Chapter 4: Moral Reasoning and its Application in Business Ethics

Lawrence Kohlberg on Moral Reasoning

 Lawrence Kohlberg (1927-1987) contends that in as much as the human

person’s cognitive aspect is in a development mode (following Jean Piaget),
his or her moral aspect as a person also follows a progressive pattern. What
is means is that the person’s capacity to perceive what is right and wrong
develops from one stage to another.

 Kohlberg asserted that our moral reasoning goes through three levels and six
stages. The three levels are pre-conventional, conventional and post-
conventional.

Level One: Pre Conventional Morality

 When one is in the pre-conventional level, the person is not yet

fully aware of the various ethical standards, laws and customs
agreed upon and instituted by the community and the society at
large.

 According to Kohlberg, there are two stages under the pre-

conventional level: the punishment and obedience orientation and
the instrumental relativist orientation.

Stage One: Punishment and Obedience Orientation

 Here, children are driven to act rightly because they are motivated
by fear of punishment.

Stage Two: Instrumental Relativist Orientation

 This is also the moral disposition of children who are not yet
aware of the rules and regulations of the community and the
society at large.

Level Two: Conventional Morality

 In the conventional level, the person becomes conscious that he or

she is living in a society of countless people with countless
interests.

Stage Three: Interpersonal Concordance or “Good boy Nice Girl”

Orientation

 During this stage, the young adolescent becomes conscious of his

or her image and identity.

Stage Four: Law and Order

 Moral development is manifested when a person is not just

concerned about being punished, getting a reward, or being too
conscious about the expectation of family and friends; rather he or
she simply realizes that the law must always be upheld, respected
and obeyed.
 Level Three: Post-conventional Morality

 It is because on this level, the person is no longer determined and

conditioned by “ social conventions ” such as laws, written codes
and agreed standards. Rather, he or she exercises freedom and
becomes more conscious of the foundations of the society’s norms
such as the social contract and the universal ethical principles of
human rights, justice, fairness, equality, human dignity and
common good.

 In this level, the person is not enslaved by the letters of the law. He
or she goes above and beyond what the law says; he or she sees
that goodness cannot simply be equated with following the law.

Stage Five: Social Contract Orientation

 In this stage, the adult person reasons out the laws are social
contract, that is people in the society agree to promulgate and be
bound by laws not only because it endures order and harmony.

Stage Six: Universal Ethical Principles

 Here the morally mature person is no longer governed by fear of

punishment nor by reward, by social expectations, by societal laws
and percepts, or by basic social contracts. The person who
operates on this stage is simply propelled by the RIGHT thing to
do.

Other Implications to the Conduct of Business

a. The first implication of Kohlberg’s theory is that it helps people in business

would raise and attempt to answer question “ What kinds of moral reasoning
do people use in business? “

b. The second implication relates to the attitude toward the relationship

between law and ethics.

c. The third implication is with regard to the recognition that majority of

people including those who are in the business world and the workplace,
operate in the conventional level.

d. The fourth implication for business and the workplace is the relationship
between moral education and organizational training on the one hand and
moral development on the other.
Chapter 5: Philosophical Foundations of Business Ethics

Consequentialism
 Philosophy, the term “consequentialism” refers to an approach in moral
decision-making where in the prime consideration is the effect or consequence
of an action or decision.
 Teleological ethics (telos is a Greek word which means end, intention or
purpose).

Ethical Egoism
 It describe human nature as basically selfish, self-interested, and self-
centered.
 Thomas Hobbes the English philosophers says that “I was in pain to consider
the miserable condition of the old man; and now my alms, giving him some
relief, does also ease me.”

Utilitarianism
 Jeremy Bentham (1748-1832) and John Stuart Mill (1806-1873) the English
Philosophers
 Utilitarianism (from the latin word utilist which means useful) is also a
consequentialist approach to ethical decision-making because it tells us that
an acts rightness and wrongness is determine solely by the acts
consequences and not by any feature of the act itself.
 Utilitarian’s main concern is not individual interest.

Immanuel Kant’s Deontological Ethics

 Immanuel Kant was known for his modernistic philosophy in which he
believed that reasoning is the cause of the morality.
 Aside from utilitarian, the ethics of deontology is a dominant moral.
 Action in a given situation would have better overall consequences.

