***This is my section of a group project****
Each group will be designated by the instructor and will begin reviewing and discussing the
organizational process of developing the case project. The format and method for solving the case must
be based on the steps of Hosmer’s analytical process model (as outlined in Ethics of Management: A
Multidisciplinary Approach).
The central idea of the project is to apply the Hosmer analytical model—understand all moral standards,
recognize all moral impacts, define the complete moral problem, determine the economic outcomes,
consider the legal requirements, evaluate the ethical duties (this one is my section of the group
project), and propose a convincing moral solution—to the questions at the end of your case; only apply
those elements from the Hosmer model that are relevant. Each of the elements of the model that you
include must become a Level 1 heading in your paper. As this is a paper that requires research, it must
be written in third person.
I have attached the case we will be working on (Case 1-5 - Lead Paint on Children's Toys: Who
Was Responsible?). My section of the paper will be about Evaluate the Ethical Duties. I have also
attached the chapter of the textbook that talks about Ethical Duties.
Please write a detailed outline and the written part. The written part should be 1-1.5 pages long.
Please use 1-2 scholarly citations in APA format in the writing.
Case 1-5
Lead Paint on Children’s Toys: Who Was Responsible?
RC2 Corporation of Oak Brook, Illinois, holds the relatively new position of marketing specialist in the
children’s toy industry. The company neither develops nor manufacturers the toys that it sells. Instead,
it contracts with large media companies and publishing houses for the rights to use the characters
developed by others such as Big Bird, Winnie the Pooh, Bob the Builder, and Thomas the Tank Engine.
RC2 then designs wooden or stuffed toys based upon those characters; contracts with low-cost
manufacturers, primarily in China, to make them; ships the finished toys in low- cost container vessels to
the United States and Europe; and distributes them through low-cost retail chains such as Walmart,
Kmart, and Toys “R” Us for final sale to the parents. It is a low-cost and high-volume business model that
has been highly successful.
RC2 was a relatively small player in the toy market, but its revenues had more than doubled in the five
years before the U.S. Consumer Product Safety Commission announced the company had been ordered
to recall half a million Thomas and Friends wooden railway train sets that consisted of model engines,
cars, and track sections because their paint coatings contained lead.1
Parents, of course, were surprised and shocked. Lead is known to be highly toxic. When ingested by
young children it can cause learning disabilities, behavioral problems, and growth concerns. In older
children and adults, lead poisoning can lead to high blood pressure, kidney failure, and stomach distress.
The adverse effects of lead upon health had become known during the 1960s, and laws were passed in
the early 1970s throughout the United States and Western Europe to restrict lead amounts in all
consumer products, and over time these laws had been extended on a nearly global basis. By 2007, for
example, it was illegal in China to use lead- based paint on export goods. Despite the parental concerns
and the relevant laws, however, lead paint continued to be found on many children’s toys. Soon, news
came out that one of the bigger toy companies, Mattell, was also recalling nearly one million toys due to
the discovery of lead paint used by a contract manufacturer in China.2
What went wrong? It was easy to blame the Chinese toy manufacturing companies, and many people
did. They explained that lead paint creates brighter, shinier colors that appeal both to the children who
play with the toys and the parents who purchase them. Also, lead paint flows more evenly, so that it is
easier and less expensive to apply. And finally, lead paint is much cheaper; it is said to sell in China for a
third of the cost of paint that would meet global standards of protection.
The general conclusion of those on this side of “it’s their fault” argument was that the Chinese
manufacturers had deliberately disregarded both the standards in their purchase contracts and the laws
in their country in search of high profits. There were others, however, who disagreed, believing some of
the responsibility should be shared by American and European multinational companies that put too
much pressure on Chinese companies to supply cheap products in the interest of increasing profit
margins.3
Those who believed that the responsibility extended beyond the Chinese manufacturers, who
admittedly had applied the lead-based paint for reasons of appearance and profit, cited a recent change
in the competitive structure of the children’s toy industry. Traditionally, this industry had three
participants: small manufacturing companies who designed and made toys, regional wholesale firms
who distributed the toys, and local retail stores who sold the toys. These toys were almost always
generic; that is, they were of the “If you’ve seen one stuffed bear, cast truck, or wooden locomotive
you’ve seen them all” variety.
Similar to many other industries, however, the children’s toy industry began to consolidate in search of
the dual economies of scale and scope during the 1980s. This was at the same time that children’s
television programs such as Sesame Street began to dominate the networks with content that was both
intriguing to preschool children and acceptable to their parents. The right to market toys based upon
the characters popular- ized on these programs quickly was recognized as a huge competitive advantage
by the media companies, who held the rights to those characters, the manufacturers who wanted those
rights for their toys, and the retail chains who wanted the high volume sales that would result.
The manufacturers, that over this period had grown by accretion, were caught between large and well-
financed media companies that wanted high royalties and the equally large and well-financed retail
chains that wanted low prices. Numerous accounts have been published relating the experiences of
manufacturers and importers that had come with an appointment and a proposal to the headquarter
offices of one of the larger retail chains, had then been told that the chain purchasing department had
analyzed the costs of producing the items on that proposal in the expected volumes, and ended by
stating, “This is the price (as specific dollar figure) that you’re going to have to accept.”
There are far fewer anecdotal accounts of manufacturers and/or importers going similarly hat-in-hand
to the headquarter offices of the large media companies (generally in New York or Los Angeles, not in
Arkansas), but it can be assumed that they also encountered a similar “This is the price you’re going to
have to pay” rigidity. There was limited bargaining at either end of the value chain in the children’s toy
industry because both the media companies and retail chains, equally large and well-financed players,
held the pricing power.
