Moral Issues in Business

13th Edition
by
William H. Shaw and Vincent Barry

Lecture Outlines

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Part I: Moral Philosophy
and Business
Chapter 1: The Nature of Morality
Chapter 2: Normative Theories of Ethics
Chapter 3: Justice and Economic Distribution
 What is Ethics?

https://www.youtube.com/watch?v=bOpf6KcWYyw
Moral Issues in Business
Chapter 1
 Chapter One:
The Nature of Morality

This multimedia product and its contents are protected under copyright law. The following are prohibited by law:
• any public performance or display, including transmission of any image over a network;
• preparation of any derivative work, including the extraction, in whole or in part, of any images;
• any rental, lease, or lending of the program.
Moral Issues in Business
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 Overview
➢ Chapter One examines the following topics:
(1) Business and organizational ethics
(2) Moral versus nonmoral standards, etiquette and
professional codes
(3) Religion and business morality
(4) Ethical relativism and the “game” of business
(5) Moral principles, conscience, and self-interest
(6) Personal values, integrity, and responsibility
(7) Moral Reasoning, arguments, and judgments
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 Introduction to Business Ethics
➢ What is ethics? The study of right and wrong,
duty and obligation, moral norms, individual
character, and responsibility.
➢ What is business ethics? The study of right and
wrong, duty and obligation, moral norms,
individual character, and responsibility – in the
context of business.

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 Moral Versus Nonmoral Standards
➢Nonmoral standards: Standards about
behavior or practices with no serious effects
upon human well-being
➢Moral standards: Standards about behavior
or practices with serious effects upon human
well-being
 Some Features of Moral Standards
➢ Moral standards take priority over nonmoral
standards.
➢ The soundness or validity of moral standards
depend on the quality of the arguments or the
reasoning that support them.
 Morality and Etiquette
➢ Rules of etiquette are ordinarily nonmoral in
character and are meant to serve as guidelines for
socially acceptable behavior.
➢ Violations of etiquette can sometimes have moral
implications.
➢ The strict observance of rules of etiquette can
sometimes conceal serious moral issues.

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 (1) Morality and Law
➢ Statutes: Laws enacted by legislative bodies such
as the U.S. Congress and state legislatures
➢ Regulations: Laws enacted by special boards or
agencies for various kinds of conduct
➢ Common law: The body of judge-made laws
developed in English-speaking countries over the
course of many centuries
➢ Constitutional law: Court rulings on the
requirements of the U.S. Constitution and on the
constitutionality of legislation
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 (2) Morality and Law
➢ The distinction between morality and legality:
➢An action can be illegal but morally right
➢An action can be legal but morally wrong
➢ Professional codes: The rules that govern the
conduct of the members of a given profession
➢Individuals have the responsibility to critically
assess the rules of their professions
➢These rules are not always complete and
reliable guides to adequate moral conduct
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“You come upon this scene—the car is smoking, and it is
clear that an accident just took place. In most states, you are
not legally obligated to stop and offer help to the victims.”
 (1) The Sources of Morality
➢ The justification of moral norms: Moral
philosophers study mainly the justification, rather
than the origin, of moral norms.
➢ The claim that morality is based on religion:
➢Religion provides incentives to be moral
➢Religion provides moral guidance
➢Moral norms are in essence divine commands

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 (2) The Sources of Morality
➢ Example of morality in religions:
• Good people proceed while considering that what is
best for others is best for themselves. (Hitopadesa,
Hinduism)
• Hurt not others with that which pains yourself.
(Udanavarga 5:18, Buddhism)
• What you do not want done to yourself, do not do to
others. (Analects 15:23, Confucianism)
• No one of you is a believer until he loves for his
brother what he lovesMoralfor
Issueshimself.
in Business (Traditions, Islam)
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 (3) The Sources of Morality
➢ Ethical relativism: The view according to which
moral norms derive their ultimate justification
from the customs of the society in which they
occur.
➢ This means that moral norms are not universal,
but are dependent upon a particular cultural or
social context.

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 (4) The Sources of Morality
➢ Implications of relativism:
➢There is no independent standard by which to
judge the rightness or wrongness of other
societies.
➢The idea of ethical progress loses its
significance.
➢It wouldn't make sense to criticize the moral
code of one’s own society or culture.

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 (5) The Sources of Morality
➢ Relativism and the “game” of business:
➢The idea that business is a just game captures
the thesis of Albert Carr.
➢He argued that business professionals are
expected to follow a code that has little or
nothing to do with ethics in other contexts.
➢This view entails – incorrectly – that the
practices of business professionals cannot (or
should not) be evaluated from an ordinary
moral standpoint.

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 (1) The Importance of Moral
Principles
➢ What it means to have principles: Accepting
moral principles is not just a matter of intellectual
recognition, but of profound individual
commitment to a set of values.
➢ Conscience: The internalized set of moral
principles taught to us by various authority
figures – parents and social institutions.
➢ Conscience and its limits: Conscience is not always
a reliable guide because it can be (1) conflicted
and (2) erroneous.
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 (2) The Importance of Moral
Principles
➢ Moral principles and self-interest: The morality of
an action can run counter to our self-interest
➢The moral point of view requires that we
restrict our self-interest to satisfy social co-
existence.
➢In situations of conflict between moral
principles and self-interest, it is important to
appeal to shared principles of justification.

