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Business Ethics, Anderson University DBA Fall 2001

Summary of the main points of the first two chapters in the book. The
remaining chapters are application of the concepts summarized as relating
to political forms of government and market systems. These further chapters
are less relevant to the DBA class that this summary was prepared for.

Chapter 1 – Ethics & Business values including (especially?)


self-interest.
Ethics is the principles of
4. Moral standards are based on
conduct governing an individual
impartial considerations. –
or a group. It is the study of
that is, a point of view that
morality.
does not evaluate standards
Morality are the standards that according to whether they
an individual or group has about advance the interests of a
what is right and wrong, or good particular individual or group,
and evil. but one that goes beyond
personal interests to a
Moral norms can usually be “universal” standpoint in
expressed as general rules or which everyone’s interests
statements, such as “Always tell are impartially counted as
the truth”. Moral values can equal.
usually be expressed as 5. Moral standards are
statements describing objects or associated with special
features of objects that have emotions and a special
worth, such as “Honesty is vocabulary.
good” and “Injustice is bad”.

Five characteristics can help pin Ethics is the discipline that


down the nature of moral examines one’s moral standards
standards. or the moral standards of a
society. Ethics is the study of
1. Moral standards deal with moral standards – the process
matters that we think can of examining the moral
seriously injure or seriously standards of a person or society
benefit human beings. to determine whether these
2. Moral standards are not standards are reasonable or
established or changed by the unreasonable in order to apply
decisions of particular them to concrete situations and
legislative bodies. issues. The ultimate aim of
3. We feel that moral standards ethics is to develop a body of
should be preferred to other moral standards that we feel are

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Business Ethics, Anderson University DBA Fall 2001

reasonable to hold – standards Corporate issues in business


that we have thought about ethics are ethical questions
carefully and have decided are raised about a particular
justified standards for us to company. Individual issues in
accept and apply to the choices business ethics are ethical
that fill our lives. questions raised about a
particular individual or particular
Although ethics is a normative individuals within a company.
study of ethics, the social
sciences engage in a descriptive Because corporate acts originate
study of ethics. A normative in the choices and actions of
study aims to discover what human individuals, it is these
should be. A descriptive study individuals who must be seen as
attempts to describe or explain the primary bearers of moral
the world without reaching any duties and moral responsibility.
conclusions about whether the Nonetheless, it makes perfectly
world is as it should be. good sense to say that a
corporate organization has
1.1 The Nature of Business Ethics moral duties and that it is
Business ethics concentrates morally responsible for its acts.
on the moral standards as they
apply to business policies, The fact that multinationals
institutions, and behavior. operate in more than one
Business ethics, in other words, country produces ethical
is a form of applied ethics. It dilemmas for their managers
includes not only the analysis of that managers of firms limited to
moral norms and moral values, a single country do not face.
but also attempts to apply the
conclusions of this analysis to • The ability to shift its
that assortment of institutions, operations between countries
technologies, transactions, enables the multinational to
activities, and pursuits that we escape the social controls
call business. that a single nation might
attempt to impose on the
Business ethics investigates multinational and can allow
three different kinds of issues: the multinational to play one
systemic, corporate, and country against another.
individual. Systemic issues in • It can sometimes transfer raw
business ethics are ethical materials, goods and capital
questions raised about the among its plants in different
economic, political, legal, and countries at terms that
other social systems within enable it to escape taxes and
which businesses operate. fiscal obligations that

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Business Ethics, Anderson University DBA Fall 2001

companies limited to a single when the property in question is


nation must bear. information. Finally,
• They often have the biotechnology has created yet
opportunity to transfer a new another host of troubling ethical
technology or set of products issues.
from a more developed
country into nations that are 1.2 Moral Development & Moral
less developed. Reasoning
• It is often faced with the As people mature, they change
quandary of deciding which of their values in very deep and
these different norms and profound ways. The ability to
standards to implement in its make reasoned moral judgments
many operations. develops in identifiable stages
(Kohlberg).

Ethical relativism is the view


that there are no ethical
standards that are absolutely
true and that apply or should be
applied to the companies and
people of all societies. Thus, the
theory of ethical relativism
implies that whatever the
majority in our society believes
about morality is automatically
correct. The fundamental
problem with ethical relativism
is that it holds that the moral
standards of a society are the
only criteria by which actions in
that society can be judged.