The manufacturers, given those limits, quickly arranged for far less expensive production abroad and
turned themselves into marketing specialists. These changes in the competitive structure of the
preschool toy industry, from the traditional to the consolidated, are shown in the following graphic:
In the traditional structure of the preschool toy industry, it would seem clear who was responsible for
the use of lead-based paint upon the children’s toys, had such an event occurred. It would have been
the small manufacturing firms that designed and made the toys they sold to the regional wholesale
firms that, in turn, sold to the local retail stores that then sold to the public. The final price to the public
was the one that determined the overall demand, and the three participants had approximately equal
power to divide the profits.
In the consolidated structure, however, the responsibility for the lead paint on the children’s toys is not
so clear. Obviously, the foreign manufacturers were the ones that actually put the lead paint on the
children’s toys—but here the industry participants did not share equal size and power: the two on the
ends held very dominate positions. Without the consent of the national media companies, toys based
upon their popular television characters could not be manufactured and sold, and high royalty payments
were required to gain that consent. Similarly, without acceptance by the big-box chain stores, toys
based upon those characters could not have been sold in the volumes needed to pay the high royalties
that had been charged, and low unit costs were needed to obtain that acceptance.
Class Assignment
After an exceedingly harmful event occurs and the results become widely known, it is always easy to say
what should have been done to prevent that event from occurring. In this case, despite the legal
contracts that the marketing specialist firms, RC2 and Mattel, had with their Chinese suppliers that
clearly stated that no lead paint should ever be used, one fairly obvious preventive measure would have
been to test on a regular basis each shipment of wooden toys for lead in the paint. In the famous words
of President Ronald Reagan when speaking about an atomic weapons treaty his administration had
reached with the government of Russia, “Trust, but verify.”
1. Why, in your opinion, did the senior executives at RC2 and Mattel not setup a statistically reliable
sampling program to check for all of the obvious safety hazards that can appear on wooden toys for
young children: small parts that can be swallowed, sharp edges that could cut, or toxic chemicals that
might be present in the wood or have been added to the paint? Those marketing specialist firms had
already been forced, by recent changes in U.S. law, to inspect the operations of their Chinese suppliers
for unsafe working conditions and improper employment practices. Why did they not begin inspecting
those suppliers’ products when they arrived in the United States?
2. Who, in your opinion, should bear the costs of such an inspection program? Should it be the federal
government (to protect U.S. citizens), the marketing specialist firms (to protect their own interests), or
all of the members of the toys for young children value chain, from the national media companies to the
big box retailers (to protect their customers)? Remember, the last two participants named have strong
economic clout at each end of this value chain. How would you convince them to join in the effort?
3. Are there any good alternatives to an inspection program? Inspecting what someone else has already
done is totally inefficient in any economic sense—and it eventually led to inspection of the inspectors. It
would be far better to get it done right the first time. Getting it done right the first time should be the
primary task of management. Members of this class are, it is easy to assume, in a program on
management. How would you get it done right the first time?
4. Lastly, what exactly changed in the children’s toy industry that brought about this outcome in which
an unknown and unknowable number of very young children were badly hurt? So far as is known, after
lead paint had been found to be so harmful to the mental and physical development of children, there
had been no use of that paint on preschool toys until the consolidation occurred in the 1990s. Were the
managers in that new industry structure, both American and Chinese, simply less concerned about the
impact of their actions upon others, or was there something more basic going on? If so, what was the
more basic something, and how would you have dealt with it?
Chapter 4 Moral Analysis and Ethical Duties
We are concerned in this book with moral problems: the decisions and actions faced by managers in
which their firm’s financial performance (measured by the revenues, costs, and profits generated by the
firm) and the social performance (difficult to mea- sure, but represented by the overall well-being and
general satisfaction level of the population) are in conflict. These are the situations in which some
individuals and groups to whom the organization has some form of obligation—employees, customers,
suppliers, distributors, creditors, stockholders, local residents, national citizens, and global inhabitants—
are going to be hurt or harmed in ways outside their own control, while others are going to be benefited
or helped. These are also the situations in which some of those same individuals or groups are going to
see their rights ignored or per- haps diminished, while others will see their rights recognized and even
expanded. The question is how to find an equitable balance between financial performance and social
performance when faced with these conditions, and how to logically convince others to accept or
approve that balance.
One of the basic premises of this book is that this logical conviction of others is key for managers at all
levels of an organization that has encountered such a moral problem. It is key for the future of their
organizations, the future of their societies, and the future of their careers. Moral problems of this
“important for all” nature are becoming far more prevalent, due to the highly competitive nature of the
stressed global economy. Consequently, graduates of our business schools are going to have to know
how to effectively deal with the moral problems caused by that competition and that stress. The process
for effectively dealing with these problems under those conditions has been graphically portrayed in
each of the previous chapters, and is repeated in Figure 4.1 one last time for emphasis.
Within the diagram, there are three evaluative methods proposed to select the most equitable mix of
benefits distributed, harms allocated, rights recognized, and rights denied. We can’t avoid all of those
harms brought to other people, or all of those rights ignored for other people, but we can evaluate them
and find what we believe to be an equitable balance and then attempt to convince others that it is
indeed more equi- table than the alternatives. These evaluative methods consist of economic outcomes,
legal requirements, and ethical duties. All have an element of impartiality to counter the usual
assumptions of self-interest in management. Before moving on to the ethical duties, which will be the
subject of this chapter, let us briefly review the advantages and disadvantages of the first two, and the
sources of their impartiality, to illustrate the need for the third:
1. Economic outcomes, based upon impartial market choices. The rule here is that man- agers should
always use the least wanted and, therefore, the lowest cost resources owned by members of society to
produce the most wanted and, therefore, the highest price products sought by members of society
because this will automatically result in the greatest financial profits for the stockholders of the firm and
the greatest material satisfactions for the members of society. But, there are both practical and
theoretical problems with this approach; the most telling theoretical problem is that this “opti- mal
benefits for all” outcome will occur only if (a) all input factor and output product markets are truly
competitive, (b) all suppliers and all customers within those mar- kets are fully informed, and (c) all
external costs outside those markets are totally included. It certainly helps to know the economic
outcomes that come from a given decision or action, but we need something more to ensure that
competition, require that information, and compel that inclusion. That “something more” consists of the
legal requirements of the law, based upon participative social and political processes.
