A comprehensive summary of all exam materials of this course. It includes lecture notes and summaries of articles, book chapters, reports, and TED Talks. This summary is for the general part of the Ethics and the Future of business course (6314M0507Y), part of the Master Business Administration.
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ETHICS AND THE FUTURE OF BUSINESS
Readings and lectures summary
,Table of contents
Week 1: Morals & Ethics ...................................................................................................................................... 2
Lecture - Session 1 ................................................................................................................................................... 2
Introduction to business ethics .......................................................................................................................... 2
Normative ethical theories ................................................................................................................................. 2
Readings week 1 ...................................................................................................................................................... 5
Crane Chapter 3 (2019): Evaluating Business Ethics – Normative Ethical Theories ......................................... 5
Awad et al. (2018): The Moral Machine Experiment ......................................................................................... 7
Bazerman (2020): A New Model for Ethical Leadership .................................................................................... 8
TED Talk: Sandel – Why we shouldn’t trust markets with our civic life ............................................................ 8
Week 2: Behaviors & Actions.............................................................................................................................. 9
Lecture - Session 2 ................................................................................................................................................... 9
Descriptive theories in ethics ............................................................................................................................. 9
Ethical decision-making process à.................................................................................................................... 9
Individual and situational factors ..................................................................................................................... 10
Cognitive biases ................................................................................................................................................ 11
Ethics in action .................................................................................................................................................. 11
Ethics toolbox ................................................................................................................................................... 12
Readings week 2 .................................................................................................................................................... 13
Crane Chapter 4 (2019): Making Decisions in Business Ethics – Descriptive Ethical Theories ....................... 13
Banaji et al. (2003): How (Un)ethical Are You?................................................................................................ 15
Ciulla Chapter 1 (2020): Ethics and Effectiveness: The Nature of Good Leadership ...................................... 16
TED Talk: Ariely – Our buggy moral code ......................................................................................................... 16
Week 3: Strategies & Stakeholders................................................................................................................. 17
Lecture - Session 3 ................................................................................................................................................. 17
Changing behavior ............................................................................................................................................ 17
Social entrepreneurship ................................................................................................................................... 17
Corporate responsibility, sustainability and shared value ............................................................................... 18
Stakeholder thinking ......................................................................................................................................... 19
Readings week 3 .................................................................................................................................................... 22
Griskevicius et al. (2012): The Evolutionary Bases for Sustainable Behavior .................................................. 22
Mair (2020): Social Entrepreneurship .............................................................................................................. 23
Porter & Kramer (2011): Creating Shared Value ............................................................................................. 24
BSR 2019: Five-Step Approach to Stakeholder Engagement........................................................................... 25
TED Talk: Freeman – Business is about purpose ............................................................................................. 27
Week 4: Challenges & Solutions ...................................................................................................................... 28
Lecture – Session 4 ................................................................................................................................................ 28
Broader context of business ............................................................................................................................. 28
Business and climate change............................................................................................................................ 29
Towards a sustainable economy? .................................................................................................................... 30
Readings week 4 .................................................................................................................................................... 31
Kubiszewski et al. (2013): Beyond GDP: Measuring and Achieving Global Genuine Progress ....................... 31
EMF (2013): Towards the Circular Economy ................................................................................................... 32
IPCC (2021): Climate Change 2021 – The Physical Science Basis .................................................................... 33
Joyce & Paquin (2016): The Triple Layered Business Model Canvas ............................................................... 33
TED Talk: Raworth – A healthy economy should be designed to thrive, not grow ......................................... 35
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,Week 1: Morals & Ethics
Lecture - Session 1
This session is about the individual level of ethics. We look at ethical dilemmas and normative theories that help
us make decisions.
This sessions build-up:
1. Introduction to business ethics
2. Normative theories of ethics
Introduction to business ethics
What is morality, ethics, and ethical theory?
- Morality: humans have the ability to distinguish between right and wrong
- Ethics: the systematic study of morality
- Ethical theory: the principles and rules that determine right and wrong
Today, we focus on normative ethics aka the study of how we ought to behave.
Ethics
Ethics has a long on-going discussion about morality. Theories from long ago can still be relevant in today’s
dilemmas. Ethics typically examines right and wrong from the perspective of a human being (instead of e.g.,
nature). The key questions that we tend to ask ourselves in ethics are:
- What kind of moral principles should guide our actions?
- What kind of aims or outcomes should we have?
Ethics is not just theorization of morals, but the aim is to also affect practice. However, ethical theories can give
contradictory solutions to the same problem.
