BECG Pt.

-I
Introduction to business ethics

BECG-2: Ethical Concepts

and Theories
 Ethical Concepts and
Theories

Concepts of Utilitarianism and

Universalism – Theory of
Rights , Theory of Justice –
Virtue Ethics – Ethics of Care
 ETHICAL CONCEPTS

• Ethical
Subjectivism
• Ethical
relativism
•
Consequentialis
m •Ethics of Virtues

• Ethical Dilemmas in
Business
 Ethical Theories : Three Subject
Areas

• Metaethics
• Normative Ethics
• Applied Ethics
 METAETHICS
Entire gamut of ethical issues “The Study of the origin
and meaning of ethical concepts”

- it covers three issues

vMetaphysical issues – whether the moral

values exist independently of humans or they are
simply human conventions

vPsychological issues – physiological basis

of the moral action

vLinguistic issues – deals with the meaning

of the key moral terms, we use
 NORMATIVE ETHICS

Ø- Something that ‘guides’ or ‘controls’

Ø- Branch of ethics that guides human conduct
Ø- Sets of certain moral standards that help us to
determine what is right and what is wrong

⃘ Examples:
q golden rules : we should treat others the
same way that we want others to treat us. – one single
principle on the basis of which an action may be
adjudged ‘right’ or ‘wrong’

q Set of fundamental principles- such as

“moral rights to life and liberty” which serve as
guide to ethical behavior
 Normative Ethics : Contd .
v Pre – requisites for application of a moral Principle
Prescriptive – imperative or command , Universal –
applicable to all in a given situation , Overriding –
primary consideration , Public – presupposes social
intention , Practical – achievable by average individual

Three Theories
“how should one act in particular circumstances”

1)Teleological or Consequentialist Theory: “Thinking rationally about ends” –an

action is considered morally correct if the consequences of that action are more
favorable than unfavorable
vDetermine ethics of an act by looking to the probable outcome or consequences
of the decision (the ends)
2)Deontological ethical theory: focus on certain fundamental duties that we have as
human being, duties to God, duties to oneself includes preserving ones life and
happiness ,duties to others including family and society
vDetermine the ethics of an act by looking to the process of the decision
(Means)
3)Virtue Ethics : Virtues may be defined as any disposition of character or personality
that an individual desires in himself or others Theory emphasizes character
development rather than the articulation of abstract moral principles that guide
action
 Consequentialism
Three definitions of good
Each definition give different consequentialist moral theory