2. Legal requirements, based upon participative social and political processes. The belief here is that
managers should always obey the law, despite personal disagree- ments with some provisions of that
law, because law can be said to represent the collective moral standards of the members of our society.
Each member has a set of goals, norms, beliefs, and values that are primarily derived from his or her
religious and cultural traditions and his or her economic and social situations. Combined, these goals,
norms, beliefs, and values form his or her intuitive moral standards of behav- ior. These moral standards
of citizens are aggregated into the legal requirements of society through social and political processes
that move from informal groups to for- mal organizations to governmental institutions. Again, there are
both practical and theoretical problems with this approach. The most critical practical problem is that it
is difficult to write legal requirements with the precision and completeness that will cover all current
and future moral problems that may come before a court. The most telling theoretical one is that most
legal requirements do not combine the standards
derived from all cultural and religious traditions and all economic and social situa- tions evenly; some
are excluded. It certainly helps to know the legal requirements that apply to a given decision or action,
but once again something more is needed. The “something more” in this instance are the ethical duties
based upon universal principles.
Ethical duties based upon universal principles, and the application of those duties and principles in
moral analysis, is the topic of this chapter. What are ethical duties? Let us be very clear here. They are
duties you believe you owe to other people based upon your rational thought processes. No one can tell
you what you ethically owe to others. You have to decide on your own. But, there are some universal
principles that can help you to decide, and that you can then use to logically convince others to support
your proposed solution to a given moral problem.
What are universal principles? They are rules for decisions or actions that are (1) not limited to any
particular cultural or religious tradition or any specific economic or social situation, (2) are thought to
lead to the overall well-being and general satisfac- tion of the full society, and (3) have an easily
understood rationale why the application of that universal principle will lead to that beneficial result. Let
me give an example. This universal principle is from Aristotle, a well-known Greek philosopher who lived
382 to 324 BC. The rule he proposed was that to ensure an overall benefit to society, a person should be
open, honest, truthful, and proud of what he or she did. Why should this mix of personal characteristics
ensure benefits to society? Aristotle’s reasoning was that Greek society at this time was composed of
groups of citizens who varied in their types of activities and that the cooperation and coordination of
those groups was neces- sary to form a productive whole. If the members of each group knew what the
members of other groups were doing, with no intentional evasion or concealment, then everyone could
work together to achieve the benefits of unity. Why was pride important? This was the critical element
of the rationale: If members of one group were proud of what they were doing or planned to do, they
would be certain to inform others, probably even boast to others.
As an illustration of the use of this universal principle, let us go back once again to the first case in this
book, the one where health care insurance companies were pay- ing the health care consulting firms
who were advising small companies and public organizations on the selection of the “best” health care
policies for their employees. Those health care policies were complex and lengthy documents, and it
was difficult for managers at the small companies and public organizations to tell which policy would
provide the best coverage and care for any given group of employees with dif- ferent health care needs
When this practice of “pay to play” first became known, the executives at the health care insurance
companies and the representatives of the health care consulting firms—both those who made the
payments and those who received the payments—quickly made the standard proclamation: “We have
done nothing wrong.” But, according to Aristotle’s universal principle of personal virtue they certainly
had. If the payers and payees of those often substantial amounts were truly proud of what they were
doing, they would been open, honest, and truthful about the practice, informing everyone they knew,
and they would have been so proud that they would wanted to see this practice broadly reported in
both local and national newspapers.
Aristotle’s proposed principle was truly universal in that it could be applied to all and be understood by
all. Those two elements—applicable to all and understandable by all—are fundamental to moral
philosophy. They are the two basic points to remember as you begin the study of this often infuriating
discipline.
Definition of Moral Philosophy
The universal principles that will be described in this chapter have been derived over the centuries from
the study of moral philosophy. What is moral philosophy? General philosophy is the study of rational
thought and conduct; that is, how people descrip- tively do think about issues that are important to
them and to their society. Moral phi- losophy is the study of proper thought and conduct; that is, how
people normatively should think about issues that are important to themselves and to our society.
Moral philosophers have been looking at these issues of normative thought and conduct for more than
2,500 years, since the time of Protogoras who lived from 490 to 420 BC. They have attempted to
establish a logical thought process, based upon an incontrovertible first principle, that would absolutely
determine whether a given decision or action was right or wrong, just or unjust, fair or unfair.
They have not been successful in that there is no agreement on which of the proposed first principles is
best, which one comes closest to absolutely determining the rightness or wrongness of a given decision
or action. But, you will find that many of the pro- posed first principles from moral philosophy will help
you to more clearly understand and more easily apply the earlier constructs of economic outcomes and
legal require- ments because they will help you to more accurately estimate the degree of rightness or
wrongness of a given decision or action.
Let me provide an example here. One of the sales representatives of a health care consulting firm was
reported to have received cash payments totaling $517,138 over a two-year period from one of the
health care insurance companies. I think that was wrong because it was (1) not openly and proudly
acknowledged and (2) not economi- cally efficient in that it raised the costs of health care for the
employees of the small companies and public organization who purchased those policies. You may or
may not agree. But, let us say that the health care insurance company sent that consultant a case of
quite elegant wine and a handwritten thank-you note at the end of the year instead of the cash
payments. Was that right in a moral sense? In my view, maybe—if openly acknowledged. Again, you
may agree or disagree.
