Ethics: Meaning and Nature of Ethics

Meaning: Moral and Ethics

Ethics or moral philosophy is a branch of philosophy with morality as it prime focus.

Ethics is intrinsic to our daily life and must be expressed in all our actions. It is not merely an
academic subject, rather it is a human necessity.

When we seek to understand the foundation and structure of morality and ethics, in fact, we want
to learn how we should live. “We are discussing no small matter but how we ought to live” –
Socrates in Plato’s REPUBLIC.

Both the terms, ‘Morality’ and ‘Ethicality’ derive their meaning from the idea of custom, i.e. normal
behavior. Moral comes from the Latin ‘mores’ and Ethics from Greek ‘ethos’ .

The principles of ethics, when honored, ensure that the playing field is level, that we win by using
our own work and ideas, and that we are honest and fair in our interactions with each other,
whether personally or in business.

Morality differs from law and etiquette by going deeper into the essence of our social existence. It
differs from religion by seeking reasons and not revelations or authority for that matter to justify its
principles. The central purpose of moral philosophy is to secure valid principles of conduct and
values that can guide human actions and produce good character. As such, it is the most important
activity we know, for it concerns how we are to live.

Features of Morality [PUPOP] (Can be used as nature of Ethics also)

Although there is no universal agreement on the traits a moral principle must have, there is a wide
consensus about five features:

a) Prescriptivity

Moral principles guide one’s course of actions and are usually put forth as commands or imperatives
such as “Do not kill.”

b) Universalizability

Moral principles must apply to all people who are in a relevantly similar situation.

c) Overridingness

Moral principles have predominant authority and override other kinds of principles. They are not the
only principles, but they also take precedence over other considerations including aesthetic,
prudential, and legal ones.

d) Publicity

Moral principles must be made public in order to guide our actions

e) Practicability

A moral principle must have practicability, which means that it must be workable and its rules must
not lay a heavy burden on us when we follow them.

The complete list of acts:

Business is a socioeconomic activity flourishing in a specific cultural context. Business Ethics

demands a close analysis of these perquisites as also the social and business structures that are
conducive to moral principles.

“Ethics is the inquiry concerned with the justification for person’s actions. Such justification is the
search for a coherent set of rules or norms which guide our actions when they cause conflict with
others.”

-R. Edward Freeman/Daniel R. Gilbert-

The American Heritage Dictionary defines ethics as, “The study of the general nature of morals and
of specific moral choices, moral philosophy and the rules or standards governing the conduct of
the members of a profession. The difference between an ordinary decision and an ethical decision
lies in the point where the accepted rules no longer serve and the decision maker is faced with the
responsibility for weighing values and reaching a judgment in a situation which is not quite the same
as any s/he has faced before.”

“Ethics broadly and simply is the study of how our decisions affect other people. It is also the study
of people’s rights and duties and of the rules that people apply in making decisions.”

-R.E. Freeman, A.F Stoner-

Business Ethics is the study of how personal moral norms apply to the activities and goals of
commercial enterprise. It is not a separate moral standard, but the study of how the business
context poses its own unique problems for the moral person who acts as an agent of this system.

“A strong sense of leadership, ethics and responsibility is expected from the business today to meet
the expectations and urgent requirements of society.”

Thomas R Piper
Ethics is an area dealing with moral judgment related to voluntary human conduct. These moral
standards are the pinnacle of human success. Ethics tries to set the benchmark for the ultimate goal
or the highest good to be achieved.

Ethics is related strictly to humans as it is only man who can distinguish between good and evil and
right and wrong. Moreover, the human behavior is voluntary and not enforced or coerced by people
or circumstances

Ethical Principles [Birla Life ko RAJ BLRaJ]

a) Beneficence

We should attempt to generate the largest ratio of good over evil in the world. This principle
stipulates that ethical theories should strive to achieve the greatest amount of good because people
benefit from the most good.

b) Least Harm

In situations where we are faced with alternatives and neither of the choices are beneficial, we
should choose to do the least harm to the least number of people.

c) Respect for Autonomy

An Ethical theory should allow people to take control of themselves and thereby able to make
decisions that apply to their lives. People should have control to their lives as much as possible.

d) Justice

Ethical theories should prescribe actions that are fair to those involved. Ethical decisions should be
consistent with the ethical theory unless extenuating circumstances that can be justified exist in the
case.

Types of Ethics [ NAME DR.]

1) Normative Ethics

Normative ethics is the branch of philosophical ethics that investigates the set of questions that arise
when we think about the question “how ought one act, morally speaking?”. It is about what ought to
be and not what is. The key assumption in Normative ethics is that there is only one ultimate
criterion of moral conduct. The classical example of a Normative theory is the Golden Rule, “We
should do to others what we would want others to do to us.” Normative ethics thus said to be
prescriptive, rather than descriptive.

a) Virtue Theories

(Virtue = The quality of doing what is right and avoiding what is wrong)

Virtue Ethics was first prescribed by Aristotle and focuses on the inherent character of a person
rather than on the specific action s/he performs. Simply put, Virtue theorists place less emphasis on
learning rules and instead stress the importance of developing good habits of character such as
benevolence.

