Unit II

INDIVIDUAL & ORGANISATIONAL FACTORS

 Ethical dilemma :Choice of promoting among three candidates.

 Decisions based on morals are seen to stand the test of time. Philosopher Nash has suggested 12 questions to asked when facing ethical dilemmas. Have you defined the problem correctly? How would you define the problem if you stood on the other side of the fence? How did the situation occur in the first place? Who was involved in the situation in the first place? What is your intention in making this decision? How does this intention compare with likely results? Who could your decision or action injure? Can you engage the affected parties in a discussion of the problem before you make your decision? Are you confident that your decision will be as valid over a long period as it seems now? Could you disclose your decision without qualms to your boss, CEO, Family and society? What is the symbolic potential of your action if understood? Under what conditions would you allow exceptions to your stand?

 As an individual matures, individual values such as honesty, trustworthiness and integrity develop into moral philosophies by which right and wrong are decided. To understand the process, moral philosophies and cognitive development process should be analyzed.

Moral Philosophy
System of values by which people live. Moral philosophy refers in particular to the principles or rules that people use to decide what is right or wrong. Guidelines for determining how conflicts in human interests are to settled for optimizing mutual benefit of people living together in groups Milton Friedman market will punish or reward companies for unethical conduct without need for government regulation. The success of the economic system in any country is dependent on the moral philosophies and individual values. E.g. Greece , Germany

 Moral philosophies are ideal moral perspectives that provide individuals with abstract principles for guiding their guiding their social existence. Functioning of economic and business systems depends on individuals coming together and sharing philosophies that create the moral values ,trust, and expectations that allow the system to work. Moral philosophies are a result of cultural and social development.

Moral Philosophies used in business

Teleology Egoism States that acts are morally right or acceptable if they produce some desired result, such as realization of self-interest or utility Defines right or acceptable actions as those that maximize a particular persons self-interest as defined by the individual

Utilitarianis m
Deontology

Define right or acceptable actions as those that maximize total utility, or the greatest good for the greatest number of people
Focuses on the preservation of individual rights and on the intentions associated with a particular behavior rather than on its consequences Evaluates ethicalness subjectively on the basis of individual and group exercises

Relativist

Virtue Ethics

Assumes that what is moral in a given situation is not only what conventional morality requires, but also what the mature person with a good moral character would deem appropriate
Evaluates Ethicalness on the basis of fairness : distributive, procedural ,and interactional

Justice

Teleology
Teleological philosophies assess the worth of a behavior by looking at its consequences. Emphasis on consequentialism Rightness of an act is determined solely by the good consequences it produces. Important philosophies that guide business are egoism and utilitarianism.

Egoism
Right or acceptable behavior in terms of its consequences for the individual. Decisions are taken to maximize self interest ,based on individual perceptions. Do the act that promotes elf interest Egoists are termed as unethical, short term oriented and taking advantage of consumers given the opportunity in business.

Utilitarianism
Velasquez pg 73 Right actions and institutions maximize aggregate happiness. utilitarianism is generally held to be the view that the morally right action is the action that produces the most good On the utilitarian view one ought to maximize the overall good that is, consider the good of others as well as one's own good. Everyone's happiness counts the same

Classical utilitarianism
In this goodness is human well being Pleasure is taken to be ultimately the only good and evil is the opposite of pleasure or pain. Whatever provides benefit is good and whatever makes them worse is evil. Utilitarianism might consider as acceptable, a persons death if that action created some greater benefit.

Jeremy Benthams version

Utilitarianism means that principle which approves or disapproves of every action whatsoever incidence of pleasure and pain. Consequence can be measured in some way so that the pleasure and pain of different individuals can be added together and the results of different courses of action can be compared.

John Stuart Mills version

Actions are right in proportion as they tend to promote happiness, wrong as they tend to produce the reverse of happiness He says it is better to be Socrates dissatisfied than a fool dissatisfied Both Bentham and Mill assured that the amount of pain produced by an action can be subtracted from the amount of pleasure to yield the net amount of pleasure.

Utilitarian principle
Universalism Consequentialism

Utilitarian principle

Maximalism

Hedonism

 Universalism The consequences are those of everyone alike. E.g. :pollution Maximalism Right action not only results in but maximizes good consequences Hedonism Utility is identified with pleasure and absence of pain

 Consequentialism The view that the rightness or wrongness of actions and institutions is a function of the goodness or badness of their consequences. Non- Consequentialism The view that the rightness or wrongness of actions and institutions is a function of something other than the goodness or badness of their consequences.

Plus points of Teleology

Utilitarianism explains why lying, breaking a promise or stealing is wrong and saying truth, keeping up promise are right. Utilitarianism explains why lying in a particular situation is the right thing to do. Teleological theories provide a relatively precise and objective method for moral decision making. Economists use the utilitarian assumption that individuals seek to maximize their own utility or welfare to predict a wide range of economic phenomena, such as prices and allocation of resources.

