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Some Different Views

About Business Ethics

David LongCanterbury Christ Church University

IPW Helsinki Metropolia Business School, Finland May 13 – 17 2013

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Aims of this Lecture

The aims of this lecture are to introduce:

The difference between ethics and the law The concepts of Moral Absolutism and Moral

Relativism To contrast Consequentialism and Non-

Consequentialism To understand a range of different views about

business ethics.

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Good people do not need laws to tell them what to do

Bad people will always find a way round.

Ethics and the Law

Ethics

Law

grey area

Source: Crane & Matten (2010) p7

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Ethics and the Law

ALegal

Ethical

BNot Legal

Ethical

CLegal

Unethical

DNot legalUnethical

Ideal statetrue free market

Minimal compliancewith the law

Difficult decisionsethics influencenew laws

Worse casescenario

© Long & Taylor, 2007

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If Laws are what you MUST do ...

Ethics are what you OUGHT to do

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Moral Absolutism vs Moral Relativism

Moral AbsolutismUniversal notions of right and wrong associated (often) with religious and humanist schools of thought

Moral RelativismNotions of right and wrong depend on the circumstances (e.g. Culture, environment, pressure etc.)

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Consequentialism vs Non-Consequentialism

ConsequentialismThe result of an action determines what is right or wrong. The means (action taken) are justified by the ends achieved e.g. Utilitarianism

Non-ConsequentialismRight and wrong determined by motives, principles or rules, not outcomes. There is a primary need to respect persons e.g. Deontology/Kantianism

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Consequentialism:Utilitarianism

According to Utilitarianism, an action is According to Utilitarianism, an action is morally right if it results in the greatest morally right if it results in the greatest amount of good for the greatest number of amount of good for the greatest number of people affected by the actionpeople affected by the action

Maximise benefits to society and minimise harmsMaximise benefits to society and minimise harms Net balance of good consequences over badNet balance of good consequences over bad Assumes all people are equalAssumes all people are equal Not a perfect picture, but to bring the greatest Not a perfect picture, but to bring the greatest

pleasure to the greatest number of people, but pleasure to the greatest number of people, but not all the people.not all the people.

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Deontology/Kantianism

• Proposed by the Greek Philosopher Plato

• Idealists regard moral values as unchanging

• Immanuel Kant (German Philosopher 1724-1804) extended Plato’s ideas

– Categorical Imperatives of Consistency, Dignity & Universality

– Primary Respect for Persons.

Non-Consequentialism:

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Now some Post-Modernist Views about Business Ethics ...

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“Business is Part of Society”Richard De George

“Business is not just a matter of economic exchange … it involves human interactions, is basic to human society”

Moral judgements sometimes differ from business judgements

Good ethical practice pays in the long term

- Difficulties with moral pluralism in the world

- Wealth arguments … who deserves profit?

- The importance of moral education and the social impact of decisions.

(source: Chryssides & Kaler, 1993, original article 1978)

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“The Poker Game Analogy”Albert Carr

“The ethics of business are not those of society, but rather those of the poker game”

Pressure to deceive in business Two sets of ethical standards:

- Home- Office

Duty to obey the laws, not to make them Self-regulation versus legislation The ‘game’ of business.

(source: Chryssides & Kaler, 1993, original article HBR 1968)

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“The Social Responsibility of Business is to Increase its Profits”Milton Friedman

Only human beings have a moral responsibility for

their actions It is a manager’s responsibility to act solely in the

interests of shareholders Social issues and problems are the proper province

of the state rather than corporate managers.

(source: Chryssides & Kaler, 1993, original article NY Times 1970)

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“The Stakeholder Theory of the Modern Corporation”Edward Freeman

Managers have a fiduciary responsibility to

stakeholders of a business This responsibility goes wider than shareholders, to

include employees, customers, the local communities and governments

Each stakeholder has the right not to be treated as a ‘means to an end’.

(source: Chryssides & Kaler, 1993, pp 254-265)

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Different Views of Ethics:Summary of Learning

People hold different views about right and wrong, both within and between different national cultures

There appears to be no single right way to resolve ethical issues

Frameworks exist to explain different behaviour.

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And Finally, Ernest Hemingway Wrote About Ethics

I know only that ..I know only that ..

What is moral … you feel good afterWhat is moral … you feel good after

What is immoral … you feel bad afterWhat is immoral … you feel bad after

Ethics is what you do … hoping others Ethics is what you do … hoping others will feel good after!will feel good after!