CHAPTER 2 ETHICAL THEORIES IN BUSINESS PREPARED BY : MADAM MARLIA BINTI MARZUKI POLITEKNIK KUCHING, SARAWAK
COURSE LEARNING OUTCOME CLO1 : Explain clearly categories, concepts and theories of business ethics in the related field ( C2, PLO1)
At the end of the learning process, students should be able to: 2.1 EXPLAIN CONSEQUENTIALIST ETHICAL THEORIES 01 2.2 EXPLAIN NONCONSEQUENTIALIST ETHICAL THEORIES 02 2.3 DISCUSS THE CHARACTERISTICS OF BEST ETHICS PRACTICE 03 2.4 ELABORATE THE CONCEPT OF MORAL DEVELOPMENT IN AN ETHICAL PERSPECTIVE 04
Ethical Theories 1) Teleological theories • Also referred to as consequential theories. This theory holds that the rightness of actions is determined solely by the amount of good consequences they produce 2) Deontological theories • Also referred to as non-consequential theories. It denies that consequences are relevant to determining what we ought to do.
ETHICAL THEORIES Consequentialist ( Teleological) Egoism Utilitarianism Non - Consequentialist (Deontological) Kants Ethics Prima Facie Obligations Moral rights
2.1 Consequentialist Ethical Theories Consequentialist (Teleological theories) • Those that determine the moral rightness or wrongness of an action based on the action’s consequences or result. Consequentialism defined : • Act are morally right just because they maximize the amount of goodness in the world • There are two theories : 1.Egoism 2.Utilitarian
2.1 Consequentialist Ethical Theories A) EGOISM • Practiced by Milton Friedman and Adam Smith • All human act for their own interest without think about others • Self-interest as soleobjective to all actions carried out
2.1 Consequentialist Ethical Theories Egoist : those determine the moral value of an action based on the principle of personal advantage • an action is morally right if it promotes one’s long term interest • An action is morally wrong if it undermines it • Do not necessarily care only about pursuing pleasure or behave dishonestly and maliciously toward others • Can assist others if doing so promotes their own advantage
2.1 Consequentialist Ethical Theories TYPE OF EGOISM 1) INDIVIDUAL ETHICAL EGOISM • All human need to act for me 2) PERSONAL ETHICAL EGOISM • I act for my self-interest and others act for their own interest 3) UNIVERSAL ETHICAL EGOISM • Everyone should act for the people interest of oneself without drag or burden others
Consequentialist Ethical Theories Egoism is further divided into two different theories: Ethical Egoism and Psychological Egoism 1) Ethical Egoism – self interest – normative teory • Describe how people should behave ( normative theory ) – eg : self interest • Pursue of self interest is ethically correct • The only valid standard of conduct is the obligation to promote one’s own well being above else’s. • Emphasizes the way things ought ( should) to be. • It is acceptable to make a decision or choose an action that benefits oneself interest.
Consequentialist Ethical Theories 2) Psychological Egoism • Everyone is always motivated to act in his or her own perceived self-interest. • Describe how people actually behave • Declares that we must be selfish. • Selfishness is the quality or state of being selfish; exclusive regard to one's own interest or happiness; that supreme self-love or self-preference which leads a person to direct his purposes to the advancement of his own interest, power, or happiness, without regarding those of others. • Self-interest is selfish or excessive regard for one's personal advantage or interest. • Refers mainly to the way people act. • An act performed out of selfishness means that it was only done to benefit you. • A main argument against psychological egoism is that there may be no purely altruistic moral motivation to help other people unless there is personal gain. • Selfishness is lack of concern for the values of others- doesn’t care about others
CRITISM / ARGUMENTS TOWARDS EGOISM THEORY • People will pretend be good to avoid society criticism. So, an act perform out of self-interest. • Ross (prima facie pioneer), Egoist do not have commitment to devoted to society and carry voluntary work • Egoist not emphasize generosity because pursue self-interest and can be harmful toward others
Consequentialist Ethical Theories B) UTILITARIAN • basically promotes the idea that actions are judged right or wrong according to the amount of happiness that comes from those decisions. • Founded by the British philosophers Jeremy Bentham(1748 -1832) and John Stuart Mill(1806 – 1873), • FATHER OF UTILITARIAN – JEREMY BENTHAM • Later criticized by his wayward discipline - JOHN STUART MILL
Consequentialist Ethical Theories •Utilitarianism is a theory of moral philosophy that is based on the principle that an action is morally right if it produces a greater quantity of good or happiness than any other possible action •It requires us to look at the consequences to determine the morality of an action and claim that the morality of the action depends on the amount of “goodness” that the action produces. In the case of both Jeremy Bentham and John Stuart Mill, good = pleasure •All utilitarianism involves a moral calculus as follows: (Amount of Good Produced) – (Amount of Evil Produced) = “Utility” of the Act
JEREMY BENTHAM • An action is right if and only if it produces the greatest balance of pleasure over pain for everyone’. • It judges an action to be right by virtue of the consequences of performing that action. JOHN STUART MILL • An action is right and if and only if it conforms the a set of rules the general acceptance of which will produce the greatest balance of pleasure over pain for everyone’. • This principle relates to the importance of complying with rules. It puts emphasis on results only regardless of compliance to rules.
