Ethics Notes For Exam PDF

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Condensed Ethics NotesKey Ethical Theories Teleological – Consequentialist arguments; focus on attaining good/desirable outcomes Deontological – Rules-based argumentsTheory 1: Utilitarianism  Consequentialist; outcomes-based; greatest good for the greatest number(a) Jeremy Bentham  Pleasure as an ...

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Condensed Ethics Notes Key Ethical Theories Teleological – Consequentialist arguments; focus on attaining good/desirable outcomes Deontological – Rules-based arguments Theory 1: Utilitarianism  Consequentialist; outcomes-based; greatest good for the greatest number (a) Jeremy Bentham  Pleasure as an intrinsic good  All sources of pleasure are of equal quality  Level of happiness depends on intensity, duration, certainty, frequency or extent of pleasure (b) John Stuart Mill  Greatest Happiness Principle – overall societal happiness  Equal weight to everyone’s pains and pleasures – Impartiality  Higher vs Lower pleasures – non-exchangeable; Higher > Lower always  Envtal Ethics: Sanctity of wildlife/environmental diversity; Natural beauty  Act UT – consider based on single act; case-by-case basis; more immediate effects  Rule UT – generalizing the act as a rule to follow; considers more longer-term effects (c) Pros/Cons  Simple, straightforward decision-making  Hard to quantify pleasures, target audience, extent of benefits/costs, probabilities ascribed  Ignores minority rights; only care about overall benefit/welfare  Requires knowledge of preferences and rankings – varies based on needs/circumstances  May lead to unfair/unequitable outcomes Theory 2: Kantian Ethics  Acting from moral obligation/duty; allowed to exercise free will/autonomy to act (a) Principle of Universality – fundamental rights  Applied consistently; no double standards  Recast intended decision as maxim, then consider if it can be universalized as law Example: “I should be entitled to hire employees of the same ethnic group albeit inferior to other candidates on objective grounds”  If applied universally, then workers hired will be less skilled and thus less productive, hence employers will not do so, so racially discriminatory hiring practice is unethical (b) Principle of Humanity  Never treat/use people solely as a means to an end  Some acts may have ends which are in fact based on Principle of Humanity Example: Retrenching staff amidst company’s imminent bankruptcy – end to ensure job security of as many employees as possible is in fact based on Principle of Humanity (c) Pros/Cons  Fair treatment of / Respect to everyone’s rights/interests (Universal Healthcare) vs Mill  Non-relativistic view of ethics – applies consistently across societies  Flexibility vs certainty – generally does not permit exceptions Applying Kantian Ethics: How you phrase the maxim matters – differ by context; not people  E.g. It is ok to steal in desperate circumstances – acceptable by rational people; universalizable  Reason: Stealing is an act based on POH to save a life instead of profiting from it  E.g. One uses someone else as a means, but acceptable as long as justified and reasonable

Theory 3: Virtue Ethics  Focused on human character, actions or practices  Purposive disposition, lying in a mean that is relative to us, determined by a rational principle  Context for appropriate virtues: time period, industry, people/actors, issue involved  Higher virtues depend on context – e.g. Compassion during times of crises/recession (a) Purposive – existence of objective aimed at with some mental deliberation (b) Voluntary – moral actor causes the act; aware of circumstances; has choice (c) Mean – “right amount” of action between 2 attainable/realistic extremes  Avoid extremes of excess and deficiency, learn from errors and guard against pleasures  Some actions inherently evil are not subject to the mean – e.g. adultery, theft, murder (d) Relative to us  Depends on moral actor’s relative judgement as to where the mean lies  Ought to be tempered by rationality  Refers to factual circumstances and perceptions of situations/events  Influenced by personal backgrounds, knowledge, experiences (e) Pros/Cons  Helps to develop adaptable, flexible individual decision-making (e.g. intuitive biz decisions)  Allows for the recourse to experience, reflection and social support  Accords more with reality due to less rules  Difficult to achieve the mean – right person, extent, time, reason and way  Not straightforward in giving rules/principles to determine right actions in specific situations  Dependent on societal views; varies as time progresses Theory 4: Confucian Ethics  Focused on cultivation of virtues, humanity and self-development  Not opposed to wealth accumulation/profit-making – but must not be sole business objectives  Altruism/Reciprocity – intimately linked to humanity; family relations over universal love  Golden Rule: do not do unto others what you do not want others to do unto you  Guanxi – giving and exchange of favours  Intimately connected with & influenced by Confucian ideas on social relationships and ties  Ethicality depends on factors like any violation of significant fiduciary duties, ends and means adopted, intentions and the degree of coercion involved

