ethics and governance.

ACCT20080 Governance & Ethics Module 1: The History and philosophies of ethics

1 Created by Dr G. L. Ilott, CQUniversity Australia

Learning Objectives After completing this chapter, you should be able to:

1. Explain the historical origins of ethical thinking in the Western philosophical tradition

2. Identify the key theories of ethics that are relevant to modern business ethics, and

3. Trace the key ideas behind each of the great theories and show how they are relevant in today’s business world.

2 Created by Dr G. L. Ilott, CQUniversity Australia

Why bother with the historical origins? What we consider good and not-good has not really changed much over time. Out of the depths of time, the great religions tell us stories of the perils of greed and pride (arrogance).

It is useful to see the historical development of the ideas and values we still place so much importance on.

3 Created by Dr G. L. Ilott, CQUniversity Australia

The ancient Greeks Athens in 5th Century BC was a mix of sophists and philosophers.

The most famous philosophers came from a line of teacher-student relationships. They are Socrates, his pupil Plato, and Plato's pupil Aristotle.

4 Created by Dr G. L. Ilott, CQUniversity Australia

The Fab Three

5 Created by Dr G. L. Ilott, CQUniversity Australia

Socrates

Socrates believed that truth and goodness must be searched for and found through logical argument. He told us not to expect truth to be given to us, we must find it ourselves.

Truth is found by careful examination, logical argument and awareness.

Socrates was probably the pioneer of modern education systems. The "Socratic method" is still used around the world, especially at the Harvard Business School.

6 Created by Dr G. L. Ilott, CQUniversity Australia

Plato

Plato was Socrates' student, and almost everything we know of Socrates' teachings comes to us from Plato's writing.

Plato believed that all things had a perfect "form", an ideal against which our imperfect physical form could be measured. Perfection was a virtue to be constantly strived for.

7 Created by Dr G. L. Ilott, CQUniversity Australia

Aristotle

Plato's pupil Aristotle also believed in achieving perfection, or "happiness". It was an outcome, and therefore both the beginning of virtue ethics and consequentialism.

Aristotle was probably the first to set out his ideas in methodical and systematic arguments. As such he is probably the first scientist as well. His works on the classification of the natural world are still referred to by biologists.

8 Created by Dr G. L. Ilott, CQUniversity Australia

The great theories from the Fab Three

Of relevance to this Unit, these three philosophers gave us:

1. Teleology/Consequentialism: Goodness is found in the result of striving, whether it be knowledge, wisdom or perfection. However, it is an outcome for the individual, not for all, that counts.

2. Virtue ethics: All three were concerned with the identification of virtues that good people should identify with. Aristotle was the most influential here.

9 Created by Dr G. L. Ilott, CQUniversity Australia

10 Created by Dr G. L. Ilott, CQUniversity Australia

The social contract: for the greater good Through his treatise on the social contract (in Leviathan, 1651), Thomas Hobbes wrote that the ruler should rule for the greater good.

This was the first major discussion of good consequences being for the majority rather than the self.

This was the start of Utilitarianism.

11 Created by Dr G. L. Ilott, CQUniversity Australia

Equality and justice ethics

100 years after Hobbes, Rousseau wrote about the social contract in terms of equality and inequality. To surrender one's freedom to civil rule was morally troublesome.

Rousseau may be difficult to agree with, but his was a serious attempt to introduce justice ethics.

12 Created by Dr G. L. Ilott, CQUniversity Australia

Duty and rights

Immanuel Kant charged us with the responsibility to question other people's truth. This seems like a continuation of Socrates, and it is.

However, Kant framed his ideas in terms of moral obligations to society and your duty to protect the rights of all.

This is the first big attempt at deontology.

13 Created by Dr G. L. Ilott, CQUniversity Australia

And now a more detailed review using the required reading

14 Created by Dr G. L. Ilott, CQUniversity Australia

What are…?

• Theories of ethics? Ethical theories are those that attempt to answer and explain how people can live together socially and productively.

• Normative theories? Normative theories focus upon what should be considered "the norm" (hence the name "normative"). They are value-laden and seek to prescribe what a person "should" do. Almost all ethical theories are normative.

• Ethical dilemmas? A ethical dilemma is one in which there is no clear ethical outcome. It is the classic "lose/lose" scenario. An example would be to have to choose between closing a factory or risk losing the company. In either case, there are clear losers.

