Business Ethics

MGT503

S 2. MAIN THEORIES OF NORMATIVE ETHICS

 (1) Morality and Law
 Statutes: Laws enacted by legislative bodies such as
the Parliaments and state legislatures.
 Regulations: Laws enacted by special boards or
agencies for various kinds of conduct.
 Common law: The body of judge-made laws
developed in English-speaking countries over the
course of many centuries.
 Constitutional law: Court rulings on the
requirements of the National Constitution and on the
constitutionality of legislation.
 (2) Morality and Law

 Two Dimensions of Ethics: Legal & Moral

 Legal

Q1 Q2

 Moral Immoral

Q4 Q3

Illegal
 (2) Morality and Law
 The distinction between morality and legality:
An action can be illegal but morally right.
An action can be legal but morally wrong.
 Professional codes: The rules that govern the
conduct of the members of a given profession.
Individuals have the responsibility to critically
assess the rules of their professions.
These rules are not always complete and
reliable guides to adequate moral conduct.
 The Sources of Morality
 The justification of moral norms: Moral
philosophers study mainly the justification,
rather than the origin, of moral norms.
 The claim that morality is based on religion:
Religion provides incentives to be moral.
Religion provides moral guidance.
Moral norms are in essence divine
commands.
 Ethical Relativism

 Ethical relativism: The view according to which

moral norms derive their ultimate justification
from the customs of the society in which they
occur.
 This means that moral norms are not universal, but
are dependent upon a particular cultural or social
context.
Implication of Ethical Relativism

There is no independent standard by

which to judge the rightness or
wrongness of other societies.
The idea of ethical progress loses its
significance.
It makes no sense to criticize the moral
code of one’s own society or culture.
 Ethical Relativism & Business
 Relativism and the “game” of business:
The idea that business is a just game
captures the thesis of Albert Carr.
He argued that business professionals are
expected to follow a code that has little or
nothing to do with ethics.
This view entails – incorrectly – that the
practices of business professionals cannot
(or should not) be evaluated from a moral
standpoint.
 (1) The Importance of Moral Principles
 What it means to have principles: Accepting
moral principles is not just a matter of intellectual
recognition, but of profound individual
commitment to a set of values.
 Conscience: The internalized set of moral
principles taught to us by various authority
figures – parents and social institutions.
 Conscience and its limits: Conscience is not
always a reliable guide because it can be:
(1) conflicted and (2) erroneous.
 (2) The Importance of Moral Principles

Moral principles and self-interest:

 The morality of an action can run counter to our
self-interest.
 The moral point of view requires that we restrict
our self-interest to satisfy social co-existence.
 In situations of conflict between moral principles
and self-interest, it is important to appeal to
shared principles of justification.
 Morality and Personal Values
 Morality in the narrow sense:
The moral principles or rules that do, or
should, govern the conduct of individuals in
their relations with others.
 Morality in the broad sense:
 The values, ideals, and aspirations that
influence the decisions and lifestyles of
individuals and entire societies.
 Business ethics are mainly concerned with
morality in the narrow sense.
 But values, ideals, and aspirations also affect
the behavior and ethical choices of business
professionals.
Individual Integrity &Moral Responsibility

 Organizational norms: Employees of business

organizations (especially corporations) are:
Expected to further profit goals.
Often pressured to compromise moral values
and ignore or violate rules of ethical conduct.
 Conformity: Studies show that individuals are
more prone to act unethically when they are a
part of an organization or a group.
 Individual Integrity & Moral
 Groupthink:
Responsibility
 The pressure on group members to conform to
morally questionable policies or strategies, often
resulting in unethical conduct.
 Diffusion of responsibility:
 The multiplicity, complexity, and distribution of
tasks that can lead individuals to feel less
responsibility or accountability for their actions.
 (1) Moral Reasoning
 Based on Argument:
 A group of statements in which one statement
(conclusion) is true and follows from the others
(premises).
 Example:
(1) If Norman is bald, then Norman does not need a
haircut.
(2) It is the case that Norman is bald.
(3) Therefore, Norman does not need a haircut.
 Requirements for a sound argument:
If its statements (premises and conclusion) are true
and its form (or structure) is correct.
Validity: The correctness of an argument.
Invalid arguments: Those with incorrect form (or
structure).
 Determining whether an argument is valid or
invalid requires familiarity with the rules of logic.
 Those conflicting theories and beliefs whose
conclusions are moral judgments, based on the
premise of moral standards and statements of
fact. Moral arguments
 Example:
(1) If an action violates the law, it is morally wrong.
(2) Affirmative action on behalf of women and
minorities in personnel matters violates the law.
(3) Therefore, affirmative action on behalf of women
and minorities in personal matters violates the law.
 What makes a moral judgment defensible?
If it is supported by a moral standard that can be
defended as well as relevant facts.
 Evaluating moral arguments:
(1) Clarifying the terms of the premises.
(2) Examining the factual claims.
(3) Assessing the moral standard.
 Thus, an argument can be refuted by:
(1) Uncovering ambiguity in the terms.
(2) Questioning the factual claims.
(3) Challenging the moral standards.

Business Ethics
Chapter 1
 Criteria for moral judgments:
(1) Should be logical.
 Embedded in valid arguments.
 Compatible with moral and non-moral beliefs.
(2) Should be based on facts.
 Using supportive, relevant, and true
information.
(3) Should be based on acceptable moral principles.

Business Ethics
Chapter 1
 Assignment 1
• 1. Write TWO (2)-page essay on Business Ethics
in your country.
• 2. Print a minimum of two (2) articles related to
business ethics. You can use these articles as a
basis to your essay.
• 3. The hard copy essay and articles are to be
submitted on or before next lecture.
• 4. Those who do not submit on the stipulated
time, don’t bother to submit. You get zero (0) for
this assignment!!
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