PHILOSOPHICAL BACKGROUND OF BUSINESS ETHICS

A. Greek and Graeco-Roman Ethics

1. Socrates - “Virtue is knowledge”

Man must know first what is good. If a man knows what is good, he will
inevitably follow it. According to Socrates, “No man will deliberately do
wrong if he knows what is good.

Example:

a. A man will not steal because he knows that stealing is not good.
b. A student will not cheat even if he has the opportunity to do it because
he knows that it is wrong.

Thought:

If businessmen know what business practices are right and wrong,

they will be prevented from wrong-doing in business.
2. Plato

He agred that the first need is to know what is good for if a man succeeds
in knowing what is good, he will know courage and justice – the
embodiment of good.

3. Aristotle - “Doctrine of the Mean” or the “Ethics of Moderation

Every situation stimulates in a man a certain kind of natural emotion or

action such as fear, anger and punishment. If it shows too much or too little of
the naturally appropriate reaction, it becomes “vice” (Aristotle’s term for
wrong).

Example: THE SOLDIER

A natural reaction to dangerous situation is fear: too much fear is

exhibiting cowardice, too little is being fool-hardy: showing the right amount of
fear is courageous.

When a soldier has too much fear, he will be of no use since he will hide
rather than fight the enemy. On the other hand, if the soldier shows no fear,
he will die immediately because he will not protect himself. However, if a
soldier exhibits fear without cowardice, he will be able to guard himself from
immediate danger and at the same time not be too fearful to kill the enemy.

Thought:
 Man should do things moderately. Neither too shy nor too aggressive,
neither to follow the extreme in fashion, drinking, smoking, socializing, sexual
behavior or immerse in work without time for recreation or vice versa.

Having just enough profit as a compensation for one’s industry. To take

less is being foolish and would result to bankruptcy. To take too much shows
greed and selfishness.

4. Epicurus – “Doctrine of Pleasure or the “School of Epicureanism”

The pleasure is the sole good and pain is the sole evil.

According to Epicurus, virtuous conduct and speculative activities are

justified if they make life pleasurable. Unless it will lead to painful
consequences, pleasure must not be rejected. Likewise, pain should not be
chosen unless it will ultimately lead to greater pleasure.

Example with Thought:

1. Taking big as a profit as possible yields immediate pleasure in money

but it will ultimately result in business downfall because customers will
soon know that they are taken advantage of and will no longer
patronize the business.
2. Taking no profits would not be good since it does not reward risk or
effort and will bring a sense of loss rather than pleasure. It will also
lead to bankruptcy. The people who invested in the business will lose
their money and the closed business will have lost the opportunity to
serve the customer.
3. Taking just enough profit to reward one’s efforts is good: it will give
pleasure and a sense of achievement and it will also result in business
success.

B. Christian Ethics or the Doctrine of Love

Ethics spring from man’s relationship with God. The bulwarks of the
Christian belief are:

1. To love God
2. To love one’s neighbor as one’s self

These commands develop sense of duty in doing good. Christian ethics

are firmly rooted in the teachings of the Old Testament and tne New Testament.
These include the Ten Commandments, the teachings of Jesus Christ and the
writings of Apostle Paul.
 Thought: “Do unto others as you would like others do unto you”

If the businessmen would follow the teachings of Jesus, they would avoid
unethical acts and would make business decisions that would be fair to
themselves, their customers and to their community.

C. Medieval Ethics

According to Abelard, man’s actions are good or bad depending on their

cause and intention. An action is good not because it is intrinsically good but it
has a good intention.

Example: SELLING BELOW COST

Selling an outmoded item or a shelf-worn material below cost is fair but

selling below cost to force a competitor out of business is unfair.

Thought:

An act may be good at one time and bad another time depending on the
intention

Note: Ethical philosophy after the middle ages is called modern ethics.

D. Modern Ethics

1. Hobbes

There is a need for moral laws but it would be foolish to observe them if
others do not.
Many businessmen today recognize the need for rules to guide business
decisions however, they themselves cheat, lie, misinterpret things,
rationalizing that other people do it anyway.

2. Utilitarianism

2.1 Jeremy Bentham and John Stuart Mill- founded Utilitarianism

“The greatest good is the greatest pleasure of the greatest number”

2.2 Moore
Problems in Ethics
a. The problem of determining what state of affairs are good
 b. The problem of what affairs are right
According to Moore, the right action is the one that will bring the greatest
amount of intrinsic good to the individual.

Example: EXAMINATION

When a student faces an exam, he has several alternatives open to him.

He can study and be prepared for the examination, he can say “bahala na”
and not study at all and he can prepare “codigo” which he plans to copy
when the instructor is not looking.
Examining the alternatives open to him, the student may choose to study
and be prepared for the examination – the action that will bring him to the
greatest amount of good grade and the satisfaction of learning something
which the other alternatives will not provide.

3. Immanuel Kant (1724-1804)

He echoed the teaching of Abelard which is, “man’s actions are good or
bad depending on their cause and intention (motive)”. If the act came from
the sense of duty then the motive is good and the act is right. Talents such
as intelligence and with are good only when employed in the service of duty.
4. Hegel

According to Hegel, an act must be judged right or wrong not only by its
motive or commonality but also its content. The content of the act comes
from the laws, institutions and the customs of the community. The rightness
and the wrongness of the act depend on its harmony with the laws and
traditions of the society.

Example: WIVES

It is wrong for the Christians to marry two wives because it is against its
beliefs but it is right for the Muslims because their culture and their laws
allow it.

Thought:

An act is wrong if it is in contrary with the laws, customs and traditions of

the community and right if it accord with them.

5. Pragmatism or Instrumentalism
Founded by James (1842-1910) and Dewey (1859-1952)

It advocates that the moral problems come from conflicts between

impulses or desires. Any action that will bring harmony to this conflict is the
 right one. Dewey believed that there is no absolute good since every solution
gives rise to further conflicts which must be dealt with in the same way.

Other Schools of Ethical Philosophy

a. Naturalism (Ethics of Domination)

“What is natural or normal is right. Any actions that are unnatural are
abnormal or wrong.”

Example: FIGHT
It is normal to fight back when under attack; thus, thus it is also right.

Flaw: What is normal or natural varies with each person.

b. Rationalism (Doctrine of Reason)

“Reason is right and emotion is wrong.”

Anyone whose actions are based on reason lives a moral life for only a
rational being has the ability to see clearly what is right and what is wrong.
This is because reason requires a man to act not on the basis of his own likes
of dislikes but with based on consistency, deliberation and impartiality.

Rationalization. Finding excuses for doing what one wants because of self-
interest, impulse or emotion. It makes unreasonable conduct appear
reasonable.

Rationalism Vs. Rationalization

Rationalization
A poor lady who justifies his stealing of milk by saying that she is poor and
cannot afford to buy.
Rationalism
A student who decides not to join his friends in the disco bar because he
needs to prepare for an exam.
c. Humanism (Principle of Humanity)

“Man is inherently good and thus he should not be subjected to indignities

and the evil acts of his fellowmen.”

A man must be respected, must not be cheated, lied to and taken advantage
of and be treated fairly and honestly.

d. Hedonism (Doctrine of Pleasure)

 “Pleasure is the main goal of life”

The greater and more intense the pleasure that one gets out of his actions,
the more right are his actions.

E. Confucian Ethics

Confucius believed that righteousness begins with the individual. If each

person governs himself well, he will govern his family well. It each family is well
governed then the whole country will also be well governed.