The point that I am trying to make here is that all moral problems consist of situa- tions in which there
are benefits for some and harms for others, and in which there are rights recognized for some and
denied for others. Hopefully, that idea is clear because that statement has been repeated numerous
times in this book. But, all moral solu- tions involve compromises on the nature and extent of those
benefits and harms, and of those rights recognized and rights denied. No one likes compromises. There
should be a right, just, and fair way of doing things for all situations, but there just plain isn’t. We have
to make do with what we have: economic outcomes, legal requirements, and ethical duties.
Moral philosophy provides additional help in making those compromises through the universal
principles that moral philosophers have developed over the centuries to define our ethical duties to
each other, but that help is not as extensive or as exact as one might wish. Here, however, is a summary
of those universal principles that, once again, have to be applicable to all and understandable by all to
be considered as “universal.” There are in my mind eight of these, one of which overlaps markedly with
the previously discussed concept of legal requirements and another one may not overlap but certainly
supports the earlier described idea of economic outcomes. All eight are explained below in the historical
sequence of their development:
The Principle of Self-Interests (Protagoras, 490–420 BC, and Democritus, 460–370 BC)
The issue addressed by these early Greek philosophers was the question: “What con- stitutes a good life,
what should a man (women were not considered important enough in Athenian society to be included
in their political discussion which normally took place in a public forum) strive for?” Only fragments of
their original writings remain, but these twin questions were clearly predominant. The most famous
surviving quota- tion of Protagoras was “Man is the measure of all things.” This referred to man, not
men, and the usual interpretation is that the only measure that matters is the life of the individual, and
the means by which that life can be made to be satisfying and fulfilling. The most famous surviving
quotation of Democritus (though the accreditation and even accuracy of this statement has been
questioned for years) is “Better a good life than a pleasant dinner,” and the common interpretation here
is that it is only the long-term goal of a good life, to be evaluated just prior to death, that matters.
Both writers agreed that the evaluative goals for that good life had to be a combination of comfortable
conditions and cheerful companions and that such untroubled happiness could be achieved only by a
moderation in personal lifestyles and an acceptance of pub- lic standards. Both were thought to be
necessary in order to avoid irritating or provoking others. Justice was thus seen as a contract in which
each citizen agreed not to harm other citizens, either by acting adversely to them or by creating envy
among them, and it was pro- posed that all parties would accept this contract because it was in
everyone’s long-term self interests to live in a peaceful, orderly society with little probability of
retribution and harm.
Here we find that 2,500 years ago two very early moral philosophers were discuss- ing a universal
principle that would tie good personal conduct to the goal of a stable, cooperative society, and they
were using the long-term consequences of that conduct as the basis for this principle. Hopefully, it is
now clearer what was meant by the earlier statement in this chapter that ethical principles have to be
clearly applicable to all, and logically understandable by all. In my view, this ancient principle clearly
would have been seen as applicable to every Athenian citizen attending one of the public forums within
that city, and also understandable by everyone there. It can be expressed in mod- ern terms as “Never
take any decision or action that is not in the long-term, or enlight- ened, self-interests of yourself, and of
the organization to which you belong, in order to avoid the possibility of future retribution and harm
from others.” Principle of Personal Virtues (Socrates, 470–399 BC,
Plato, 427–347 BC, and Aristotle, 384–322 BC)
The concept of moderated or enlightened self-interest was not acceptable to this remarkable series of
Greek philosophers. The problem, Socrates noted early in his series of public discussions or forum
teachings, was that a person could act with subter- fuge or deceit and thus achieve a position of such
wealth and power that he would have no fear of future retribution or harm. Socrates started the
sequence of analysis to which all three moral philosophers contributed, and that ended with the
principle that every- one should act in ways that conveyed a sense of honor, pride, and self-worth. We
don’t necessarily have to be kind and considerate to others, they concluded. We don’t even have to be
concerned about the reactions of others. We do, however, have to be honest, truthful, courageous,
temperate, and high-minded in our own actions. Why? Because the goal of human existence is the
active, rational pursuit of excellence, and excellence requires those personal virtues.
The “rational pursuit of excellence”—a goal also often termed “knowledge of the good”—is the basis of
classic Greek philosophy. If you commit those two phrases firmly to your memory, all of the rest of the
teachings of Socrates, Plato, and Aristotle will be crystal clear to you.
Two thousand four hundred years ago in Athens, these unusually perspicacious men began to address
questions of ethical duties and moral justice and laid the foundation for the Western approach to both
politics (rules for the conduct of society) and ethics (rules for the conduct of people). This sort of
thinking about duties and justice, about politics and ethics, had never before been present in the ancient
world. Why in Athens, and why at this time?
The reason was an unusual combination of prosperity and peace. Greece is a moun- tainous peninsula,
with limited agricultural land suitable for growing grain, but the cli- mate is warm and mild, ideal for
olives, grapes, and livestock. There were easy “along the coast” sea routes to Egypt, then the granary of
the Eastern Mediterranean. Egypt had surplus wheat and barley for export, but it needed olive oil and
wine for home con- sumption. A very prosperous trade developed between the two regions. The defeat
of the invading Persian army at Marathon in 490 BC brought a period of peace in Greece that lasted for
140 years, a time that came to be known as the “Golden Age” of Athens.