CRITISM / ARGUMENTS TOWARDS UTILITARIAN THEORY • This theory may force an individual to do something against his/her own morals. • •Utilitarianism seems willing to sacrifice the good of individuals for the greater overall good • •This theory is degrading to human –people only attaining pleasure as goal in life • •Time-consuming-impossible to calculate the amount of pleasure and pain implied by each alternative • •Utilitarianism is unattainable –Impossible to act always for sake of the general happiness of society • •Encourage selfishness-people will only concerned to maximizing their own happiness
2.2 Non - Consequentialist Ethical Theories Non - consequentialist (Deontological ethical theories) • Is an ethical theory that uses rules to distinguish right from wrong • Is associated with philosopher Immanuel Kant • Deontology is simple to apply. It just requires people follow the rules and do their duty There are three theories : 1.Kant's Ethics 2.Prima Facie Obligations 3. Moral Rights
2.2 Non -Consequentialist Ethical Theories A) KANT'S ETHICS ( KANTIAN ETHICS) Kant believed that ethical actions follow universal moral laws such as Don't lie, Don't steal, Don't cheat • By Immanuel Kant (1724 – 1804), a German philosopher with a nonconsequentialist approach to ethics. • A moral theory that holds you should follow only those rules which you would will to be universal laws for everyone, including yourself. • Kant believed that morality should follow absolute rules that admit no exceptions, which has been a major argument against this theory. • Principles of UNIVERSALIZABILITY
A)KANT'S ETHICS Formulations of the categorical imperative: (1) Universal acceptability: To determine whether a principle is a moral law, we need to ask whether the command expressed through it is acceptable to all rational agents. (2) Humanity as an end, never as a means: We must always act in a way that respects human rationality in others and in ourselves. Kant in an organizational context: (1) The categorical imperative provides a solid standard for the formulation of rules applicable to any business circumstances. (2) Kant emphasizes the absolute value and dignity of individuals. (3) Kant stresses the importance of acting on the basis of right intentions.
CRITISM / ARGUMENTS TOWARDS KANT'S THEORY (1) Kant’s ethics is too extreme insofar as it excludes emotion from moral decision making and makes duty paramount. (2) Kant fails to distinguish between excepting oneself from a rule and qualifying a rule on the basis of exceptions. (3) It is not always clear when people are treated as ends and merely as means.
2.2 Non -Consequentialist Ethical Theories B) PRIMA FACIE OBLIGATIONS • W. D. Ross (1877–1971): British scholar who held that our moral experiences are too complex to be reduced to the principle of utility or the categorical imperative. His beliefs: • We have various duties that oftentimes come into conflict with each other. • There are no universal rules for the resolution of conflicts of duties. • Different situations generate different priority orders of duties. SIR WILLIAM DAVID ROSS
B) PRIMA FACIE OBLIGATIONS • Can be overridden by a more important duty in specific circumstances. Example: • We are in conflict over the duty to keep our promise to a friend and the duty to help a person in need. • We may have to override the promise and favor the more important duty to help the person. But in some other circumstances we ought to do the opposite
BASIC PRIMA FACIE OBLIGATIONS (1) Duties of fidelity. (2) Duties of reparation. (3) Duties of gratitude. (4) Duties of justice. (5) Duties of beneficence. (6) Duties of self-improvement. (7) Duties not to injure others.
