ETHICS & ETHICAL STANDARDS

 All societies have their moral codes within which individuals try to decide what SHOULD OR SHOULD
NOT BE DONE.
 Ethical philosophers help us to understand what is to be moral.
 LAW OF MOSES – greatest moral code that greatly influenced the ethics of Christian and Muslim world.
 2000 BC – CODE OF HAMMURABI was found engraved in a black stone in Persia (now IRAN).
 HEBREW & HINDU LAWS – to secured justice in buying and selling activities.
 DOCTINE OF JUST PRICE – to sell a thing “more than its worth” was regarded immoral.
 ORIGIN OF ETHICS
- Ethics arose in actual life
- ETHICS – from Greek word “ETHIKOS” – having to with character
THEORY OF MORALITY OT RIGHT CONDUCT
 EARLY ETHICS
- Father is the head of the family, he must have the respect and obedience of his family.
- 10 Commandments – respecting the rights of every individual.
- Socrates – father of moral philosophy
- “Know thyself” and “Knowledge is virtue”
- Aristocles (Plato’s real name) – “Greed is the origin of many evils in the society.”
“For a rich man cannot be a perfectly good man, as part of his wealth must necessarily
acquired and expended unjustly.”
 LATER ETHICS
- Thomas Hobbes (English Philosopher) – “Man always acts in consonance with his desires to
satisfy his needs and wants.”
- Robert Cumberland – “The greatest good for the greatest number.”
- Immanuel Kant – “Actions must be judged by its motive and that motives arise from a natural
sense of duty.”

 CHARACTERISTICS OF AN ETHICAL PERSONS

1. WISDOM – intelligence grounded in experience
- Wisdom is to the mind as health is to the body.
2. COURAGE – determination to stand behind one’s decisions
3. TEMPERANCE – ability to see the extreme positions of an issue
4. JUSTICE – is a constant desire to render to every man his due
5. CONSCIENCE – man’s faithful friend
- capacity to recognize situations that call for ethical decision-making.

 BUSINESS ETHICS
- common good for the business promotion
- awareness of the need for social responsibility and concern for their fellow beings.
- the problem of proper business has to do with considerations of right or wrong in the conduct of
business activity
- Ethical conducts develops reputations for INTEGRITY of individual businessman.

 ETHICAL ISSUES IN BUSINESS BY Mr. James J. Cribbin (Management professor, St John’s University,
U.S.A.)
1. Is it ethical for a small business firm staffed with otherwise unemployable people like amputees to pay
them less than a living wage if the alternative is that it will be forced to go out of business and by force
of circumstances throw them out in the street?
2. Is it ethical for a businessman to engage in certain unethical practices in order to counteract the
strategies of a competitor who has a little or no regard for ethical behavior like the cut-throat
competition in the market?
3. Is it ethical for a tobacco company to manufacture cigarettes containing marijuana if the law does not
prohibit its use?
4. Is it ethical for a liquor manufacturing company to continually advertise an alcoholic beverage knowing
that children saw it on television screen?
ETHICAL BUSINESS - business practices that obey the regulatory rules of morality (do right) and are
committed to the concerns of morality (to do well).

WHY PEOPLE ACT IMORALLY

1. They have no will-power.
2. They care more for something else.

3 WAYS TO MOTIVATE PEOPLE

1. Fear-scare the knaves into being ethical (external constraint)
2. Deception-fool the knaves into being ethical (external constraint)
3. Rational persuasion (internal constraint)

WHY MOTIVATION ON ETHICS DOESN’T WORK SOMETIME?

1. Fear will only work if the social costs of acting unethically are great.
It is doubtful that modern society has the power or the will to make the costs of unethical action sufficiently
grim for this to be a realistic fear. In fact, many criminals get-off, even get rewarded for their misdeeds
(book deals). Many social sub-groups sympathize with the offender. Only a small fraction of those who
offend are detected. And it is always that case that there are some for whom the costs of getting caught
never outweigh the benefits-they are going to try it.
2. Deception is not a possibility either.
The ill effects of wrongdoing are socially, not naturally attached to the offense. If that person is not found
out by society, no penalty is imposed. And if your society doesn't even recognize moral evil as bad, knaves
won't be found out.
3. Good ethics is a means to good business.
It is rational to be ethical in order to ensure business success? Is ethics in business the appropriate means
to business success and profit?
Not necessarily. The ill effects of wrongdoing are not natural but social. Doing wrong is only bad for
business if you are found out. We need to consider the risks of getting caught and the costs of
getting caught.