Conflicts among the nobles (the ex-warriors), the merchants (the ex-sailors), and the citizens (the
current residents) brought about an interest in government within Athens. An interest in government
brought about schools, first to teach rhetoric (how to talk to assembled groups of citizens) and then
logic (how to convince members of those assem- bled groups). An interest in logic led back to the
question, “What is the good life?”
Socrates addressed this question, “What is the good life,” for both individuals and societies, which, at
the time, meant advanced city-states such as Athens. Socrates wrote nothing, yet Plato recorded
Socrates’ discussions with other Athenians in the form of a set of dialogues soon after the death of the
older man, and these can be assumed to be his thoughts if not his words.
The goal of Socrates was to develop the “first rule for a successful life.” Successful then meant happy; it
would probably now be translated as contented and prosperous. There could be no happiness in the
pursuit of pleasure, Socrates continued, or in the
ownership of property, unless you knew how to use each one of those well. Knowledge of the “good”
was thus the goal of life. But knowledge of this good came from both the goodness/badness of the
character and the wisdom/foolishness of the intellect. It was necessary to develop both so that
everyone (nobles, merchants, and citizens alike) would recognize proposals that were good both for
themselves (ethics) and for their society (politics). Ethics and politics were synonymous in Greek
thinking; you could not have one without the other.
Plato succeeded Socrates as the major public thinker following the death of the older man in 399 BC. He
focused more on politics, on the need to have a good society in order to have a good life. He wrote The
Republic, in which he began discussing the concept of justice—what it was and how it could be
achieved. Athens at the time, like the other city-states on the Greek peninsula, was divided into
statesmen (the leaders of the citi- zens; they were men of thought), nobles (the warriors, who were men
of courage), and merchants (the sailors, who were men of property). You needed all three for a good
(again, contented and prosperous) society. “Justice” was defined as the harmonious union of all three
groups of citizens, with each group excelling at what they did best, and with no one group interfering
with the activities of any of the other groups.
Aristotle, the third in this remarkable sequence, focused on ethics, on the need to have good men in
order to form a good society. The goal of a society, he wrote, had to be happiness for all of the citizens.
But what is happiness? Not pleasure, wealth, or fame. People are reasoning animals, Aristotle wrote,
and thus happiness has to be associated with reason. Given that the active use of reason leads to
excellence, then happiness has to be the “pursuit of excellence” (again, remember this phrase; it is basic
to the understanding of Aristotle’s coming conclusion, and it is not a bad rule for mod- ern life).
Excellence, he continued, is focused in the character of a man and can be found on a number of
different dimensions, such as openness, honesty, truthfulness, temperance (moderation), friendliness,
courage, modesty, and pride. Consequently, if everyone would strive for excellence on those
dimensions, then all of the elements in the diverse Athenian society—the statesmen, warriors, and
merchants, each with very different goals, activities, and interests—would work together well for the
benefit of all.
This ethical principle—that “we should be open, honest, truthful, moderate, and proud of what we do so
that we work together well for the benefit of all”—has fre- quently been translated into modern terms:
“Never take any decision or action that is not open, honest, and truthful, and that you would not feel
proud (here the terms are very modern) to have reported on the front pages of national newspapers or
the evening portions of a national news broadcasts.”
The Principle of Religious Injunctions (early religious writers of numerous faiths)
The problem with the “be open, honest, truthful, and proud” rule, which clearly can be applied to all and
is understandable by all, is that these personal virtues are not enough. There are lots of people who can
be open, honest, truthful, and proud of decisions and actions that most of the rest of us would view as
exploitive, mean, and self-centered. Something more was felt to be needed, and for many of the early
reli- gious writers that something more came from the inherent and established concepts of
community (brotherhood and sisterhood) and service (kindness, compassion and help) that underlie
almost all faiths.
It is always awkward to write of religious faiths, and of their injunctions to act with kindness and
compassion in service to others, in a textbook because, obviously, faiths do differ, and unfortunately in
the past and continuing into the present, those differ- ences have been far more emphasized than the
similarities. But, there are similarities. Let me give an example. Variations of the well-known “Do unto
others as you would have others do unto you” Golden Rule of Christianity can be found in most of the
other religions of the world, and many of these predate by a considerable extent the beginning of the
Christian era:
Buddhism (religious creed and ethical system of central and eastern Asia, founded about 460 BC). “Harm
not others with that which pains yourself.”
Confucianism (ethical system added to the existing Chinese religious creed about 510 BC). “Loving
kindness is the one maxim which ought to be acted upon throughout one’s life.”
Hinduism (traditional religious creed and social system of the Indian subcontinent). “This is the sum of
duty: do nothing to others which if done to you would cause you pain.”
Islam (religious creed of western and southeastern Asia, founded about AD 630). “Not one of you is a
believer until you wish to everyone what you love for yourself.”
Judaism. “What is hurtful to yourself, do not do to others. That is the whole of the Torah, and the
remainder is but commentary. Go and learn it.”
Taoism (religious creed and philosophic system of northern China, founded about 550 BC). “Regard your
neighbor’s gain as your gain, and regard your neighbor’s loss as your loss.”
The basic teachings of most religions stress a sense of community among all holders of a given faith, a
belief in a common goal for that community, and a duty of kindness, compassion, and help to people,
even to those outside the faith. The modern version of this ethical principle, once more applicable to all
and understandable by all, can be expressed as “Never take any action that is not kind and
compassionate toward others, and that does not forward a sense of true community, a belief that all of
us should work jointly toward a common goal.”
Principle of Government Requirements (Hobbes, 1588–1679, and Locke, 1632–1704)
Kindness, compassion, and a sense of everyone working jointly toward a common goal would be ideal if
everyone would be kind, compassionate, and oriented toward the well-being of the full community, but
everyone won’t be. Hobbes, as was explained earlier in Chapter 3 and consequently will be summarized
only briefly here, returned to the early “people truly are self-centered” assumptions of the pre-Socratic
philosophers, before the “moderated” and “long-term” assumptions were added.
