe only the rights and duties we owe to others,
• and,
• in the context of business, act on the basis of a primary motive to do
what is right by and for all stakeholders
Character/Integrity- Decision Maker
• The third normative approach, typically called virtue theory,
• That focuses on the character of the decision maker—a character that
reflects the training we receive growing up.
• In this view, our ethical analysis of a decision is intimately connected
with the person we choose to be. It is through the development of
habits, the routine actions in which we choose to engage, that we are
able to create a character of integrity and make ethical decisions.
Virtue theory
• Virtue theory has its roots in the Greek philosophical tradition, whose
followers sought to learn how to live a flourishing life through study,
teaching, and practice. The cardinal virtues to be practiced were
courage, self-control, justice, and wisdom.
• In a vague sense, we all know what it means to have a virtuous
character; we all know people who can be counted upon to do the
right thing.
• Virtue ethics is the idea that we can and should instill those qualities
in people and then let them go out into the complex business world
confident that they’ll face dilemmas well.
Virtue theory
• A virtuous person should have these ethical qualities:
• Wisdom (both theoretical and practical)
• Fairness
• Courage
• Temperance
• Prudence
• Sincerity
• Civility
Virtue theory
• Virtues gives the businessperson a positive character and constitutes the very
best idea of integrity of character. The virtue ethics approach to business can
be summarized as follows:
• 1. Individual virtue and integrity count, but good corporate ethics programs
encourage individual virtue and integrity.
• 2. By the employee’s role in the community (organization), these virtues
associated with appropriate conduct form a good person.
• 3. The ultimate purpose is to serve society’s demands and the public good
and to be rewarded in one’s career.
• 4. The well-being of the community goes together with individual excellence
because of the social consciousness and public spirit of every individual.