Risks: When the risks of being found out are low, it is rational to be unethical. When the risks of
being found out are low, and the payoff is big, it is even more rational to risk being unethical.

Costs1: what about the stress involved in being ethical? Not all people find this stressful; some
enjoy it.

Costs 2: What about the costs of discovery? It is rational to be unethical if

 The costs of being ethical are too great or greater than the costs of being unethical.
What if being ethical will put you out of business?
 The people who will find out won't care.
What if the public does not generally perceive the unethical action as unethical?
 You're a small business with not very much to lose.
If public sympathies will be in your favor, maybe the public at large will favor your
unethical action against a certain despised social or minority group. (Change with
the mood of the population rather than with what ethics dictates.)
 The personal risks are too great-that you would lose your job unless you do this unethical
action.

MEANING & VALUE OF WORK

WORK – could be exalting, uplifting, fulfilling; or: degrading, tedious, and troublesome.

Business Ethics goals:

1. Articulate the vision of good work and the good workplace.
2. Articulate and defend the conditions required to make work fair, just, and humane.

THE MEANINGS OF WORK

 activities that involved perseverance, discipline that usually performed with a degree of seriousness and
concentration.
 an accomplishment
 any general undertaking
 a job, employment

Work has great variety: job, profession, career, trade, labor. These are distinguished by the degree to which
they identity of the person is determined by the role.

Job - self-identity is independent of activity

Career - developing relationship between self-identity and activity
Calling - morally inseparable. (Professions, artisans, farming)
VALUE OF WORK

Instrumental values
 to attain an income, and by that, get other things
 to attain feelings of satisfaction, that we get by meeting a challenge
 to gain a sense of personal satisfaction and self-worth, self-esteem, happiness (To express our attitudes
and character)
 to gain social status, or other social goods
 to make an important contribution to the community

Intrinsic:
 to do it for its own sake

THEORIES ABOUT WORK

1. The Conventional View of Work
2. The Human fulfillment Model
3. The Liberal Model

THREE POINTS OF VIEW THAT BUSINESS DECISIONS CAN INTEGRATE

1. Economic - what is best from the point of view of economics or business?
2. Legal - what is best/allowable in terms of the law and legal requirements
3. Moral - what is the best thing to do (absolutely speaking)

2 FEATURES OF MORAL POINT OF VIEW

 Shared and impartial
o Ethics is communal, public - the means we have of living together
o Not make myself an exception - ethics is not about our preferences!
o Accountability - we are all in this together
o Expectations - moral value is an expectation we have ourselves and others!
o No such thing as personal ethics
 Rational
o Guided by reason
o Legitimate expectations - that ones we can make stick, can convince others of respecting
o Accountability - rational accountability
o Allows for disagreement - if it is legitimate
Ex: if there are different legitimate answers to a problem, we should all be able to see that there
are, and know why
o Making your case - defending yourself
o Being willing to present your case, to show it to others, to open yourself up to them and their
inspection, questioning, criticisms
o Ethics is neither (observable) fact nor (mere) opinion - it is rationally defended non-factual
assertions.
o Need to be open-minded.
o Obstacles to ethical open-mindedness
 Dogmatism: unshakable commitment to one answer or view
 Off-hand self-justification: automatic excuse making or defensiveness about our views
 Lazy relativism: avoiding or shutting off discussion by appeal to relativism--don't criticize
others; all moral opinions are equal; what right for me may not be so for you.

LANGUAGE OF JUSTICE: DUTIES & RIGHTS

Right – (Claim) determines the duties of others in order to establish or preserve right relationship to us.
Legitimate expectation or justified claim on someone else's action.

Duty - morally legitimate action or inaction required by role.

Always a duty to someone or some group. These latter persons have a right.

HUMAN RIGHTS & LEGAL RIGHTS

 Human rights justified in the dignity or inherent value of the human person
 Legal right: "created right." By government action, contract or promise, relationship

ELEMENTS OF DUTY
1. subject
2. object
3. content
4. strength
RIGHTS OF CORE STAKEHOLDERS: MAINTAINING RIGHT RELATIONSHIPS

Human rights: Life, Human Dignity, Community, and Property

 Life: right to life and health, right to safety.
 Dignity: right to respect for persons, right to freedom right to work right to assistance
 Community: right to participation, right to truth, right to education, right to freedom of speech.
 Property: right to secure possession, right to fairness in exchange, right to use, enjoy, and dispose of
property.

LEGAL OR CREATED RIGHTS OF CORE STAKEHOLDERS

General duty: Keep promises and honor contracts.