Hobbes proposed that people were essentially equal in strength of body and mind, and that this equality
of ability lead to an equality of hope in the achievement of ends, and that in turn led to a constant
struggle for gain, for safety, and for reputation. This constant struggle, he claimed, could easily become
a war where “every man is enemy to every man,” and the resulting chaos would probably result in a
decline in science, trade and production with the final outcome: “the life of man: solitary, poor, nasty,
brutish, and short.”
To avoid that outcome, Hobbes proposed that men and women living in a state of nature, a free
association of individuals before any corrupting political and economics institutions had been invented,
would agree to surrender their most crucial right—the right to life—to a powerful central authority that
would then guarantee the peace and enforce the law. Locke added the rights to liberty and property to
make a trio of the rights considered most crucial.
Together these two writers developed the idea of the Social Contract. Here the ques- tion was what
would free people—deciding among themselves to advance their indi- vidual self-interests but ignorant
of exactly what those self-interests really were due to their early “state of nature” condition before any
property had been divided or wealth had been created—choose as their most basic ethical principle,
applicable to all and understandable by all. Hobbes and Locke both concluded that that basic ethical
princi- ple would be “obey the law to avoid chaos and loss.” The modern version of this “obey the law”
rule can be expressed as “Never take any action that violates the law because the law represents the
agreed-up minimal moral standards of our full society, and those minimal moral standards must be
observed by all to maintain the peace among all and advance the well-being of all.”
The Principle of Utilitarian Benefits (Bentham, 1747–1832, and Mill, 1806–1873)
Bentham and Mill jointly made the argument that, clearly, obedience to the law was a basic requirement
of a productive and pleasant society, but that specific laws could be either manipulated or misdirected
for individual gain, particularly by the powerful central authority proposed by Hobbes and Locke. There
had to be a means of evaluat- ing which laws were good and consequently should be obeyed, and which
were not and consequently should be replaced.
Bentham proposed that all individuals are governed by feelings of pleasure and pain, and they naturally
act to increase the pleasure and decrease the pain. This net effect he termed “utility”: that phrase is still
in use, more than 200 years later, to refer to indi- vidual preferences in economic theory. Utility, he
continued, could be defined as the benefit, advantage, or happiness of the party involved. That party
could be an individual or, more frequently, a collection of individuals freely associating in an ongoing
com- munity, and then Bentham concluded that laws could be considered to be good, and therefore
should be obeyed, and not replaced if they advanced the utility or the happi- ness of all of the persons
freely associated within that full community.
Mill later formalized this concept. He started by saying that there had been little progress in the search
for the true criteria that would separate right from wrong in human
activities and that there had to be one fundamental principle to accomplish this; there could not be
multiple competing principles. The fundamental principle he proposed was the creation of the greatest
net good for the full society. This was later changed by an English clergyman to the familiar “greatest
good for the greatest number,” but Mill objected, saying the measure should be the net effect upon the
full society, not upon a fortunate portion that society. The modern version of this ethical principle can
be expressed as “Never take any action that does not result in greater net benefits than harms for the
full society of which you are a part.”
The Principle of Universal Duties (Kant, 1724–1804)
There are two basic problems with the principle of greater net benefits than harms for the full society as
a gauge of what is right, just, and fair for that society. The first focuses on distribution. Every member of
the community does not receive an absolutely equal share of the social benefits and social harms. Some
may garner most of the ben- efits, while others may suffer almost all of the harms. The second problem
concerns measurement. The benefits usually consist of desired goods and useful services; both—
particularly in a market economy—can easily be expressed in financial equivalents. Harms, however,
often involve the life and health of individuals or the usefulness and attractiveness of their surroundings;
both are difficult to convert to a monetary scale.
Kant knew of these problems, but he did not refer to them in his writing. Kant was also focused on the
search for an absolute principle that would logically separate right from wrong in all human activities (as
had been Mill), but he wanted to base his reasoning on duties rather than outcomes. He started by
proposing that nothing in this world could be considered to be an absolute good, except for a good will.
This “good will” is usually translated as a person’s positive intent, beneficial desire, or recognized duty to
help others. Obviously, a person’s true positive intent, beneficial desire, or recognized duty toward
others cannot be directly observed because it is both internal and private.
How then can other people tell whether a particular individual’s will is indeed good and reflects a true
sense of obligations toward others? Kant proposed that a will could be considered to be good only if the
individual involved was willing to have his or her intent made into a universal law: everyone in the same
situation should then be free or even encouraged to act in exactly the same way. This was the first
formulation of the universal duty, or Categorical Imperative.
The second formulation of the Categorical Imperative is derived from the first: Every person should
always treat others as ends, worthy of dignity and respect, and never as means to his or her own ends.
Kant maintained that this second formation had exactly the same meaning as the first, for clearly all
individuals would be willing to have everyone else in the world act in exactly this categorically
imperative way toward themselves, and treat them with dignity and respect. The modern version of this
ethical principle then is “Never take any action that you would not be willing to see others, faced with
the same or a closely similar situation, also be free or even encouraged to take, and never take any
action that does not treat all others as ends, worthy of dignity and respect, and never as means to your
own ends.” The Principle of Distributive Justice
(Rawls, 1921–2002)
Many critics have noted that the problem with Kant’s first formulation of the uni- versal duty principle—
which states that none of us should ever take any action that we would not be willing to see others free
or even encouraged to take in roughly simi- lar situations—is that it provides no means for the
comparison or relative ranking of alternatives. In Kant’s view, a decision or action was either morally
right or morally wrong, with no possible gradations between those two extremes. The problem with his
second formulation—which states that we should always treat other people as ends, worthy of dignity
and respect, and never as means to our own ends—is that it is hard not to treat other people as means
to our ends. Adam Smith explained in The Wealth of Nations (1776), while Kant was still active, that
storekeepers were the means to pro- curing our dinners, customers were the means to earning our
livelihoods, and workers were the means to staffing our factories. Almost exactly 200 years later, John
Rawls thought we needed something more precise than a rule to treat everyone with dignity and
respect, and he proposed an ethical principle that he believed to be both universal and applicable
because it was based upon the difficult-to-deny benefits of economic efficiency.