Concept 1: Workplace Ethics 1. Asymmetrical employer-employee relationship  Loyal and dutiful execution of orders without considering unethical effects  Cultural, career-related disincentives when questioning morally wrong orders  Employment Laws  Employment at Will – free to terminate in times of crises; dictated by market forces  Just Cause – cannot keep lean/agile workforce, especially during economic crises  Modified at Will – statutory protection for employees 2. Gig Economy – short-term project/contract of service; no employer obligations; effective cost-cutting  Deceptive employment model – opportunity costs; additional expenses to incur  No employment benefits – no health insurance/pensions; no min. pay/sick leave/perks  No effective right of recourse to justice system – Amazon arbitration; ≥$10k  Segregation of workforce – Google TVCs left out of meetings, different-colour badges 3. Workplace Discrimination – prejudicial, stereotypical society (a) Race Discrimination – Harvard’s affirmative action policies, Malaysia’s bumi, India caste (b) Age Discrimination – Retirement and Re-Employment Act; airlines firing older flight attendants  Older workers: outdated skillsets; less tech-savvy and less receptive to training/IT  Danger of tokenism in diversity hires: legacy issues; law compliance; reputational damage (c) Gender Discrimination – invisible glass ceiling; pregnancy; “motherhood” penalty  Utilitarianism will argue less commitment to the firm / take too much time off work  Kant will argue violation of Humanity due to sole means of using her to make profits  Virtue Ethics will argue for profit-maximisation; extremes will be all males vs hiring females just to make profits; mean is hiring males/females to the extent of sacrificing some profits 4. Sexual Harassment (a) Quid pro quo – Sexual favours as condition for promotion, retention or work-related decision (b) Hostile working environment – physical touch or psychological lewd remarks/proposed intimacy  Kant would think that employer is obliged to protect employee from sexual harassment if one treats it as workplace hazard – what constitutes sexual harassment?  Controlling workplace harassment  Establish codes of inter-employee behaviour, including guidelines on sexual harassment  6 conditions: from aesthetic appreciation to foreplay harassment and then the ultimate threat  Supply-chain reform: Identify stakeholders; Find out factors causing sexual harassment in those firms; Draw up a statement on expectations and consequences; Get partners to agree  Note: not effective unless a firm takes care of its workers first (e.g. McDonalds’) 5. Workplace Privacy  Promotes individuality and freedom of action  Provides workers with healthy sense of dignity & self-worth  Establish boundaries between individuals  Essential to being human  4 types of privacy  Information privacy – relates to collection and handling of personal data  Bodily privacy – relates to people’s physical selves (against invasive procedures)  Territorial privacy – relates to people’s physical environments like work/public spaces  Privacy of communication – related to security/privacy of emails/mail/communications (a) Utilitarianism – “on-the-fence”

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Inaccurate/Incomplete info collected → false accusations → great harm Some acts morally objectionable (e.g. eavesdropping, hidden cameras) Considers only harms and benefits from privacy intrusion; assumes harm exceeds benefits Mill’s higher pleasures (e.g. loyalty to country) could justify surveillance

(b) Kantian – against privacy intrusion  Autonomy: making rational choices without interference from other  Respect: giving due recognition to rights as an equal, autonomous person  Privacy intrusion violates rights to autonomy and respect – Principle of Universality 6. Conflict of Interest  When personal interests come into conflict/interfere with duty to act in other’s interest  Application: employee obliged to act in employer’s interest by virtue of employment contract  Thus, COI arises where employee harbours private interest that is antagonistic to company’s best interests OR has potential to affect employee’s independent judgement  Types of Conflict of Interest  Actual – actual acts prejudicial to principal’s interests but out of self-interest  Potential – possible failure to perform duty to act in other’s interest  Apparent – may not have COI but situation appears so to outsider  Impersonal – acting for 2 parties with conflicting interests (e.g. lawyer with 2 clients)  Individual/Organizational – agency situation (e.g. same company offering audit and consult services; Arthur Andersen/Enron scandal gave rise to Sarbanes-Oxley act)  3 ways to manage  Avoid – easier for individuals BUT difficult for large companies (e.g. Big 4 law firms)  Disclose – give adequate time/opportunity to take precautions  Escape – Recuse self from decision; used upon occurrence of COI (i.e. not before it arises)

