Business Ethics Defined

Morality Ethics

The standards that an individual or a group has about what is right and wrong or good and evil.

The activity of examining one's moral standards or societies' and asking

how these standards apply to our lives whether they are reasonable or unreasonable

Business Ethics Defined

Five Characteristics of moral standards
deal with matters we think can seriously injure or benefit human (& other sentient?) beings not established or changed by the decisions of authoritative individuals or bodies are overriding: take precedence over other standards & considerations (especially of self-interest) are based on impartial considerations: like my momma said
"what if you were them?"; " "how'd you like someone to do that to you?"

associated with special emotions and vocabulary

emotions like guilt, shame, & remorse vocabulary like "wrong", "right", "ought", "good", "bad", "immoral"

Business Ethics Defined

Business Ethics : normative study of moral standards as they apply to business policies, institutions, and behavior Three kinds of Issues for Business Ethics (arising from the purposes & structure of Corporations) systemic: concerning the economic, political, and other social systems within which businesses operate. corporate: concerning issues & practices of a particular company individual: concerning particular individuals within companies

Globalization, Multinationals, and Business Ethics

Globalization : The worldwide process by which the economic and social systems of nations have become connected
Multinational corporation : A company that maintains manufacturing, marketing service, or administrative operations in many different host countries

Globalization, Multinationals, and Business Ethics

Most large companies today are multinationals: firms that maintain operations in many different countries. The fact that multinationals operate in more than one country produces ethical dilemmas Able to shift operations out of one country & into another that offers more favorable conditions, e.g., cheaper labor less stringent laws: e.g., environmental regulations lower rates of taxation Enabling them to playing off one government against another (as happens even between U.S. states) to escape social controls (e.g., minimum wage laws, safe working condition laws & environmental laws) even taxes

Globalization, Multinationals, and Business Ethics

Moral Dilemmas Posed by these Abilities: requires choosing between the needs & interests of the business & those of their host countries. Their ability to relocate v. the expense of relocation, threat of confiscation, etc. by host countries means they can face hard choices: To go along with ethically questionable local practices (e.g., apartheid as previously practiced in South Africa) v. risk their operations & market in the host country To practice tax avoidance to the maximum of their abilities v. paying what might be viewed as their fair share Benefits of technology transfer v. risks

Business Ethics and Cultural Differences

Ethical relativism : A theory that there are no ethical standards that are absolutely true and that apply or should be applied to the companies and people of all societies. Objection to Ethical Relativism Theory : Some moral standards are found in all societies Moral differences do not logically imply relativism Relativism is incoherent Relativism privileges the current moral standards of a society

Technology and Business Ethics

"Technology consists of all those methods, processes, and tools that humans invent to manipulate their environment. New Technologies Now Transforming Society Information technology including the internet and cyberspace.
issues of privacy
issues of property: copyrights v. "fair use"

Nanotechnology poses unknown risks Biotechnology and especially genetic engineering poses dimly understood ecosystemic risks

Moral Development and Moral Reasoning

Kohlbergs Three Levels of Moral Development Preconventional : centering on response to rules, punishments, and social expectations. Conventional : characterized by the ability to see situations from the point of view of others and to subordinate the needs of the individual to the needs of the group. Postconventional/Autonomous : at these stages the individual has questioned previous laws and values and sees the value of reason in morality.

Moral Development and Moral Reasoning

Moral Reasoning : The reasoning process by which human behaviors, institutions, or policies are judged to be in accordance with or in violation of moral standards

Arguments For and Againts Business Ethics

Simple Argument
Ethics should govern all human activities. Business is a human activity.

Therefore, ethics should govern business too.

Arguments For and Againts Business Ethics

Argument from Businesses Need for Ethics Businesses can't survive without ethics
business requires at least a minimal adherence to ethics on the part of those involved in the business: e.g., the honoring of contracts by customers, managers, & employees

business requires a stable society in which to carry on its dealings: morality is a stabilizing force in society.

Therefore it is in the best interests of businesses to promote ethical behavior (and practicing it is the best way to promote it).

Arguments For and Againts Business Ethics

Objections to Bringing Ethics into Business :
In a free market economy, the pursuit of profit will ensure maximum social benefit

A managers most important obligation is to the company

Business ethics is limited to obeying the law

Arguments For and Againts Business Ethics

Game theoretic considerations: "the prisoner's dilemma" lesson: "when people deal with each other repeatedly, so that each can later retaliate against or reward the other party, cooperation is more advantageous than continually trying to take advantage of the other party."
Unethical businesses become targets of moral outrage which works to their detriment.

Moral Responsibility and Blame

Conditions of Moral Responsibility: A person is morally responsible only for those acts and their foreseen injurious effects of deliberate acts or ommissions

Moral Responsibility and Blame

Elements of Moral Responsibility
Individual must causes or fail to prevent an avoidable injury or wrong

Individual must know what he is doing

Individual must act of his own free will

Moral Responsibility and Blame

Corporate acts: acts brought about by several actions or omissions of many different people all cooperating together so that their linked actions and omissions jointly produce the corporate act. Question: Who is morally responsible? "Traditional" Individual Responsibility View: those who knowingly & freely did their parts are each morally responsible for the act. Alternative Corporate Responsibility View: the corporate group and not the individuals who make up the group must be held responsible.