Almost all ethical issues raised


by new technologies are related
in one way or another to
questions of risk. Many of the
ethical issues new technologies
have created – especially
information technologies – are
related to privacy. Information
technologies have also raised
difficult ethical issues about the
nature of the right to property

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Business Ethics, Anderson University DBA Fall 2001

a. Preconventional f. Law and Order


Stages Orientation – Right
At these first two stages, the child and wrong at this
is able to respond to rules and more mature
social expectations and can apply conventional stage
the labels of good, bad, right and now come to be
wrong. These rules, however, are determined by
seen as something externally loyalty to one’s own
imposed on the self. larger nation or
b. Punishment and surrounding society.
Obedience g. Post Conventional,
Orientation – At this Autonomous, or
stage, the physical Principled Stages
consequences of an At these stages, the person no
act wholly determine longer simply accepts the values
the goodness and and norms of the groups to which
badness of that act. he or she belongs. Instead the
c. Instrument and person now tries to see situations
Relativity Orientation from a point of view that
– At this stage, right impartially takes everyone’s
actions become interests into account.
those that can serve h. Social Contract
as instruments for Orientation – At this
satisfying the child’s first post-
needs of the needs conventional stage
of those for whom the person becomes
the child cares. aware that people
d. Conventional Stages hold a variety of
Maintaining the expectations of conflicting personal
one’s own family, peer group, or views and opinions
nation is now seen as valuable in and emphasizes fair
its own right, regardless of the ways of reaching
consequences. consensus by
e. Interpersonal agreement, contract,
Concordance and due process.
Orientation – Good i. Universal Ethical
behavior at this early Principles Orientation
conventional stage is – At this final stage,
living to the right action comes to
expectations of be defined in terms
those for whom one of moral principles
feel loyalty, chosen because of
affection, and trust, their logical
such as family and comprehensiveness,
friends. universality and
consistency.

Although people generally


progress through the stages in
the same sequence, not
everyone progresses through all
the stages. Kohlberg has been

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Business Ethics, Anderson University DBA Fall 2001

criticized for claiming that the


higher stages are morally
preferable to the lower stages. It First and primarily, moral
fails to adequately trace out the reasoning must be logical. All
pattern of development of the unspoken moral and factual
women. Females, Gilligan assumptions must be made
claimed, tend to see themselves explicit, and both assumptions
as part of a “web” of and premises be displayed and
relationships. For women, subject to criticism. Second, the
morality is primarily a matter of factual evidence cited in support
“caring” and “being responsible” of a person’s judgment must be
for others with whom one is accurate, relevant, and
involved in personal complete. Third, the moral
relationships, and not a matter standards involved in a person’s
of adhering to impartial and moral reasoning must be
impersonal rules. Moral consistent. The consistency
development for women is requirement is the basis of an
marked by progress toward important method of showing
more adequate ways of caring that a given moral standard
and being responsible for must be modified or rejected:
oneself and for others. This is the use of counter examples or
called the care perspective. hypotheticals.

Moral reasoning refers to the 1.3 Arguments For and Against


reasoning process by which Business Ethics
human behaviors, institutions, or Persons involved in business,
policies are judged to be in they claim, should single
accordance with or in violation mindedly pursue the financial
of moral standards. Moral interests of their firm and not
reasoning always involves two sidetrack their energies or their
essential components: firm’s resources into “going
good works”. First, some have
1. An understanding of what argued that in perfectly
reasonable moral standards competitive free markets, the
require, prohibit, value, or pursuit of profit will by itself
condemn; and ensure that the members of
2. Evidence or information that society are served in the most
shows that a particular socially beneficial ways. First,
person, policy, institution, or most industrial markets are not
behavior has the kinds of “perfectly competitive”. Second,
features that these moral the argument assumes that any
standards require, prohibit, steps taken to increase profits
value, or condemn.

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Business Ethics, Anderson University DBA Fall 2001

will necessarily be socially professional ethics are to be


beneficial. Third, the argument considered,” and “in no event
assumes that, by producing would it be implied that an
whatever the buying public agent has a duty to perform acts
wants (or values), firms are which are illegal or unethical.”
producing what all the members Third, the loyal agent argument
of society want, when in fact the assumes that if a manager
wants of large segments of agrees to serve a firm, then this
society (the poor and agreement automatically
disadvantaged) are not justifies whatever the manager
necessarily met because they does on behalf of the firm.
cannot fully participate in the
marketplace. Fourth, the A third kind of objection is
argument is essentially making sometimes made against
a normative judgment on the bringing ethics into business.
basis of some assumed but This is the objection that to be
unproved moral standards. ethical it is enough for business
people merely to obey the law:
A loyal agent of his or her Business ethics is essentially
employer, the manager has a obeying the law. It is wrong,
duty to serve his or her however, to see law and ethics
employer in whatever ways will as identical. Moreover, most
advance the employer’s self- ethicists agree that all citizens
interests. The loyal agent have a moral obligation to obey
argument relies on several the law so long as the law does
questionable assumptions. First, not require clearly unjust
the argument tries to show, behavior. This means that, in
again, that ethics does not most cases, it is immoral to
matter by assuming an break the law.
unproved moral standard.
Second, the loyal agent One way to argue that ethics
argument assumes that there should be brought into business
are no limits to the manager’s is simply by pointing out that,
duties to serve the employer, because ethics should govern all
when in fact, such limits are an voluntary human activities and
express part of the legal and because business is a voluntary
social institutions from which human activity, ethics should
these duties arise. The law of also govern business.
agency states that, “in
determining whether or not the Business activities, like any
orders of the client to the agent other human activities, cannot
are reasonable … business or exist unless the people involved
in the business and its