Specific duties

To Customers:
 Right to a fair price
 right to information required to make a sound buying decision
 right to a product or service consistent with reasonable expectations
 right to products or services adequate to needs (no monopoly)

To Employees:
 right to fair compensation
 right to a safe working environment
 right to information relevant to job performance and security
 right to training
 right to a candid and fair evaluation
 right to reasonable freedom in doing the job
 right to loyalty
 right to fairness in termination
 right to flexibility (illness, family emergency, etc)
 right to job stability and security

To Investors:
 right to competent management aimed at producing a reasonable return on investment
 right to vote on certain decisions
 right to (declared) dividends
 right to residual assets
 right to sell shares

To Creditors:
 right to timely payment
 right to competent management aimed at avoiding unnecessary risk
 right to adequate information (disclosure)

To Suppliers:
 a right to loyalty
 right to an opportunity to bid or to adjust prices
 right to preference over competitors
 right to timely advice of changes

To Communities:
 a right to support for the common good
 right to a safe and clean environment
 right to decisions and actions that do not unnecessarily disrupt the community
 right to efficient and effective use of resources (privatization)

To Competitors:
 right to compete
 right to expect activities that do not unfairly distort the market
 right to honest statements
 right to "honest" pricing
VIRTUE & CORPORATE CULTURE

Why virtue in business?

1. Society is committed to ethics in business.
The best means to achieve ethical business is through creating and developing virtuous people.
2. Business is committed to quality.
The best way to achieve quality is through creating and developing virtuous people.

Clearly: developing virtue is consistent with the idea of "good practice".

How?

Practical steps to encourage the development of virtue, is to create a culture where it is easy to be virtuous
and where viciousness is not rewarded.
1. Managers must model virtuous behavior and coach it
2. Managers must recognize virtuous behavior publicly
3. Tell stories about virtuous behavior.
4. Align incentive and reward structures - route out incentives that create a temptation to vicious behavior or
actually reward it.
5. Teach people about virtuous behavior - through mission statements and ethics statements, etc.

IS ETHICS BASED ON VIRTUE?

How should we think about ethics or morality? Is it a code of rules that people agree not to break or a practice that
can be taught?

 Utilitarian (good actions give good results) and Kantians (good actions respect other persons) focus on
actions.
For them the "correct ethical condition" possessed a theory allowing you to decide what to do.

 Virtue ethics focuses on character.

The "correct ethical condition" is being a certain sort of person, which allows you to be ethical with
pleasure, skill, and even grace.

VIRTUE AS A MORAL REALITY

 does not focus on the morality of specific actions, but the moral character of our lives as a whole.
(A good question is: how many people actually ever do this?)
 allows us to integrate many aspects of life into ethical reflection: emotions, commitments to other people,
friends, social responsibilities into our analysis of ethics
(how might this differ from a purely action-focused analysis)
 has a more natural starting-point-most people ask themselves the questions "who am I?" and "how is my
life going?" when they are reflecting ethically
 Ancient Greek ethicists were unanimous in looking at morality from the perspective of what makes for a
worthwhile life, rather than focusing on the morality of specific moments in our lives.
 Virtue was thought of as excellence or capacity to act, kinds of "skills"-skills at living.
 Like all skills, one acquires a virtue by practice.
 We learn the appropriate virtues by imitating others who are good at the activity. Later, after having
acquired the virtue, we come understand its nature and its value-to see the point of why you act the way
you do. (why this skill/virtue is useful/important for this practice)
 Any definition of virtue implies a standard for how people ought to act. For Aristotle, the standard was
reason. People ought to follow their reason, act according to reason
 Virtues are the opposite of vices. But instead of a good/bad dichotomy, Aristotle thought of virtues as the
mean between two extremes or vices.
Achieving virtue was a matter of finding the "middle ground" or mean-there is not "right" enough, and too
"right."
 Virtue ethics doesn't promise a decision procedure, which is what utilitarianism and Kantians (action
theorists) are trying to provide.
The right ethical condition is NOT having the correct theory, but the appropriate character
 Phronesis (or practical prudence/wisdom) was the virtue that one acquires that helps one to know what the
right thing to do is at any given moment.
Practical wisdom is more a technique, which works out of knowledge gained by experience and reflection,
as well as the sensitivity and imagination of the person making the decision. It takes time to acquire it, and
cannot be simply taught to someone.
 Virtue allows us to include emotion into our analysis of ethics: emotion is not a distraction in acting rightly,
but a powerful ally. The person of virtue has this ally.
 Virtue theory insists that we cannot isolate ethical decisions from our identities, prior commitments and
histories. All these operate in decision-making for these create practical wisdom. Ethical choices are
related to the bigger picture, which includes time as well as space
  Virtue theory insist that acting ethically can (and should be) pleasurable-the pleasure one gets out of
mastering a set of skills and being able to use them well, with grace and beauty. Just as someone good at
sports enjoys playing it, so the virtuous person enjoys acting virtuously.
 One's character gives a person a sense of being a real person, having a nature.