The First Formulation of the Categorical Imperative

 “Act only in accordance with that maxim through which you can at the same
time will that it become a universal law”
 Kantian ethics use the terms universalizability and reversibility to express
the criteria set by the First Formulation in simple terms.

The Second Formulation of the Categorical Imperative

 “Act so that you use humanity, as much in your own person as in the person
of every other, always at the same time as and never merely as means.”
 We have to recognize first that Immanuel Kant has the highest regard for the
human person being the only known creature that nature endowed with
rationality and autonomy.
 Man’s rationality and autonomy must be upheld, and not be trampled upon.

 Kant’s deontological ethics has other applications in the field of business

ethics. One may start thinking about those business activities that exploit
people and simply reduce them to the level of commodities that can easily be
disposed.
 According to author James s. Taylor, “business should not defraud those they
interact with, on the grounds that such practices would be examples in which
persons were not treated as ends in themselves, and so their autonomy was
not respected but only as mere means.”

Moral Rights
 basic claims are called rights.
 What is a right? “Right are entitlements (not) to perform certain actions,
or (not) to be in certain states; or entitlements that others (not) perform
certain actions or (not) be in certain states.”
  On accounts of why a right-holder is entitled to them, rights can be
classified into two: legal rights and moral rights.
 A legal right is acquired due to specific laws of a locality. The basic
justification for the existence of a legal right is the existence of a law that
guarantees it.
 A moral right (also known as human right) is significantly different from
a legal right. It is inherent in each and every human person by the virtue
of his or her very personhood.

Ethics of Care
 The ethics of care started as a reaction to the male-centered theories
of moral reasoning.
 In 1982, feminist psychologist Carol Gilligan, a student of Lawrence
Kohlberg, argued that men and women have different orientations
and approaches when it comes to moral reasoning and decision-
making.
 For her, while men are driven by justice and entitlement to rights,
women are oriented toward basic human feelings such as sympathy,
compassion, fidelity, close relationship, and so forth.
 The main premise of the ethics of care is “that we have an obligation
to exercise special care toward those particular persons with whom
we have valuable close relationships, particularly relations of
dependency.
 In the business sphere, the ethics of care is a very relevant
consideration in making ethical business decisions.

Virtue Ethics
 Virtue ethics is more concerned with a assessing in the moral
integrity of character of the person.
 It focuses on the act but on the character of the agent, “on the traits of
character expressed in this and other actions, his or her virtues.”
 Virtue ethics is mainly a reaction against “the dominance of
utilitarianism and Kantian deontology in the contemporary moral
philosophy” in general and business ethics in particular.
 Virtue ethics is rooted in the moral philosophy of the Greek
philosopher Aristotle and the medieval philosopher Thomas Aquinas.
 Virtus is the Latin translation of the Greek word arête, which literally
means “excellence of any kind” or “moral virtue.”
 Arête understood as “excellence of any kind” refers to the
characteristic of anything (living thing and nonliving things alike)
when it is true to its purpose.
 In his book Nicomachean Ethics, Aristotle identifies and discusses
some basic such as courage, generosity, wisdom, justice, and
temperance or self-control.
 According to Aristotle, a virtue is the mean between the two extremes
of excess and deficiency.
 In contemporary business situation, courage may mean, “doing the
right thing despite the cost.”
 Humility cannot be declared at once as a virtue if it is understood as
false of undue humility.
 45 virtues that are most relevant to business according to Robert
Solomon. The following are few of those in the list: autonomy,
caring, courage, entrepreneurship, honesty, justice, loyalty and
passion.
 A virtuous person can show extreme anger (no moderation at all) if
the situation calls for it.

Republic of the Philippines

Department of Education
Region III
 Division of San Jose City
San Jose City National High School
San Jose City, Nueva Ecija

SUMMARY AND CRITIQUING

BUSINESS ETHICS AND SOCIAL RESPONSIBILITIES
(CHAPTER 4 and CHAPTER 5)

Submitted by:

Ronaliza Pascua
Cyrus Miranda
Cristina Lucero
Corrine Joy Manuel
Sharlene Bernardino
Noimie Oca
Jay Bhoy Ubaldo

Submitted to:

Mr. Deomel Caballero

Business Ethics Teacher