Chapter 4 Business Ethics Business Administration.pptx

Business Ethics

1. Chapter :4 Individual Factors: Moral philosophies and Values

2. Definition of Philosophy The general system of values by which they live. The term “philosophy” means, “ love of wisdom ”. Philosophy is an activity people undertake when they seek to understand fundamental truths about themselves, the world in which they live, and their relationships to the world and to each other. Moral Philosophy The specific principles or rules that people use to decide what is right or wrong. e.g. A production manager may be guided by a general philosophy of management that emphasizes encouraging workers to know as much as possible about the product that they are manufacturing.

3. However, his moral philosophy comes into play when he must make decisions such as whether to notify employees in advance of upcoming layoffs. Many theories associated with moral philosophies: Economic value orientation: is associated with values that can be quantified by monetary means. If an act produces more value than its effort, then it should be accepted as ethical. Idealism: this is the view that the only reality is the ideal world This would be the world of ideas, it is the view that there is no external reality composed of matter and energy There are only ideas existing within minds. Originator: Plato and Socrates Focus: Mind

4. Realism: reality exists independent of the human mind. World of physical o b jects is ultimate reality. Originator: Aristotle also called father of realism Focus: Body

5. Theories of Moral Philosophies 1.Teleology: ( from Greek word for “end”) refers to moral philosophies in which an act is considered morally right or acceptable if it produces some desired results such as ( pleasure, knowledge, career growth, realization of self interest, utility, or even fame ). This theory states that an action is good or bad depending on its outcome only. Egoism : defines right or acceptable behavior in terms of its consequences for the individual. In ethical decision making situation, an egoist will probably choose the alternative that contributes most to his self interest. Enlightened egoism : people who provide benefits to others, acting to increase their happiness. e.g. control pollution, avoid cheating, help create jobs.

6. Utilitarianism : is concerned with consequences, but the utilitarian seek the greatest good for the greatest number of people . Seeking pleasure and avoiding pain govern us in all we do, in all we think and in all we say Pleasure and Pain Act utilitarians : focuses upon actions ( Jeremy) Actions are approved those provide maximum pleasure to maximum number of people e.g. C harity Actions are disapproved that provide maximum pain to maximum number of people e.g. Robbery, harassment Rule utilitarians : focuses upon rules (John) It refers that an action is right as it conforms to a rules or principles that leads greatest wellbeing.

7. 2. Deontology: (from the G reek word for “ethics”) that focus on the rights of individuals and on the intentions associated with a particular behavior rather than on its consequences. Fundamental to deontological theory is the idea that equal respect must be given to all person. Act deontologists: focuses on individual act and whether it is the right decision in a given situation Rule deontologists : believe that conformity to general moral principles determines ethicalness.

8. Relativist Perspective: relativism is the belief that there is no absolute truth, only the truths that a particular individual or culture happen to believe. The same action may be morally right in one society but be morally wrong in another. Descriptive relativism: observing cultures. We may observe that different cultures exhibit different norms, customs, values. Metaethical relativists: that people naturally see situations from their own perspectives and argue that, as a result, there is no objective way of resolving ethical disputes between value systems and individuals. Normative relativism: assume that one person’s opinion is as good as another’s.

9. Virtue Ethics A moral virtue represents an acquired disposition that is valued as apart of an individual character Virtue is not so much a natural characteristics like height, or hair color; its more of an acquired skill. As an individual develops socially, he may become disposed to behave in the same way as he considers to be moral. The idea is that people who are good will do the good and right thing, regardless of the circumstances: whether they are home or abroad.

10. The elements of virtue that are importance to business transactions Trust, self-control, empathy, fairness and truthfulness. Attributes in contrast to virtue would include lying, cheating, fraud, and corruption.

11. Justice Justice is the ethical idea that people are to be treated impartially, fairly, and properly, and reasonably law, that laws are to ensure that no befalls another. Types of justice Distributive justice: is concerned with processes involved in the fair and equitable distribution of resources and burdens among diverse members of a community. Procedural justice: Priority to procedure It refers to the idea of fairness in the process that resolve disputes and allocate resources. Fair decision making process, openness, and participation It has 4 pillars Being fair in processes, being transparent in actions, providing opportunity for voice, being impartial in decision making.

12. 3. Interactional justice: based on evaluating the communication processes used in the business relationship. Because interactional justice is linked to fairness in communication. WHITE COLLAR CRIME The terms crime and criminal normally make as a picture in our mind as murder, arson, these are crimes of the street. White collar crime is a nonviolent crime of deceit or concealment to obtain personal or business advantage. Those who are on high position usually commit this crime. Examples: public corruption, health care fraud, insider trading, money laundering, education departments, engineering

13. Cognitive Moral Development Moral development: Moral development is suppose to be a part of cognitive development because morality is very much associated with one’s own consciousness. Morality can be develops in developing child by continuous engagement with moral stories discussions and activities. Kohlberg’s theory of moral development Kohlberg was an American psychologist and best known for his theory Heinz Wife has cancer, he needs medicine for her. Medical store sells drugs at much higher rate Should he steal the drugs? Or steal now but pay later? Or wait for the right cost?

14. He gave 3 levels and 6 stages of moral development Pre- Conventional level : Child’s sense of morality is externally controlled Obedience and Punishment orientation 8-9 age In first stage defines “right” as literal obedience to rules and authority. A person in this stage will respond to rules and labels of good and bad in terms of the physical power of those who determine such rules. Individual instrumental purpose and exchange It defines “right” as that which serves his own needs. The individual no longer makes moral decisions solely on the basis of specific rules or authority figures, he now evaluates behavior on the basis of its fairness to him.

15. 2. The Conventional level: To early adolescence (10-13 years) sense of morality tied to personal and societal relationships. Mutual interpersonal expectations, relationships, and conformity Good boy –nice girl orientation In this stage individual emphasizes others rather than himself. Although ethical motivation is still derived from obedience to rules, the individual considers the wellbeing of others. Social system and conscience maintenance: legal orientation or laws and order stage; rules are rules ( rules are absolute that cannot be changed) An individual determines what is right by considering his duty to society.

16. 3. Post Conventional level: sense of morality defined in terms of more abstract principles and values When people decide based on what they think is right rather than just following rules Ex: In Heinz’s dilemma, the protection of life is more important than breaking the law against stealing Prior rights, social contract, or utility An individual is concerned with upholding the basic rights, values, and legal contracts of society. In this stage he feels a sense of obligations towards society that provide maximum utility. Universal ethical principles A person believes that “right” is determined by universal ethical principles that everyone should follow .