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 Morality and Personal Values
➢ Morality in the narrow sense: The moral
principles or rules that do, or should, govern the
conduct of individuals in their relations with
others
➢ Morality in the broad sense: The values, ideals,
and aspirations that influence the decisions and
lifestyles of individuals and entire societies
➢ Business ethics are mainly concerned with
morality in the narrow sense.
➢ But values, ideals, and aspirations also affect the
behavior and ethical choices of business
professionals.
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 (1) Individual Integrity and Moral
Responsibility
➢ Organizational norms: Employees of business
organizations (especially corporations) are:
➢Expected to further profit goals
➢Often pressured to compromise moral values
and ignore or violate rules of ethical conduct
➢ Conformity: Studies show that individuals are more
prone to act unethically when they are a part of an
organization or a group.

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 Asch Conformity Experiment

See Solomon E. Asch, “Opinion and Social Pressure,” Scientific

American (November 1955): 31–35

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 (2) Individual Integrity and Moral
Responsibility
➢ Groupthink: The pressure on group members to
conform to morally questionable policies or
strategies, often resulting in unethical conduct.
➢ Diffusion of responsibility: The multiplicity,
complexity, and distribution of tasks that can lead
individuals to feel less responsibility or
accountability for their actions.

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 (1) Moral Reasoning
➢ Argument: A group of statements in which one
statement (conclusion) follows from the others
(premises)
➢ Example:
(1) If Norman is bald, then Norman does not need a
haircut.
(2) It is the case that Norman is bald.
(3) Therefore, Norman does not need a haircut.

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 (2) Moral Reasoning
➢ Requirements for a sound argument: If its
statements (premises and conclusion) are true and
its form (or structure) is valid
➢Validity: If the assumption that an argument's
premises are true guarantee that the conclusion
is true, then it's valid
➢Invalid arguments: If the assumption that an
argument's premises are true do not guarantee
that the conclusion is true, then it's invalid
➢ Determining whether an argument is valid or
invalid requires familiarity with the rules of logic.
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 (3) Moral Reasoning
➢ Moral arguments: Those conflicting theories and
beliefs whose conclusions are moral judgments,
based on the premise of moral standards and
statements of fact
➢ Example:
(1) If an action violates the law, it is morally wrong.
(2) Affirmative action on behalf of women and
minorities in personnel matters violates the law.
(3) Therefore, affirmative action on behalf of women
and minorities in personal matters is morally
wrong.
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 (4) Moral Reasoning
➢ What makes a moral judgment defensible? If it is
supported by a defensible moral standard and
relevant facts
➢ Evaluating moral arguments:
(1) Clarifying the terms of the premises
(2) Examining the factual claims
(3) Assessing the moral standard

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 (5) Moral Reasoning
➢ Thus, an argument can be challenged by:
(1) Uncovering ambiguity in the terms
(2) Questioning the factual claims
(3) Challenging the moral standards

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 (6) Moral Reasoning
➢ Criteria for moral judgments:
(1) Should be logical
➢Embedded in valid arguments
➢Compatible with moral and nonmoral beliefs
(2) Should be based on facts
(3) Should be based on acceptable moral principles

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 Argument
An argument is a group of statements, one of
which (called the conclusion) is claimed to
follow from the others (called the premises).

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 Argument 1
If a person is a mother, the person is a
female.

Fran is a mother.

Therefore, Fran is a female.

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 Valid vs. Invalid Argument
Valid argument
Premises logically entail its conclusion.
Example: Argument 1

Invalid argument
Premises do not entail its conclusion.
Example: Argument 2

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 Argument 2
If a person is a mother, the person is a
female.

Fran is a female.

Therefore, Fran is a mother.

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 Counterexample
An example that is consistent with the
premises but is inconsistent with the
conclusion.

Argument 2 Counterexample
“Fran is a two-year-old” is consistent with
premises but inconsistent with conclusion
since could not be a mother.
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 Argument 3
If a person is a female, she must be a
mother.

Fran is a female.

Therefore, Fran must be a mother.

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 Sound vs. Unsound Argument
Sound argument
Have true premises and valid reasoning
Example: Argument 1

Unsound argument
Have at least one false premise, as in
Argument 3, or invalid reasoning, as in
Argument 2, or both.
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 Moral Arguments
Arguments whose conclusions are moral
judgments.

Moral Reasoning or argument typically

moves from a moral standard, through one
or more factual judgments about some
person, action, or policy related to that
standard, to a moral judgment about that
person, action, or policy.
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 Argument 4
If an action violates the law, it is morally
wrong.
Affirmative action on behalf of women and
minorities in personnel matters violates the
law.
Therefore, affirmative action on behalf of
women and minorities in personnel
matters is morally wrong.
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 Defensible Moral Judgments
If a moral judgment or conclusion is
defensible, then it is must be supportable
by a defensible moral standard, together
with relevant facts.

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 Patterns of Defense and
Challenge
1. Evaluating factual claims.
2. Challenging the moral standard.
3. Defending the moral standard.
4. Revising and modifying the argument.

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 Requirements for Moral
Judgments
• Should be logical
• Should be based on facts
• Should be based on acceptable moral
principles
- Example: consistency with our
considered moral beliefs

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 Cases
Case 1.1
Made in the U.S.A. – Dumped in Brazil,
Africa, Iraq…
Case 1.2
Just Drop off the Key, Lee
Case 1.3
The A7D Affair

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Moral Issues in Business
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 Readings
Reading 1.1
It’s Good Business

Reading 1.2
Moral Responsibility in the Age of
Bureaucracy

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