Business Ethics Assignment

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Business Ethics Concepts & Cases

Manuel G. Velasquez

Chapter Two

Ethical Principles in Business

Utilitarianism

Actions and policies should be evaluated on the basis of the benefits and costs they will impose on society.

The only morally right action in any situation is that whose utility is greatest by comparison to the utility of all the other alternatives .

Leading utilitarian theorists:

Jeremy Bentham

John Stuart Mill

How to Apply Utilitarian Principles

First, determine what alternative actions or policies are available to me in that situation.

Second, for each alternative action, estimate the direct and indirect benefits and costs that the action will probably produce for all persons affected.

Third, for each action, subtract the costs from the benefits to determine the net utility of each action.

Fourth, the action that produces the greatest sum total of utility must be chosen as the ethically appropriate course of action.

Three important mistakes to watch out while using utilitarianism

Right action is the one that produces the most utility – NOT for the person performing the action, but for all persons affected by the action

It does NOT require us to consider only the direct and immediate consequences of our actions, instead, consider both the immediate and all foreseeable future costs and benefits that each alternative will provide for each individual as well as any indirect effects

It does NOT say that an action is right as long as its own benefits outweigh its own costs. Right action is the one whose combined benefits and costs outweigh the combined benefits and costs of every other action the agent could carry out

Measurement Problems

How can the utilities different actions have for different people be measured and compared

There are certain kinds of benefits and costs that seem impossible to measure – value of health, life

It is unclear exactly what should count as a benefit and what should count as a cost – when we are dealing with controversial issues on which people place very different values

All benefits are measurable implies that all benefits can be traded with equivalents of each other

There are some noneconomic goods – life, freedom, health, love, equality, motherhood fatherhood – that we would not be willing to trade for any amount of enjoyment of economic goods

Criticisms of Utilitarianism

Critics say not all values can be measured.

Utilitarians respond that monetary or other commonsense measures can measure everything.

Critics say utilitarianism fails with rights and justice.

Utilitarians respond that rule-utilitarianism can deal with rights and justice.

The Concept of a Right

Right = an individual’s entitlement to something.

Legal right = An entitlement that derives from a legal system that permits or empowers a person to act in a specified way or that requires others to act in certain ways toward that person.

Moral (or human) rights = rights that all human beings everywhere possess to an equal extent simply by virtue of being human beings.

Legal rights confer entitlements only where the particular legal system is in force.

Moral rights confer entitlements to all persons regardless of their legal system.

Moral Rights

-- are rights that impose prohibitions or requirements on others and allow or empower individuals to pursue certain interests or avtivities

These moral rights identify activities or interests that the individual is:

empowered to pursue,

must be left free to pursue,

must be helped to pursue,

as the individual chooses.

Moral Rights

Can be violated even when “no one is hurt”.

Are correlated with duties others have toward the person with the right.

Provide individuals with autonomy and equality in the free pursuit of their interests.

Provide a basis for justifying one’s actions and for invoking the protection or aid of others.

Focus on securing the interests of the individual unlike utilitarian standards which focus on securing the aggregate utility of everyone in society.

Three Kinds of Moral Rights

Negative rights require others leave us alone.

Duties others have to not interfere in certain activities of the person who holds the right

Positive rights require others help us.

Duties of other agents to provide the holder of the right with whatever he or she needs to freely pursue his or her interests

Contractual or special rights require others keep their agreements.

Contractual Rights and Duties

Created by specific agreements and conferred only on the parties involved.

Require publicly accepted rules on what constitutes agreements and what obligations agreements impose.

Underlie the special rights and duties imposed by accepting a position or role in an institution or organization.

Require (1) the parties know what they are agreeing to, (2) no misrepresentation, (3) no duress or coercion,(4) no agreement to an immoral act.

Kant and Moral Rights

Individuals generally must be left equally free to pursue their interests.

Moral rights identify the specific interests individuals should be entitled to freely pursue.