OBJECTIONS
1. Virtue theory and being virtuous fails to help people facing a crisis, because it doesn't provide any clear
rules for action.
Should I inform society about the corrupt practices of my company?
Virtue theory doesn't give us any concrete answers. Virtue theory is not this kind of theory and this
objection begs the question about what is the most pressing problem in ethics; what to do or who to be.
Virtue theory would say that the answer is a matter of the occasion, and the person acting--something that
must be determined by practical wisdom by the person facing the choice.
2. Virtues vary from community to community.
Virtues therefore are relativistic, and possibly at odds.
3. How many people really do develop (or are capable of developing) character which causes them to act
morally?
This is described as the most devastating criticism. The Millgram experiments seem to show that situations
have more power over people than character. 60% of the population has weak characters if Milgram's
conclusions are to be accepted.

WHAT IS A MORAL VIRTUE?

The concept of worthwhile living may be affected by cultural views, but is not wholly determined by them.

Core of morality is as constant as human nature and the basic necessities of life. There are certain constant
factors that promote or spoil the chances in life.

For example: Control of our fears (Courage).

Control of our anger (Good temperedness).

6 BASIC CHARACTERISITCS
1. Dispositional feature of character
- it makes a person feel good and do his jobs well - it affect the character, not just a person’s lives. (They
"actually engage the will" - moral virtues if possessed are (in the sense of must always be) used.) It can
predict how a person possessing the virtue will act and react in different situations. [Unlike being sickly, 43
years old or married]
2. Voluntarily acquired
- people aren't born with them, but it is up to them to acquire it. As it is beneficial to them, they have as
well reason to acquire it.
[Someone who doesn't or even doesn't choose to acquire them is at least foolish, and may be bad. Unlike
having perfect pitch or being good at holding liquor.]
3. Involve acting with judgment
- virtues blend emotion and judgment. The virtuous response is given generally, but each particular
situation requires discernment about the appropriate response. They are "emotional perceptiveness"-
involving "hitting the target," in the right way, at the right time, etc.
4. Needed for living well
- Without a virtue, people’s lives would be spoiled. No one would choose a life without the virtues.
5. Pervasively relevant to all roles in life
- central in all areas of life. [Unlike being able to swim or sing in tune]
6. Involve acting with a proper motive
- you cannot exercise a virtue for the wrong motive. Some motives, like greed, malice, spite, envy, are
completely incompatible with virtue. [Unlike being curious, shy or energetic]

What are the virtues of concern to us?

Executive virtues: require to bring about action appropriately.

Temperance
courage
good-temperedness
ambition
prudence

The two dimensions for living well (two dimensions of goods and evils in life):
1. Social values - traits that dispose us to be peaceable, able to understand, cherish, and uphold each other's
rights: justice (honesty, loyalty, fairness) and humanity.
 2. Aspiration values - promote inner peace of mind, the sense that one has something to live for...: sensibility,
ambition or enthusiasm, modesty (self-knowledge)

WHEN IS A BUSINESS ACTION RIGHT?