(1) Duties of fidelity.- faithful to promised made / strive to keep promise / be honest (2) Duties of reparation – we should make amends when we have wrong someone else. (3) Duties of gratitude. Appreciation for support offered (4) Duties of justice - impartial, equal treatment (5) Duties of beneficence - help for others (6) Duties of self improvement - self fulfilment. (7) Duties not to injure others.- avoid harming others
2.2 Non - Consequentialist Ethical Theories C) MORAL RIGHTS A right is an entitlement to act or have others acts in a certain way. Some moral rights derive from special relationships, roles, or circumstances in which we happen to be. Moral rights that are not the result of particular roles, special relationships, or specific circumstances are called “human rights.
KEY FEATURES OF HUMAN RIGHTS (1) Human rights are universal. (2) Human rights are applied equally to all. (3) Human rights are inalienable and not transferable. (4) Human rights are natural in that they do not depend on human institutions.
CATEGORIES OF HUMAN RIGHTS (1) Negative rights: Those that reflect the vital interests that humans have in being free from outside interference (such as the freedom of speech, assembly, religion, etc.) (2) Positive rights: Those that reflect the vital interests that humans have in receiving certain benefits (such as the right to education, medical care, equal job opportunity, etc.)
Nonconsequentialism in an organizational context: (1) Moral decision making involves the weighing of different moral factors and considerations. (2) This theory acknowledges that the organization has its own legitimate goals to pursue. (3) It stresses the importance of moral rights and especially human rights.
CRITISM / ARGUMENTS TOWARDS NONCONSEQUENTIALISM 1) Ross maintained that moral truths are known intuitively, i.e. they are self-evident. (2) Critics question whether intuition is always a reliable guide for establishing moral truths. (3) They say that appeals to intuition should be critically assessed. (4) It is not always clear how issues with conflicting rights and principles ought to be resolved.
2.3 Discuss the characteristics of best ethics practice
Ethical practice refers to the standards of professional conduct that any industry professional is expected to uphold. ... These standards govern the professional conduct of an employee in any profession, particularly those who are responsible for interacting with the public.
Characteristics of Best Ethics Practice • 1. HONESTY. Ethical executives are honest and truthful in all their dealings and they do not deliberately mislead or deceive others by misrepresentations, overstatements, partial truths, selective omissions, or any other means. • 2. INTEGRITY. Ethical executives demonstrate personal integrity and the courage of their convictions by doing what they think is right even when there is great pressure to do otherwise; they are principled, honorable and upright; they will fight for their beliefs. They will not sacrifice principle for expediency, be hypocritical, or unscrupulous. • 3. PROMISE-KEEPING & TRUSTWORTHINESS. Ethical executives are worthy of trust. They are candid and forthcoming in supplying relevant information and correcting misapprehensions of fact, and they make every reasonable effort to fulfill the letter and spirit of their promises and commitments. They do not interpret agreements in an unreasonably technical or legalistic manner in order to rationalize non-compliance or create justifications for escaping their commitments. • 4. LOYALTY. Ethical executives are worthy of trust, demonstrate fidelity and loyalty to persons and institutions by friendship in adversity, support and devotion to duty; they do not use or disclose information learned in confidence for personal advantage. They safeguard the ability to make independent professional judgments by scrupulously avoiding undue influences and conflicts of interest. They are loyal to their companies and colleagues and if they decide to accept other employment, they provide reasonable notice, respect the proprietary information of their former employer, and refuse to engage in any activities that take undue advantage of their previous positions. • 5. FAIRNESS. Ethical executives and fair and just in all dealings; they do not exercise power arbitrarily, and do not use overreaching nor indecent means to gain or maintain any advantage nor take undue advantage of another’s mistakes or difficulties. Fair persons manifest a commitment to justice, the equal treatment of individuals, tolerance for and acceptance of diversity, the they are open-minded; they are willing to admit they are wrong and, where appropriate, change their positions and beliefs.
