Summary of all the materials for the first exam of Ethics and the Future of Business (semester 1, period 1) for the Master Business Administration at UvA. The summary includes all the articles and lecture slides
Reading 101: Crane, 2019 (Ch. 3)
Reading 102: Awad e.a., 2018
Reading 103: Ciulla, 2...
Reading 101: Crane, 2019 (Ch. 3)
Ethical conclusions in business situations is far more complex than in most
of the situations where we, as individuals, have to make ethical decisions.
Because there are a variety of people involved (might have different views
and attitudes).
also: in business context there is a need for these (ethical) decisions to
be based on a systematic rationale and widely understandable argument
so they can be defended, justified and explained to relevant stakeholders.
Normative ethical theories Normative: ethical theories that aim to
prescribe the morally correct way of acting (how we ought to behave).
= Rules, guidelines, principles and approaches that determine right and
wrong.
- A code of conduct that all rational beings would adhere to
- Descriptive morality (opposite of normative): applies to a code of
conduct adopted by a particular group or society. (guidelines of a
religion for instance)
Ethical absolutism = claims there are eternal, universally applicable moral
principles. Right and wrong are objective qualities
Ethical relativism = morality is context-dependent and subjective. There
are no universal rights and wrongs that can be rationally determined.
Ethical pluralism = accepts that we ought to recognize that incompatible
values can be equally legitimate and tolerate them as such.
- Pluralism can be over tolerant
- Pluralism allows an important openness and sensitivity to new
realities
in order to make good business decisions, you need to understand that
people have different moral presuppositions in making a decision.
Value of ethical theory
1. Rationalize, explain and understand the gut feelings we have about
right and wrong
2. Make it possible to engage in rational discourse between individuals
whose moral values are different from each other
Differences between religious and normative (philosophical) theory
- Source of rules and principles
o Religion: faith is the source of determining right and wrong
o Philosophical: human reason should drive ethics
- Consequences of morality and immorality
o Religion: spiritual consequences
o Philosophical: not really specified
,Western modernist ethical theories
- Modernist because of the enlightenment (18th century)
- Generally, offer a certain rule or principle one can apply to any given
situation absolutist in intention
- But are normative since they start with the assumption about the
nature of the world (and human beings)
- Unequivocal solution
- Division: consequentialist (goal orientated: if the outcomes are
desirable, the action is morally right) and principle based (moral
judgements are based on derivation of principles, what is right as
opposed to desirable)
Consequentialist theories
1. Ethical egoism
a. Theory that suggests that an action is morally right if in a
given situation all decision-makers freely decide to pursue
either their (short-term) desires or their (long-term) interests
b. Hobbes; the war of all against all (pessimistic view of human
nature). No person has a moral obligation to others beyond
things which serve their own interest.
c. Ayn Rand; every human is an individualist. We are each
responsible for our own happiness, self-development and self-
perfection (objective ethics)
d. Adam smith and Milton Friedman; egoism in business
(capitalism and free market)
e. There is a difference between egoism based on desire and
selfishness
f. Egoism based on the pursuit of interest is the ultimate
rendering of ethical egoism (as opposed to desires)
Weaknesses of ethical egoism
- It only works if there is a mechanism in society that makes sure that
no individual egoist pursues their own interests at others egoists’
expense. (Adam Smith thinks that is the free market, but there is
market failure).
- People think it cannot be a moral theory because it is internally
inconsistent. People have to accept that others also follow their own
self-interest, even when it is not in line with their own self-interest.
- Condones blatant immoral wrongs (anything goes)
2. Utilitarianism
a. Bentham and Mill: being ethical means doing that which has
good outcomes for all people
b. The greatest happiness principle
c. Theory which states that an act is morally right if it results in
the greatest amount of good for the greatest number of
people affected by the action.
d. Notion of utility (Bentham); humans are hedonists whose
purpose it is to maximize pleasure and minimize pain.
(hedonistic view)
e. Eudemonistic view: happiness and unhappiness
, f. Ideal view: intrinsically valuable human goods
g. Very easily applicable in economics. Pain pleasure cost-
benefit analysis.
Problems with utilitarianism
- Subjectively
o Act utilitarianism (Mill): single actions and bases of the moral
judgement on the amount of pleasure and the amount of pain
this single action causes
o Rule utilitarianism (Mill): looks at classes of actions and asks
whether the underlying principles of an action produce more
pleasure than pain for society in the long run
- Equal weighting (neither exclude nor prioritize ourselves or people
close to us)
- Problems of quantification and calculation
- Distribution of utility (interest of minorities are overlooked)
Principle-based theories
1. Ethics of duties (Kantianism)
a. Ethical theories that consist of abstract, unchangeable
obligations, defined by a set of rationally deduced a priori
moral rules, which should be applied to all relevant ethical
problems
b. Kant: morality is a question of certain abstract and
unchangeable obligations. Humans are rational actors who
have a free will to make their own choices and could decide
these principles for themselves. Humans are independent
moral actors.
c. Categorical imperative: act only according to that maxim
(principle or rule) by which you can at the same time will that
it should become a universal law.
i. Universal acceptability
ii. Human dignity (respect for persons)
Problems with Kantianism
- Undervaluing motivation
- Undervaluing outcomes (sometimes a little rule-bending might be for
the best)
- Assumption of rationality
2. Ethics of rights: human rights
a. Basic, inalienable and unconditional entitlements that are
inherent to all human beings, without exception
b. Locke; rights to life, freedom and property
c. It relies on the duty of other actors to respect your human
rights.
d. UN Global Compact: signed by corporations to include human
rights obligations.
Problems
- Notions of rights are quite strongly located in a Western,
individualistic view of morality. Friction might occur if these ideas
, were to be directly transferred on communities with a different
cultural and religious legacy.
3. Ethics of rights: justice
a. The simultaneous fair treatment of individuals in a given
situation with the result that everybody gets what they
deserve.
b. But what does fairness mean?
i. Fair procedures: determined according to whether
everyone has been free to acquire rewards for their
efforts
ii. Fair outcomes: determined according to whether the
consequences are distributed in a just manner,
according to some underlying principle such as
need/merit.
Problems
- How can society achieve issues of social and economic justice?
4. Social contract theory
a. A hypothetical agreement between members of a society and
those who govern it that establishes the inter-relationships,
rights and responsibilities on a fair basis.
b. Jean-Jacques Rousseau; social contract. Shared endeavour of
society and the benefit to us all of the passing on and sharing
of knowledge, art, and information.
c. Rawls: Theory of justice. Veil of ignorance; people have to act
without knowing what role or situation occupy in society. It
forces people to be fair and impartial in their judgement about
how to organize society.
i. Society is just when each person has an equal right to
the most extensive total system of basic liberties
compatible with a similar system of liberty for all
ii. Social and economic inequalities are arranged so that
they are both
1. To the greatest benefit of the least advantaged
(difference principle)
2. Attached to position open to all under conditions of
fair equality of opportunity (principle of equal
opportunity)
Criticism of Western modernist ethical theories
- Too abstract (Stark, 1994); not pragmatic for day-to-day concerns of
managers
- Too narrow
- Too objective and elitist (Parker, 1998)
- Too impersonal
- Too rational and codified; denigrates the importance of our moral
feelings and emotions
- Too imperialist; look also at Asian and African philosophy
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