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The most important human endeavor
is the striving for morality in our
actions. Our inner balance, and even
our very existence depends on it.
Only morality in our actions can
give beauty and dignity to our lives.
Albert Einstein
Ethics
The study of what is good and evil, right
and wrong, and just and unjust. (p.180)
– Descriptive Ethics deals with what is
– Normative Ethics deals with what ought
to be
– Business Ethics is the application of
ethics to the business setting.
• Theory of Amorality: The belief that
business should be conducted without
reference to the full range of ethical
standards, restraints and ideals in society.
– Business as a Game with its own rules
• Theory of Moral Unity: Business
actions are judged by the general ethical
standards of society, not by a special set of
more permissive standards.
– Business as a social institution no different
from others.
Types of Management Ethics
• Immoral
– Recognize the ethical issues involved and
choose to do the wrong thing.
• Moral
– Recognize the ethical issues involved and
choose to do the right thing.
• Amoral
– Do not consider the ethical implications of an
action or believe that ethics are irrelevant.
Major Sources of Ethical Values in
Business
McGraw-Hill/Irwin
7-5
© 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Approaches to Ethics
• Conventional Approach (Ethics)
– Ethical Relativism: Culture
• Principles Approach (Morals)
– Moral Absolutes: Religion and Philosophy
• Law
– Codified Ethical Expectations
Definitions
• Ethics: Rules of conduct based on
consensually-accepted standards of
behavior. (Conventional Approach)
• Morals: Absolute Precepts of personal
behavior based on religion or philosophy.
(Principles Approach)
• Law: Formal standards that permit or
forbid certain behaviors.
The Overlap Model of Law,
Ethics and Morals
• While all three approaches of law, ethics,
and morals attempt to give us guidance as to
the propriety of our conduct, they do not
always give us the same answers.
The Overlap Model
Ethics
Morals
Law
Follow the Law Approach
• “Law is the public’s agency for translating morality
into explicit social guidelines and practices for
stipulating punishments for offenses.”
--Beachamp and Bowie (2001)
• It is not uncommon (especially in business situations)
for people to equate law and ethics.
• “…ethical behavior is typically thought to reside
above behavior required by the law. This is the
generally accepted view of ethics…. we would
certainly say that obedience to the law is generally
regarded to be minimum standard of behavior.”
-- Carrol & Buchholz (2003)
Law Does not Equal Morals
The fact that an action is permitted by
the laws of the state does not by itself
render the action morally permissible….
There are many perfectly legal ways to be
vicious, cruel, hurtful, and deceitful…. It
is often legal to dupe a retiree into
investing his life savings stupidly, to incite
racial hatred for political gain, or to sell
arms to murderous regimes abroad.
• If these practices are wrong,
the fact of their legality does
not make them less wrong.
Applbaum, Ethics for Adversaries p. 114.
The Overlap Model of Law,
Ethics and Morals
• “A law-abiding person is not necessarily morally
sensitive or virtuous, and the fact that something is legally
acceptable does not imply that it is morally acceptable….
A related problem involves the belief that a person found
guilty under law is therefore morally guilty. Such
judgments are not necessarily correct but rather depend
on the moral acceptability of the law on which the
judgment has been reached…. Taken together, these
considerations lead to the following conclusion: If
something is legal, it is not necessarily moral;
if something is illegal, it is not necessarily
immoral.”
--Beachamp and Bowie 2001
Civil Disobedience
Any thinking African in this
country is driven continuously
to a conflict between his
conscience and the law.
Nelson Mandela
Conventional Approach: Ethics
• Our pursuit of self-interest ought to be bounded
by the standards of society.
• Behaviors are judged right or wrong based on
their agreement with prevailing norms of society
or consensually accepted standards of behavior
• Because this approach is based on consensus,
our notion of what is right or wrong may vary
over time and among different societies.
Ethical Relativism
Ethical relativism is the doctrine that the
moral rightness and wrongness of actions
vary from society to society and that there
are not absolute universal moral standards
on all men at all times. Accordingly, it
holds that whether or not it is right for an
individual to act in a certain way depends
on or is relative to the society to which he
belongs.
John Ladd
We do not any longer make the mistake
of deriving the morality of our locality
and decade directly from the inevitable
constitution of human nature. We do not
elevate it to the dignity of a first principle.
We recognize that morality differs in
every society, and is a convenient term
for socially approved habits.
Ruth Benedict 1934
Ethics in Botswana
So everybody knew, for instance, that it was wrong
for a man to be too close to a place where a woman is
giving birth. That was something which was so
obvious that it hardly needed to be stated. But then
there were these remarkable ideas in other countries
that suggested that men should actually attend the birth
of their children. When Mma Ramotswe read about
that in a magazine, her breath was taken away. But
then she had asked herself why a father should not see
his child being born, so that he could welcome it into
the world and share the joy of the occasion, and she
had found it difficult to find a reason.
That is not to say it was not wrong—there
was no question that it was profoundly
wrong for a man to be there—but how could
one justify the prohibition? Ultimately the
answer must be that it was wrong because
the old Botswana morality said that it was
wrong, and the old Botswana morality, as
everybody knew, was so plainly right.
It just felt right.
Tears of the Giraffe, Alexander McCall Smith, Random House, New York, 2000, p. 19.
Ted Bundy -- Subjectivism
Then I learned that all moral judgments are
“value judgments,” that all value judgments are
subjective and that none can be proved to be either
‘right’ or ‘wrong’…. I figured out for myself that
if the rationality of one value judgment was zero,
multiplying it by millions would not make it one
whit more rational.
I quickly discovered that the greatest obstacle
to my freedom, the greatest block and limitation to
it, consists in the insupportable ‘value judgment’
that I was bound to respect the rights of others.