Characteristics of Best Ethics Practice • Continue… • 6. CONCERN FOR OTHERS. Ethical executives are caring, compassionate, benevolent and kind; they like the Golden Rule, help those in need, and seek to accomplish their business objectives in a manner that causes the least harm and the greatest positive good. • 7. RESPECT FOR OTHERS. Ethical executives demonstrate respect for the human dignity, autonomy, privacy, rights, and interests of all those who have a stake in their decisions; they are courteous and treat all people with equal respect and dignity regardless of sex, race or national origin. • 8. LAW ABIDING. Ethical executives abide by laws, rules and regulations relating to their business activities. • 9. COMMITMENT TO EXCELLENCE. Ethical executives pursue excellence in performing their duties, are well informed and prepared, and constantly endeavor to increase their proficiency in all areas of responsibility. • 10. LEADERSHIP. Ethical executives are conscious of the responsibilities and opportunities of their position of leadership and seek to be positive ethical role models by their own conduct and by helping to create an environment in which principled reasoning and ethical decision making are highly prized. • 11. REPUTATION AND MORALE. Ethical executives seek to protect and build the company’s good reputation and the morale of its employees by engaging in no conduct that might undermine respect and by taking whatever actions are necessary to correct or prevent inappropriate conduct of others. • 12. ACCOUNTABILITY. Ethical executives acknowledge and accept personal accountability for the ethical quality of their decisions and omissions to themselves, their colleagues, their companies, and their communities.
Work Ethics • Ethics is a collection of values and behaviors which people feel are moral. • In other words, ―”ethics” is the name we give to our values or good behavior. • Positive work ethic is the collection of all the values and actions that people feel are appropriate in the work place.
WORK ETHICS PERFORMANCE STANDARDS • STANDARDS To be successful in a career you must possess both strong occupational skills and good work ethics. • The following are ten areas of work ethic traits and performance standards you will be presented and expected to exhibit in the workplace:
1. Attendance • Attend 90% or more of the required class time • Be tardy for class no more than eight times during a six weeks • Notify instructor before planned absences or tardiness • Be prepared for work by reading assignments and completing job • Participate in activities by contributing to work discussion, completing assignments, and being involved in any activities • Begin and end work as expected • Use work time appropriately
Attendance • GOOD ATTENDANCE IS EXPECTED • IT IS THE CORNER-STONE OF ADVANCEMENT • DEPENDABILITY = RELIABILITY = MARKETABILITY
2. Character • Display a high level of effort and commitment to performing and completing work • Be honest in all situations • Demonstrate trustworthiness and responsible behavior • Displays loyalty, dependability, reliability, initiative, and self-discipline
LOYALTY • In return for salary and benefits, the firm expects loyalty. • With loyalty comes a sense of pride. • All employees are goodwill ambassadors and salespeople for their company. • Employees must keep company ―”secrets”. • The more the company succeeds the more you will succeed. • If you can not feel faithfulness and allegiance to your company, you should seek a job eleswhere.
HONESTY • Honesty is valuable • Employees account for 30% of all ―”shortages”
HONESTY • Being honest is more than just not taking ―”things” • In an 8 hour day --- how much time should be spent on task? • Using the company telephone for personal calls, checking email, or texting is actually stealing from the company!!!
HONESTY Never lie on your: –Application –Time sheet –Expense statements Never cheat a: –Customer –Associate –Employer
TRUSTWORTHINESS • Higher trust = higher pay!! –Closing or opening the office –Supervising others –Handing cash • Complete a task –earn some trust • Dependability & reliability = trustworthiness. • Employers quickly see who can handle responsibility.
INITIATIVE • When employees have initiative, they are willing to see that work gets done.People with initiative are: –Motivated –Enthusiastic –Industrious –Hard working • People with initiative see a job that needs to be done and do it!Beyond the ―”call of duty”.
SELF-DISCIPLINE & SELF-RESPONSIBILITY • Self-discipline is a part of accepting responsibility • Self-discipline requires the handling of emotions • The hard part is making the best choice among the alternatives
3. Teamwork • Encourage and facilitate cooperation, pride, trust, and group identity • Foster commitment and team spirit • Facilitate cooperation • Respects the rights of others • Respects confidentiality • Is a team worker • Is cooperative • Is assertive • Displays a customer service attitude • Seeks opportunities for continuous
4. Appearance • Present a neat, clean appearance • Practice personal hygiene • Wear clothing suitable to the job, task and environment • Uses appropriate verbal and written etiquette
Appearance • Appearance deals with every aspect of how we perceive an individual. In an instant, we form opinions about a person based on: –Appearance, –Smell, –Cleanliness, –Mannerisms. • Depending on the career, acceptable appearances will vary. • Regardless of the job, there is no excuse for not being groomed correctly.
5. Attitude • Demonstrates a positive attitude • Appears self-confident • Display a willingness to cooperate and accept constructive criticism • Set realistic expectations