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Presented By:
Somya (13105
Lets see an example….
The Reluctant Donor Case: Suppose that you are famous transplant
surgeon, and that your transplants always work. You have five patients,
each of whom needs a transplant. One needs a heart, one a brain, two
need one lung each, and one needs a liver. You have a patient named
“Mr. Kumar” who has come in today to find out the results from some
lab work. You know from the results of the lab work that Mr. Kumar
would be a perfect donor for each of your five other patients, and you
know that
there are no other available donors. So you ask Mr. Kumar if he would
be willing to be cut up and have his organs distributed. He declines
your kind offer. But you then realize that you could cut Mr. Kumar up
without his permission during some minor surgery he has already
consented to. Is it permissible for you do so? 2
Business Ethics: What Does It
Really Mean?
• Ethics involves a discipline that examines good
or bad practices within the context of a moral
• Moral conduct is behavior that is right or wrong
• Business ethics include practices and
behaviors that are good or bad
Business Ethics: What Does It
Really Mean?
Two Key Branches of Ethics
• Descriptive ethics involves describing,
characterizing and studying morality
– “What is”
• Normative ethics involves supplying and
justifying moral systems
– “What should be”

Sources of Ethical Norms
Regions of
Fellow Workers

Family Profession
The Individual
Friends Employer

The Law Religious

Society at Large

Ethics and the Law
• Law often represents an ethical minimum
• Ethics often represents a standard that exceeds
the legal minimum
Frequent Overlap

Ethics Law

Making Ethical Judgments
Behavior or act compared with
Prevailing norms
that has been
of acceptability

Value judgments
and perceptions of
the observer

3 Models of Management Ethics
Three Types Of Management Ethics

Three Models of Management
Morality and Emphasis on CSR

Developing Moral Judgment
External Sources of a Manager’s Values
• Religious values
• Philosophical values
• Cultural values
• Legal values
• Professional values

Developing Moral Judgment
Internal Sources of a Manager’s Values
• Respect for the authority structure
• Loyalty
• Conformity
• Performance
• Results

Can Business Ethics Be Taught
And Trained?

• Ethic courses should not:

– Advocate a set of rules from a single perspective
– Not offer only one best solution to specific ethical
– Not promise superior or absolute ways of thinking and
behaving in situations

Can Business Ethics Be Taught
And Trained?
• Scholars argue that ethical training can add value to the
moral environment of a firm and to relationships in the
workplace by:
– Finding a match between employer’s and employee’s
– Handling an unethical directive
– Coping with a performance system that encourages
unethical means

Ethics-Moral Disengagement
• Social Learning Theory
– Moral reasoning translates to moral action through
self regulatory processes
• You do things that bring you self-worth
• You avoid things that avoid self censure
• You have to disengage from your normal internal
self sanctions to commit unethical or deviant
Theories of Ethics
• Four major theories of ethics in the Western
– Utilitarianism: net benefits
– Rights: entitlement
– Justice: fairness
– Egoism: self-interest

How does this work?
What makes an act right or wrong?

Inclination Intended Result

Duty Actual Result
Ethical Theory 1: Utilitarianism
• Famous Proponents: Jeremy Bentham, J.S. Mill
• What makes something good or bad, right or wrong, is that it
produces the greatest amount of pleasure (or lack of pain) for the
greatest number of people
• Basic Principle: Greatest Happiness Principle
 Maximizing positive outcomes for the largest number of people,
negative outcomes for lowest number of people
 One should chose the action which will lead to the greatest happiness
(i.e. pleasure, lack of pain) overall
 One’s own pleasure and pain only count as much as any other
person’s affected 17
Utilitarianism (Contd)

• Assessment of net benefits includes any important indirect


• Example: assessing the effects of pollutant discharge

from a factory on the immediate surrounding environment
and those down stream or down wind from the factory

• Two forms: act and rule

Act utilitarianism

• It asks a person to assess the effects of all actions

• Rejects the view that actions can be classified as

right or wrong in themselves

• Example: lying is ethical if it produces more good

than bad

Rule utilitarianism
• It asks a person to assess actions according to a set of
rules designed to yield the greatest net benefit to all

• Compares act to rules

• Does not accept an action as right if it maximizes net

benefits only once
• Example: lying is always wrong or “thou shalt not lie”
Limitations of Utilitarianism
• Hard to use in difficult to quantify situations

• Does not include rights and justice

• A few doctors decide that a number of
experiments on a few people, even if most of
them died, would be worth it if they could find a
cure for a disease that would relieve the
suffering of millions of people. Utilitarianism
would give the approval for such because it
produces the greatest good for the greatest
number of people.
What makes an act right or wrong?

Inclination Intended Result

Duty Actual Result

Ethical Theory 2: Justice
• Looks at the balance of benefits and burdens distributed
among members of a group

• Can result from the application of rules, policies, or laws that

apply to a society or a group

• Just results of actions override utilitarian results

• Rejects view that an injustice is acceptable if others benefit

the action 24
Ethical Theory 3: Rights

• Right: a person’s just claim or entitlement

• Focuses on the person’s actions or the actions of
others toward the person
 Legal rights: defined by a system of laws
 Moral rights: based on ethical standards
• Purpose: let a person freely pursue certain actions
without interference from others

Rights (contd)
• Features
• Respect the rights of others
• Lets people act as equals
• Moral justification of a person’s action
• Examples
• Legal right: right to a fair trial in the United States
• Moral right: right to due process within an organization

Rights (contd)
• Rejects view of assessing the results of actions
• Expresses moral rights from individual's view, not society's.
Does not look to the number of people who benefit from
limiting another person's rights
• Example: right to free speech in the United States stands
even if a person expresses a dissenting view

Types Of Rights
• Negative rights: do not interfere with another person’s rights
• Positive rights: A person has a duty to help others pursue their rights

Negative: do not stop a person from whistleblowing

Positive: coworker helps another person blow

the whistle on unethical actions

What makes an act right or wrong?

Inclination Intended Result

Duty Actual Result

Ethical Theory 4: Egoism
• Famous Proponents: Ayn Rand, Adam Smith
• What makes something good or bad, right or wrong, is that it
satisfies one’s desires, or meets one’s needs
• Basic Principle: Self-interest of person doing, considering, or
affected by the action
• One should chose the action which most realizes or conduces to
one’s own self-interest
• Important Variation: should the person look simply to self-
interest, or to enlightened or rational self-interest?
• Conception of Rational Self-Interest is basic component of
capitalist economy and business models 30
Types of Egoism
Individual Ethical Egoism
– Judges actions only by their effects on one’s interests
– Usually rejected by moral philosophers as a defensible basis of ethics

Universal Ethical Egoism

– Can include the interests of others when assessing one’s actions
– Still self-centered: pursuing pleasure and avoiding pain
– “Enlightened self-interest.” Considers the interests of others because
the person wants others to do the same toward him or her
Objections regarding Egoism

• Does not resolve conflicts in people’s interests

• One party would always have the pursuit of his or her

interests blocked

Questions From The Ethical
• Utilitarianism: does the action yield the greatest net

• Rights: does the action negatively affect someone’s moral


• Justice: does the action give a fair distribution of costs and

benefits among those affected?

• Egoism: will the action lead to other people behaving

toward me in a way I would like? 33