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COR3301 ETHICS & SOCIAL RESPONSIBILITY

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Seminar 2
(25 Aug 2022)
Ethical Frameworks I

Theories of Welfare, Rights, Justice

(Market system, if time permits)

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Preliminary

•To understand the basics of the main

Ethical Theories and to use them as a tool
in ethical decision making in business.
•Where do our ethical precepts come
from?
oConscience
oUpbringing
oReligion
oMoral Philosophies

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Why learn Ethical theories?

•Be more aware of ethical issues
•Be better able to recognize impact of
decision. Be empathetic
•Be aware of duties, integrity and values
•Make a more informed and
reasoned/reasonable decision
•Be able to more articulately explain why
you’ve made a certain decision. You can
be more sophisticated, credible and
influential.
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A brief Decision-making Model

1. Determine the facts
2. Identify ethical issues
3. Identify stakeholders & their perspective
4. Consider alternatives
5. Consider how stakeholders affected by
alternative decisions, based on
• Consequences
• Duties, rights, principles
• Implications for personal integrity
6. Make decision
7. Monitor Outcomes.
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Principal Ethical Theories

• Teleological (Consequentialist):
• Egoism (narrow interests based)
• Utilitarianism (wide consequences based)
• Deontological (Non-Consequentialist):
• Rights based: Kant
• Justice based: Aristotle, Rawls, Nozick
• Virtue Theory
• Character based: Aristotle/ Solomon
• Free Market Theory
• Ethics of Care
• Confucian Ethics
• Ethics of Asian religions
• (Moral relativism)
• Integrative Social Contracts Theory

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Consequentialist Theories

• Egoism
• Focuses on self-interest
• Decision based on Egoism can benefit others, but is of no concern.
• Long-run self-interest is better
• Often may not adhere to moral standards of society’s culture, so will
be judged unethical
• Utilitarianism: Bentham & Mill
• Focus on ‘ends’ (ends justify the means)
• Acts are determined solely by their consequences
• Greatest happiness of the greatest number
• People desire Happiness as an end in itself
• Pleasure as an intrinsic good
• Prediction of likely outcome
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Utilitarianism
• Problem of Undifferentiated pleasure
• Measuring happiness by
• 1. Bentham’s Hedonistic Calculus:
• Intensity.
• Duration.
• Certainty.
• Remoteness.
• Repeatability.
• Purity.
• Extent.
• 2. Mill’s Higher and lower pleasures.
• Higher pleasure cannot be exchanged for any amount of lower pleasure.
• Who judges?
• One who has experience or knowledge of both pleasures.

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Utilitarianism: Some Issues

• Happiness difficult to quantify

• Problems of interpersonal comparison of utility.
Preferences and strength thereof.
• Difficult to quantify attributes like love, life
• Likelihood of predicted outcome difficult to assess
• Duration. Future generations?

• Whose happiness? What about the minority? E.g.,

slave owning societies, dissidents, etc Issue of
Justice.
• Conflict with Fundamental Principles: Aren’t some
actions wrong even if they produce good?
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Two Different Types of Utilitarianism

• Act Utilitarianism. Focuses on consequences of

individual act.
• Rule Utilitarianism. Focuses on consequences of a
general rule.
• What moral rules should a society adopt to
maximize happiness?
• Takes into account the costs of promoting those
rules
• E.g. lying is generally wrong.
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Cost-Benefit Analysis
• Bentham’s ideal of a precise quantitative method for decision
making
• Differs from his hedonistic calculus primarily in the use of
monetary units to express the benefits and drawbacks
• Means for efficient allocation of resources
• Advantage of cost-benefit analysis is that prices of many goods
are known; determined by market
• Used for major investment decisions and on matters of public
policy rather than as a basis for personal morality
• Problems of assigning monetary values.
• Difficult to determine-( Quiet Vistas)]
• Should all things be assigned a monetary value? Friendship, Love etc.
Human life Value? Not actual worth.
• Blood collection. Sold vs Voluntary. Commodity vs Special gift. What are the
consequences?