⃘ Egoism – if consequence of that action are more

favorable than unfavorable only to individual performing
that action
⃘ Utilitarianism – if consequences of action are
more favorable than unfavorable to everyone
⃘ Altruism – if consequences of action are more
favorable than unfavorable to everyone except the
individual
 Utilitarianism
• Chief intellectual forces in the development of utilitarianism:
– Jeremy Bentham (1748-1832)
– John Stuart Mill (1806-1873)
• Utilitarianism directs us to make decisions based on greatest
“good” (or “utility”) for the greatest number as the end result
• Most basic form of utilitarian analysis : cost- Benefit Analysis;
where you tally the costs & benefits of a given decision & follow
the decision that provides greatest
• Weighing social costs and benefits
• A general term for any view that holds that actions and policies
should be evaluated on the basis of the benefits and costs they
will impose on society
• Right action and policy is the one that will produce the greatest net
benefits or the lowest net costs
• Strong powerful theory, because it is liberal
• It appeals to no authority in resolving differences of opinion
• Differences of opinion are irrelevant except as they create a
majority or minority
• Able to describe much of the process of human decision- making, its
process seems “neutral”- well suited to many decisions
• Egalitarian process as no one person’s “good” valued more than
another
• Weaknesses:
 Utilitarianism- Contd.
• Jeremy Bentham (1748-1832) :
– The right course of action from an ethical point of view
would be to choose the policy that would produce the
greatest amount of utility
– Assumes that we can somehow measure and add the
quantities of benefits produced by an action and
subtract from them the measured quantities of harm
the action will have and thereby determine which
action produces the greatest total benefits or the
lowest total costs
– An action is right if it produces the most utility for all
persons affected by that action (including the person
performing the action)
• First, I should consider what alternative action or
policies are available to me on that occasion
• Second: for each alternative action, I must
estimate the direct and indirect benefits and
costs that the action will probably producer for
each
Utilitarianism is also theand every
basis person affected
of economic by the
Cost - Benefit action
Analysis . in
Efficiency- means operating in such a future
the foreseeable way one produces the most , one can
with the resources at hand - is what utilitarianism advocates
• Alternative that produces the greatest sum of
 Distributive Justice
• Conceptualized by Harvard Philosopher, John
Rawls- Distributive justice is another
teleological approach of decision making,
based on the concept of fairness
– It holds that ethical acts or decisions are those
that lead to an equitable distribution of goods
and services
– Rawls suggests that we should consider how we
could distribute goods and services- if we
were under the ‘veil’ of ignorance, that
prevented us from knowing our status in the
society (our intelligence, wealth, appearance)
• What rules we would impose on this
society if we had no idea whether we
would be princes or poppers
– High taxes and expensive welfare
projects which would benefit
impoverished but prove costly to the
 Justice and Fairness
• Standards of justice are generally taken to be more
important than utilitarian consideration
– If society is unjust to some of its members, then we
normally condemn that society, even if injustices
secure more utilitarian benefits for everyone: we
condemn a society that uses slavery even if slavery
makes that society more productive---greater benefits
for some can not justify injustices for others
– Standards of justice do not generally override moral
rights of individuals- reason: justice is based on
individual moral rights
• Types of Justice:
– Distributive Justice : concerned with the fair
distribution of society’s benefits and burdens
– Retributive (punitive) Justice: Just imposition of
punishment and penalties on those, who do wrong
• Just penalty is one that in some sense is
deserved by the person who do wrong
(Retributive justice would be at issue, for example, if
we were to ask whether it would be fair to penalize
Cotton Mills for causing brown lung disease among
their workers)
– Compensatory Justice: concerns with the just way of
Summary of Beliefs and Problems in the Five
Major Ethical Systems
 Ethical Universalism
•The school of ethical universalism holds that in terms of
biological and psychological needs, human nature is
everywhere the same.
•To be a ethical universalist you only have to agree that there is
some kind of action that’s always right or always wrong.
•The relevant kind may be something very general, e.g. “doing
something that brings about the greatest good for the
greatest number.”
•Universal laws to be applied to whole of mankind
•Suggests that in reaching a decision, we should consider
