Business Ethics 3 - Classical Ethical Theories PDF

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Business Ethics 3 (Semester 2, Year 1)

Business Ethics 3 – Introduction Objectives 1. Ethical dilemma 2. Consequentialist moral reasoning: a. Egoism b. Utilitarianism 3. Non-consequentialist moral reasoning: a. Duty Ethics (Kant) b. Ethics of rights & justice (Rawls) c. The logic of appropriateness (Don Quixote?) d. Virtue theory (Aristotle) 4. Case discussion: Tom’s ethical decision 5. Mock exam questions

1. Ethical Dilemma “A moral or ethical dilemma is a situation in which a person does not know how to act because of conflicting beliefs about what is required.”

2. Non-Consequentialist Moral Reasoning a) Egoism 

Foundation of economics

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Human beings are self-interested by nature

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Pursuit of individual self-interest produces desired outcome for society

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Invisible hand of the market

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Criticisms o Not always benevolent to all stakeholders in markets - Poorly paid workers

b) Utilitarianism 

Governed by feelings of pleasure and pain

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Greatest happiness principle o Pleasure - Pain = utility of an action o

consequences determines what actions will provide the most amount of happiness (utility) for the most amount of people

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Must look at all parties involved and discuss the potential utility for each party

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Focuses on the ends of an action, rather than its means

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Greatest utility for the majority o E.g. Bentham pauper management 

Beggars reduced utility of the overall population

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Business Ethics 3 (Semester 2, Year 1)

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Put them in work houses – get them off the streets and give them work and accommodation

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Criticisms o Is utility quantifiable? o Utility is subjective – difficult to quantify and is different for different people o Minorities are overlooked o Difficult to predict utility prior to events happening

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E.g. Animal testing provides happiness to all the humans who benefit vs the pain it causes the animals and protestors

3. Non-Consequentialist Moral Reasoning a) Duty Ethics (Kant) 

Ethics were not determined by situations, rather universal moral principles

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Duty to act morally

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Focuses on the means of an action rather than the ends – motives not consequences

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Kant developed a universal moral framework – the Categorical Imperative: o Maxim 1 – Universality o Maxim 2 – Humans should be treated as ends in themselves not means o Maxim 3 – Principles of actions should be acceptable for everyone to do

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Kant has links to religion, but his moral law differs – not imposed by a god

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Kant on human dignity and human worth: o All human beings have the capacity to reason, beyond having desires and preferences o As such, all human beings are worthy of respect

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Criticisms o No consideration of outcomes o Complex to apply all maxims successfully o Idealistic that everyone just acts out of duty o

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Business Ethics 3 (Semester 2, Year 1)

b) Ethics of Rights and Justice 

Natural rights – life, freedom, property o Extended to include: freedom of speech, conscience, consent, privacy, fair legal process Natural Rights – certain, basic, important, unalienable entitlements that should be respected and protected in every single action

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Based on the idea of human dignity

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Human rights, animal rights…

Justice – The simultaneously fair treatment of individuals in a given situation with the result that everybody gets what they deserve 

Fair procedures (procedural justice) o Fairness is determined according to whether everyone has been free to acquire rewards for his or her efforts.

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Fair outcomes (distributive justice) o Fairness is determined according to whether the consequences (positive and negative) are distributed in a just manner, according to some underlying principle such as need or merit.

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Criticisms o Too abstract o Too reductionist o Too objective and elitist o Too impersonal o Too rational and codified o Too imperialist

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John Rawls: A Theory of Justice (1971) o Originally began theory with thought experiment about how people would choose principles of a society under a veil of ignorance 

Veil of ignorance 

Deciding on morality behind a veil of ignorance which takes you and your own personal interests out of the question

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You won’t know who you are in the ethical situation 3

Business Ethics 3 (Semester 2, Year 1)

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E.g. deciding on an equal society behind the veil of ignorance means you won’t know who you are in the society

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Means you decide on the principles that benefit society not yourself

o Rawl believes two principles of justice will emerge: 

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c) Virtue Ethics (Aristotle) 

Character based ethics

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A virtuous person takes pleasure in moral things

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The right act is the action a virtuous person would do

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Provides guidance as to the sort of characteristics and behaviors a good person will seek to achieve

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Suggest only a minimum set of characteristics that a person needs to possess in order to be regarded as virtuous

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Cardinal virtues o Prudence o Justice o Fortitude / Bravery o Temperance

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Virtuous leadership

o Character matters in business

d) The Logic of Appropriateness 

James march

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Business Ethics 3 (Semester 2, Year 1)

Summary

4. Absolutism vs Relativism 

Ethical absolutism claims there are eternal, universally applicable moral principles o Right and wrong are objective qualities o Can be rationally determined o Typically traditional ethical theories

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Ethical relativism claims morality is context-dependent and subjective o No universal right and wrongs that can be rationally determined o Depends on person making the decision & culture in which they are located o Typically contemporary ethical theories

5. Ethical Pluralism 

Diverse normative theories throw light from different angles on one and same problem

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Many theories are not mutually exclusive; they can help managers to deliberate the options when encountering an ethical dilemma

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