WEEK 1 - CHAPTERS 1&5: NATURE OF MORALITY AND ETHICS OF CORPORATIONS
THE NATURE OF MORALITY (chapter 1)
What is ethics? The study of right and wrong, duty and obligation, moral norms, individual character, and
responsibility
An ethical decisions has/is
- Significant effects on others
- Characterized by freedom of choice
- Perceived as ethically relevant by one or more parties
What is business ethics? The study of what constitutes right and wrong, or good and bad, in a business
context
Moral standards concern behavior that is of serious consequence to human welfare, that can injure or
benefit people such as lying, stealing, killing…
- Moral issues in business situations: whether products are healthful or harmful, work conditions
are safe or dangerous, hiring procedures are biased or fair, privacy respected or invaded
Business ethics:
- Examples of ethical questions: what should an employee do when his or her superiors pressure
him/her to compromise ethical standards?
- Examples of ethical misconducts: corruption, illegal practices at the workplace, conflicts of
interests, public accountability, insider trading...
Ethics and law: what is the difference?
- An action can be illegal but morally right: gay marriages when it was outlawed
- An action can be legal but morally wrong: broekers are not legally required to act in their
customers’ best interest, even when they are advising them about their savings
Ethics and etiquettes: what is the difference?
- Etiquettes refer to the social norm of conduct in a given society
- They are nonmoral rules and are meant to serve as guidelines for socially acceptable behavior
- Example: Taking out your shoes when you enter your house
- Business also has its etiquettes: how we negotiate, how we respond to situations (implicit rules
about how to do it - not morally related)
- Violations of etiquette can sometimes have moral implications: boss calling female employee
“honey” is against etiquette (not how you treat female employees) and it can also result in
gender discrimination in the workplace - so ethics and etiquettes are related but also distinct
,Ethical norms vs organizational norms
Employees and business organizations (especially corporations) are:
● Expected to further profit goals
● In this process employees are often pressured to compromise values and ignore or violate rules
of ethical conduct
● How does this work? Individual integrity and moral responsibility
○ Conformity
○ Groupthink
○ Diffusion of responsibility
MORAL REASONING (chapter 1)
The soundness of moral reasoning = quality of the arguments + the reasoning that supports them
Determining whether an argument is valid or invalid requires familiarity with the rules of logic.
Argument: a group of statements in which one statement (conclusion) follows from the others
(premises)
- Premise: All humans are mortal
- Premise: Socrates is a human
- Conclusion: Therefore, Socraties is mortal
Example Argument 1
- Premise: If a person is a mother (A), the person is a female (B)
- Premise: Marijke is a mother (A)
- Conclusion: Therefore, Mraijjke is a female (B)
An argument is valid when premises logically entail its conclusion (A1)
Example Argument 2
- Premise: If a person is a mother (A), the person is a female (B)
- Premise: Marijke is a female (B)
- Conclusion: Therefore, Mraijjke is a mother (A)
An argument is invalid when premises do not entail its conclusion (A2)
Counterexample: an example that is consistent with the premises but is inconsistent with the conclusion
Example Counterexample Argument 2
- Marije is a two-year-old is consistent with the premises but inconsistent with the conclusion
since a 2yo could not be a mother
, Example Argument 3
- Premise: If a person is a female, she must be a mother
- Premise: Marijke is a female
- Conclusion: Therefore, Marijke must be a mother
An argument is unsound when it has at least one false premise (first in A3) even if the reasoning is valid
Sound arguments
● Have true premises and valid reasoning → argument 1
Unsound arguments
● Have at least one false premise → argument 3
● Or invalid reasoning → argument 2
● Or both
What makes an argument moral? Arguments whose conclusions are moral judgements
Example Argument 4
- Premise: If an action violates the law, it is morally wrong
- Premise: Affirmative action on behalf of women and minorities in personnel matters violates the
law
- Conclusion: Therefore, affirmative action on behalf of women and minorities in personnel
matters is morally wrong (conclusion refers to moral aspect; moral judgment)
Criteria for moral reasoning:
● Should be logical
○ Embedded in valid arguments
○ Compatible with moral and nonmoral beliefs
● Should be based on facts
● Should be based on acceptable moral principles
Thus, an argument can be challenged by:
● Uncovering ambiguity in the terms
● Questioning the factual claims
● Challenging the moral standards
CORPORATIONS (chapter 5)
What is a corporation? It is a three-part organization made up of:
1. Shareholders who provide the capital, own the corporation, and are liable (for company debt)
up to the extent of their investments
2. Managers who run the business and operations
3. Employees who produce the goods and services
It is a legal entity, with legal rights and responsibilities similar, but not identical, to those enjoyed by
individuals:
- Right to sue, issue stock, have property, limited-liability (owners or stockholders are liable for
corporate debts only up to the extent of their investments)