Concept 2: Corporate Social Responsibility (CSR)  Integrates stakeholders’ environmental, social, governance (ESG) considerations into biz ops  Not a one-size-fits-all approach  Salient attributes  Responsible/ethical conduct  Balancing competing and often conflicting aims and aspirations of diverse stakeholders  “Triple bottom-line” – positive non-financial outcomes (E/S/G) + financial (profits)  Aid in sustainability of businesses  Generally voluntary in nature, over and above what law requires  Engage both internal and external stakeholders – intertwined impact; continuous dialogue 1. Investor-based – Friedman: solely profit-driven motive towards shareholders  Agency problem – employees acting as principal in social responsibilities; in breach of agent’s duties to employer (of making $$ and creating shareholder value)  Must compete fairly and legally – no under-hand acts disadvantaging competitors  Inappropriate imposition of tax on business – anti-democratic to use shareholder $$ to support social causes; quasi-government functions  Contrary to free-market mechanism – allocative inefficiency; voluntary cooperation for own benefit implies pursuit of profits immoral thus the need for government intervention 2. Stakeholder-based – increasingly popular  Must balance competing needs of ALL stakeholders affected  Profitability on sustainable basis is more relevant & pertinent in maintaining viable business  Can resonate with Virtue Ethics: achieving the mean  Example: donating $$ to  Article: Coke’s 5by20 initiative, Cisco’s IT-literate workforce, Nordea AM’s demand for more transparency about Big Pharma suppliers’ actions on the environment 3. CSR as a Strategy – Porter/Kramer  Corporate growth and social welfare are interdependent, i.e. not treated as zero-sum game  “Strategic CSR” – integrating strategy into business; create shared value 1. Company must make effort to find opportunities to create shared value 2. Involves use of social impact as vital competitive advantage 3. Purpose is to change how companies and society think about each other  Help to catalyse social innovations – redirect capitalism towards the common good  E.g. Samsung Technical School – fostering gender equality while training a pool of engineers with technical skills to repair latest Samsung products / expanding into far-flung markets

Concept 3: Corruption  Many different definitions; not really universally agreed upon and applied  Efficiency (profitable acts for businesses) appears to dominate equity (right and just acts)  Issue: Ethical Relativism (companies allowed to claim tax deductions equal to bribes given)  Bottom-line: should look at the underlying structure of the bribe Laws  

UNCAC: no single definition; legally-binding to ensure cooperation; agreed acts of corruption  Article 15 targets public officials giving/accepting undue advantage  Article 21 private act in breach of duties/refrain from act when giving/receiving bribes Singapore’s Prevention of Corruption Act (PCA)  Section 5 linked to UNCAC Article 21 – “member, officer or servant”  $1 Bribe case: Acts done by employees/agents; on behalf of firms  Section 6(a): 1st element is physical element of offence; 2nd-4th are mental elements 1. Acceptance of gratification – can include non-monetary items like promise 2. Must be as an inducement/reward for act/favour/disfavour to the recipient’s principal’s affairs – link between gratification and act that was intended to procure 3. Objective “Corrupt” element – recipient must believe that bribe was given likefor-like for conferring dishonest gain to the giver, even if giver didn’t have that intent 4. Must have accepted gratification with guilty knowledge – usually found as long as 2nd/3rd established, even if “mistakenly believed” to be proper

1. Deontological/Kantian  Maxim v1: “It is permissible for agents to take bribes and betray principal’s interests”  If universalized, principal-agent relationship becomes meaningless and integrity destroyed  Maxim v2: “It is permissible to give gratifications to induce a breach of duty to principal”  Principle of Humanity violated as using principal solely as a means to getting benefits  Bribery is an intentional violation of binding moral duty owed exclusively to principal 2. Consequentialist – AGAINST; aspiration for clean government like SG/HK 3. Justifying Corruption  Act UT – Railway contract; other company low quality but need to pay bribe to minister; justified in the positive benefits to society through safer railway  Kant looks at motives – acting from duty to ensure positive well-being of people (railroads vs oxcarts/primitive methods) + in accordance to Principle of Humanity  McKinsey case: told Boeing about need to pay bribes to get Indian mining permits for titanium parts; didn’t flag “illegal” nature; implicated in Ukrainian oligarch Mr Firtash’s extradition  Ethical theories don’t speak unanimously on extent to which corruption is permissible Corrupt vs Grease Payments Grease Payments Ensure timely delivery of routine Govt Purpose service to which there is legal entitlement Official’s Control over procedure Little/no discretion in decision-making Role Size Usually small Effects / Entrenched bribery system Issues Displays govt incompetence to citizens