In business ethics, the outcomes are especially important. Business ethics is the study of business situations,
activities, and decisions where issues of right and wrong are addressed. Some challenges we find in business
ethics are:
- Comprehensiveness: addresses challenging questions at individual, organization and societal levels
- Cross-disciplinary: philosophy, management, economics, political science, earth system science
- Abstract nature: it can be difficult to recognize the practical implications of ethical theories
- Critical thinking: you should not always take the theories as given
- Experience: experience in business can be helpful to address ethical dilemmas
The Moral Machine (Awad et al., 2018)
The Moral Machine is a platform designed to explore moral dilemmas faced by autonomous vehicles. It shows
human preferences between two choices on how a vehicle should solve a dilemma (e.g., save elder person or
save kid in stroller). In terms of culture there are different preferences among Western, Eastern and Southern
people (in the world).
Normative ethical theories
2
, Perspective 1: Ethical egoism + moral machine
Ethical egoism is usually not considered as an ethical theory, although this view is very influential in economics.
This theory states that an action is morally right if the decision-maker freely decides in order to pursue either
their (short-term) desires or their (long-term) interest. Influential authors that support this theory are Thomas
Hobbes, Adam Smith and Ayn Rand. The problem with ethical egoism is that it is very inconsistent, moral views
based on short term satisfactions can be contradictory with our moral principles (theft, murder). Although taking
care of your needs and interests is morally important, the theory needs to be complemented by more developed
ethical theories.
Þ Moral Machine: What would an ethical egoist do?
If an ethical egoist is buying a car, they would protect the people inside the car. If an ethical egoist is
manufacturing the car, they would likely aim to serve egoist customers to sell more cars.
Theory 2: Utilitarianism
Utilitarianism states that an act is morally right if it results in the greatest amount of good to the greatest
amount of people affected by the action. The groundwork of this theory is formed by ethical egoism, but
utilitarianism takes it to an actual theory. Egoism in economics tends to function within a utilitarian societal
moral theory. Important authors that support this theory are Jeremy Bentham and John Stuart Mill.
Utilitarianism is very influential in normative economics. In practice, utilitarianism becomes an analysis of
advantages and disadvantages, so basically a cost/benefit analysis. The problem with utilitarianism is that it is a
subjective, context-dependent theory, it can be contradictory with the idea of basic rights, and does not include
the idea of reciprocity.
Þ Moral Machine: What would a utilitarian do?
You should conduct a cost/benefit analysis of what causes the most benefit or least harm in each
situation. Harm as few as possible. On a broader view, self-driving vehicles should minimize casualties,
they should only be introduced if they are likely to make driving in general safer.
Theory 3: Ethics of duties
Ethics of duties, or otherwise known as Kantianism, talks about the central concepts of moral philosophy: duty,
consistency, dignity, and universality. Duties do not mean mechanistically following rules, but they involve
human’s ability to develop moral law and moral rules. Kant’s deontological theory develops principles or
categorical imperatives to guide our actions.
- Consistency: what is right for one, is right for all
- Dignity: a human being is in itself a valuable autonomical being, not as a means to an end
- Universality: check that the principle is acceptable to every human being
The problem with ethics of duties is that it is a difficult and abstract theory, morality can be seen as a heavy
burden to bear. Also, morality is too strict on the use of reason and undervalues outcomes of actions.
Þ Moral Machine: what would someone following ethics of duties do?
They should determine general rules that apply to all. Human moral reasoning should be central.
Example: if the owner of the car is seen as responsible for the consequences of it, then the person
inside the car should be sacrificed.
Theory 4: Rights & Justice
States that natural (human) rights are certain basic, important, inalienable entitlements that should be respected
and protected in every single situation. These are based in human dignity and lead to a duty for others to
protect, respect, and support them. The main natural rights are: right to life, freedom, property, speech, privacy,
conscience, and fair trial among others. Important authors that support this theory are John Locke and John
Rawls. Rights-based thinking is a central part of Western political and ethical thought and the foundation of
universal human rights. Key ideas within this theory: procedural vs distributive fairness; veil of ignorance; social
contract; system of basic liberties; judgement of society by the state of the least advantaged, and equal
opportunity. The problem with this theory is that rights are relatively arbitrary and too Western.
Þ Moral Machine: what would someone following a rights and justice perspective do?
They cannot discriminate by age, gender, appearance or status. From a justice perspective, the entire
traffic systems need to be fair in considering every person in this situation.
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