Rawls believed that society was an association of free individuals, and that coopera- tion between those
individuals was needed to generate social benefits in the form of marketable goods and services, but
that these difficult-to-deny benefits were unjustly distributed because some people were excluded from
the twin markets for output goods and services and for input material, capital, and labor. These
unfortunate, left-out peo- ple owned no material or capital and had so few inherent abilities or
educated skills that they were unable to find remunerative employment in the labor markets, and thus
had only minimal wages to satisfy their needs in the product markets. Rawls believe that those
distributive inequalities were not adequately addressed by the social and political processes that were
an accepted portion of the complete economic theory.
Rawls suggested that under the conditions of the Social Contract, or—as he termed this same concept—
the Veil of Ignorance (where people did not know what abilities, skills, or resources they might have, and
thus their potential for earnings to satisfy their needs), they would make a single and simple agreement.
This single and simple agree- ment would be that inequalities in the distribution of the material benefits
of social cooperation would be permitted only as long as it was reasonable to assume that those
inequalities would work out to the benefit of all. That is, it would be perfectly all right to pay scientists
more than laborers because it would be reasonable to assume that the additional pay would attract
more scientists who would invent better products that would make life more rewarding for everyone,
including the laborers.
Rawls understood that it would be impossible to compute the impacts of all the inequalities in benefit
distribution upon the life prospects of all of the people within society, and so he suggested that instead
we could compute the impact upon the “least among us,” those with the least education, the least
income, and the least skills and abilities—and consequently the ones most likely to be excluded from the
normal distri- bution methods, whether based upon market forces or social/political processes.
The rule he suggested was that that people who had been excluded from these nor- mal distribution
methods had to be benefited in some way, however slight, but should never, under any circumstances,
be harmed. This ethical principle, clearly applicable to all and understandable by all, can then be
expressed as “Never take any action that harms the least among us, those with least income, education,
wealth, competence, influence, or power.”
The Principle of Contributive Liberty (Nozick, 1938–2002)
Robert Nozick agreed with John Rawls that society was an association of free individu- als and that
cooperation between those individuals was needed to generate social benefits in the form of
marketable goods and services, but he argued that this cooperation came about as the result of the free
exchanges of those goods and services to satisfy individual desires and that any exchange that was
voluntary had to be just and regarded as proper.
The example he proposed of these free exchanges involved Wilt Chamberlain, a famous basketball
player of the era. You could, he explained, set up whatever original set of holding of property and
money you believed to be just and proper among all members of society, but if those same people were
willing to pay to see Wilt Chamber- lain play basketball, then, at the end of a given period of time, those
holdings would be different, and it would be hard to argue that these new holdings were unjust and
improper because all of the exchanges had been voluntary. If all voluntary exchanges were regarded as
just and proper, then Rawls’ rule from distributive justice that income inequalities had to work out for
the benefit of everyone, and particularly for the benefit of those who were least able to look after their
own self-interests due to a lack of educa- tion, income, or position, was clearly wrong.
Nozick proposed the dual rules that no one should interfere with the voluntary exchanges of other
persons, and further that no one should interfere with the self- development efforts of those other
persons, so that everyone could arrange their own voluntary exchanges to their own best advantage.
Liberty, the right to develop skills, was more important than justice, the right to receive benefits,
according to Nozick, because self-development led to greater personal abilities and consequently to
greater social benefits. The ethical principle he proposed, once more applicable to all and
understandable by all, was “Never take any action that interferes with the rights of others to develop
and improve their skills and abilities because this interference would deny the rights of all of us, not just
the least among us, to pursue our own self-interests through our own voluntary exchanges.”
Conclusions on the Principles of Normative Philosophy
There are eight major ethical systems of belief, as summarized in Figure 4.2. They do not outwardly
conflict with each other. An action such as lying that is considered wrong in one ethical system will
generally be considered wrong in all others, but these ethical systems cannot be reconciled into a single,
logically consistent whole.
FIGURE
4.2
Summary
of
the
Principles
and
Problems
in
the
Major
Ethical
Systems
Self-Interests
Personal
Virtues
Religious
Injunctions
Government
Requirements
Utilitarian
Benefits
Universal
Duties
Statement
of
the
Principle
Never
take
any
decision
‘of
action
that
is
not
in
the
long-term,
enlightened
self-
interests
of
yourself
and
of
the
organization
to
which
you
belong,
due
to
the
probability
of
retaliation
by
those
who
feel
harmed.
Never
take
any
decision
or
action
that
is
not
open,
honest,
and
truthful,
and one
that
you
‘would
feel
proud
to see
widely
reported
on
the
front
pages
of
national
newspapers
and
in
the
evening
broadcasts
of
national
news
programs.
Never
take
any
decision
or
action
that
is
not
kind
and
‘compassionate
toward
others,
and
that
does
not
build
a
sense
of
community,
of
everyone
working
jointly
towards
‘common
goal.
Never
take
any
decision
or
action
that
violates
the
law
because
the law
represents
the
minimal
moral
standards
of
the
full
society.