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Deontology (Non-consequentialist): Kant

• Focuses on ‘duties’ (obligations, responsibilities)
• Consequences ‘Irrelevant’ (ends do not justify the means).
• Based on PURE REASON. Not on feelings.
• Principles independently valid. Stds of right & Wrong
• Are Good not Promote Good.
• Imperative not discretionary
• FROM a moral duty not just in conformity with a duty
•Enshrines Principles of
1. Universal law, and
2. Respect for persons. As human beings, we
need to have
rationality and
autonomy
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Deontology: Kant
• Kant’s main Categorical Imperatives:
• (1) “ACT ONLY ACCORDING TO THE MAXIM BY WHICH
YOU CAN AT THE SAME TIME WILL THAT IT SHOULD
BECOME A UNIVERSAL LAW”
• (2) “ACT SO THAT YOU TREAT HUMANITY, WHETHER IN
YOUR OWN PERSON OR IN THAT OF ANOTHER, ALWAYS
AS AN END AND NEVER AS A MEANS ONLY”
• Factor 2 means we treat people
• as ends, not only as means to an end
• as subjects and not as objects only

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Deontology: Kant (Factor 1)

• “ACT ONLY ACCORDING TO THE MAXIM BY WHICH YOU CAN AT
THE SAME TIME WILL THAT IT SHOULD BECOME A UNIVERSAL
LAW”
• Firstly, you must create a relevant maxim. For example,
WE CAN MAKE FALSE PROMISES.
• Secondly, can you Universalize the Maxim you created?
• You need to use reason/logic to argue if you can.
• In this case, you can’t.
• If we can all make false promises as we like, then the concept of
‘promises” will no longer exist, there would be no promises at all
and hence, by reason, we could not universalize such a maxim.
• It would be impossible. Like saying you are in 2 places at the
same time.

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Deontology - Kant: Criticisms & Some Resolutions

• Categorical Imperatives do not allow for exceptions to suit
particular circumstances.
• Is there really always a single answer derived from reason
that is applicable to all situations? Whose standards?
• Are you bound to tell the murderer where the victim is?
• Conflict between Kantian Imperatives
• Means to an end?
• Aren’t employees a means to an end?
• First Mover Disadvantage.
• Bribery cannot be a universal law. So, applying Kantian Ethics (KE)
and not giving a bribe disadvantages Company
• But KE is OK if everyone is rational and follows it.
• Also, economic cost is not a good reason against KE.
• Downsizing example.
• Respect. Notice. Package. Profits/Survival
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Theories of Justice
• Justice associated with issues of rights, good, equality and fairness
• Evaluates actions of individuals/ social, political, economic practices
& institutions
• Concept relevant to business ethics is the distribution of benefits and
burdens
• Theories considered by: Aristotle, John Rawls & Robert Nozick

• Aristotle’s Theory of Justice

• Particular ( vs Universal) Justice: 3 kinds
• Distributive justice
• Distribution of benefits and burdens
• Compensatory justice
• Compensating persons for wrongs done to them
• Retributive justice
• Punishment of wrongdoers
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Aristotle’s Theory of Justice

• Distributive justice: the principle of proportionality
• Egalitarian principle: “all men think justice to be a
sort of equality”
• Treating like cases alike
• Difference in each person’s share of the good to
be proportional to the difference in his/her share
of the relevant difference
• Critique of the theory
• Ability vs. Effort
• Different justifying criteria in different contexts
• More than one criteria may be relevant

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John Rawls’ Egalitarian Theory of Justice

• Based on social contract (societal rules) and rational
choice
• Embodies Kantian concept of equality (Universal law)
• Proposes a society that recognizes its members as free
and equal moral persons
• Each will try to get maximum social goods
• Questions of justice arise when such persons attempt to
advance their own interest and come into conflict with
others doing the same
• Need for creating social institutions that assign rights
and duties and distribute benefits and burdens of
mutual cooperation
• Focuses on social justice