According to Aristotle, it is not an easy task to find the perfect mean between extreme character
traits. We need assistance from our reason to do this. Interest in Virtue Theory continued through
the middle ages but declined in the 19 th century. Of late, there has been a renewed interest in this
field.

b) Duty or Deontological Theories

Deontological Theory argues that decisions should be made considering the factors of one's duties
and other's rights. There are some clear obligations we have as human beings and we are to fulfill
these duties irrespective of the consequences that might arise from our actions.

There are four central duty theories:

 Samuel Pufendorf’s theories

i) Duties towards God

A theoretical duty to know the existence and nature of God.

A practical duty to both inwardly and outwardly worship God.

ii) Duties towards Self

Duties of the Soul, which involve developing one’s skills and talents.

Duties of the body, which involve not harming our bodies, as we might through gluttony or
drunkenness and not killing oneself.

iii) Duties towards Others

Avoid doing wrong to others.

Treat people as equals.

Promote the good of others.

 Rights theory approach

Right is a justified claim against another person’s behavior. Rights and duties are two sides of the
same coin. Essential features of moral rights are:

a) Rights are Natural

b) Rights are Universal

c) Rights are Equal

d) Rights are Inalienable

  Kant’s philosophy

This philosophy emphasizes a single principle of duty, “Treat people as an end and, never as a means
to an end.” Suicide according to this philosophy will be wrong since I would be treating my life as a
means to the alleviation of my misery.

 Ross’s Duty based Theory

Our duties are a part of the fundamental nature of the universe. There is a short list of duties:

Fidelity

Reparation

Gratitude

Justice

Beneficence

Self Improvement

Non maleficence

c) Consequentialist Theories

“ An Action is morally right if the consequences of that action are more favorable than unfavorable.”

The most attractive feature of consequentialism is that it appeals to publicly observable

consequences of an action. There are 3 sub divisions of Consequentialist theories. They are:

i) Ethical Egoism

“An action is morally right if the consequences of that action are more favorable than unfavorable
only to the agent performing the action.”

ii) Ethical Altruism

“An action is morally right if the consequences of that action are more favorable than unfavorable to
everyone except the agent.”

iii) Utilitarianism

“An action is morally right if the consequences of that action are more favorable than unfavorable to
everyone.”

2) Meta Ethics or Analytical Ethics [Meta = Beyond] G.E Moore’s Principia Ethica

The most abstract and least clearly defined area of moral philosophy as it asks about the nature of
goodness and badness, i.e. what is to be morally right and wrong. It attempts at making a bird’s eye
view of the entire project of ethics.
Meta Ethics is not about what people ought to do. It is a about what they are doing when they talk
about what they ought to do.

Hudson

a) Moral Realism and Anti-Realism

Moral Realists hold that moral facts are objective facts. Things are good or bad independent of us
and then we come along to discover morality.

Anti Realists hold that moral facts are not out there in the world until we put them there. Morality is
thus not a discovery, but an invention.

b) Cognitivism and Non-Cognitivism

Moral Statements describe the world

Moral statements describe the feelings of a particular person.

c) Psychological Issues

i) Egoism and Altruism

Egoism = For Our own good. Morality or good of others is for selfish reasons.

Altruism = For overall good. We are naturally inclined to morality or good of others.

ii) Emotion and Reason

iii) Male and Female Morality

3) Descriptive Ethics

4) Relativism Ethics

5) Applied Ethics

Applied Ethics is the branch of ethics which consists of the analysis of specific, controversial moral
issues such as abortion, animal rights, or euthanasia. Applied ethics has been subdivided into
convenient groups such as medical ethics, business ethics, environmental ethics and sexual ethics.

Features of Issue in Applied ethics:

a) It must be controversial. (Some say an act is right, some say it’s wrong.)

b) It must be a distinctly moral issue and not a social or a political issue.

a) Normative Principles in Applied Ethics

Personal Benefit; Social Benefit; Principle of Benevolence; Principle of Paternalism; Principle of non
Harm; Principle of Honesty; Principle of Lawfulness; Principle of Autonomy; Principle of Justice;
Rights.

b) Issues in Applied Ethics

Biomedical Issues

Business Ethics

Environmental Ethics

Sexual Morality

6) Evolutionary Ethics

Evolutionary Ethics tries to bridge the gap between philosophy and the natural sciences by arguing
that natural selection has instilled human beings with a moral sense i.e. we are born to be good,
naturally.

