Ethical Theory and Business, 6th Edition

Tom L. Beauchamp & Norman E. Bowie

Chapter One Ethical Theory and Business Practice

© Prentice Hall, 2001

Objectives
٠ After studying this chapter the student should be able to:
– Distinguish between morality and ethical theory. – Distinguish between morality and prudence. – Distinguish between morality and law. – Explain the three approaches to the study of morality. – Describe the moral theory of relativism.

© Prentice Hall, 2001

2

Objectives
– Discuss the egoism moral theory. – Explore some of the problems of the egoism theory. – Interpret the different types of utilitarian theory. – Discuss some of the problems of the utilitarian theory. – Apply Kantian ethics using different scenarios.

© Prentice Hall, 2001

3

Objectives
– Explain the principles behind the common morality theories. – Explore the concept of rights theories. – Distinguish between virtue ethics, and feminist theories and the ethics of care.

© Prentice Hall, 2001

4

Overview ٠ Morality ٠ Approaches to the Study of Morality ٠ Relativism ٠ Egoism ٠ Utilitarian Theories ٠ Kantian Ethics ٠ Common Morality Theories © Prentice Hall. 2001 5 .

2001 6 .Overview ٠ Rights Theories ٠ Virtue Ethics ٠ Feminist Theories and the Ethics of Care ٠ Analysis of Cases © Prentice Hall.

2001 7 .Morality Principles or rules of moral conduct that people use to decide what is right or wrong. © Prentice Hall.

٠ No one moral philosophy is accepted by everyone! © Prentice Hall.Morality v. ٠ Ethical theory and moral philosophies provide guidelines for justification of right or wrong actions when settling human conflict. 2001 8 . Ethical Theory ٠ Morality is concerned with the social practices defining right and wrong.

doing what is prudent for oneself.Morality v. 2001 9 . © Prentice Hall. ٠ Morality and prudence should generally work hand-in-hand if a business is to succeed. ٠ Rules of morality promote the interest of other people. Prudence ٠ Rules of prudence promote self-interest.

Law Public's agency for translating morality into explicit social guidelines and practices and for stipulating punishments for offenses. © Prentice Hall. 2001 10 .

٠ Morality and ethics begin where the law is unclear or not defined! © Prentice Hall. Law ٠ Statutory law v.Morality v. – Case laws are judge-made laws that establish influential precedents that provide material for reflection on both legal and moral questions. case law – Statutory laws are federal / state statutes and their accompanying administrative regulations. 2001 11 .

religious belief. © Prentice Hall.Rule of Conscience ٠ Consciences: – Vary from person to person and time to time. and training. – Are altered by circumstance. ٠ Moral justification must then be based on a source external to conscience itself. – Are not consistent from day to day. 2001 12 . life experiences.

sociologists. justice. ٠ Conceptual approach . and responsibility. and historians. 2001 13 . as performed by anthropologists. good. obligation.Approaches to the Study of Morality ٠ Descriptive approach . – Referred to as the scientific study of ethics.provides a factual description and explanation of moral behavior and beliefs. © Prentice Hall.analyzes meanings of central terms in ethics such as right. virtue.

© Prentice Hall.Approaches to the Study of Morality ٠ Prescriptive approach .attempts to formulate and defend basic moral norms or standards by determining what ought to be done versus what is being done. – Referred to as normative ethics. 2001 14 .

Relativism An ethical theory that claims right and wrong is subjectively determined by each culture. © Prentice Hall. 2001 15 .

because those rules are necessary for society to exist. ٠ An argument against relativism: – There are some basic moral principles that all societies will have in common. © Prentice Hall. 2001 16 . ٠ There is no such thing as universal truth in ethics. there are only the various cultural codes and nothing more.Relativism ٠ What is good is socially accepted and what is bad is socially unacceptable in a given culture.

Methods to Easing Moral Disagreements ٠ Obtaining objective information ٠ Definitional clarity ٠ Example-counterexample ٠ Analysis of arguments and positions © Prentice Hall. 2001 17 .

Egoism A moral theory that contends all choices either involve or should involve self-promotion as their sole objective. 2001 18 . © Prentice Hall.

© Prentice Hall. ٠ A main argument against psychological egoism is that there may be no purely altruistic moral motivation to help other people unless there is personal gain. 2001 19 .Psychological Egoism ٠ Everyone is always motivated to act in his or her own perceived self-interest.

٠ Ethical egoists believe that people should not be their brother’s keeper.Ethical Egoism ٠ The only valid standard of conduct is the obligation to promote one's own well being above everyone else's. because people do not completely understand the true needs of others. ٠ It’s every man for himself in this world! © Prentice Hall. 2001 20 .

2001 21 . © Prentice Hall.Utilitarian Theories Moral theories that assert an action’s rightness is determined by the actual or probable consequences that the action will have for the greatest number of people affected by that action.