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Business Ethics, Anderson University DBA Fall 2001

surrounding community adhere threat of future retaliation


to some minimal standards of makes it more rational for the
ethics. parties in a series of repeated
exchanges to cooperate than to
Ethical considerations are try to take advantage of each
consistent with business other. The most important
pursuits, in particular the pursuit lesson of the prisoner’s
of profit (results have been dilemma, then, is that when
mixed, but no studies have people deal with each other
found a negative correlation). repeatedly, so that each can
later retaliate against or reward
A prisoner’s dilemma is a the other party, cooperation is
situation in which two parties more advantageous than
are each faced with a choice continuously trying to take
between two options: Either advantage of the other party.
cooperate with the other party
or do not cooperate. From the Business interactions with
joint standpoint of the parties employees, customers,
involved, the best outcome in a suppliers, and creditors are
prisoner’s dilemma is for both repetitive and ongoing. The
parties to cooperate in their prisoner’s dilemma argument,
agreement. In short, when then, implies that, over the long
people must choose between run and for the most part, it is
cooperating or not cooperating better to be ethical in business
in rules or agreements, and than to be unethical.
when each has more to gain by
not cooperating, then rational Finally, we should note that
self-interest suggests that there is also a good deal of
people should not cooperate in evidence that most people so
keeping the rules or value ethical behavior that they
agreements. The prisoner’s will punish those whom they
dilemma, then, seems to show perceive to be behaving
that the rational self-interested unethically and reward those
person should be unethical in who are perceived to be ethical.
business when there is
something to be gained through 1.4 Moral Responsibility & Blame
unethical behavior. However, Moral reasoning, however, is
this conclusion is based on a sometimes directed at a related
false assumption. We have but different kind of judgment:
assumed so far that prisoner’s determining whether a person is
dilemma situations are isolated morally responsible, or culpable,
interactions between people for having done something
who never interact again. This wrong or for having wrongfully

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Business Ethics, Anderson University DBA Fall 2001

injured someone. The term in an act (these affect the


moral responsibility is degree to which the person
sometimes used as an actually caused or helped to
equivalent to moral duty or cause the wrongful injury).
moral obligation. These can lessen a person’s
responsibility for wrongdoing
A person is morally depending on a fourth factor:
responsible only for those acts the seriousness of the wrong.
and their forseen injurious
effects (a) which the person Who is morally responsible for
knowingly and freely performed jointly produced acts? The
or brought about and which it traditional view is that those
was morally wrong for the who knowingly and freely did
person to perform or bring what was necessary to produce
about, or (b) which the person the corporate act are each
knowingly and freely failed to morally responsible.
perform or prevent and which it
was morally wrong for the Critics of the traditional view of
person to fail to perform or the individual’s responsibility for
prevent. corporate acts have claimed
that the corporate group and not
Two conditions completely the individuals who make up the
eliminate a person’s moral group must be held responsible
responsibility for causing a for the act. The law typically
wrongful injury: (1) ignorance attributes the acts of a
and (2) inability. There are also corporation’s managers to the
several mitigating factors that corporate (so long as the
can lessen a person’s moral managers act within their
responsibility depending on the authority) and not to the
severity of the wrong. Mitigating managers as individuals.
factors include (a) Because individuals are morally
circumstances that leave a responsible for the known and
person uncertain but not intended consequences of their
altogether unsure about what he free actions, any individual who
or she is doing (these affect the knowingly and freely joins his
person’s knowledge); (b) actions together with those of
circumstances that make it others, intending thereby to
difficult but not impossible for bring about a certain corporate
the person to avoid doing it act, will be morally responsible
(these affect the person’s for that act. The excusing
freedom); (c) circumstances that factors of ignorance and
minimize but not completely inability, which are endemic to
remove a person’s involvement large-scale bureaucratic

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Business Ethics, Anderson University DBA Fall 2001

corporate organizations, will


completely eliminate a person’s
moral responsibility. Moreover,
depending on the seriousness of
the act, the mitigating factors of
uncertainty, difficulty, and
minimal involvement can also
diminish a person’s moral
responsibility for a corporate
act.