Importance of Ethics

1. It can free us from prejudice and dogmatism

2. It gives moral justification to our actions.

3. Helps us to face dilemmas where one course of action is to be chosen.

4. Ethics helps us to become better human beings.

5. Helps in maintenance of law and order and promotes social etiquettes.

Nature of Ethics

Morality is the standard that an individual or a group has about what constitutes right and wrong, good or evil.
Ethics is a branch of moral philosophy that examines the moral standards of an individual or society, and
asking how these standards apply to our lives and whether these are reasonable or unreasonable.

1. Ethics is an area dealing with moral judgment related to voluntary human conduct.
2. The idea of Ethics is related to humans only.
3. The study of Ethics is a field of Social Science
4. It is normative in nature
5. Ethics deals with human conduct which is voluntary and not enforced or coerced by people or
circumstances.
6. Ethics are grounded in interpretation, perspective and cultural beliefs.
Business Ethics Meaning and Nature

In most cultures and communities, business has been seen to be a rather dirty and vulgar matter.
Christ threw the money lenders from the temple; taking interest (usury) is prohibited by Islam;
Confucius sais that , “The superior person knows what’s right; the inferior person knows how to
sell.” Corporations and their inhabitants are presented as conspiratorial places populated by
immoral individuals.

To condemn or praise someone else’s action is one of the most powerful things that we can do with
language, and that others can do to us.

Business Ethics is neither against the business nor against its owners. It is not a choice between
profits and ethics but making profits in an ethical manner.

Importance of Ethics in Business

The managers today are motivated to find a new ethical justification for their role in the society.
Public Concern has become strident and vocal about the externalities (such as pollution) and these
are not amenable to direct market control. Moreover, human dignity and the Value of Human Life
have assumed greater priorities leading to a substantial growth in business ethics in recent times.

Business has been one of the most stable sectors of the society as it is governed by laws and dictums
that are being implemented among every aspect of it. Ethics has relevance in every sphere of life
and Business is not different. As Henry Ford said, “ A business that makes nothing but money is a
poor kind of business.” Institutionalizing the corporate ethics and implementing the ethical code for
the organization will ensure a highly ethical and long running business which will help the business
attain its primary goal - “Maximizing the wealth and profits of the organization by ensuring long term
survival and growth.” Some of the notable roles of Ethics in Business are as follows:

1. Helps to increase credibility and develop a sense of responsibility in the managers by instilling
in them moral values.

2. Improves the quality of decisions through value judgment.

3. Increased Business activity via Customer Loyalty and corporate image

4. Opportunity to Convert Social problems into profitable ventures

5. Instills Sense of belongingness and improve employee loyalty and morale

6. Attention to Business Ethics has substantially improved society

7. Ensures Sustainable Development via efficient and judicious utilization of resources.

8. Avoids direct intervention by the Government

9. Helps cultivate strong teamwork and increase productivity

10. Ethics ensures formulation and implementation of policies that are legal.

Types of Business Ethics

Business Ethics is principally a type of applied ethics, which analyzes various ethical rules and ethical
or moral problems that may take place in a commercial environment. Business ethics may take the
form of a descriptive field (subject area) or normative field.

The different forms of business ethics can be categorized as:

1. General Business Ethics

2. Professional Business Ethics

3. Ethics of Accounting Information

4. Ethics of Production

5. Ethics of Sales and Marketing

6. Ethics of Intellectual Property, skills and knowledge

7. International Business Ethics.

Relationship Between Corporate Responsibility and Business Ethics

 Fig: Carroll’s Four Part Model of Corporate Social Responsibility

Corporate Social Responsibility is a concept whereby organizations consider the interests of the
society by taking responsibility for the impact of their activities on customers, employees,
shareholders, communities and the environment in all aspects of their operations.

A Corporate body which follows CSR is said to be a Corporate Citizen. In other words, the term
‘Corporate Citizenship’ denotes the extent to which businesses meet the social responsibilities i.e.
legal, ethical, economic and Philanthropic placed on them by their stakeholders.

“Corporate Social Responsibility encompasses the economic, legal, ethical and philanthropic
expectations placed on organizations by society at a given point in time.”

-Archie Carroll (Founder of the Term CSR 1979)

“Corporate Social Responsibility is the continuing commitment by business to behave ethically and
contribute to economic development while improving the quality of life of the workforce and their
families as well as of the local community and society at large.”

-World Business Council for Sustainable Development

Corporate Governance

The Term Corporate Governance has come to mean two things:

 The processes by which all companies are directed and controlled.

 A field in economics which studies the issues arising from the separation of ownership and
control.

Corporate Governance is defined as “The formal system of accountability and control for ethical and
socially responsible organizational decisions and sustainable use of resources.”

Principles of Corporate Governance

1. Shareholder Rights and Equitable Treatment.

2. Roles and Responsibilities of the Board of Directors. (Internal Directors<External Directors)
3. Integrity and Ethical Behavior.
4. Disclosure and Transparency.
5. Interests of other stakeholders.