Deontology
Deontology is the science of duty. Primary duty of an individual is not to do bad. Deontology refers to moral philosophies that focus on rights of individuals and their intentions associated with a particular behavior rather than on the consequences. Unlike utilitarianism, deontologists argue that there are some things that we should not do, even to maximize utility. Bribery is an offense, irrespective of for what purpose.

 Deontologists believe that individual has certain absolute rights

Freedom of conscience Freedom of consent Freedom of Privacy Freedom of speech Due Process -The idea that laws and legal proceedings must be fair.

Non-consequentialism or the ethics of respect for persons The view that the rightness or wrongness of actions and institutions is a function of something other than the goodness or badness of their consequences.

Kantianism
German philosopher Immanuel Kant has stated that an action is morally right only if the person performing it is motivated by a goodwill. Possession of such a will makes the action right, the absence makes it wrong. A goodwill according to Kant means action done for reasons of principle from a sense of duty.

Kantian ethics
Theme one: persons as ends-in-themselves Always treat persons (rational agents) as ends-inthemselves and never merely as means to your ends Theme two: social contract theory The right moral rules are those which rational agents would freely choose to have govern them. Theme three: universalizability Act only on universalizable maxims.

Deontological
Gives importance to universal values Goodness is the basic concept Strong in flexibility Upholds ethics of sense of duty Gives equal importance to means and ends

Teleological
Focuses on selfish actions generate happiness are correct Goodness is only means to an end Weak in flexibility Upholds ethics of happiness to all focusing on the end only

Encourages common good

Encourages only individual goodness

The Relativist Perspective

Relativists use themselves or people around them as their basis for defining ethical standards. Definitions of ethical behavior are derived subjectively from experiences of individuals or groups. Groups positive consensus defines right, or ethical behavior. With time or change in composition of the group unethical behavior can be termed as ethical In business perspective, relativist aims for group consensus.

Virtue Ethics
A moral virtue represents an acquired disposition. E.g. trait of honesty will make a person utter truth as it is right and comfortable. A virtue is considered praise worthy as it is an achievement an individual develops through practice and commitment. Virtue ethics : A mature person with good morals will deem appropriate in a given situation.

 Virtue ethicist believe that to have a successful contractual market economy , society must be capable of carving out sanctuaries like family , school, church and community where virtues can be nurtured. Virtues such as truth, trust, tolerance and restraint create obligations that make social cooperation possible. Important to business transactions are trust, self control, empathy,

fairness,truthfulness,learning ,gratitude,civility,Moral leadership. (Ferrell

Pg 104)

Theories of Moral Virtue

Aristotle: Habits that enable a person to live according to reason. MacIntyre: Disposition that enables a person to achieve the good at which human practices aim. Pincoff: Dispositions we use when choosing between persons or potential future selves. Aquinas: Habits that enable a person to live reasonably in this world and be united with god in the next.

Justice and Fairness

In business ethics involves evaluations of fairness or the disposition to deal with perceived injustices of others. Justice is fair treatment and due reward in accordance with ethical or legal standards. Based on perceived rights of individuals and on intentions of people involved in business transaction. Concept is based more on deontological theories than teleological. Types of justice for evaluating fairness of different situations as follows :

Justice Type

Evaluations fairness

of

Distributive justice :based on the Benefits derived evaluation of outcomes or results of Equity in rewards the business relationship

Procedural justice :based on the Decision making process processes and activities that produce Level of access, openness and the outcome or results participation
Interactional justice :based on an Accuracy of information, evaluation of the communication Truthfulness, respect, and process used in the business courtesy in the process relationship

The ethics of care

An ethic that empathizes caring for the concrete well being of those near to us. Main features
Claims ethics needs to be impartial Emphasizes preserving and nurturing concrete valuable relationships Says we should care for those dependent on and related to us.

 Ethics of care is similar to communitarian ethics which sees concrete communities and communal relationships as having a fundamental value that should be preserved and maintained like traditions, culture, practices and history. Objections to ethics of care
Can degenerate to favoritism Can lead to burnout

Cognitive Moral Development

Stages through which people progress in their development of moral thought. Cognitive moral processing is crucial element in ethical decision making. According to Kohlbergs model of moral development, people make different decisions in similar ethical situations because they are in different stages of six cognitive moral development stages.

Kohlbergs Model of Cognitive Moral Development

The stage of punishment and obedience. The stage of individual instrumental purpose and exchange. - right The stage of mutual interpersonal expectations, relationships and conformity. focus on other specific persons The stage of social system and conscience maintenance. society The stage of prior rights, social contract or utility. The stage of universal ethical principles.

Moral Reasoning
The reasoning process by which human behaviors, institutions, or policies are judged to be in accordance with or in violation of moral standards. Moral reasoning has two essential components
An understanding of what reasonable moral standards require, prohibit, value or condemn Evidence or information that shows that a particular person ,policy, institution, or behavior has the kinds of features that these moral standards require, prohibit, value or condemn. Has explicit and implicit moral judgements.

Analyzing Moral Reasoning

Moral reasoning must be logical The factual evidence cited in support of a persons judgment must be accurate, relevant and complete. Persons moral reasoning should be consistent.
Pg 32-33(implicit and explicit moral reasoning)