Never
take
any
decision
or
action
that
does
not
generate
<reater
benefits
than
harms
for
the
society
of
which
you
are a
part.
Never
take
any
decision
or
action
that
you
would
not
be
willing
to
see
others,
faced
with
the
same
or
a
closely
similar
situation,
be
free
and
‘even
encouraged
to
take.
Problem
with the
Principle
‘Some
people
will
go
ahead
with
short-term
actions
that
do
harm
to others
in
the
belief
that
they
can
achieve
a
position
of
such
wealth
and
power
that
they
can
ignore the
possibility
of future
retaliation.
Some
people can
be
open,
honest,
and
truthful
and
even
fee!
pride
in
decisions
and
actions
that
most
of
rest
of
us
would
view
as
exploitive,
self-
centered,
and
mean.
Kindness,
compassion,
and
a
sense
of
community,
with
everyone
working
toward
a
‘common
goal,
would
be
ideal
if
everyone
shared
those
traits.
Everyone
doesn’t.
We
need
something
stronger
to
regulate
behavior.
The
social
and
political
processes
that
formulate
the
law
tend
to
be
siow
to
respond
to
new
problems,
and
often
fail
to include
the
views
of
all
groups
and
organizations.
Itis
difficult
to
measure
many
of
the
harms,
which
often
involve
issues
of
life
and
health,
and
the
distribution
of
the
benefits
and
harms
may
bbe
skewed,
with
the
benefits
going
to
one
group,
and
the
harms
to
another.
The
principle,
while
truly
universal,
provides
no
means
of
‘comparison
or
relative
ranking
of
alternatives.
To
make
a
reasoned
choice,
we
need
that
ranking
(continued)
Each ethical system of belief, and its associated universal principle that is applicable to everyone and
understandable by everyone, expresses a portion of the truth. Each sys- tem has adherents and
opponents. And each, it is important to admit, is incomplete or inadequate as a means of judging the
absolute primacy of the different moral solutions that may be proposed to a specific moral problem.
What do we do then, when we first encounter such a specific moral problem? The argument of this book
is that we first define the problem in the familiar-by-now terms of who has been benefited, who has
been harmed, whose rights have been recognized, and whose rights have been ignored; get some
agreement on that definition as reason- ably inclusive and accurate; and then apply the three evaluative
methods in sequence:
1. Economic outcomes. Which alternative under discussion offers the best economic outcomes, given
the presence of fully competitive input resource and output prod- uct markets, fully informed resources
suppliers and product customers, and fully included external costs?
2. Legal requirements. Given that some markets are not totally competitive, many suppliers and
customers are not totally informed, and most external costs are not totally included, which alternative
most fully complies with the law regarding those conditions?
3. Ethical duties. Given that the laws regarding the degree or extent of market competi- tion,
supplier/customer information, and cost inclusion may not be totally clear or totally current, which
alternative under discussion most fully meets the eight univer- sal principles?
All moral solutions are a compromise. But the compromise has to be understood by all and accepted by
most. If the group of moral philosophers who have been cited in this chapter are right that society
consists of individuals in a free association, each of whom must cooperate with others to contribute to
the well-being of all, then it is the conclusion of this chapter that you should decide if it is your function
as a manager to provide a moral solution that continues that association, ensures that cooperation, and
provides that contribution.
Running Header: EVALUATION OF ETHICAL DUTIES 1
Evaluation of Ethical Duties
Name
Institution
Running Header: EVALUATION OF ETHICAL DUTIES 2
Evaluation of Ethical Duties
Ethical duties are the laws that govern the running of businesses in the market. They
ensure that these firms do not exploit the end consumers by taking too much from them, as
well as providing them with goods and services of beneficial effect without a harmful outcome.
The legal requirements are also set to create a competitive environment to allow everyone the
chance to thrive (Christians et al, 2016). In the case of RC2 Corporation, which is known for
producing children toys painted with lead paint. Paint made of lead is very toxic and should not
be used at all. The presence of lead in these toys is an ethical issue in a business environment
and this paper; we will evaluate and find which market player is responsible for the
misconduct.
The key player in the presence of lead in the paint used in the children toy is the foreign
American and European countries, who put much pressure on the Chinese manufacturing
companies to make toys. Every player in the market is up to making a profit, only if it is a non-
profit making firm (Hausman, McPherson & Satz, 2016). Therefore, the Chinese companies
want to make a profit as well. Given all the resources, these companies can make any toy
design, free of any toxic substance. However, the American and European companies are up to
making too many profits. Analyzing their sales line, they acquire these toys in China at a low
price, then use cheap shipment method. When the goods reach America, they still prefer
cheaper distribution lines. This shows how little the companies do not want to spend, however
when it comes to sales; they make a tremendous margin. It is up to these firms to change their
mind to invest in the toy production. When they provide adequate resources to China
companies, good quality toys will be produced that are lead-free. The Chinese companies only
Running Header: EVALUATION OF ETHICAL DUTIES 3
use lead paint since the funds allocated to them are low, so they use the resources that allow
the budget.
In as much as the Chinese toy manufacturing companies are to blame for toys with lead
paint, the cause is the American and European countries ordering the goods. When they
allocate enough funds to purchase lead-free toys, then they will get the products suitable for
their consumers.
Running Header: EVALUATION OF ETHICAL DUTIES 4
Reference
Christians, C. G., Richardson, K. B., Fackler, M., Kreshel, P., & Woods, R. H. (2015). Media
Ethics: Cases and Moral Reasoning, CourseSmart eTextbook. Routledge.
Hausman, D., McPherson, M., & Satz, D. (2016). Economic analysis, moral philosophy, and
public policy. Cambridge University Press.
