Module 5

“Notes on Ethical Systems”

• Business ethics focuses on nature and operation of the markets, the corporation as moral
agent, behavior of individuals wi the corporation, fiduciary responsibilities, and conflicts
bw role values and personal values

• Utilitarian Ethics: “Do unto others as you would have them to unto you” rightness of
action is determined by the consequences (act U); an action is right if and only if it
conforms to a set of rules the general acceptance of which would preside the greatest
balance of pleasure over pain for everyone (rule U)

o Morally correct action is one that results in the greatest good for the greatest
number of people

o Cost benefit analysis: money provides a common factor for allocating resources
or determining values that cannot be otherwise easily compared

 Problem = not all costs/benefits monetary values, market prices do not

reflect true costs always; varies depending on the level which it is applied
what works for individual may not work for firm as a whole

o Strength = quantifies moral reasoning; how we ordinarily view moral problems

o Weakness = does always account for concepts of right and justice bc they hold
that consequences are irrelevant in determ what is good or band; justifies as
morally things that are clearly immoral

• Deontological Ethics: duty done for duty’s sake, rightness or wrongness of an act is in
part a matter of the intrinsic moral features of the kind of act (lying is always wrong and a
duty not to do that); ends don’t nec justify means

• Does not mean consequences are not relevant for assessing those acts but they aren’t
what make the act right – they help us determine which action is more in keeping w what
is already our duty

o 1. Everyone is morally equal to every one else

o 2. Everyone can reason one’s moral obligations – moral principle is universal

applicable for everyone who is in the same moral situation

• Kant: applies reason to deontological ethics; humanity is unique in its capacity for reason
and it is reason what makes people free and is dependent on free will and autonomy

o Right of free consent

 o Right of privacy

o Right of freedom of conscious

o Right of freedom

o Right of due process

• Virtue Ethics: emphasizes character of moral agent rather than rules for consequences as
key to ethical thinking; virtues are acquired and must be cultivated and a virtuous
character is the basis for justice in modern, democratic societies

• Professionalism: moral conduct is determined by customary practices of a profession

community and professional standards establish criteria for determining due care

o Businesses have responsibilities to avoid harm, honor warranties, and remove

conflicts of interests…

• Legal Theory of Morality: obeying law is all that is required in business

• Economic Theory of Morality: corps have a primary obligation of maximize profits as

efficiently as possible

• Theories of Rights and Justice:

• Natick: motivated to protect human rights not to promote human well being
(deontological) richer are under no obligation to provide welfare for the poor provided
they hold their riches in accordance w just transfer and just original acquisition

o 1. Just transfer

o 2. Just original acquisition

o 3. Rectification of prop holdings taken wrongly or transferred wrongly

• Rawls: (Kant – humans are rational and reasonable) Society in which individuals
recognize each other as free and equal and key to society is institutions that enable
individuals w conflicting ends to interact in mutually beneficial away; concerned w social
justice

o 1. Each person is to have an equal right to the most extensive total system of basic
liberties

o 2. Social and economic inequalities are to be arranged so that they are to the
greatest benefit of the least advantaged and attached to offices and positions open
to all under

“Tracking Down the Seat of Moral Reasoning”

 • 2 school of thoughts: Kant believes moral judgments were rational, reasoned while Hume
believes moral judgments are emotional

• We process moral judgments differently bc dif brain functions are involved in thinking
through each problem

• Crying baby scenario: hard choice bw emotional and reasoned responses – see more act
in the part of the brain the anterior cingulated cortex which tends to become active when
there are competing behavioral responses

• Emotional impulse to think its wrong to smother the baby as well as a utlitatarian impulse
to weigh the number of deaths w each poss outcome (dif parts of brain are at work in the
emotional and utilitarian case)

• Moral judgment is not a single kind of process but its dif systems in the brain in some
cases competing w each other

• We are not born w an innate set of moral judgments but people’s intuitions are
surprisingly stable across cultures but there still is some cultural variability

“Phineas Gage”

• American railroad construction foreman now remembered for his survival of an accident
where a large iron rod was driven completely through his head destroying much of his
brain’s left frontal lobe

• First case suggesting that damage to specific regions of brain might affect personality and
behavior

• Social recovery hypothesis: Gage’s most serious mental changes may have existed for
only a limited time after the accident and later in life he was far more functional and
socially better adapted than has been thought

• Before accident Gage was hard working, responsible, and efficient and after he was
impatient of restraint or advice when it conflicted w his desires, devising plans of future
operations but abandoned them when others seemed more feasible (child in intellectual
capacity and animal passions of a strong man)

• Maladapted Gage may have existed for only a limited time after accident and that Phineas
eventually figured out how to live despite his injury and later in life was far more
functional, socially better adapted

o It is hypothesized that this change represents a social recovery undergone by Gage

over time – someone or something gave enough structure to their lives for them to
relearn lost social and personal skills (highly structured employment in Chile)