An interest is important enough to raise to be a right if:

we would not be willing to have everyone deprived of the freedom to pursue that interest

the freedom to pursue that interest is needed to live as free and rational beings.

Kant’s Categorical Imperative (First Version)

We must act only on reasons we would be willing to have anyone in a similar situation act on.

Requires universalizability and reversibility.

Similar to questions:

“What if everyone did that?”

“How would you like it if someone did that to you?”

*focuses on a person’s interior motivations(reasons or motives)

*no moral worth – self-interest or pleasure

*has moral worth – doing right regardless of self interest and pleasure, motivated by a sense of duty you believe everyone should act in similar cases

Kant’s Categorical Imperative (Second Version)

Never use people only as a means to your ends, but always treat them as they freely and rationally consent to be treated and help them pursue their freely and rationally chosen ends.

Based on the idea that humans have a dignity that makes them different from mere objects.

It is, according to Kant, equivalent to the first formulation.

Kantian Rights

Kant’s theory implies that individuals must be left equally free (or helped) to pursue their interests while moral rights identify the specific interests individuals should be entitled to freely pursue (or be helped to pursue)

An interest is important enough to become a right if (1) we would not be willing to have everyone deprived of the freedom to pursue that interest, and (2) the freedom to pursue that interest is needed to live as free and rational beings.

Criticisms of Kant

Both versions of the categorical imperative are unclear.

Rights can conflict and Kant’s theory cannot resolve such conflicts.

Kant’s theory implies moral judgments that are mistaken.

Libertarian Philosophy

Freedom from human constraint is necessarily good and that all constraints imposed by others are necessarily evil except when needed to prevent the imposition of greater human constraints.

Robert Nozick’s Libertarian Philosophy:

the only moral right is the negative right to freedom

the right to freedom requires private property, freedom of contract, free markets, and the elimination of taxes to pay for social welfare programs

Types of Justice

Distributive Justice

requires the just distribution of benefits and burdens.

Retributive Justice

requires the just imposition of punishments and penalties.

Compensatory Justice

requires just compensation for wrongs or injuries.

Principles of Distributive Justice

Fundamental

distribute benefits and burdens equally to equals and unequally to unequals

Egalitarian

distribute equally to everyone

Capitalist

distribute according to contribution

Socialist

distribute according to need and ability

Libertarian

distribute by free choices

Rawls

distribute by equal liberty, equal opportunity, and needs of disadvantaged.

John Rawls

Principle of Equal Liberty: each person has an equal right to the most extensive basic liberties compatible with similar liberties for all

Social and economic inequalities are arranged so that they are both

a. To the greatest benefit of the least advantaged persons – difference principle

b. Attached to offices and positions open to all under conditions of fair equality of opportunity – principle of fair equality of opportunity

Original position – an imaginary meeting of rational self-interested persons who must choose the principles of justice by which their society will be governed

Veil of ignorance – the requirement that the persons in the original position must not know particulars about themselves which might bias their choices

Advantages of John Rawls

preserves te basic values of our moral beliefs – freedom, equality of opportunity, concern for disadvantaged

fits easily into the economic institutions of the Western world – doesn’t reject the market system, work incentive, inequalities. Instead, requires inequalities to work for the benefit of the least advantaged, requires equality of opportunity

incorporates both communitarian(difference principle) and individualistic(principle of equal liberty) strains

takes into account the criteria of need(difference pr), ability, effort, contribution(pr of fair eq of opportunity)

Moral justification of original position

Retributive and Compensatory Justice

Retributive Justice = fairness when blaming or punishing persons for doing wrong.

Compensatory Justice = fairness when restoring to a person what the person lost when he or she was wronged by someone else.

Ethic of Care

Ethics need not be impartial.

Emphasizes preserving and nurturing concrete valuable relationships.

We should care for those dependent on and related to us.

Because the self requires caring relationships with others, those relationships are valuable and should be nurtured.