whether it would be acceptable if everyone in every situation
made this same decision- “ Act only according to that maxim
whereby you can at the same time will, that it should become
a universal law”- Golden rule an example
•Universalism offers guidance with regard to the rules by which
someone should make decisions
•Kant recognized universal rights such as :
– Freedom of speech
– Freedom of consent
– Right to privacy
– Freedom of conscience
•Whether one is Hindu, Christian, Jewish, Muslim, Buddhist or
 Ethical Universalism:
Contd.
• Ethical Universalism says that there are
universal moral codes, things that are
right or wrong, either ordained by god
or by some natural moral law of the
universe.
Ethical relativism says that it really
depends on the way you view things.
Examples:
Universalism - murder is wrong because
god says it's wrong.
Relativism - murder is wrong, for some
people, but it's okay sometimes, like
during war or when you are murdering a
serial killer.
 Ethical Relativism vs. Ethical
Universalism
• Ethical relativists hold that there is no kind of action
that is always, everywhere and for everyone right or
wrong.
• While as per Universalism, Human rights assume universalism
• Ethical universalists hold that there is some (at least one)
kind of action that is always, everywhere and for everyone
right or wrong.
• Ethical universalists do not claim that every kind of action is
either always right or always wrong!
• Ethical relativism - each society's view of ethics considered
A s p eand
legitimate r U ethical
n iv e rsa lism :
• vM ouniversalism
Ethical ra lity is u n ive rsa l, o bmoral
- basic je ctiveprinciples
& a b so ltranscend
u te
vIf a n a ctio n /boundaries
cultural/national in te n tio n / ch a ra cte r is rig h t ( o r w ro n g ) a t o n e
p la ce & tim e th e sa m e ( o r re le va n tly sim ila r)
• a ctio n / in te n tio n / ch a ra cte r w illb e rig h t ( o r w ro n g ) in a ll
p la ce s & a t a lltim e s
vN o exce p tio n s, exe m p tio n s, excu se s
 Theory of Rights
• Utilitarianism is unable to deal with moral issues-
relating to rights
– Individual entitlements to freedom of choice and well being
• Rights are individual’s entitlement to something
– Legal Rights: entitlements that derives from a legal
system that permits or empowers a person to act in a
specified way or that requires others to act in certain ways
towards that person
– Moral Rights: rights that human beings of every
nationality possesses to an equal extent simply by virtue of
being human beings- Universal
• Characteristics of rights:
– A right is an individual's entitlement to something
– Rights derived from legal system are limited by jurisdiction
– Moral or Human Rights are based on moral norms and are not
limited by jurisdiction
• Summary of Moral rights:
– Tightly correlated with duties
 Theory of Rights: Contd.
• Positive Rights: Duties of other agents( it is not always
clear, who) to provide the holder of the right with whatever
he or she needs to freely pursue his or her interests
• Negative Rights: Duties others have not to interfere in
certain activities of other person who holds the right
• Contractual Rights: Contractual rights and
duties(sometimes called special rights and duties or
special obligations) are the limited rights and correlative
duties that arise when one person enters an agreement with
another person.
• Basis of Moral Rights:
– Immanuel Kant (1724-1804) : Theory based on moral
principles that Kant called the “Categorical
Imperative” ( the requirement that everyone should
be treated as a free person equal to everyone else)
• Maxim: A maxim for Kant is the reason a person
in a certain situation has, for doing, what he or
she plans to do. A maxim would “become a
universal law”- if every person in a similar
situation chose to do the same thing for the
same reason
• “ An action is morally right for a person in
 Theory of Rights: Contd.
• First Formulation of Categorical Imperative:
incorporates two criteria for determining moral right and wrong
– Universalizability: the person’s reasons for acting must
be reasons that everybody could act on at least in
principle
– Reversibility: the person's reasons for acting must be
reasons that he or she would be wiling to have all others
use, even as a basis of how they treat him or her
– There is an obvious similarity between the categorical
imperative and the so called Golden Rule : “Do unto
others as you would have them to do unto you”
– Kent’s Categorical imperative focuses on a person’s
interior motivation and not on consequences of external
actions
• Second formulation of Kant’s categorical
imperative: an action is morally right for a person if, and only if,
in performing the action, the person does not use others merely as a
means for advancing his or her own interests, but also both respects
and develops their capacity to choose freely for themselves
• Kent’s Categorical Imperative Formulas:
– Never do something unless you are willing to have everyone do
 Theory of Rights: Contd.