1. THE DEFINITION OF RIGHT AND WRONG (basic division of ethics)
 Right means not wrong; wrong means forbidden by a rule
 Right is therefore a "residual" or "remainder" category-right is everything "not wrong." Some right actions
are morally obligatory (right to do, wrong not to do) while others (maybe the majority) are morally
permissible (right to do, not wrong not to do).
 All actions therefore are either (morally) right or wrong; there are no actions that are neither.
 To "map" right from wrong we need to know (1) what is wrong, and (2) how to signify it on our "map."
2. WHAT IS WRONG? (specifying and justifying the regulatory rules of morality)
 Wrongdoing relates most obviously to disobeying the "regulatory rules of morality."
Rules influence our choices in two different ways:
(1) Definitive rules – are called "regulatory" rules-we speak of obeying these kinds of rules.
Regulatory rules are the more fundamental ones. Wrongdoing now means: "violating a regulatory
rule of morality"
(2) Strategic rules - are called "guideline" rules-we speak of following or applying these rules.
 In order to justify restricting choices the way a regulatory rule does, there must be compensating gain. This
gain must be something of universally compelling importance, something that is necessary for all of us.
The suggestion: our basic need to live in a society, to live cooperatively with one another. (Hobbesian
grounding for the regulatory rules of morality) This makes compliance rational.
Wrongdoing now means: "failing to observe the rules necessary to keep the peace, to live
cooperatively."
 The conditions for living in peace are that we submit to constraints on the use of force and fraud: rational
engagement in cooperative ventures cannot occur unless we trust one another not act violently and we can
take each other at their word.
Wrongdoing now means: "failing to constrain our uses of force and fraud."
 Formulating the regulatory rules. There is no list-we know what they are meant to do, so the task is to
state the rule appropriately in each situation. The strictness of our moral rules against force and fraud
depend on the degree of flexibility it is safe to tolerate, which depends on the attitudes and circumstances
of the place and time (what is the rule against lying?)
IMPORTANT NOTE FOR THOSE SUCH AS YOURSELVES WHO NEED TO FORMULATE RULES AT
TIMES.
There are three classifications of rules:
1. Rules that have no exceptions.
These ordinarily do not come into conflict. If they did, then one (at least) must have an exception,
and we've classified it wrong)
2. Rules with unspecified but specifiable exceptions.
When conflict occurs, we resolve by rewriting more precisely.
3. Rules with exceptions which cannot be fully specified.
The exceptions are too many to be listed because they are too subtle or dependent on the infinite
varieties of circumstance. We must exercise moral judgment to resolve conflicts in these situations.
3. SIGNIFYING WRONGDOING
If we cannot state the rule, how can we represent it? We can say at least that it makes some sense to start
with what we have inherited from our predecessors.
 Regulatory rules will mark off no-go areas and certain practices involving fraud and force are to be avoided
whoever we are.
 Other practices are wrong for some to do, not for others, on some occasions and not others. Some
circumstances, occasions or roles may permit or even require "travel" in the no-go areas.
 This stresses the important relevance of self-knowledge to making ethical decisions. This also means that
making ethical determinations can be a more complicated thing than merely knowing what is right and
wrong, and what goals in life are worth pursuing.
4. WHEN IS A BUSINESS ACTION RIGHT?
A business action is (morally) right when it is not wrong, i.e., when it is not an act of force or fraud, for
persons or in situations where such kind of activity would not otherwise be permitted or required. Doing
right requires a commitment not to act against whatever constraints are necessary for us all to
acknowledge if rational cooperation is possible.

RESOLVING RIGHT VERSUS RIGHT PROBLEMS

1. The Futility of Grand Principles

 Three Sources of MORAL GUIDANCE

1) Mission statements and ethical guidelines
2) Legal responsibilities
3) Fundamental principles of traditional moral philosophy
  Problems with using these three sources to resolve right versus right problems…
1) They are too general and tend to "float" above problems
2) They often contradict one another
3) They ignore the decisive practical and personal factors

 Grand principles are important to us: they serve as an "electric fence" that separates right from wrong,
good from evil. We need to know the basic principles that under gird laws, rules and social practices that
make civilized life possible. Loosely, he is describing the "regulatory" rules of morality.
 We also need "warm and breathing" truths-answers that come from within ourselves, from our moral
intuitions and instincts, that express our selves, not grand boundaries, that is authentically ours, not
"humankind's." Here is clearly talking about what we called the "concerns" of morality-ultimately ordered to
having our lives go well.