It is clearly mistaken, however,


to think that an employee who
freely and knowingly does
something wrong is absolved of
all responsibility when he or she
is “following orders”.

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Business Ethics, Anderson University DBA Fall 2001

Chapter 2 – Ethical Principles in evaluated on the basis of the


Business benefits and costs they will
impose on society. Many
Judgments about justice are business analysts hold that the
based on moral principles that best way to evaluate the ethical
identify fair ways of distributing propriety of a business decision
benefits and burdens among the – or any other decision – is by
members of a society. relying on utilitarian cost/benefit
Judgments about violations of analysis.
people’s rights are based on
moral principles that indicate Jeremy Bentham (1748-1832) is
the areas on which people’s generally considered the
rights to freedom and well-being founder of traditional
must be respected. utilitarianism. The utilitarian
principle holds that: “An action
A utilitarian standard of is right from an ethical point of
morality; a moral principle, that view if and only if the sum total
is, that claims that something is of utilities produced by that act
right to the extent that it is greater than the sum total of
diminishes social costs and utilities produced by any other
increases social benefits. An act the agent could have
ethic of care is an ethic that performed in its place.”
emphasizes caring for the
concrete well-being of those The utilitarian principle assumes
near to us. Evaluations of the that we can somehow measure
moral character of persons or and add the quantities of
groups are based on what is benefits produced by an action
called an ethic of virtue. and subtract from them the
measured quantities of harm the
2.1 Utilitarianism: Weighing Social action will have. Both the
Costs and Benefits immediate and all foreseeable
Selecting the course of action future costs and benefits that
that would have the most each alternative will provide for
beneficial consequences is each individual must be taken
sometimes referred to as a into account as well as any
consequentialist approach and significant indirect effects.
sometimes as a utilitarian
approach. Three steps are performed:

Utilitarianism is a general term 1. Determine what alternative


for any view that holds that actions or policies are
actions and policies should be

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Business Ethics, Anderson University DBA Fall 2001

available to me on that Replies to the Problems of


occasion. Utilitarianism
2. For each alternative action,
estimate the direct and • Utilitarianism merely insists
indirect benefits and costs that the consequences of any
that the action would produce projected act be expressly
for each and every person stated with as much clarity
affected by the action in the and accuracy as is humanly
foreseeable future. possible, and that all relevant
3. The alternative that produces information concerning these
the greatest sum total of consequences be presented
utility must be chosen as the in a form that will allow them
ethically appropriate course to be systematically
of action. compared and impartially
weighed against each other.
Expressing this information in
Utilitarian views have been quantitative terms facilitates
highly influential in economics such comparisons and
and is the basis of the weightings. However, where
techniques of economic cost- quantitative data are
benefit analysis. unavailable, one my
legitimately rely on shared
Problems with Utilitarianism and common sense
judgments of the comparative
1. Difficulties encountered
values things have for most
measuring.
people.
2. Some benefits and costs
seem intractable to • Several common-sense
measurement (health). criteria can be used to
3. Because many of the benefits determine the relative values
and costs of an action cannot that should be given to
easily be predicted, they also various categories of goods.
cannot be adequately Instrumental goods are
measured. things that are considered
4. It is unclear exactly what is to valuable only because they
count as a benefit and what is lead to other good things.
to count as a cost. Intrinsic goods, however,
5. The assumption that all goods are things that are desirable
are measurable implies that independent of any other
all goods can be traded for benefits they may produce.
equivalents of each other. • You can weigh goods
between needs and wants.

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• A standard objection against whey trying to determine


using monetary values to whether a particular action is
measure all costs and ethical, one is never supposed to
benefits is that some goods, ask whether that particular
in particular health and life, action will produce the greatest
cannot be priced. The amount of utility. Instead, one is
utilitarian may argue, supposed to ask whether the
however, that not only is it action is required by the correct
possible to put a price on moral rules that everyone
health and life, but that we do should follow. If the action is
so almost daily (ex. the cost required by such rules, then one
of safety equipment in a car). should carry out the action. But
what are the “correct” moral
rules? It is only this second
Rights and Justice – question, according to the rule-
Problems with Utilitarianism utilitarian, that is supposed to be
answered by reference to
The major difficulty with maximizing utility. The correct
utilitarianism, according to some moral rules are those that would
critics, is that it is unable to deal produce the greatest amount of
with two kinds of moral issues: utility if everyone were to follow
those relating to rights and them.
those relating to justice. That is,
the utilitarian principle implies 1. An action is right from an
that certain actions are morally ethical point of view if and
right when in fact they are only if the action would be
unjust or violate people’s rights. required by those moral rules
It can also go wrong, when it is that are correct.
applied to situations that involve 2. A moral rule is correct if and
social justice. only if the sum total of
utilities produced if everyone
Replies to the Problems with were to follow that rule is
Rights and Justice greater than the sum total
utilities produced if everyone
Utilitarians have proposed an
were to follow some
important and influential
alternative rule.
alternative version of
utilitarianism call rule-
utilitarianism. The basic There are two main limits to
strategy of the rule-utilitarian is utilitarian methods of moral
to limit utilitarian analysis to the reasoning, therefore, although
evaluations of moral rules. the precise extent of these limits
According to the rule-utilitarian, is controversial. First, utilitarian

