Normative and Descriptive Ethical Theories PDF

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This lecture introduces ethical theory frameworks and outlines traditional, normative ethical theory and descriptive ethical theory. The role of ethical theory in judgement formation and decision making is demonstrated. Taught by Rob Caruana and Claire Ingram...

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4. Normative and Descriptive Ethical Theories What are Ethical Theories?    

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Ethical theories are the rules and principles that determine right and wrong for any given situation (Crane and Matten, 2010) These tend to fall into different categories / approaches to that situation – normative and descriptive Normative ethical theories are those that propose to prescribe the morally correct way of acting o What should be done? Descriptive ethical theories seek to describe how ethics decisions are actually made in business o What is actually done? o This provides explanations of what actually happens in the real world, what organisations actually do and why The illustration on the right shows the act of someone being thrown into a volcano o If we take a normative approach to the act of killing someone in effect, we would say everyone has the right to life, it is wrong to kill someone so this should not be done o If we take a descriptive approach, it is more the question of how and why this action was allowed to happen. What were the cultural, economic or market dynamics which surround this ethical dilemma which would explain why this human sacrifice was allowed to happen E.g. the idea of modern-day slavery o Normative – everybody has the right ot be compensated for their labour and not incarcerated and controlled so modern slavery should not be allowed anywhere o Descriptive – they might say modern slavery happens in these scenarios, why does this happen in these areas where economic resources are highly pressured where they are forced to take these actions. Descriptive ethics tends to explain the situation rather than giving an actual moral judgement

Normative Ethical Theory When thinking about normative ethical theory, we are thinking about what norm or rule to apply in this particular decision process. The access to this rule is through reasoning and contemplation. The question which confronts managers is what should they do when facing an ethical issue? OR what norm or rule should we apply in this particular business context?

Types of questions that can be considered ethical… Should managers promote/hire employees on non-performance criteria? Should managers seek cheaper product components for an aircraft? Should executives award themselves bonus payments during periods of poor financial performance?  Should companies employee under 16s?  Should banks offer “pay-day” loans to poorer customers?  Should companies share your personal information without consent? When speaking about normative ethical theories, we are talking about what ethical rule we should apply in each of these contexts.

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One would hope that an ethically robust and legally compliant multinational corporation that uses aircrafts to transport its customers from different places around the world, would have a clear set of legal and ethical criteria when it comes to making key decisions which may affect the fundamental safety of the aircraft. E.g. the company is being forced to consider cost-cutting decisions in order to save revenue, there should be a clear set of criteria or rules that say certain areas of the organisation cannot and should not cost cut, especially if it invokes issues of harm. The last thing we want to do is have an aircraft with inferior product components that may cause a malfunction during the flight. The answer in this case would be that managers should not seek cheaper or inferior product components for the aircraft element of their business. Is there always a clear, “right” answer? When a manager is confronted with an ethical dilemma, all they need to do is think of a particular decision rule or theoretical framework for answering the question, what is the right thing to do. Using one of these, managers would hope there would be a coherent, single answer to the question. However, there are always grey areas or even conflicts and contradictions when it comes to subjective human behaviour and the local context in which business decisions are made. Should companies enforce random drug testing on their employees?  Hearing this, many would say that this is an invasion of privacy as all workers have the right to have control in and out of the workplace However, if we add in a bit more information in this context: what if workers are operating dangerous machinery and accidents are on the rise?  The issue broadens now to not just an issue of employee privacy but now also an issue of employee safety  We now have two competing sets of rights so it may not be clear what set of actions to now follow considering the information given  Your answer may now be changed to saying that drug tests are needed for employee safety which contrasts to the stance that was taken before  This shows that you do not always get a clear and coherent answer when using normative ethical theories

Consequentialist or Non-Consequentialist Ethical Theories Most normative ethical theories fall into one of two caps, they are either focused on consequentialist ethics or non-consequentialist ethics.   

Action is an event or behaviour, e.g. a human sacrifice, the action of random drug testing, the action of employee / consumer safety around certain products The question is how we approach this action or issue There are two options – a consequentialist, outcomes-based view of the action or a non-consequentialist view

Consequentialist Ethics  Looking at the issue from an outcomes-based view of the action  Also known as teleological view to ethics  This looks at the different outcomes that could happen if this action was allowed to take place  E.g. random drug testing. Outcomes include o Negative – a feeling of greater intrusion of management into employee privacy o Positive – lower instance of workplace injury or fatality o There may be an increase or decrease in employee satisfaction  We are thinking of doing the action from the point of view of identifying the positive and negative outcomes, i.e. looking at the consequences of taking that particular action Non-Consequentialist Ethics  From the left-hand side, we are completely uninterested in the outcomes of the actions but are looking at the action in its own right and are looking at the motivations and principles that govern the approach of that particular action  Also called deontological ethics – deontology meaning duty  We look at the duties which may apply and govern our behaviour in any context that this action comes uo  E.g. human sacrifice – everyone has the fundamental right to life → thinking about the fundamental rules of this context  E.g. in the business context – modern slavery and people forced to work for free → we would say that it would be wrong to undertake this action because

everyone has the right to be compensated for work and managers have a duty of care for their workers. Major Normative Theories This table shows the philosophers that contributed to shaping the theories, what it means in terms of the level of focus on the theoretical norms which apply in the context and the type of theory itself. Egoism

Utilitarianism

Ethics of Duties

Contributor s

Adam Smith

Jeremy Bentham John Stuart Mill

Immanuel Kant

Focus

Collective welfare

Duties

Rules

Individual desires or interests. Maximization of desires / selfinterest.