2. Sleep Test ethics

 Named after the idea of being able to sleep soundly after your decision - relying on our own personal
insights, feelings, and instincts when we face difficult ethical problems.
 All sleep-test ethics rely heavily on instincts, using physical and emotion distress as indicators that
something is morally amiss.
 Sleep-test ethics is
 Deeply personal, encouraging people to ground decisions in core intuitions, passions, and
commitments rather than principles and calculations
 Optimistic. It helps people feel better about themselves and about human nature.
 Possibly of genetic origin
 Culturally based: an important mandate of our Western tradition
 Extraordinarily practical
 PRO AND CON
 Sleep test ethics is useless in right-versus-right situations. Intuition does not point to an answer,
but only highlights the difficulty
 Ethical intuitions can be easily distorted-by our wants, needs, surrounding culture, and by the
pressures and demands of an organization
 Managers need to explain and justify their decisions in terms that others can understand, not by
appealing to their feelings or "hearts"
 THE ARGUMENTS FOR SLEEP-TEST ETHICS
 Human beings will inevitably rely on their intuition when they face difficult moral decisions-so
outlawing it is impossible
 Intuition can play a valuable role in right-versus-right decisions, as they have significant personal
and emotional dimensions.
 Two competing versions of sleep-test ethics.
A. Meism-simple or "quickie version" of sleep test ethics.
 Takes moral intuition as self-justifying: whatever you clearly and heartfeltly feel is morally correct
(alleges to be self-validating) -"conscience is king" view.
Conscience is a judgment, not God.
 Highly individualistic: sees no social or ethical restraints on individual behavior. Subjectivist.
Shaped by a culture and community that has no respect for virtue and sees no value to training
young people to think and act in accordance with them (highly subjective)
B. Aristotle's criteria for correct sleep-test ethics
 Sleep-test ethics must presuppose a thoughtful, mature person, someone with character (i.e.,
virtue)
 Cannot be a single, compelling impulse
 Cannot be a substitute for common sense, logic, or consideration of basic ethical principles
 Cannot take the place of serious attention to relevant facts, but must arise after this.
 Cannot never lead a person across the boundary between right and wrong defined by grand
principles (over the "electrified" fence)
 Can be explained to others in ways that draw on important social and ethical practices in society.

GREED: IS IT NECESSARILY BAD.

Greed: having more than you "need"

A. Does "Greed"-getting more-rob others?

1. Business is not a "Zero-Sum" game-if I get more, then someone else necessarily has less.
As David Kelley explains: producers create wealth. There simply is more in existence after they are done.
Getting more then doesn't mean someone else necessarily gets less "of the pie."
[This has limited appeal: capitalism does create new wealth, but that is no guarantee that some benefiting
from their business is only taking the "new" wealth they created.]
2. Capitalists don't "rob" people of their money.
In capitalism, you cannot compel people to give money, but you need to persuade them to give you their
business. In capitalism, both parties benefit from a transaction. Everyone wins (unless someone cheats.) It
is not a zero-sum game, but a win-win game.
 Side point: usually cheaters don't get rich. Investigations showed that to get really rich, you have to
work hard. Have to learn what people want and how satisfy their needs. Persuade by having a product
they wanted, at a price that was good. Cheaters are looking for ways around this, and usually succeed
only in the short term. People find them out.

Consumers benefited from capitalists’ innovations.

B. Should we want most human activities touched "greed"? Isn't selfless action better?
1. "Greed" produces better products at a cheaper price.
When profit is correlated with personal exertion and effort, then people have a motive for putting in effort,
and some are motivated to put in more effort. All people will benefit from this by getting better products,
more efficient services, etc.
[Things work better if people benefit directly from the efforts they expend. The harder you work, the better
you fare; so people will work harder and smarter. Why call this greed. The desire for more may actually be
a need for more.]
2. "Greed" gets people to cooperate and work together.
Caring about your self is the best way to care for others. People who just care about "money and boxes"
make the capitalism system work, getting steaks from Wyoming to New York.
In the money grabbing experiment:
Greed without cooperation = not as much money.
Greed with cooperation = more. The greedy choice should be to cooperate.
In capitalism, caring about your own needs (money, a livelihood, therefore doing what you do as best as
you can) produces the best products and the system we have.
[Doesn't "greed" just mean "self-interest"?]

C. Isn't using greed to motivate people wrong? We shouldn't teach that to people.
School for example. People were more interested in learning when they could obviously use this learning
to make money. [Does this turn learning into something pragmatic? Even if people are more motivated to
learn if they will get something out of it, why should that something be money?]

D. Should there be limits on "greed"-on how much someone can make?

The hated businessman image again. They fire employees and give themselves raises. [This isn't
necessarily wrong, is it?]
No answer: limiting salaries is not a good thing.

MOTIVES, MORAL REASONS AND COMPLIANCE

Reasons why people don't do their duty

 They lack will-power (possess an ineffective conscience) [set aside]
 They don't care (no motivation-no conscience)

People who have no conscience:

 Can lack a conscience about wrong doings in particular situations
 Can lack a conscience in general: i.e., are "open-minded" about whether or not to avoid unethical
practices.

Basic assumption:
ethics is just another obstacle to overcome, not the ground rules for all action.

"ROGUE" businesses. (lawbreaker businesses)

- Aren't such open-minded people just crazy? Don't they care about society?
- They do care about society "collectively"; they see no reason for them individually to comply
- The rogue business values society and the moral principles that keep it intact in a collective way: it is
interested in having people (other people) keep their moral obligations; the rogue business doesn't see the
individual value of it following those rules, especially when there is more to gain by selectively not
following them. This selective non-compliance makes rational sense in the context of everyone else's
compliance that everyone become open-minded, all gains disappear. But the rogue business doesn't
advocate that!

