PHILOSOPHY OF ETHICS.pptx for business students

PHILOSOPHY OF ETHICS.pptx for business students

1. PHILOSOPHY of ETHICS . 1

2. INTRODUCTION Managers and executives make hundreds of decisions in an organization everyday in their business dealings. Many of these decisions may be morally and ethically justifiable, while some of them, often taken in the context of exigencies of business or compulsions of competitive pressures, may be unethical and even illegal. 2

3. ETHICAL MODELS THAT GUIDE DECISION MAKING There are several ethical theories that have been developed by philosophers over the years. These theories offer certain benchmarks to set organizational or professional standards, and more importantly, help develop a basis for normative judgment that could transcend organizational or professional cultures. However, it must be stressed here that business theorists have not made much use of these theories that could offer models of ethical decision making. There are a couple of reasons for this: ethical theories and their relevance to business research are not easily understood by business theorists; and (ii) ethical theories, being normative, are difficult to put into practice. 3

4. some writers have developed models of professional standards based on some of these ethical theories. Of these, three models based on rights, justice and utilitarianism are prominent and used more often than others. Theories of Ethics: Rights: Rights Theories The rights-based theories were advocated by Immanuel Kant, who stressed personal rights, and Locke, who underlined the importance of property rights. Both the proponents focused on the entitlements of individuals as persons with dignity and held the view that ethical decisions should protect the legal and moral rights that an individual is entitled to. According to ethicists these individual rights would include the rights to ( i ) free consent; (ii) freedom of conscience; (iii) privacy; (iv) free speech; and (v) due process 4

5. Utilitarianism: Utilitarianism as an ethical theory holds the view that an action or decision is right if it maximizes utility or produces the greatest good for the largest number of people. Justice: In the modern context, ethical decisions should result in a situation where all human beings are treated equally, and in case some are treated unequally, it must be based on some defensible reasons. It is in the nature of things that all persons cannot, and should not be, treated equally. 5

6. WHICH APPROACH TO USE? Each of these theories discussed above has its own nuances, strengths and weaknesses and followers. Though all these theories can be claimed to be a set of ethical principles, each theory addresses an ethical aspect of behaviour that cannot be ignored. It is difficult to arrive at a standard answer on how to reconcile a decision situation when different views are competing with one another. 6

7. APPLYING MORAL PHILOSOPHY TO ETHICAL DECISION MAKING Applying moral philosophy to ethical decision making is a normal process individuals resort to. However, what moral philosophy they take depends on whether they make a personal decision outside the work environment or they do so in a work-related matter. As we have seen earlier, this difference in the approach of applying moral philosophies may arise because the kind of goals and pressures that motivate persons to achieve success in the work environment does not exist in their domestic or personal lives. As a result, a worker may consider a certain deed good in his or her job-related environment, but unacceptable in the domestic arena. 7

8. INFLUENCES ON ETHICAL DECISION MAKING There are three major influences that have an impact on employees’ decision making in business— their personal moral standards, their workplace ethics and culture, and the nature of the issue concerned. 8

9. Work Place Ethics When a person works in an organization, he or she has to reckon to a set of values that are part of the workplace—corporate culture, the set of beliefs, values, goals, norms, and the manner of solving problems that workers of the organization share. If the corporate culture is one that is straightforward, as per the mission and vision statements, well-laid out policies, and procedures and reflects a strong desire for protection of stakeholders, then it will not create any problem to an ethically sensitive employee during his or her day-to-day business. On the contrary, if the organizational culture is one of haughtiness, one-upmanship, or do-what-you-like, but-bring-us-business-and-profit type of attitude as it was in cases of Enron and Reliance, conflicts between personal and professional roles are bound to arise. 9

10. PERSONAL VALUES AND ETHICAL DECISION MAKING An ethical decision maker needs to build and develop certain values. The Josephson Institute of Ethics34has identified ethical values such as trustworthiness, respect, responsibility, fairness, caring and citizenship as being the most important of these values. These are called The six pillars of character . According to them, these universal ethical values could be used to guide our choices. ‘The standards of conduct that arise out of these values constitute the ground rules of ethics, and therefore, of ethical decision making.’ According to the Josephson Institute of Ethics , ‘The six pillars of character taken together act as a multi-level filter through which ethical decisions can be processed,’ 10

11. The six pillars of character are : Trustworthiness Respect Responsibility Fairness Caring Citizenship 11

12. CORPORATE VALUES AND ETHICAL DECISION MAKING In a person’s work environment, the values, the vision and stated mission of the company where he or she works have greater influence than his or her own values and moral standards. In organizations, decisions— ethical or otherwise—are made jointly through committees, consultations, discussions or at meetings of groups responsible for particular operations or by getting advice and inputs from experts in the field. The evolved culture and structure of an organization operate through the individual relationships of its members and have an impact on their decisions. Every organization has a culture evolved over the years, or imposed from the top when a new management takes over, and every employee tries his best to follow it, both in the interest of the organization and in his or her own interest. He or she can ignore it or transcend it only at his or her peril. A corporate culture can be defined as ‘a set of values, beliefs, goals, norms and ways of solving problems’ that an organization’s employees share and live up with in their work environment. 12

13. A FRAMEWORK OF ETHICAL DECISION MAKING From what we have seen, it is clear that making an ethical decision is a tough task. When as individuals, we have to decide fairly on an ethical issue, we face an ethical dilemma as to which of the choices before us is likely to result in greater good or if not, lesser harm to others. Our perception of the potential consequence and judgement as to whether it is morally right or wrong will clinch the issue of decision making in our personal context. Take Choices Seriously Good Decisions Are Both Ethical and Effective Discernment and Discipline 13

14. THE PROCESS OF MAKING GOOD ETHICAL DECISIONS Recognize and Identify the Kind of Ethical Issue You Need to Resolve Pause and Think Make Sure of Your Goals Get Your Facts Right Evaluate Choices From Different Ethical Perspectives Consider Consequences Act, Then Reflect on the Decision Later 14