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Business Ethics, Anderson University DBA Fall 2001

methods are difficult to use • To indicate the existence of


when dealing with values that prohibitions or requirements
are difficult and perhaps on others that enable the
impossible to measure individual to pursue certain
quantitatively. Second, interests or activities.
utilitarianism by itself seems to
deal inadequately with
situations that involve rights and The most important moral rights
justice, although some have are rights that impose
tried to remedy this deficiency prohibitions or requirements on
by restricting utilitarianism to others and that thereby enable
the evaluation of rules. individuals to choose freely
whether to pursue certain
2.2 Rights and Duties interests or activities.
In general, a right is an
individual’s entitlement to Ways that we use the term
something. If it derives from a moral rights:
legal system, it is a legal right.
• Tightly correlated with duties.
Legal rights are limited to the
This is because one person’s
particular jurisdiction within
moral right generally can be
which the legal system is in
defined – at least partially – in
force. Moral rights or human
terms of the moral duties
rights are based on moral
other people have toward
norms and principles that
that person.
specify that all human beings
• Provide individuals with
are permitted or empowered to
autonomy and equality in the
do something or are entitled to
free pursuit of their interests.
have something done for them.
• Provide a basis for justifying
Ways that we use the term a one’s actions and for invoking
right: the protection or aid of
others.
• To indicate the mere absence
of prohibitions against
pursuing some interest or Because moral rights have these
activity. features, they provide bases for
• To indicate that a person is making moral judgments that
authorized or empowered to differ substantially from
do something either to secure utilitarian standards. First, moral
the interests of others or to rights express the requirements
secure one’s interests. of morality from the point of
view of the individual, whereas
utilitarianism expresses the

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Business Ethics, Anderson University DBA Fall 2001

requirements of morality from • Arise out of a specific


the point of view of society as a transaction between
whole. Second, rights limit the particular individuals.
validity of appeals to social • Depend on a publicly
benefits and to numbers. accepted system of rules that
define the transactions that
A large group of rights called give rise to those rights and
negative rights is duties.
distinguished by the fact that its
members can be defined wholly
in terms of the duties others The ethical rules that govern
have to not interfere in certain contracts:
activities of the person who
holds a given right. • Both of the parties to a
contract must have full
In contrast, positive rights do knowledge of the nature of
more than impose negative the agreement they are
duties. They also imply that entering.
some other agents (it is not • Neither party to a contract
always clear who) have the must intentionally
positive duty of providing the misrepresent the facts of the
holder of the right with whatever contractual situation to the
he or she needs to freely pursue other party.
his or her interests.
• Neither party to the contract
Contractual rights and must be forced to enter the
duties (sometimes called contract under duress or
special rights and duties or coercion.
special obligations) are the • The contract must not bind
limited rights and correlative the parties to an immoral act.
duties that arise when one
person enters an agreement
Kant’s theory is based on a
with another person. Contractual
moral principle that he calls the
rights and duties are
categorical imperative and that
distinguished:
requires that everyone should
• By the fact that they attach to be treated as a free person
specific individuals and the equal to everyone else. Kant’s
correlative duties are first formulation of the
imposed only on other categorical imperative is as
specific individuals. follows: “I ought never to act
except in such a way that I can
also will that my maxim should

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Business Ethics, Anderson University DBA Fall 2001

become a universal law.” An interests, but also both respects


action is morally right for a and develops their capacity to
person in a certain situation if, choose freely for themselves.
and only if, the person’s reason
for carrying out the action is a A large number of authors have
reason that he or she would be held that the categorical
willing to have every person act imperative (in one or the other
on, in any similar situation. The of its formulations) explains why
first formalation of the people have moral rights.
categorical imperative, then,
incorporates two criteria for • Human beings have a clear
determining moral right and interest in being helped by
wrong: being provided with the work,
food, clothing, housing, and
• Universalizability: The medical care they need to live
person’s reasons for acting on when they cannot provide
must be reasons that these for themselves.
everyone could act on at least • Human beings also have a
in principle. clear interest in being free
• Reversibility: The person’s from injury or fraud and in
reasons for acting must be being free to think, associate,
reasons that he or she would speak, and live privately as
be willing to have all others they choose.
use, even as a basis of how • Human beings have a clear
they treat him or her. interest in preserving the
institution of contracts.