Ted Bundy – Logical Conclusions
Why is it more wrong to kill a human
animal than any other animal, a pig or a
sheep or a steer? Is your life more to you
than a hog’s life to a hog? Why should I be
willing to sacrifice my pleasure more for the
one than for the other?
Surely you would not, in this age of
scientific enlightenment, declare that God
or nature has marked some pleasures as
‘moral’ or ‘good’ and others as ‘immoral’
or ‘bad’?
Ted Bundy – Final Effect
In any case, let me assure you, my dear
young lady, that there is absolutely no
comparison between the pleasure I might
take in eating ham and the pleasure I
anticipate in raping and murdering you.
That is the honest conclusion to which
my education has led me.
“If duty is merely the voice of the
community—if nothing in ourselves
accepts it, if our feelings do not respond
to it – then, however good conduct may
be, it is dead, and something absolutely
central to morals is lost.”
Mary Midgley
Principles Approach: Morals
• Right or wrong is a personal choice, based
on unchanging standards of right and wrong
(principles) and what society thinks is not
relevant to moral decision making.
• A key issue in the principles approach
concerns the source of these absolutes.
• Those using this approach to ethics turn to
religion, philosophy and their own
consciences to answer that question.
Principle Approach: Philosophy
• Consequentialist: Ends
– An action is right if its consequences are good.
– Utilitarianism
• Deontological: (Deon = Duty) Means
– An action is right or wrong in and of itself,
regardless of its consequences.
– Rights
– Justice
• Virtue: Being, Good Character
Consequentialist Theories:
Utilitarianism
Utility, or the Greatest-happiness
Principle, holds that actions are right in
proportion as they tend to promote
happiness, wrong as they tend to produce
the reverse of happiness. By happiness is
intended pleasure and the absence of pain;
by unhappiness, pain and the privation of
pleasure.
J.S. Mill
Utilitarianism
Seeks the greatest good for the greatest
number (i.e., the greatest possible happiness)
+ Focus on general welfare beyond self-interest
+ Think in stakeholder terms
+ Provides latitude in decision making
– Ends justify means
– Minority interests not protected
– Not all outcomes can be easily quantified
Deontological Theories: Rights
• Individuals’ rights must not be violated
• Rights cannot be overridden by utility only
by another more basic right
• Expresses morality from the point of the
individual
• Issues:
– what is a right?
– Which rights take precedence?
Which Rights Which Priority?
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Civil rights
Minorities’ rights
Women’s rights
Disabled rights
Elderly rights
Religious rights
Employee rights
Consumer rights
Property rights
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Shareholder rights
Privacy rights
Abortion rights
Right to life
Smokers’ rights
Non-smokers’ rights
Animal rights
Gay rights
Victims’ rights
Justice
• Involves fair treatment of each person, people
should be given their due, with equity and
impartiality.
• Rawl’s two principles of justice:
– Each person has an equal right to the most extensive
basic liberties compatible with similar liberties for
all others.
– Social and economic inequalities are arranged so
that they are both (a) reasonably expected to be to
everyone’s advantage and (b) attached to positions
and offices open to all.
Virtue (Character) Ethics
• Focus on Being -- who we are, our
character
• Long term success and enduring
happiness come only through virtue
• Basic virtues: honesty, integrity, loyalty,
fairness, respect for others, quality,
patience, etc.
– self evident
– consistent with most philosophies and
religions
The Character Ethic taught that there
are basic principles of effective
living, and that people can only
experience true success and enduring
happiness as they learn and integrate
these principles into their basic
character Stephen R. Covey
Principles are guidelines for
human conduct that are proven to
have enduring, permanent value.
They’re fundamental. They’re
essentially unarguable because
they are self-evident. Stephen R. Covey
.
The tenor of all the major religions
of the world, and of all the great
philosophers, is that the rules of
behavior are about as inexorable as
the laws of mathematics or physics.
You violate them at your peril.
J. Irwin Miller Cummins Engine Co
Practical Suggestions
• Think of ethics in rational terms
• Use decision-making tactics
– Imaginary conversation w/ hypothetical
opponent (look at both sides)
– Seek out an advisor
– Use two-column balance sheet
– Ethical questions approach
Practical Suggestions cont.
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Sort out ethical priorities beforehand
Be publicly committed on ethical issues
Set a good personal example
Must take action: courage is necessary
Cultivate sympathy and charity
How Companies Manage Ethics
• Establish compliance
standards and procedures
– Code of Conduct
• Ethical oversight occurs
at high levels of
management
• Do not delegate authority
to persons who are prone
to engage in criminal
behavior
– Use background checks
• Communicate standards
to all employees
– Ethics Training Programs
• Establish Monitoring and
ethical auditing systems
• Consistently enforce
standards
• Immediately after an
offence take steps to
prevent future offences
Overlap Model
Actions are ethical, moral, and legal
Ethics
Morals
Law
Overlap Model
Actions are ethical and legal, but not moral.
(e.g. abortion)
Ethics
Morals
Law
Overlap Model
Ethics
Morals
Law
Actions are moral and legal, but not ethical.
(e.g. laws protecting the privacy of aids patients, Sunday closing laws)
Overlap Model
Action is moral and ethical, but not legal.
(e.g. Sodomy laws with regard to married couples.)
Morals
Ethics
Law
Overlap Model
Actions are ethical, but not moral or legal.
(e.g. Gambling (Football pools ))
Ethics
Morals
Law
Overlap Model
Actions are moral, but not ethical or legal.
(e.g. modern-day polygamy among the FLDS )
Ethics
Morals
Law
Overlap Model
Ethics
Morals
Actions are ethical, but not moral or legal.
(e.g. Apartheid laws)
Law