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John Rawls
• The Principles of Justice
• 1. Each person is to have an equal right to the most
extensive total system of basic liberties compatible
with a system of liberty for all (e.g. voting right)
• 2. Social and economic inequalities are to be arranged
so that they are both
a. to the greatest benefit of the least advantaged,
and
b. attached to offices and positions open to all
under conditions of fair equality of opportunity
• Where,
• 2(a) is the difference principle ( ALL are better off though
unequal) and
• 2(b) is the principle of equal opportunity (realization of
capacities)
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John Rawls
• Basic Liberties include:
• Right to vote
• Freedom of speech and assembly
• Freedom of conscience and thought
• Freedom from arbitrary arrest
• Right to hold personal property
• Right to hold public office
• Right to be treated in accordance with the rule of law
• Are the 2 Rawlsian Principles Justifiable?
• Where people in a pre-contract situation unanimously accept certain terms
for governing their relations, then those terms are just and all people have an
obligation to abide by them
• This position is known as state of nature by Locke, and the original position
by Rawls
• When we are in the Original Position, we will be covered by the Veil of
Ignorance.
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John Rawls
• Veil of ignorance (Impartiality)
• The Method:
• Individuals asked to agree on the principles of justice
must do so without knowing many facts about
themselves and their situation
• They do not know their social status or class, their
natural assets or abilities, their intelligence or physical
strength, their race or sex, or their own conception of a
good life
• The Purpose
• Distributive Justice – allocation of limited resources
• Equal rights to most extensive system compatible with
rights of others
• Arrange social & economic inequalities so that they
benefit least advantaged and all have fair opportunity.
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Theories of Justice-Robert Nozick’s Entitlement Theory

• Free market
• All free to pursue interests with minimum government intervention
• Libertarian theory. Does not force rich to help poor
• Justice is not to promote human well-being or equality, but to
protect rights.
• 3 Principles:
• Principle of Just Original Acquisition
• Principle of Just Transfer
• Principle of Rectification
• Takes into account historical events
• Not Patterned
• Looted national treasures?
• Poland limits property claims Aug 2021:
https://www.aljazeera.com/news/2021/8/14/israel-furious-as-
poland-signs-law-to-limit-property-claims
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Ethics and the Market System (Might be done next week. Depends on how much
time we have.)

• Adam Smith
• “Laissez-faire” approach: ‘system of perfect liberty’ or capitalism
• Emphasis on private sector: Role of government only to protect
society, administer justice and maintain public institutions
• Individual self-interest guided by Invisible Hand
• Private accumulation of capital/Division of labor
• Individuals trade with each other giving up what they own in exchange
for other things they need or want. Market system is ethical enough
because:
• The invisible hand
• By seeking only personal gain, each individual is “led by an
invisible hand to promote an end which was no part of his
intention.” ( Technically Ethical Egoism)
• “Nor is it always the worse for the society that it was no part of
it. By pursuing his own interest he frequently promotes that of
the society more effectually than when he really intends to
promote it.” (but with Ultimately Utilitarian Benefits)
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The Market System (Not ethical enough)

• The invisible hand: Some problems
• Markets may be efficient but not necessarily maximize
utility unless the economy produces goods and services
that people want
• The precondition of perfect competition frequently
does not exist
• Inadequate assumptions regarding economic man
• Not take into account externalities like the costs of
pollution, accidents from defective products, etc.
• The problem of collective choice. E.g., transportation
policy, instead of leaving to the central planner,
individuals are allowed to make a multitude of
individual choices.
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Next (Session 3):

• Ethics & Market System? If not yet done.

• Virtue Ethics
• Ethics of Care
• Confucian Ethics
• Islamic, Buddhist, Hindu Ethics
• Codes
• Moral Relativism
• Integrative Social Contracts Theory
• Ethics and Decision making.

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