The second formulation Kant


gives of the categorical Problems with Kant:
imperative is this: “Act in such a
way that you always treat • Kant’s theory is not precise
humanity, whether in your own enough to always be useful.
person or in the person of any • Although we might be able to
other, never simply as a means, agree on the kinds of
but always at the same time as interests that have the status
an end. Or never treat people of moral rights, there is
only as means, but always also substantial disagreement
as ends. “An action is morally concerning what the limits of
right for a person if, and only if, each of these rights are and
in performing the action, the concerning how each of these
person does not use others rights should be balanced
merely as a means for against other conflicting
advancing his or her own rights.

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Business Ethics, Anderson University DBA Fall 2001

• There are counterexamples the kind of treatment in question


that show the theory should be given similar benefits
sometimes goes wrong. and burdens, even if they are
dissimilar in other irrelevant
respects; and individuals who
The Libertarian Objection: are dissimilar in a relevant
Nozick. The American respect ought to be treated
philosopher Robert Nozick dissimilarly, in proportion to
claims that the only basic right their dissimilarity. It is based on
that every individual possesses the purely logical idea that we
is the negative right to be free must be consistent in the way
from the coercion of other we treat similar situations.
human beings. Nozick and other
libertarians pass too quickly Justice as Equality:
over the fact that the freedom of Egalitarianism
one person necessarily imposes
constraints on other persons. Egalitarians hold that there are
no relevant differences among
Justice and Fairness people that can justify unequal
treatment. Every person should
Issues involving questions of be given exactly equal shares of
justice and fairness are usually a society’s or a group’s benefits
divided into three categories: and burdens.

• Distributive justice, the Criticisms of Egalitarians:


first and basic category, is
concerned with the fair • There is no quality that all
distribution of society’s human beings possess in
benefits and burdens. precisely the same degree.
• Retributive justice refers to • The egalitarian ignores some
the just imposition of characteristics that should be
punishments and penalties on taken into account in
those who do wrong. distributing goods both in
• Compensatory justice society and in smaller groups:
concerns the best way of need, ability and effort.
compensating people for
what they lost when they
were wronged by others. Some egalitarians have tried to
strengthen their position by
distinguishing two different
The principle of distributive kinds of equality: political
justice: Individuals who are equality and economic equality.
similar in all respects relevant to Political equality refers to an

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equal participation in, and anything worthwhile through


treatment by, the means of these efforts is to reward
controlling and directing the incompetence and inefficiency.
political system. This includes
equal rights to participate in the Productivity: the better the
legislative process, equal civil quality of a person’s contributed
liberties, and equal rights to due product, the more he or she
process. Economic equality should receive. This ignores
refers to equality of income and people’s needs. It is difficult to
wealth and equality of place any objective measure on
opportunity. the value of a person’s product,
especially in fields such as the
Thus, they have argued that sciences, the arts,
every person has a right to a entertainment, athletics,
minimum standard of living and education, theology, and health
that income and wealth should care.
be distributed equally until this
standard is achieved for Supply and Demand: The
everyone. The economic surplus value of a person’s product
that remains after everyone has should be determined by the
achieved the minimum standard market forces of supply and
of living can then be distributed demand. Unfortunately this
unequally according to need, method of measuring the value
effort and so on. of a person’s product still
ignores people’s needs.
Justice Based on
Contribution: Capitalist Justice based on Needs and
Justice Abilities: Socialism

Effort: Benefits should be First proposed by Louis Blanc


distributed according to the (1870-1924) “From each
value of the contribution the according to his ability, to each
individual makes to a society, a according to his needs.” The
task, a group, or an exchange. socialist principal: work burdens
The main question raised by the should be distributed according
contributive principle of to people’s abilities, and
distributive justice is how the benefits should be distributed
“value of the contribution” of according to people’s needs.
each individual is to be
measured (based on work First there would be no relation
effort). To reward a person’s between the amount of effort a
efforts without any reference to worker puts forth and the
whether the person produces amount of remuneration one

