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Business Ethics and Governance
Business Ethics and Governance
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Consider a business ethics dilemma that has caused you concern. Preferably, this issue is something that you, or someone close to you, has suffered, or something that you are concerned about. It is important that you hold a strong and personal position on this problem. • 1.5 line spacing |
Report topic
Consider a business ethics dilemma that has caused you concern. Preferably, this issue is something that you, or someone close to you, has suffered, or something that you are concerned about. It is important that you hold a strong and personal position on this problem.
Assume that you have been engaged as a business ethics consultant by the offending organization to advise the CEO of how the problem should have been handled.
You will write a report outlining the nature of the problem and the harm that has resulted. You will explain why this is an ethical dilemma (remembering that actions that are illegal do not qualify as ethical dilemmas because ethics deals with those issues that are above the law, that is, when organizations act legally yet immorally).
You will then consider at least two alternative courses of actions that the organization may have taken utilizing at least two different normative ethical theories from Chapter 3 of the Crane and Matten (2010) text.
You will then recommend that the organization adopt one of those options and explain, in language of that theory, why this would be a better, less-harmful, alternative.
This report should be approximately 2,000 words long. It must be formatted correctly and contain:
- Letter of Transmittal
- Title Page
- Table of Contents
- Executive Summary
- Introduction
- Body
- Conclusion
Only cite the Crane and Matten (2010) text using Harvard style.
- 1.5 line spacing
- 2.5cm left and right margins
- Times New Roman 12pt font
- Page numbering
- Letter of Transmission and Tile page have no numbering
- Use roman numerals for: Table of contents, List of abbreviations and/or glossary, and the Executive summary/abstract
- Page numbers should be placed at the bottom of the page aligned right
- Add a section header to these sections: Introduction, Body, Conclusion, Recommendations, Bibliography and Appendices
Chapter 3
Evaluating Business Ethics:
Normative Ethical Theories
Lecture 3
Overview
Locate the role of ethical theory
Highlight international differences in perspectives
Provide critical overview of traditional ethical theories
Explore contemporary ethical theories
What are normative ethical theories?
Ethical theories are the rules and principles that determine right and wrong for any given situation Crane and Matten (2010)
Normative ethical theories are those that propose to prescribe the morally correct way of acting
As opposed to descriptive ethical theories which seek to describe how ethics decisions are actually made in business
The role of ethical theory
The role of ethical theory
Two extreme positions (De George 1999)
Ethical absolutism claims there are eternal, universally applicable moral principles
Right and wrong are objective qualities, can be rationally determined
Typically traditional ethical theories
Ethical relativism claims morality is context-dependent and subjective
No universal right and wrongs that can be rationally determined; depends on person making the decision & culture in which they are located
Typically contemporary ethical theories
Normative ethical theories
North American and European origins and differences
Differences between Anglo-American and European approaches based on philosophical arguments
Individual versus institutional morality
US tend to individualistic perspective
Europe towards wider economic and governing institutions
Questioning versus accepting capitalism
US tend to accept the capitalist framework
Europe tend to question the ethical justification of capitalism
Justifying versus applying moral norms
US tend to focus on application of morality
Europe focus on justification and ethical legitimation of norms
In contrast, Asian perspectives tend to be based on religion (e.g. Islam, Buddhism)
Western modernist ethical theories
Traditional ethical theories
Generally offer a certain rule or principle which one can apply to any given situation
These theories generally can be differentiated into two groups
Major normative theories
Egoism
Theory of egoism – an action is morally right if the decision-maker freely decides an action to pursue either their (short-term) desires or their (long-term) interests.
Adam Smith (1793): pursuit of individual interest morally acceptable as invisible hand of market creates benefit for all
Relies on free competition and good information
‘Enlightened egoism’
However, markets do not function perfectly
Anti-globalisation movement
Sustainability debate
Utilitarianism
According to utilitarianism, an action is morally right if it results in the greatest amount of good for the greatest number of people affected by the action
Also called the ‘greatest happiness principle’
Based on cost-benefit analysis
Problems with Utilitarianism
Subjectivity
This has led to refinement of theory
Act utilitarianism
Rule utilitarianism
Issues around quantification and distribution of utility
Act- and Rule-Utilitarianism
Act utilitarianism
Looks to single actions and bases the moral judgement on the amount of pleasure and the amount of pain this single action causes.