Ethics of Care

Communitarian ethic – sees concrete communities and communal relationships as having a fundamental value that should be preserved and maintained

Caring about something vs. caring after someone vs. caring for someone

Not all relationships have value and so not all would generate the demands of care

Demands of caring are sometimes in conflict with the demand of justice

Carol Gilligan – women and men approach moral issues from two different perspectives

Objections to Care Approach in Ethics

An ethic of care can degenerate into favoritism.

Response: conflicting moral demands are an inherent characteristic of moral choices

An ethic of care can lead to “burnout”.

Response: adequate understanding of ethic of care will acknowledge the need of the caregiver to care for him or herself.

Integrating Utility, Rights, Justice and Caring

-- inquire systematically into the utility, rights, justice and caring issues that are raised by the situation

Does the action, as far as possible, maximize benefits and minimize harms?

Is the action consistent with the moral rights of those whom it will affect?

Will the action lead to a just distribution of benefits and burdens?

Does the action exhibit appropriate care for the well-being of those who are closely related to or dependent on us?

Generally, standards concerned with moral rights have greater weight than utilitarian and justice; standards of justice accorded greater weight than utilitarian considerations; standards of caring given greater weight than impartiality in situations that involve close relationships and privately owned resources

Theories of Moral Virtue

Aristotle

virtues are habits that enable a person to live according to reason by habitually choosing the mean between extremes in actions and emotions

Aquinas

virtues are habits that enable a person to live reasonably in this world and be united with God in the next

MacIntyre

virtues are dispositions that enable a person to achieve the good at which human “practices” aim

Pincoffs

virtues are dispositions we use when choosing between persons or potential future selves

Moral virtue

An acquired disposition to behave in certain ways that is valued as part of the character of a morally good human being and that is exhibited in the person’s habitual behavior.

A person has a moral virtue when he behaves with the reasons, desires and feelings that are characteristic of a morally good person (virtue of honesty)

A moral virtue must be acquired, and is praiseworthy because it is an achivement – its development requires effort.

Agent-based focus vs. action-based focus

Agent based focus looks at a person’s moral character – exhibiting virtue or vice

Virtues and Principles

A theory of virtue judges actions in terms of the dispositions that are associated with those actions, whereas an ethic of principles judges dispositions in terms of the actions associated with those dispositions

For an ethic of principles actions are primary, for an ethic of virtue dispositions are primary

Principles look at the moral life in terms of the actions that morality obligates us to perform, whereas the virtues look at the moral life in terms of the kind of person morality obligates us to be

Objections to Virtue Theories

It is inconsistent with psychology which showed that behavior is determined by the external situation, not moral character.

Response: moral character determines behavior in a person’s familiar environment.

Response: recent psychology shows behavior is determined by one’s moral identity which includes one’s virtues and vices.

Unconscious vs. Conscious Moral Decisions

Unconscious Moral Decisions

Comprise most of our moral decisions.

Made by the brain’s “X-system” using stored prototypes to automatically and unconsciously identify what it perceives and what it should do.

Conscious Moral Decisions

Is used in new, strange, or unusual situations for which the brain has no matching prototypes.

Consists of the conscious, logical but slow processes of the brain’s “C-system”.

Evaluates reasonableness of our intuitions, cultural beliefs, and the norms stored in our prototypes.

Legitimacy of Unconscious Moral DM

Casuistry – is a way of making moral decisions by relying on previous paradigm cases(a past situation where it was clear what the ethical response should be and the reasons why that was the ethical response – determine similarity)

Paradigms function like the prototypes the brain uses

Precedents – a legal case that was decided previously by a higher court or by the court that is deciding the current case

Cultural Influences and Intuition

are two other ways in which we acquire our convictions(prototypes) about what morality requires of us

Cultural influences – family, peer groups, stories, songs, media

Intuition – Although I don’t know why its wrong, I still know that it is wrong

Action principle – harm caused by action is morally worse than equivalent harm caused by an ommision

Intention principle – harm intended as a means to a goal is morally worse than equivalent harm foreseen as the side effect of a goal

Contact principle – using physical contact to cause harm to a victim is morally worse than causing equivalent harm to a victim without using physical contact