Act / rule utilitarianism

Categorical imperative

Concept of human beings

Man as an actor with limited knowledge or objectives

Man is controlled by avoidance of pain and gain of pleasure (“hedonist”)

Man is a rational moral actor

Type

Consequentialist

Consequentialist

Non-consequentialist

1. Ethical Egoism (e.g. Smith)  Theory of egoism – an action is morally right if the decision-maker freely decides an action to pursue either their (short-term) desires or their (long-term) interests  The action or event chosen will use the decision rule of what is in my best interests and how can I achieve the greatest benefit for myself, both in the short and long run  Adam Smith (1793) (we see elements of ethical egoism in Adam Smith and the wealth of nations) o Pursuit of individual interest morally acceptable as invisible hand of market creates benefit for all (goods will be redistributed by the market itself) o Relies on free competition and access to good information o However, markets do not function perfectly if we look at this in real life  In reality, if ethical egoism was used and we all completed actions in our best interests, `markets would soon fall apart because stakeholder relationships do rely upon levels of trust, good information about products. All this information needs to flow between the organisation and different stakeholders  We also know that there are externalities which come from people’s actions in the market, including social and environmental, these would be maximised if everyone is maximising their own selfinterests and not caring about wider stakeholders  Anti-globalisation movement  Sustainability debate

What should the ethical “egoist” do?  You work in a sales team divided into territories of potential customers  The egoist pursuing short term self-interest here would be inclined to encroach on other’s territories to raise their personal commission, pay bonus, career advancement  The problem is you may end up being self-defeating as others will eventually follow suit and do the same and you would end up with a huge trust deficit in the environment of organisation and trust o This works against the organisation because it would flourish more if the sales team worked collaboratively compared to if they were all out for themselves  There are very few advocates for this egoist approach to business as they tend to ignore fundamental stakeholder relations 2. Utilitarianism (e.g. Bentham and Mill) 

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An action is morally right if it results in the greatest amount of good for the greatest number of people affected by the action o Also called the “greatest happiness principle” o Based on cost-benefit analysis How it works as a theory: o Identifies those stakeholders who may be affected by (outcome of) a decision o Assigns pleasure (benefit) and pain (cost) to each stakeholder o Chooses the decision that creates the best balance for all involved. Far more inclusive and far more socially collective as it looks at the benefit of the greater good as well as individuals

E.g. drug testing in the workplace  Employees would be the most affected stakeholder group  A cost would be the loss of privacy in the workforce  On balance, managers trying to enforce random drug testing in the workforce and able to make a strong case that in the long-term, it is in employees best interest for this programme to take place because these long-term benefits would outweigh the loss of privacy E.g. the construction of a hydroelectric dam  Would have to factor in all the stakeholders affected by the dam  Assign weightings to the benefits or costs to these different stakeholder groups, e.g. farmers losing their land  In the end, you would try to arrive at a decision which maximises the most good for the most number of stakeholders concerned with the action What should a “utilitarian” do?  You are trying to commercialize a dieting drug that is likely to have side-effects for some users  The Utilitarian might well decide that on balance, a greater population of people will enjoy the benefits of weight loss  Problems: o Who decides if weight loss pills are good in the first place? (safer options, e.g. healthy diet, exercise)

o How do we know we’ve considered all the affected stakeholders? (animal testing) o How can we assign pleasure and pain to each? (pleasure and pain ratings is a subjective process) o What happens when, in reaching the best decisions for the most people (i.e. the greatest good), a small group are seriously harmed?  This is a fundamental challenge concerned with utilitarian thinking 3. Ethics of Duties (e.g. Kantianism) This theory is non-consequentialist so is not concerned with any of the consequences that’ll come after the decision for actions ‘Categorical Imperative’ (Kant) – this is a way that all human individuals, through access to their own mental capacity and reasoning capabilities, imagine what the right rule to follow is in any given context. 