Wouldn't external constraints be enough to stop rogue businesses?

External constraints: constraints imposed on businesses from society, to make unethical action impossible
or not worth the risk

Internal constraints: constraints imposed on businesses by itself, to stop it from acting unethically
("conscience")
 Two kinds of external constraints
1. fear - we can scare the would-be sensible knaves into following the rules, if the social costs of
acting unethically are great. This will work only if the cost is sufficiently grim, and it is
questionable whether our modern society has the power or the will to make a sufficiently
grim cost a realistic fear. Many criminals get off, even get rewarded for their misdeeds
(book deals). Many social sub-groups sympathize with the offender. Only a small fraction of
those who offend are detected. Costs of getting caught do not outweigh the benefits for
some offenders.
2. Ignorance - the idea is that we can con the sensible knaves with fables and rhetoric, and make them
think that you just can't do unethical things. Work only if the ill effects of doing wrong were
attached naturally to the offense. But they aren't. They are only attached socially-so if you
aren't found out by society, no penalty is imposed. And if your society doesn't even
recognize a moral evil as bad, they won't be found out.

CREATING BUSINESS CONSCIENCE

a. WHY DON'T WE ACT ETHICALLY?
 Plato's view rejected: unethical people are not (necessarily) people who mistaken desire "worldly"
pleasures and whose characters are out of control (lacking discipline, self-control)

Three reasons in the text to reject this view

1. Not all the constituents of happiness require that we get "our piece of the pie"
2. Unethical people are often driven by noble and unworldly motives (religious wars)
3. Villain may display considerable self-discipline!
·
 Better answer: Villains don't see moral concerns as their concerns

Different kinds of reasons for acting….

1. Horticultural reasons (this will help your garden grow)
2. Social reasons (this will keep good relations with my neighbor)
3. Legal reasons (this is the law)
4. Religious reasons (this will please God)
5. Economic reasons (this will make money, position my business for success)
6. Moral Reasons (this is ethically right)

What makes a reason a moral reason?

 universality
 thoughtful and reflective
 expresses concern for others
 expresses a moral value

What makes a reason for doing something rational?

When the means chosen are appropriate to the end in mind
What makes a reason for doing something rational?
When a reason is simply rational and its end is one of the concerns
If having a reason for doing something depends on having interests or concern for the particular standpoint
out of which the reason arises, if we can show that people have (or should have) concern for the moral
standpoint, then we can show that acting ethically is rational for everyone.

b. ARE MORAL CONCERNS OUR CONCERNS?

1. Good business is good ethics.
How does this work (our given concern for business success is hooked up to good ethics, if we
desire to succeed a business, then (if we are enlightened) we will choose the path of ethics and
virtue.
The truth of this depends on the claim that unethical practices if discovered are disastrous for
business-that's what a "clear-headed, relevantly person" should realize.
But this is not necessarily true either. Bad ethics is sometimes good business, i.e., a relevantly
informed and clear-headed person would (should) rationally choose unethical actions if:
 The risk of discovery is negligible or if discovery wouldn't matter
 The cost of furtiveness is not great (some people don't mind covering their tracks, some people
even enjoy the "rush" of living on the edge)
 The cost of discovery is less the costs of not doing the action at all.

2. The life well-lived/Virtues of character

Everyone may not be actually concerned with morality, but we all have reason to want our lives to
go well. [!"Everyone has a reason to want their lives to go well" is not the same as "Everyone
wants their lives to go well.
Moral virtues are dispositions of character that equip us for living well and for doing well-for having
a life worth living. Moral virtues still will enable people to make the best of it.

The "concerns of morality are of concern to those who have moral virtues." Whether people are in
business or not!
GOOD PRACTICE IN BUSINESS

How can the study of ethics help us to think well when faced with actual moral dilemmas and problems in
business?
It is by using ethical theory - the explanations ethicists give for how morality, right and wrong, works.
What ethical theories should we apply to our moral problems and dilemmas so that we can achieve "good
practice" in business?
Good practice that avoids wrong doing (injustice) and is consistent with the virtues generally.

UTILITARIANISM
What does utilitarianism involve?
Morality is about doing good and that in assessing the morality of what we choose to do, we should be considering
simply and solely the utility of acting this way or that. What is utility?
- What are its theoretical weaknesses?
Implications of imposing a pervasive and unrelenting obligation to maximize utility which contradict many
of the assumptions of traditional Western morality
Utilitarianism fails to make sense of the "moral must" that cannot make sense of the importance of
utilitarianism to everyone.

