Lecture w1, 12-9-22
Session 1 12-9-22
Morals and ethics
Course objectives
1. Understand, evaluate and criticize core ethical theories and models of ethical
decision-making;
2. Reflect and improve their own decision-making towards value-based and stakeholder
approaches;
3. Explain and criticize leading concepts and theories within corporate responsibility
and sustainability;
4. Learn and analyze key ethics and sustainability themes within your chosen
specialization;
5. Reflect and apply learned concepts and theories to social and environmental issues
that organizations face.
Course structure
1. Ethics
Definition: systematic study of right and wrong
Level: individual
Foundations: philosophy, psychology, economics, leadership
2. Responsibility
Definition: integration of triple bottom line into companies
Level: organization
Foundations: management
3. Sustainability
Definition: human welfare within ecological balance
Level: society
Foundations: sustainability, political science, complexity
Morality is humans’ ability to distinguish between right and wrong.
Ethics is the systematic study of morality.
Ethical theories are principles and rules that determine right and wrong in different
situations.
Normative ethics: the study of how we ought to behave.
Ethics is an ongoing discussion about morality with a very long history.
Ethics typically examines right and wrong from the perspective of a human being instead of
nature for example.
Ethics is not just theorization of morals, but the aim is to also affect practice. Ethical theories
can give contradictory solutions to the same problem.
Business ethics is the study of business situations, activities and decisions where issues of
right and wrong are addressed.
Do we need ethics when we have the law?
,In society, morality is the foundation of the law. Law and ethics are partly overlapping, the
law however does not cover all ethical issues, not all legal issues are ethical and law and
ethics can involve contradictions.
Ethical egoism
- Usually not considered as an ethical theory, although this view is very influential in
economics.
- An action is morally right if the decision-maker freely decides in order to pursue
either their (short-term) desires or their (long-term) interests.
- The influence of egoism is related to the perception of ideal markets and a limited
reading of Adam Smith’s invisible hand.
- Problems with ethical egoism:
o Inconsistent as it “condones blatant immoral wrongs, since ‘anything goes’-
violence against the vulnerable, theft, even murder- as long as the egoist’s
needs are served” Crane et al, 2019
o Thus, a moral view based on short term satisfaction of needs is contradictory
with our moral principles.
o Enlightened egoism focuses on the meeting of long-term human interests.
o Enlightened egoism does not take a stance on the nature of the interests and
desires of individuals, which can still lead to problems due to conflicting
interests.
o Although taking care of your needs and interests is morally important, the
theory needs to be complemented by more ethical theories.
Utilitarianism:
- An act is morally right if it results in the greatest amount of good to the greatest
amount of people affected by the action.
- Utilitarianism is very influential in normative economics, which is related to the
egoistic view of humans in economics.
- Egoism in economics tends to function within a utilitarian societal moral theory.
- Act utilitarianism: focuses on creating rules that produce the most common good.
- In practice, utilitarianism becomes an analysis of advantages and disadvantages, a
cost/benefit analysis.
- Problems of utilitarianism:
o A utilitarian good is subjective, context-dependent and difficult to compare
between people.
, o Utilitarianism runs into difficulties in questions related to the just distribution
of wealth
o Utilitarianism can be contradictory with the idea of respecting basic rights
o Maximizing is generally speaking not the best approach to addressing all
values
o Utilitarianism does not include the idea of reciprocity.
Ethics of duties
- Central concepts to Kant’s moral philosophy are 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.
- Problems with ethics of duty
o Ethics of duties is a rather difficult and abstract theory.
o Morality can be seen as a heavy burden to bear.
o Morality is founded perhaps too strictly on the use of reason.
o Ethics of duties undervalues outcomes of actions.
Rights and Justice
- Natural (human) rights are certain basic, important, alienable entitlements that
should be respected and protected in every single situation. They are based in human
dignity and lead to a duty for others to protect, respect and support them.
- Main natural rights: right to life, freedom, property, speech, privacy, conscience and
fair trial among others.
- Rights-based thinking are a central part of Western political and ethical thought and
the foundation of universal human rights.
- Justice: the simultaneous fair treatment of individuals in a given situation with the
result that everybody gets what they deserve.
- Key ideas: 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.
- Problems with rights and justice
o Most lists of basic rights can be seen to be relatively arbitrary. Rights are
criticized as being too Western and or neocolonial
o Basic rights presuppose institutions that allow for recourse in case of breach.
Theory does not offer practical guidance in extreme situations.
Alternative perspectives on ethics
- Virtue ethics
o The central aim is not to fulfill duties or aim for the greatest good, but to lead
a good life. Virtue ethics focuses on the character of the individual decision-
maker
- Feminist ethics
o Instead of abstract moral principles, feminist ethics emphasizes caring,
empathy, and harmonious and healthy social relationship
, - Discourse ethics
o Discourse ethics focuses on solving ethical conflicts through democratic
dialogue and providing a process of norm generation.
- Postmodern ethics
o Moving away from rationality, postmodern ethics focuses on emotional moral
impulses towards others, and focuses on individual questioning of universal
rules.
Business pragmatism and philosophy
Bazerman (2020) guidelines for creating more value
1. Compare alternatives: allows us to implement utilitarianism
2. Look for tradeoffs: allows us to reconsider on what each of values in negotiations
3. See time as a scarce resource: allows us to prioritize and focus our efforts
4. Integrate your ethical self: allows us to identify opportunities for improvement
5. Design the choice architecture: allows us to make positive value creation easier
Conclusions on using ethical theories:
- Crane & Matten defend pluralistic view of ethical theories
- Pluralism represents a moderate view
- Pluralism does not view any single theory as the only correct approach to ethical
problems. Each ethical theory is seen to provide resources for decision making
- The aim is to find a contextually appropriate balance and consensus that takes into
consideration different perspectives.