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Maxim 1: consistency o “Act only according to that maxim by which you can at the same time will that it should become a universal law” o We have to find a rule or a law that we would apply in that context without exception o In the example of modern slavery, there are no circumstances in which anyone could imagine forcing people to work for free without compensation is an acceptable thing to do so without exception, this is a rule we can apply Maxim 2: Human Dignity o “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” o Are we instrumentalising humans? Are we employing slaves in the workforce in order to profit maximise? Maxim 3: Universality o Act only so that the will through its maxims could regard itself at the same time as universally lawgiving (would others agree?) o Would other people all around the world agree that this is the wrong thing to do? Would people around the world agree with modern slavery? In all these examples, we could test worker safety, worker freedom, consumer deception, consumer safety, by working through each maxim with reason Thus in theory: o Managers would have a duty to fairly compensate employees o And/or a duty to ensure a safe working environment o And/or a duty of care to customers and/pr a duty to not deceive them o These would be the rules that we would apply in these decision contexts o Read around this further – on Moodle

What should the “Kantian” do?  Following management suspicion of inefficient workers (e.g. taking overly long breaks) in a very busy parcel warehouse, management decide to install covert video surveillance to closely monitor staff at all times  The Kantian may decide that workers have rights to not be deceived, to reasonable autonomy and privacy and, therefore, this is universally wrong

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Problems: o Who decides what the duties are? o Whose rights take precedent?  “Kantian Conflicts” between competing rights – stakeholder groups who possess more than one set of rights which may come into competition with each other  Shareholder rights for profit vs. employee privacy  The managers may find themselves as the pivot / middle agent between different stakeholder groups with their own sets of rights – it is not easy to apply Kantian theories all the time

Note: if we were to replace this with employee safety being at risk as the reason for installing cameras, this becomes a more challenging scenario to come up with a solution – Kantian conflicts so the right to safety and the right to privacy would be competing against each other Descriptive Ethical Theory Descriptive ethical theory is much more concerned with explaining what happens when the decision maker confronts ethical dilemmas. We will be asking what do managers or corporations actually do when facing an ethical issue and why do they do it that what? 

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Descriptive business ethics theories seek to describe how ethical decisions are actually made in business, and what influences the process and the outcomes of those decisions (Crane and Matten, 2010) o Instead of taking the correct course of action, we take an abstract and stand back and look at why the choosers make the decisions they make o This allows us to question a few interesting elements about the subject of the nature of human life and the conditioned nature of our behaviours when in certain decision contexts Business ethics is not just about working what is the right thing to do. It is also about understanding why people make certain moral choices o Why do people make poor ethical judgements? o Why do even “good” people sometimes make “bad” ethical decisions at work? o Why do people at work sometimes make very different ethical decisions than they would at home?

Influences on Ethical Decision-Making   

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The answer to the previous questions would fall into one or both categories Two broad categories: individual and situational (Ford and Richardson, 1994) Individual factors – unique characteristics of the individual making the relevant decision o Given at birth o Acquired by experience and socialisation Situational factors – particular features of the context that influence whether the individual will make an ethical or unethical decision o Work context o The issue itself including

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Intensity of the moral issue itself Ethical framing

Framework for Understanding Ethical Decision-Making: L o o k

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at further reading on this This shows us how individuals form ethical decisions and how they make moral judgements which lead to intent and then behaviour The idea is that individuals recognise a moral issue and may even then decide to make a moral judgement about it but they may not actually establish moral intent or go onto affect some kind of behaviour or do the right thing when confronted with that ethical dilemma The idea from Jones here is that a combination of individual and situational factors will mediate and influence the extent to which a decision maker will move from the left-hand side when they recognise a moral issue which needs addressing across to the right-hand side There is no guarantee that just because you have formed a strong opinion on an ethical issue that you would be able to actually enact it in the workplace setting

What kind of factors, about us as individuals, are likely to influence the type of ethical decisions we make? (Individual Influences) Age and Gender:  Age o There has been research on the extent to which age matters in arriving at good quality ethical decisions o The suggestion is that potentially older people, or people in specific age categories, may make better decisions o Results are contradictory and inconclusive o However, experiences may have an impact so it may be more beneficial to look into how experiences affect ethical decisions rather than measuring age  Gender o Individual characteristic is most often researched

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o One of the underlying questions is whether males or females make better quality ethical decisions when confronted with an ethical dilemma o Results are contradictory – there is an equal number of studies that show men make more consistent responses to ethical dilemmas compared with an equal measure of studies that show that women arrive at better quality decisions, so these cancel each other out to some extent o There is some promise with this research though is the extent to which different genders arrive at decisions as they may differ in terms of how decisions are processed rather than the actual outcome These categories are too simplistic

National and Cultural Characteristics:  People from different cultural backgrounds are likely to have different beliefs about right and wrong, different values, etc. and this will inevitably lead to variations in ethical decisions-making across nations, religions and cultures  For example: the use of children under the age of 12 in employment o The question of whether or not child labour is ethical is likely to vary based on the national context and the cultural outlook on child labour o In one country, e.g. UK, it is not agreed with, they believe that children should be getting an education and not forced to work at such a young age o In other countries, it may be seen as more legitimate  We can think about the relationship between individual decisions and cultural...