Corrupt Payments Influence exercise of discretion by officials in awarding contracts A lot of Discretion in decision-making Large purchases Unfair/Partial bidding process Difficult to detect and expose

Guanxi  

Fundamentally about building network of mutually beneficial relationships Involves many interactions/exchanges that create web of reciprocal obligations & indebtedness  3 Factors distinguishing proper/improper guanxi  Intent  Frequency  Value of gift/favour  Other ethical issues  Violates justice & equality – unfair distribution of consequences; hard to benefit w/o guanxi  Slippery slope of corruption – undermine law, higher business costs, non-transparent  Impact on professionals – medical guanxi; substandard treatment; patients suffer  Solutions  Structural reforms to have open, transparent and fair governance applied impartially  Streamlined approval processes to reduce layers of bureaucracy

Concept 4: Ethics in International Business Key Analytical Tools  Thinking across space – different social/governmental/political/business cultures abroad  Thinking across time – learning from the past; anticipating the future  Moral Relativism – no objective standard of right/wrong; dependent on culture, context, etc.  Business ops carried out differently based on host country’s moral standards  Issues: Keppel bribing to get Brazil contracts; low worker protection in developing nations  Rationalization – thought process that justifies acts in host country but won’t be done at home  Physical distance screens ethical considerations; rationalizes unethical behaviour  Distance – extensiveness of business’ ethical obligations in host country society/supply chain  “Greatest good for greatest number” cannot realistically encompass whole universe  Necessary to identify how far down supply chain ethical obligations extend  Underestimating risk – more often failure to appreciate risks resulting from lack of due diligence  Bhopal disaster – US officials failed to realize different operating environment; government’s poor inspections/enforcement due to understaffing  BP Deepwater Horizon Disaster – oil spill; $18.7bn settlement; faced multi-billion claims Key Ethical Issues 1. Poor workplace conditions – violate human rights; no wages/long hours; female harassment 2. Forced child labour – Gap and Nestle cases culminated in US DOL’s list of goods from child labour 3. Poor law enforcement – Rana Plaza Collapse 4. Source of materials/resources – Blood Diamonds; SEC disclosure requirement for US-listed companies Case Study: Rana Plaza Collapse  Garment factory collapsed; served high-profile clothing companies  Substandard building materials; additional 3 floors built violated Bangladesh Building Code  Bangladesh Accord: 5-year; legally-binding; safety inspected, upgraded with financial support  Improved physical safety – robust complaint mechanisms, fix violations, strict enforcement  Initiated shift in industry culture – outreach to include factories outside of Accord  Increased awareness of rights and safety – more worker complaints  Lack of freedom to join unions – low wages, poor/unsafe working conditions exist  Misalignment of interests – govt laws don’t permit implementation of worker rights  New Accord extended to address workers’ rights to unionize but only 60/220 firms signed Factors affecting Success of Multi-stakeholder approach  How traceable an act is to the actors – rebels in blood diamonds vs climate change/pollution  Ease of isolation/identification of issue and measurement of progress – tangibility of outcomes (e.g. worker safety – does having less incidents imply safer?)  Severity of issue – impetus for collective response Alternative Multi-Stakeholder Approach  Working with less – equivalent of Kimberly Process Certification system for conflict materials  US SEC’s extensive reporting requirements – easy for big companies like Apple BUT very costly for small companies; difficult to dig deep; easy to game system  Application to fair trade for global garment industry  Companies have leverage over suppliers and host governments – big brands have trade preferences with developing countries; provide only if offer better worker protection  Businesses, trade unions, foreign governments and consumers can supplement or counterbalance one another – sources of power, motivations and urgency of parties  E.g. Cambodia’s repressive government vs companies’ demand for fair wage mechanism

Local unions could coordinate with int’l groups to harmonize working standards across global production chain – offer workers uniform wages, union rights, workplace safety  Consumers can require brands to disclose the source/specific factory, and commit to purchasing only products manufactured by workers earning living wage Concept 5: Ethics of Advertising 

Deceptive Advertising  Ethical objection similar to objection against lying  Kantian ethics: lying arguably always impermissible; treating ...