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BUSINESS ETHICS
AN INTRODUCTION
ETHICS
Ethics is a branch of philosophy that examines
the moral standards of an individual or society,
and asking how these standards apply to our
lives and whether these are reasonable or
unreasonable.
Business Ethics
Business Ethics: The application of ordinary human
moral and ethical considerations in a business setting.
“Application”: Like medical ethics, environmental ethics,
business ethics is applied ethics.
Business: any or all-economic transactions between
individuals, between individuals and profit-making
organizations, and between profit-making organizations
and other such organizations.
“Moral (Latin) and ethical (Greek) considerations”: How
people ought to behave (to each other). Values of
honesty, fairness, loyalty, justice, respect, etc.
“Morality” refers to the standards that an individual or
group has about what is right and wrong conduct, good
and evil, and the values embedded, fostered or pursued
in the act.
Ethics
Ethics is the “discipline that examines one’s
moral standards or the moral standards of a
society.”
Ethics “asks how these standards apply to our
lives and whether these standards are
reasonable or unreasonable—that is, whether
they are supported by good reasons or poor
ones.”
Two questions arise from this definition:
1. What makes a standard moral?
2. What makes a moral standard reasonable?
In (1) we enter into questions of individual and
social responsibility.
In (2) we enter into moral reasoning (since ethics is
part of philosophy, and philosophy uses reasons
or reflection.
Moral Standards
What distinguishes moral standards from amoral
standards?
1. Moral standards deal with matters that can seriously
injure or benefit human beings. E.g. theft, rape, fraud,
slander, murder.
2. The validity of moral standards rests on the adequacy
of reasons to support and justify them, not on decisions
of majority or authoritative bodies. E.g. that one ought to
tell the truth does not depend on how many people will
vote on it nor on the legislature. One indication of
justification is the consensus of participants in
communication. (Habermas)
3. Moral standards are to be preferred to other values,
including self-interest. E.g. honesty is to be preferred
than cheating, although cheating can make me
graduate.
4. Moral standards are based on impartial
considerations. Another way of expressing this is
‘universalizable’ or taking the point of view of an ‘ideal
observer.’ Still, this impartiality must be balanced with
partiality towards those we have a special relationship
(family and friends) and the poor and the disabled.
5. Moral standards are associated with special
emotions such as ‘guilt,’ ‘shame,’ ‘remorse,’
‘praise,’ ‘indignation’.
What is common to all five characteristics?
None other than society taken in its broadest
sense, or in philosophical terms, the ‘other.’
In other words, individual responsibility cannot
be taken in isolation from social responsibility.
Individual and Social Responsibility
In the first place, we acquire our individual moral
standards from society: the family, friends,
school, church, associations, and media.
As we grow up, experience, learning and
intellectual development may lead us to revise
these standards, adopt new ones, or reinforce
existing ones in order to meet moral challenges
and dilemmas of adult life.
Maturity can be characterized by the expansion
of the horizon of one’s responsibility, from the
ego to the other, or what one is originally
responsible-to becomes what one is responsiblefor. e.g. my being responsible to my parents
becomes, when I have my own family, what I am
responsible-for, i.e. parenthood.
Morality is not just a question of avoiding evil
(individual) but of pro-actively doing good
(social).
Justice is not just avoiding doing harm to the
other person but of responding to the objective
demands of the situation, to the call of a higher
value.
I am not solely responsible to myself or to my
family, but also to others, to the community. I
cannot just be moral at home and not in the
workplace.
The social and the individual interpenetrate.
At times, the individual and the social come in
conflict, and there is need to apply moral
reasoning.
Moral Reasoning
Moral reasoning is the reasoning process by
which human behaviors, policies, institutions are
judged to be in accordance with or in violation of
moral standards.
Moral reasoning involves two essential components:
1. Moral standards that requires, prohibits, values, or
condemns, and
2. The factual evidence or information that a particular
person, behavior, policy or institution has the kind of
features that the moral standard requires, prohibits,
values or condemns.
In argument form, (1) forms the major premise, (2) the
second premise, and the conclusion is the moral
judgment.
Example:
(1) A firm is unjust if it does not treat women
equal to men.
(2) In Starbank, men are given preference for
promotion than women.
______________________
Therefore, Starbank’s policy is unjust.
To evaluate the adequacy of moral reasoning, various criteria are
used by ethicians:
1. Moral reasoning must be logical, that is, the premises must be
true and the reasoning valid.
2. The factual evidence cited must be accurate, relevant, and
complete.
3. The moral standards involved in the person’s moral reasoning
must be consistent. Consistency means that the moral
standards involved in the reasoning are consistent with each
other and with other beliefs the person holds. Consistency also
means that one is willing to accept the consequences of applying
one’s moral standards to all persons in similar circumstances.
Summary:
“Business ethics is a specialized study of moral
right and wrong. It concentrates on moral
standards as they apply particularly to business
policies, institutions and behavior.” (Velasquez,
p. 13).
The case of Baby Jane Doe
In late 1983 there was a great public controversy over
an infant known to the public only as Baby Jane Doe.
This unfortunate baby, born in New York State, suffered
from multiple defects including spina bifida (a broken
and protruding spine), hydrocephaly (excess fluid on the
brain), and perhaps worst of all, microcephaly (an
abnormally small head, suggesting that part of the brain
was missing. Surgery was needed for the spina befida;
however, the doctors who examined the baby disagreed
about whether the operation should be performed.
Dr. George Newman believed that surgery would be
pointless because the baby could never have a
meaningful human life. Another physician, Dr. Arjen
Keuskamp, did not think the baby’s condition was
hopeless and advocated immediate surgery. (Both
were pediatric neurologists). The parents decided to
accept Dr. Newman’s recommendation, and refused
permission for surgery. Dr. Keuskamp then withdrew
from the case.
Because such cases have become common, the plight
of Baby Jane Doe would not have received much
attention had it not been for the intervention of third
parties. Shortly after the parents made their decision,
Lawrence Washburn, a lawyer associated with some
conservative right-to-life groups, petitioned the courts to
set aside the parents’ wishes and order that surgery be
performed. The New York State Supreme Court
granted that request, but a higher court quickly
overturned the order, calling Washburn’s suit
“offensive.”
The court was impressed by Dr. Newman’s testimony:
he told the court,
The decision made by the parents is that it would be
unkind to have the surgery performed on this child…on
the basis of the combination that are present in this
child, she is not likely to ever achieve any meaningful
interaction with her environment, nor ever achieve any
interpersonal relationships, the very qualities which we
consider human.
After Mr. Washburn’s suit was dismissed, the federal
government got in the act. The Department of Justice
filed suit demanding access to the hospital’s records in
order to determine whether a “handicapped person”—
the infant—was being discriminated against. This suit
was also dismissed, with the judge declaring that the
parents’ decision “was a reasonable one based on due
consideration of the medical opinions available and on a
genuine concern for the best interests of the child.”
The parents did eventually agree to the use of a
shunt to remove the excess fluid from the child’s
brain. But the major surgery, for the spina
befida, was not performed.
Was the parents’ decision correct?