DEONTOLOGICAL THEORY
Deontological theory as an objection to utilitarianism
Utilitarianism failed to explain the importance of considerations of justice. Utilitarian are too ready to
allow a necessity of utility to override a constraint-type duty.
- Deontological theory as respect for persons
- Deontological theory as contract theory: obligatory and importance of morality is given meaning.
It is the fiction of the social contract. Facts of human nature make living in peace desirable (importance
of morality) and moral rules are the kinds of actions that guarantee some modicum of living in peace
- What are their theoretical weaknesses?
How are persons owed respect?
How is everyone owed respect even when they have done nothing to gain it?
Consent as key to respecting persons.
Respect as paying attention to persons, justice and humanity.

VIRTUE THEORY
- Better able than u or c to make sense of the importance of moral virtues-those character traits we need in
order to have the best chance of making our lives go well. (Notice how our views of moral theories are
colored by what we have already established in the centrality of the virtues to the moral life!)
- virtues are related to fundamental facts about human nature and the conditions of living tolerably
- Makes better sense of the importance, in morality, of justice considerations versus utility considerations.
It explains how those who have virtues are bound by certain constraint-type obligations but also bound
to pursue other, aspiration type obligations.

WHAT REALLY IS GOOD PRACTICE INSIDE THE FIRM?

1. Good practice
- avoiding wrongdoing and doing well, acting in a way that is ethically appropriate, consistent with
how those who have virtues would act
2. Avoiding wrongdoing relates to a group of virtues classified under justice: constraint-type duties, regulatory
rules of morality.
- duties generally: not to use violence against people, not to steal, to lie or to cheat.]
3. Obviously these are violated and yet we continue to survive as a society
4. Our living in peace, ability to cooperate, all the same, depends on these constraints being taken seriously
and being observed sufficiently generally for it to continue to be rational for us to trust one another.
5. Other virtues: in order that we can live well. Humanity and also the aspiration virtues.
6. Need these other virtues
(a) as supports to our being able to sustain justice virtues and
(b) as contributory to living well.
Ex: humanity: help us to understand what is just when that is not obvious or provide additional motivation
for doing what is just. Humanity enables us to achieve friendship and avoid loneliness.. Can we do this for
the other virtues?

2 ASPECTS OF WORK
1. HEALTH AND SAFETY
2. HIRING, FIRING, PROMOTING

Does Good Practice (ethically defensible practice, practice consistent with how those who have the virtues
would act) rule out offering jobs that threaten someone's health or safety?
 Not necessarily; virtuous employers follow the restrictions placed on them by law (conform to prevailing
standards), secure informed consent from their employees (especially where the risks are not obvious)
(demand of honesty), and will look for ways to improve safety (demand of humanity).

What are the responsibilities of employers in respect to health and safety?

How do the concerns and requirements relating to virtues bear on what might constitute good practice in
this area?

What is the employer's moral responsibilities?

(1) Follow the legal regulations, which demand that we ensure, so far as is reasonably practicable, the
health, safety and welfare of employees. This is a demand of justice.
(2) Obtain informed consent. Honesty requires that we refrain from lying and do not abuse trust. It is not
necessarily unreasonable to expose employees to risks, but they must know and consent. [Text
contains some discussion about the difficulties and obscurities of informed consent, including that the
idea of "being informed" is vague-you can be more or less informed, significantly selective-informed
may be more than someone wants to know, less than another wants). Further, freedom admits of
degrees-how free is free enough? Honesty means no lies; but not necessarily all information, but
depends on context, particular circumstances, and what people can expect to be told. As far as
coercion goes, key here is what is the responsibility of the consent seeker for the factors that might
force someone's consent. Dangerous work does not mean that everyone applying for the job is
desperate-someone might be willing to take risks if the pay is good. Dire circumstances do not mean
the consent is not genuine--lack of freedom to do otherwise arising from external circumstances an
lack of freedom depending on how ones is pushed to do a job. Consent is real even if circumstances
force it in some way, because the circumstances are not of the consent seeker's design!
(3) Ensure that the dangers do not threaten others. Informed consent is a necessary but not sufficient
condition. Honesty requires this too. (Some questions about unborn offspring raised here).
(4) Continue to work to improve. Humane employers will always look for ways to improve safety. In this
regard, they will not disregard costs, seeking to balance the open-ended, non-dischargeable duty of
improving safety with the open-ended, non-dischargeable duty of pursuing profits.
Business Ethics
Modular Syllabus