• Moral Agents? A moral agent or moral actor is anyone who has to make a decision that has ethical implications.

15 Created by Dr G. L. Ilott, CQUniversity Australia

Teleology • Egoism: Egoism is not the self-centred, greedy approach you might think. All capitalism is built upon personal

ambition and individual achievement. Although it takes some work, it is possible for an egoist to also make decisions that are ethical, respectful and benefit many. A surgeon, for example, could be motivated to "live the dream" of a mansion, the boat, the swimming pool etc., while still being an excellent surgeon.

• Utilitarianism: Where egoism sees goodness when happiness is maximised for the individual, utilitarianism is focused on attaining the most happiness for the most people (not necessarily for all people). • Rule utilitarianism

Rule utilitarians see goodness in the outcome that provides the happiness to the most people, but it is important that rules, policies or checklists are followed along the way. For example, an accountant will decide that the "greater good" is served by shutting a factory down, but it is also important that proper financial modelling (such as cost/benefit analyses) are performed first.

• Act utilitarianism The Act Utilitarian finds goodness in the result of action and is not too concerned about how the result was brought about. It is the classic "ends justifies the means" view.

16 Created by Dr G. L. Ilott, CQUniversity Australia

Deontology

• Kant & the Categorical Imperative: The categorical imperative is the classic deontological argument for ethical behaviour. It has appeared in all the major religions. Kant provided a fuller explanation of the Imperative.

• W. D. Ross: We have various moral duties to each other that cannot be reduced to a single "imperative". These duties can be a mixture of general and unique obligations.

17 Created by Dr G. L. Ilott, CQUniversity Australia

Virtue theory

• Aristotle's "excellent person": An "excellent person" can be anyone—even an imaginary person who you consider to be an ideal—you consider to embody virtues that you admire. Many of us recall mentors that we had as young professionals, and when we have to make decisions, we might ask ourselves "What would <insert name here> do?" That is an example of an "excellent person".

• Care Theory: Care theory is a feminist version of Virtue Theory. It is based on an assumption that women are more caring than men. One of the reasons people demand more women in corporate leadership roles is because they are assumed to balance the aggressive male nature with feminine caring nature.

18 Created by Dr G. L. Ilott, CQUniversity Australia

Justice theory

• John Rawls: Rawls is the most interesting of all advocates of Justice Ethics in the 20th Century. Strongly influenced by the philosopher Rousseau, Rawls believes that good outcomes must be for all, not just the majority. That is the difference between justice ethics and utilitarianism.

19 Created by Dr G. L. Ilott, CQUniversity Australia

Applying the theories All of the theories of ethics discussed here provide benefits for organisational decision-making, regardless of your profession. Here are some examples of benefits.

20 Created by Dr G. L. Ilott, CQUniversity Australia

Utilitarianism

• Promotes the development of policies for general benefit and well- being.

• Assists in resolving conflicts of interest. • Promotes results-focused decision-making.

21 Created by Dr G. L. Ilott, CQUniversity Australia

Egoism

• Promotes self-interest, but also promotes innovation and entrepreneurialism

• Utilitarianism can work with egoism to promote a restrained, or "enlightened" form of egoism. • "What is good for me is good for you": Egotistic leaders make

decisions that promote their own benefit and also has outcomes for the organisation.

• Almost all corporate leaders fit into this category.

22 Created by Dr G. L. Ilott, CQUniversity Australia

Kant and deontology

• Forces us to consider the moral rights of all others. These are just some of the basic human rights we believe in and would like to see protected. • Legal rights • Human rights • Freedom of speech • Freedom of religion • The right to a safe and healthy workplace.

23 Created by Dr G. L. Ilott, CQUniversity Australia

Justice (fairness)

Justice ethics are commonly confused with deontological theories, and they often overlap. The key to distinguishing them is to consider the motivation of the person making the decision. A deontologist will be motivated to respect and protect the rights of others (and that in itself is a form of justice). A justice ethics perspective is focused on fairness for all first. The rights of others are a secondary consideration.

24 Created by Dr G. L. Ilott, CQUniversity Australia

Finally You will find the Stanford Encyclopedia of Philosophy (SEP) useful. You can find it at:

https://plato.stanford.edu/index.html.

25 Created by Dr G. L. Ilott, CQUniversity Australia