• Libertarian Philosophers: ( Robert Nozick, American

Philosopher)
• believe that freedom from human constraint is
necessarily good and that all constraints imposed by
others are necessarily evil except when needed to
prevent the imposition of greater human constraints.
• Nozick argues that negative right to freedom from
coercion of others implies that people must be left free
to do what they want with their own labor and
whatever products they manufacture by their own
labour
 Virtue Ethics
•

• Moral Virtue: An acquired disposition that is valued as part of

the character of a morally good human being and that is
exhibited in the person’s habitual behavior
• Theory of Moral Virtue:
– Aristotle (Greek Philosopher) : habits that enable a
person to live according to reason. With respect to emotions
of fear , for example courage is the virtue of responding to
fear with a reasonable amount of daring, whereas
cowardliness is the vice of not being daring enough to
respond to fear, and recklessness is the vice of being too
daring in response to fear
• Virtues are habits of dealing with one’s emotions,
desires and actions in a manner that seeks the
reasonable middle ground and avoids unreasonable
extremes, whereas vices are habits of going to the
extreme of either excess or deficiency
– St. Thomas Aquinas (a Christian philosopher): habits
that enable a person to live reasonably in this world and be
united to God in the next
– Alasdair MacIntyre (American Philosopher): disposition
that enable a person to achieve the good at which human
“practices” aim
– Edmund L. Pincoffs: dispositions we use when choosing
between persons or potential selves. When deciding for
 Virtue Ethics: Contd.
•co n sists o f tru st, se lf-co n tro l, e m p a th y , fa irn e ss, a n d
tru th fu ln e ss
•w h a t is m o ra l is d e te rm in e d b y cu rre n t so cie ta l
d e fin itio n s
•• Virtue Theory: Thetheory that, the aim of the
moral life is to develop those general dispositions
called moral virtues, and exercise and exhibit
them in the many situations that human life sets
before us
• Virtue theory claims:
– We should exercise, exhibit and develop
virtues
– We should avoid exercising, exhibiting, and
developing vices
 Ethics Of Care
• We have an obligation to exercise special care
towards those particular persons with whom we
have valuable close relationships, particularly
relations of dependency
• Emphasizes to moral demands:
– we each exist in the web (network) of
relationships and should preserve and
nurture those concrete and valuable
relationships we have with specific persons
– We each should exercise special care for
those whom we are concretely related by
attending to their particular needs, values,
desires and concrete well being as seen
from their own perspective
– And by responding positively to these needs,
values, desires and concrete well being ,
particularly those who are vulnerable and
 Ethics Of Care: Contd.

• An ethic that emphasizes caring for the concrete

well being of those near to us
• Claims ethics need to b e impartial
• Emphasizes preserving and nurturing concrete
valuable relationships
• Says, we should care for those dependent on and
related to us
• Communitarian Ethics: An ethic that sees
concrete communities and communal
relationships as having a fundamental value
that should be preserved and maintained
 Integrating the Main Ethical
Standards
• Utilitarian standards must be used when we do not
have the resources to attain everyone’s objectives, so we
are forced to consider net social benefits and social costs
consequent on the actions (or policies or institutions) by
which we can attain these objectives
• Rights approach be employed when our actions and
policies will substantially affect the welfare and freedom of
specifiable individuals ,. Moral reasoning of this type forces
consideration of whether the behavior respects the basic
rights of the individuals involved and whether the behavior
is consistent with one’s agreements and special duties
• Moral judgments are also in part, based on the standards of
Justice , that indicate how benefits and burdens should be
distributed among the members of a group. Moral reasoning
on which such judgments are based will incorporate
considerations concerning whether the behavior distributes
benefits and burdens equally or in accordance with the
needs, abilities, contributions and free choices of people as
well as the extent of their wrongdoings
• Moral judgments based on standards of Caring indicate the
 Integrating the Main Ethical
Standards-Contd.
• Utilitarian standards consider only the aggregate social
welfare but ignores the individual and how that welfare is
distributed
• Moral rights consider the individual but discount both
aggregate well- being and distributive considerations
• Standards of justice consider distributive issues but ignore
aggregate social welfare and the individual as such
• Standards of caring consider the partiality that must be
shown to those close to us, they ignore the demands of
impartiality
• Moral reasoning should incorporate all four kinds of moral
considerations, although one or the other may turn out to be
relevant
1)Does theor decisive in a
action, as particular
far situation
as possible , maximize social
•
benefits and minimize social injuries?
21))Is the action consistent with the moral rights of those
1) whom it will affect?
2) 3)Will the action lead to a just distribution of benefits
and burdens?
4)Does the action exhibit appropriate care for the well
being of those who are closely related to or dependent