Utilitarian Theories ٠ Utilitarian theories hold that the moral worth of actions or practices are determined solely by their consequences. © Prentice Hall. 2001 22 . ٠ An action or practice is right if it leads to the best possible balance of good consequences over bad consequences for all the parties affected.

– Treats rules as useful guidelines to help determine ethical behavior. © Prentice Hall.Utilitarian Theories ٠ Act utilitarianism – Argues that in all situations the utility of an action is based on an act that leads to the greatest good for the greatest number. 2001 23 . – Will break a moral rule if breaking the rule leads to the greatest good for the greatest number.

2001 24 . © Prentice Hall. – Rule utilitarians hold that rules have a central position in morality that cannot be compromised by the demands of particular situations.Utilitarian Theories ٠ Rule utilitarianism – The morality of an action should be evaluated on the basis of principles or rules designed to promote the greatest utility for the greatest number.

2001 25 .Utilitarian Theories ٠ Utilitarian decision-making relies on tools such as cost-benefit analysis and risk assessment to determine the greatest utility. ٠ Main argument against utilitarianism is questioning whether units of happiness or some other utilitarian value can be measured and compared in order to determine the best action among alternatives. © Prentice Hall.

2001 26 . © Prentice Hall.Kantian Ethics A moral theory that holds you should follow only those rules which you would will to be universal laws for everyone. including yourself.

© Prentice Hall.Kantian Ethics ٠ Categorical imperative principle states "I ought never to act except in such a way that I can also will that my maxim should become universal law. ٠ Respect-for-persons principle states persons should never be used as a means to an end. and is imperative because it gives instruction on how one must act. 2001 27 ." – The principle is categorical because it admits of no exceptions and is absolutely binding.

Kantian Ethics ٠ Kant believed that morality should follow absolute rules that admit no exceptions. ٠ Another argument against Kantian theories is that they are narrow and inadequate to handle various problems in the moral life. 2001 28 . © Prentice Hall. which has been a major argument against this theory.

2001 29 . © Prentice Hall.Common Morality Theories A moral theory based on the concept there is a common morality that all people share by virtue of communal life.

٠ Obligations and rights are not inflexible standards.Common Morality Theories ٠ The greatest obligation in any given circumstance must be found based on the greatest balance of right over wrong in that particular context. but rather strong prima facie moral demands that may be overridden in circumstances of competition with equal or stronger moral claims. © Prentice Hall. 2001 30 .

Rights Theories A moral theory based on the concept that all people have human rights that form the justifying basis of obligations because they best express the purpose of morality. which is the securing of liberties or other benefits for a rightholder. 2001 31 . © Prentice Hall.

– Natural rights are rights that belong to all persons purely by virtue of their being human.Rights Theories ٠ Human rights are held independent of membership in a state or other social organization. ٠ Human rights evolved from the notion of natural rights. © Prentice Hall. 2001 32 . ٠ Negative rights pertain to the obligations on the part of other people to refrain from interfering with our freedom of action.

٠ A primary problem with this theory is that there is no hierarchy for right’s claims: – “How does someone determine which right takes precedence or has more value over other rights?” © Prentice Hall. 2001 33 .Rights Theories ٠ Positive rights impose obligations on people to provide other people with goods or services.

Virtue Ethics This moral theory suggests that morality is comprised of virtue. which has to do with a person's character and the types of actions that emanate from that character. © Prentice Hall. 2001 34 .

honesty. and conscientiousness.Virtue Ethics ٠ Some typical virtuous traits in the business arena would be integrity. ٠ A primary problem with this theory is that people have varying definitions of what traits are considered virtuous. courteousness. © Prentice Hall. 2001 35 . loyalty. courage. ٠ Virtuous traits are acquired and developed throughout our life experiences. truthfulness.

© Prentice Hall.Feminist Theories and the Ethics of Care This moral theory focuses on a set of character traits that are deeply valued in close personal relationships. 2001 36 .

love. fidelity.Feminist Theories and the Ethics of Care ٠ Typical traits would include sympathy. ٠ This theory grew out of two feminist presuppositions: – The subordination of women is as wrong as it is common. 2001 37 . compassion. – The experiences of women are worthy of respect and should be taken seriously. and the like. © Prentice Hall. friendship.

© Prentice Hall. whereas traditional ethics is based on the assumption that its values and rules apply to all rational persons equally.Feminist Theories and the Ethics of Care ٠ An argument against this theory is that the focus is on how power is used to oppress women only. 2001 38 .

2001 39 . ٠ The case method in business is used to present managerial situations so managers will know how to think when confronted with a dilemma. © Prentice Hall.Analysis of Cases ٠ The case method in law is used to show examples of established precedents of evidence and justification.

Analysis of Cases ٠ The casuistical method for case analysis in ethics is used to show conclusions on ethical matters. © Prentice Hall. 2001 40 . then to compare and contrast the central features of the morally clear and settled cases with the features of unsettled cases.

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