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Business Ethics, Anderson University DBA Fall 2001

receives (because remuneration a. Each person has


would depend on need, not on an equal right
effort). Human nature is to the most
essentially self-interested and extensive basic
competitive and so outside the liberties
family people cannot be compatible with
motivated by the faternal similar liberties
willingness to share and help for all, and
that is characteristic of families. b. Social and
If the socialist principle were economic
enforced, it would obliterate inequalities are
individual freedom. The arranged so
occupation each person entered that they are
would be determined by the both:
person’s abilities and not by his 1. To the greatest
or her free choice. benefit of the least
advantaged persons
Justice as Freedom: 2. Attached to offices
Libertarianism and positions open to
all under conditions
From each according to what he of fair equality of
chooses to do, to each according opportunity
to what he makes for himself
(perhaps with the contracted aid
of others) and what others Principle A is supposed to take
choose to do for him and choose priority over Principle B should
to give him of what they’ve been the two of them ever come into
given previously (under this conflict, and within Principle B,
maxim) and haven’t yet Part 2 is supposed to take
expended or transferred. priority over Part 1.
Obviously, this means it would
be wrong to tax one person to Principle A is called the
provide welfare benefits for principle of equal liberty:
someone else’s needs. This each citizen’s liberties must be
would generate unjust treatment protected from invasion by
of the disadvantaged. others and must be equal to
those of others. These basic
Justice as Fairness: Rawls liberties include the right to
vote, freedom of speech and
The distribution of benefits and conscience and other civil
burdens in a society is just if and liberties, freedom to hold
only if: personal property, and freedom
from arbitrary arrest.

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Part 1 of Principle B is called the Compensatory Justice


difference principle. It
assumes that a productive Compensatory justice concerns
society will incorporate the justice of restoring to a
inequalities, but it then asserts person what the person lost
that steps must be taken to when he or she was wronged by
improve the position of the most someone else. Traditional
needy members of society, moralists have argued that a
unless such improvements person has a moral obligation to
would so burden society that compensate an injured party
they make everyone, including only if three conditions are
the needy, worse off than present:
before.
1. The action that inflicted the
Part 2 of Principle B is called the injury was wrong or negligent.
principle of fair equality of 2. The person’s action was the
opportunity: everyone should be real cause of the injury.
given an equal opportunity to 3. The person inflicted the injury
qualify for the more privileged voluntarily.
positions in society’s
institutions.
The most controversial forms of
Retributive Justice compensation undoubtedly are
the preferential treatment
Retributive justice concerns programs that attempt to
the justice of blaming or remedy past injustices against
punishing persons for doing groups.
wrong. More relevant to our
purposes is the question of the Partiality and Care
conditions under which it is just
to punish a person for doing This view – that we have an
wrong. Major conditions under obligation to exercise special
which a person could not be care toward those particular
held responsible include persons with whom we have
ignorance and inability. A valuable close relationships,
second kind of condition of just particularly relations of
punishments is certitude that dependency – is a key concept
the person being punished in an ethic of care. Thus, an
actually did the wrong. A third ethic of care emphasizes two
kind of condition of just moral demands:
punishments is that they must
• We each exist in a web of
be consistent and
relationships and should
proportioned to the wrong.

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Business Ethics, Anderson University DBA Fall 2001

preserve and nurture those resources to attain everyone’s


concrete and valuable objectives, so we are forced to
relationships we have with consider the net social benefits
specific persons. and social costs consequent on
• We each should exercise the actions by which we can
special care for those with attain these objectives.
whom we are concretely
related by attending to their Moral reasoning of this type
particular needs, values, forces consideration of whether
desires, and concrete well- the behavior respects the basic
being as seen from their own rights of the individuals involved
personal perspective, and by and whether the behavior is
responding positively to these consistent with one’s
needs, values, desires, and agreements and special duties.
concrete well-being,
Third, our moral judgments are
particularly of those who are
also in part based on standards
vulnerable and dependant on
of justice that indicate how
our care.
benefits and burdens should be
distributed among the members
A communitarian ethic is an of a group.
ethic that sees concrete
Fourth, our moral judgments are
communities and communal
also based on standards of
relationships as having a
caring that indicate the kind of
fundamental value that should
care that is owed to those with
be preserved and maintained.
whom we have special concrete
Second, it is important to
relationships.
recognize that the demands of
caring are sometimes in conflict This suggests that moral
with the demands of justice. It reasoning should
has been claimed that an ethic incorporate all four kinds of
of care can degenerate into moral considerations,
unjust favoritism. Its demands although only one or the
can lead to burnout due to the other may turn out to be
sacrifice of their own needs and relevant or decisive in a
desires to care for the well-being particular situation. One
of others. simple strategy for ensuring
that all four kinds of
2.5 Integrating Utility, Rights,
considerations are
Justice and Caring incorporated into one’s
Utilitarian standards must be moral reasoning is to inquire
used when we do not have the systematically into the

