Business Ethics Fundamentals

THEORIES IN ETHICSPresented By:Somya (13105001)Khushbu(13105021)1

Lets see an example.2The Reluctant Donor Case: Suppose that you are famous transplant surgeon, and that your transplants always work. You have five patients, each of whom needs a transplant. One needs a heart, one a brain, two need one lung each, and one needs a liver. You have a patient named Mr. Kumar who has come in today to find out the results from some lab work. You know from the results of the lab work that Mr. Kumar would be a perfect donor for each of your five other patients, and you know that there are no other available donors. So you ask Mr. Kumar if he would be willing to be cut up and have his organs distributed. He declines your kind offer. But you then realize that you could cut Mr. Kumar up without his permission during some minor surgery he has already consented to. Is it permissible for you do so?Business Ethics: What Does It Really Mean?DefinitionsEthics involves a discipline that examines good or bad practices within the context of a moral dutyMoral conduct is behavior that is right or wrongBusiness ethics include practices and behaviors that are good or bad3Business Ethics: What Does It Really Mean?Two Key Branches of EthicsDescriptive ethics involves describing, characterizing and studying moralityWhat isNormative ethics involves supplying and justifying moral systemsWhat should be4Sources of Ethical Norms

Fellow WorkersFamilyFriendsThe LawRegions of CountryProfessionEmployerSociety at LargeReligious BeliefsThe IndividualConscience5Ethics and the LawLaw often represents an ethical minimumEthics often represents a standard that exceeds the legal minimumEthicsLawFrequent Overlap6Making Ethical Judgments

Behavior or act that has been committedPrevailing norms of acceptabilityValue judgments and perceptions of the observercompared with73 Models of Management EthicsThree Types Of Management EthicsMoralAmoralImmoral8Three Models of Management Morality and Emphasis on CSR

9Developing Moral JudgmentExternal Sources of a Managers ValuesReligious valuesPhilosophical valuesCultural valuesLegal valuesProfessional values

10Developing Moral JudgmentInternal Sources of a Managers ValuesRespect for the authority structureLoyaltyConformityPerformanceResults11Can Business Ethics Be Taught And Trained?Ethic courses should not:Advocate a set of rules from a single perspective Not offer only one best solution to specific ethical problemsNot promise superior or absolute ways of thinking and behaving in situations12Can Business Ethics Be Taught And Trained?Scholars argue that ethical training can add value to the moral environment of a firm and to relationships in the workplace by:Finding a match between employers and employees valuesHandling an unethical directiveCoping with a performance system that encourages unethical means13Ethics-Moral DisengagementSocial Learning TheoryMoral reasoning translates to moral action through self regulatory processesYou do things that bring you self-worthYou avoid things that avoid self censureYou have to disengage from your normal internal self sanctions to commit unethical or deviant acts14Theories of EthicsFour major theories of ethics in the Western worldUtilitarianism: net benefitsRights: entitlementJustice: fairnessEgoism: self-interest15How does this work? Inclination Intended ResultWill Duty Actual ResultWhat makes an act right or wrong?Ethical Theory 1: UtilitarianismFamous Proponents: Jeremy Bentham, J.S. Mill What makes something good or bad, right or wrong, is that it produces the greatest amount of pleasure (or lack of pain) for the greatest number of people Basic Principle: Greatest Happiness PrincipleMaximizing positive outcomes for the largest number of people, negative outcomes for lowest number of peopleOne should chose the action which will lead to the greatest happiness (i.e. pleasure, lack of pain) overallOnes own pleasure and pain only count as much as any other persons affected

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Utilitarianism (Contd)Assessment of net benefits includes any important indirect effects

Example: assessing the effects of pollutant discharge from a factory on the immediate surrounding environment and those down stream or down wind from the factory

Two forms: act and rule18

Act utilitarianismIt asks a person to assess the effects of all actions

Rejects the view that actions can be classified as right or wrong in themselves

Example: lying is ethical if it produces more good than bad19

Rule utilitarianismIt asks a person to assess actions according to a set of rules designed to yield the greatest net benefit to all affected

Compares act to rules

Does not accept an action as right if it maximizes net benefits only once

Example: lying is always wrong or thou shalt not lie20

Limitations of UtilitarianismHard to use in difficult to quantify situations

Does not include rights and justice21

Example A few doctors decide that a number of experiments on a few people, even if most of them died, would be worth it if they could find a cure for a disease that would relieve the suffering of millions of people. Utilitarianism would give the approval for such because it produces the greatest good for the greatest number of people.22

23Utilitarianism Inclination Intended ResultWill Duty Actual ResultWhat makes an act right or wrong?

Ethical Theory 2: JusticeLooks at the balance of benefits and burdens distributed among members of a group

Can result from the application of rules, policies, or laws that apply to a society or a group

Just results of actions override utilitarian results

Rejects view that an injustice is acceptable if others benefit the action24

Ethical Theory 3: RightsRight: a persons just claim or entitlementFocuses on the persons actions or the actions of others toward the personLegal rights: defined by a system of lawsMoral rights: based on ethical standardsPurpose: let a person freely pursue certain actions without interference from others25

Rights (contd)FeaturesRespect the rights of othersLets people act as equalsMoral justification of a persons actionExamplesLegal right: right to a fair trial in the United StatesMoral right: right to due process within an organization

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Rights (contd)Rejects view of assessing the results of actionsExpresses moral rights from individual's view, not society's. Does not look to the number of people who benefit from limiting another person's rightsExample: right to free speech in the United States stands even if a person expresses a dissenting view27

Types Of RightsNegative rights: do not interfere with another persons rightsPositive rights: A person has a duty to help others pursue their rights

Negative: do not stop a person from whistleblowingPositive: coworker helps another person blowthe whistle on unethical actions28

29Right-based Theories Inclination Intended ResultWill Duty Actual ResultWhat makes an act right or wrong?

Ethical Theory 4: EgoismFamous Proponents: Ayn Rand, Adam Smith What makes something good or bad, right or wrong, is that it satisfies ones desires, or meets ones needsBasic Principle: Self-interest of person doing, considering, or affected by the action One should chose the action which most realizes or conduces to ones own self-interestImportant Variation: should the person look simply to self-interest, or to enlightened or rational self-interest?Conception of Rational Self-Interest is basic component of capitalist economy and business models30

Types of EgoismIndividual Ethical EgoismJudges actions only by their effects on ones interestsUsually rejected by moral philosophers as a defensible basis of ethics

Universal Ethical EgoismCan include the interests of others when assessing ones actionsStill self-centered: pursuing pleasure and avoiding painEnlightened self-interest. Considers the interests of others because the person wants others to do the same toward him or her

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Objections regarding Egoism TheoryDoes not resolve conflicts in peoples interests

One party would always have the pursuit of his or her interests blocked

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Questions From The Ethical TheoriesUtilitarianism: does the action yield the greatest net benefits?

Rights: does the action negatively affect someones moral rights?

Justice: does the action give a fair distribution of costs and benefits among those affected?

Egoism: will the action lead to other people behaving toward me in a way I would like?33

34Thank You..!!!