Rule utilitarianism
looks at classes of action and ask whether the underlying principles of an action produce more pleasure than pain for society in the long run.
Ethics of duties
‘Categorical Imperative’ (Kant)
Maxim 1: Consistency
Act only according to that maxim by which you can at the same time will that it should become a universal law.
Maxim 2: Human Dignity
Act so that you treat humanity, whether in your own person or in that of another, always as an end and never as a means only.
Maxim 3: Universality
Act only so that the will through its maxims could regard itself at the same time as universally lawgiving (would others agree? Would you be happy to see your decision reported in the press?)
Problems with ethics of duties
Undervaluing outcomes
Complexity
Misplaced optimism?
Ethics of rights and justice
Natural rights
Certain basic, important, unalienable entitlements that should be respected and protected in every single action.
Based on consensus about nature of human dignity
Strongly based in western view of morality
Justice
The simultaneously fair treatment of individuals in a given situation with the result that everybody gets what they deserve
Fair procedures (procedural justice)
Fair outcomes (distributive justice)
John Rawls’s
‘Theory of Justice’
- Each person is to have an equal right to the most extensive total system of basic liberties compatible with a similar system of liberty for all.
- Social and economic inequalities are to be arranged so that they are both:
- to the greatest benefit of the least advantaged;
- attached to offices and positions open to all under conditions of fair equality of opportunity.
Limits of traditional theories
Too abstract
Too reductionist
Too objective and elitist
Too impersonal
Too rational and codified
Too imperialist
Alternative perspectives on ethical theory
Approaches based on character and integrity
Virtue ethics
Contends that morally correct actions are those undertaken by actors with virtuous characters. Therefore, the formation of a virtuous character is the first step towards morally correct behaviour
Acquired traits
Intellectual virtues
Moral virtues
Approaches based on ethics and responsibility
Feminist ethics
An approach that prioritizes empathy, harmonious and healthy social relationships, care for one another, and avoidance of harm above abstract principles
Key elements
Relationships
Decisions taken in context of personal human interrelations
Responsibility
Active ‘taking’ of responsibility, rather than merely ‘having’ it
Experience
Learn and develop from experience
Approaches based on procedures of norm generation
Discourse ethics
Aims to solve ethical conflicts by providing a process of norm generation through rational reflection on the real-life experiences of all relevant participants
Key elements
Ultimate goal of ethical issues in business should be the peaceful settlement of conflicts
Different parties in a conflict should sit together and engage in a discourse about the settlement of the conflict, and ultimately provide a situation that is acceptable to all
‘ideal discourse’ criteria
Approaches based on empathy and moral impulse
Postmodern ethics
An approach that locates morality beyond the sphere of rationality in an emotional ‘moral impulse’ towards others. It encourages individual actors to question everyday practices and rules, and to listen to and follow their emotions, inner convictions and ‘gut feelings’ about what they think is right and wrong in a particular incident of decision-making.
Postmodern business ethics
Postmodern business ethics emphasises (Gustafson, 2000:21)
Holistic approach
Examples rather than principles
‘Think local, act local’
Preliminary character
Summary
Towards a pragmatic use of ethical theory
Typical Perspective
Pluralistic Perspective
Pluralism?
Crane and Matten (2010) argue that for the practical purpose of making effective decisions in business:
Not suggest one theory or one approach as the best or true view of a moral dilemma
Suggest that all these theoretical approaches throw light from different angles on one and same problem
Complementary rather than mutually exclusive
Advocate position of pluralism
Middle ground between absolutism and relativism
Considerations in making ethical decisions: summary of key insights from ethical theories
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