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utility, rights, justice and The Nature of Virtue


caring involved in a given
moral judgment. Ask a series A moral virtue is an acquired
of questions about an action disposition that is valued as part
that one is considering: of the character of a morally
good human being and that is
1. Does the action, as far as exhibited in the person’s
possible, maximize social habitual behavior. A person has
benefits and minimize a moral virtue when the person
social injuries? is disposed to behave habitually
2. Is the action consistent in the way and with the reasons,
with the moral rights of feelings, and desires that are
those whom it will affect? characteristic of a morally good
3. Will the action lead to a person.
just distribution of
benefits and burdens? The Moral Virtues
4. Does the action exhibit
appropriate care for the Greek philosopher Aristotle
well-being of those who argued that a moral virtue is a
are closely related to or habit that enables a human
dependent on oneself? being to act in accordance with
the specific purpose of human
beings.
Moral Factual Moral
Standards Informati Judgment St. Thomas Aquinas, followed
on Aristotle in holding that the
moral virtues enable people to
Maximize Concerning On the follow reason in dealing with
social the policy, rightness
utility institution, or
their desires, emotions and
or behavior wrongness actions and in accepting that the
Respect under of the four pivotal or cardinal moral
moral considerati policy, virtues are courage,
rights on institution, temperance, justice, and
or behavior
Distribute prudence. Aquinas added the
benefits “theological” or Christian virtues
and of faith, hope and charity – the
burdens virtues that enable a person to
justly achieve union with God.
Exercise
caring
Virtues, Actions and
Institutions

Virtue theory argues that the


aim of the moral life is to

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develop those general developed country, which set


dispositions we call the moral higher or more stringent
virtues, and to exercise and standards. But this claim ignores
exhibit them in the many that introducing practices that
situations that human life sets have evolved in a highly
before us. developed country into one that
is less developed may produce
An action is morally right if in more harm than good.
carrying out the action the agent
exercises, exhibits, or develops Some have gone to the opposite
a morally virtuous character, extreme and argued that
and it is morally wrong to the multinationals should always
extent that by carrying out the follow local practices, whatever
action the agent exercises, they may be, or that they should
exhibits, or develops a morally do whatever the local
vicious character. government wants, because it is
the representative of the people.
Virtues and Principles But it is sometimes unethical to
go along with local practices or
Hence, there is no conflict government requirements as it
between theories of ethics that sometimes is to oppose them.
are based on principles and
theories of ethics based on The foregoing discussion
virtues. An ethic of virtue is not suggests that the following
a fifth kind of moral principle questions should be asked about
that should take its place any corporate action or policy
alongside the principles of under consideration by a
utilitarianism, rights, justice and company operating in a foreign
caring. Instead, an ethics of country:
virtue fills out and adds to these
four by looking not at the 1. What does the corporate policy or
actions people are required to action really mean in the context of
the local culture? When viewed in
perform, but at the character terms of its local cultural meaning,
they are required to have. is the policy or action ethically
acceptable, or does it violate the
2.7 Morality in International ethical standards of utilitarianism,
Contexts rights, justice, and caring to such
an extent that it should not be
Some have claimed that, when undertaken? From the perspective
operating in less developed of virtue, does the action or policy
countries, multinationals from encourage the exercise or the
more developed home countries development of morally good
should always follow those character?
practices prevalent in the more

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2. Taking into account the nation’s utilitarianism, rights, justice, and


level of technological, social and caring to a degree significant
economic development and what enough to require withdrawal from
its government is doing to promote that country? Is the practice so
this development, does the pernicious from the perspective of
corporate policy or action produce moral character as to require
consequences that are ethically withdrawal from the country?
acceptable from the point of view
of utilitarianism, rights, justice and
caring, or from the point of view of
moral character? Can the more
stringent legal requirements or
practices common in more
developed nations be implemented
without damage to the host
country and its development, and
in context would such
implementation be more consistent
with the ethical standards of
utilitarianism, rights, justice, and
caring? Would such
implementation encourage the
exercise or the development of
morally good character?
3. If the corporate action or policy is
allowed or required by the laws or
the decrees of the local
government, does this government
truly represent the will of all its
people? Does the corporate action
or policy nevertheless violate the
principles of utilitarianism, rights,
justice or caring, or is it
condemnable from the perspective
of moral character? If so, and if the
action or policy is legally required
to do business in the host country,
then is the ethical violation
significant enough to require
withdrawal from that country?
4. If the corporate action or policy
involves a local common practice
that is morally questionable by
home country standards (such as
sexual discrimination or bribery of
government personnel), is it
possible to conduct business in the
host country without engaging in
the practice? If not, then does the
practice violate the principles of

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