LESSON 2.

THE PHILOSOPHICAL BACKGROUND OF BUSINESS

ETHICS

Objectives:

At the end of this chapter, the students are expected to;

1. Compare and contrast ethics and philosophy
2. Evaluate the nature of the human act from the ethical perspective
3. Analyze critically the various approaches of evaluating the morality of the human
conduct
4. Understand man ‘s nature as a moral being.
5. Differentiate ethics from morality.

Introduction

Business Ethics as an applied branch of General Ethics must be studied from

the perspective of philosophy. This is because ethics is a part of philosophy, and t it
is unthinkable to discuss ethical concepts and moral principles without being
philosophical. Secondly, the process of moral reasoning involves use of metaphysical
technologies and concepts that is best understood only in the light of philosophical
abstractions.

A.

Ethics and Philosophy

B.

What is Philosophy?

Philosophy, etymologically, came from two Greek words “philos,” which

means love, and “sophis,” which means wisdom. Philosophy means “love of wisdom.”
As a science, philosophy is interested with the meaning of reality, including our
human experiences. It is a science that seeks to explain the ultimate cause of
everything by the use of human reason alone. To philosophize means to wonder
about life, to question reality and to find sense in what we do as human beings.

Other definition of Philosophy;

1.

Philosophy according to Plato, is the highest form of inquiry.

2.
 3.

For William James, philosophy is a collective name for questions that have not been
answered to the satisfaction of the one asking question. Questions like; Who am I?
How do live? Where am I going?

4.
5.

Philosophy is also defined as the science that studies the ultimate causes or
explanation of things attained by the use of human reason alone.

6.

These different definitions of philosophy only affirm that it is a metaphysical

science which basically deals with abstractions. It is from this perspective that
Business Ethics, as an applied branch of philosophy must be discussed since it
involves investigating the human values which are basically metaphysical in nature
and which are operative in fiduciary relationships both in business transactions and in
the interactions of people in business organizations and in the corporate world.

DEFINITION OF ETHICS

Ethics is a practical science of the morality of human acts.


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Ethics is the study conduct from the standpoint of morality.

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Ethics is a practical science that guides us in our actions that we live rightly and well.

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Ethics is the science which lays down the principles of right living.

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 A.

ETHICS AND MORALITY

B.

The term ethics and morality are often used interchangeably. Indeed, these
terms usually can mean the same thing, and in casual conversation there is not a
problem with switching between one and the other. However, there is a distinction
between them in philosophy.
Morality refers to the quality of goodness or badness in human act. Good is
described as moral and bad is described as immoral. It means conformity to the rules
of the right conduct. It implies judgment and refers to what we could call moral
standards and moral conduct while ethics is used to refer to the formal study of those
standards and conduct. For this reason, Ethics is also often called “moral philosophy.”

Ethics, on the other hand, involves the study of those standards and
judgment which people create. Ethics assumes that the standards exist and seeks to
describe them, to evaluate them, or to evaluate the premises upon which those
standards exist. Ethics, basically indicates the nature of moral principles, ethical
systems and moral norms that people use to justify their moral judgment.

A.

ETHICS AS NORMATIVE SCIENCE

B.

Ethics is a branch of philosophy and it is considered as a normative science because

it is concerned with the systematic study of norms of human conduct. Ethics is a
normative science because it involves a systematic search for moral principles and
norms that are used to justify our moral judgments.
There are three categories of General Ethics;

1.

Descriptive Ethics consists of studying and describing the morality of people,

culture, or society. It also makes comparisons and contrasts on the different values,
principles, code of ethics, beliefs, and practices of people. It does not prescribe or
attempt to assess the moral soundness of any ethical system but only to describe
objectively the values and belief of people.

2.

Examples:

a.

Psychological Egoism

b.

A concrete example of Descriptive Ethics is the study of human

motivation. Is says nothing about what is god or bad or right or wrong,
rather it simply declares results based on various scientific studies.

a.

Cultural Relativism

b.

It does not prescribe how people should act, rather it describes how
people, when grouped and observed in their own cultural realities, actually
differ in their behaviour. What is good or bad, moral or immoral according to
this theory is relative to the people’s own culture or sets of cultural beliefs
and practices.

1.

Normative Ethics involves moral judgment based on ethical norm or theory. This
consists both of the basic moral principles and values and the particular moral rules
that govern people’s behaviour, which is right or moral and wrong is immoral.
 2.

The three tasks of Normative Ethics are the following;

To form into a related whole the various norms, rules and values of a society’s
morality.

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To find the basic principle from which the particular norm can be derived.

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To justify an ethical norm or moral principle.

1.

Metaethics is a branch of Normative Ethics. In some other ways, both Normative

and Descriptive Ethics involve some mathematical activity. Metaethics is concerned
with analysis of the meaning of words and logic of moral reasoning. It analyses moral
terms like, “good”, “bad”, “moral”, “immoral”, “moral obligation”, and the like.
Metaethics does not describe moral belief of people, does not evaluate the process of
moral reasoning but simply analyses the usage and meaning of words.

2.

A.

DEONTOOGICAL VERSUS TELEOLOGICAL APPROACHES TO ETHICAL

EVALUATION OF THE HUMAN CONDUCT

B.

1.

Deontological Ethics or non-consequentialist approach is a body of ethical theories

that measures and evaluates the nature of a moral act based on the validity of the
motive of an act. This means that the motive or intention is good, then regardless of
the consequences, the whole action is good.

2.

Examples:

Kantianism is also known as the categorical imperative approach, the idea that one
should always base his action on maxims or rules that are believed to be universal.
For Kant moral goodness or badness of the act does not depend on the
consequences of the act but on the motive or intention of the actor, the motive is
good if it is an expression of the person’s sense of duty.

Divine Command Theory holds that the standard of right and wrong is the will or law
of God. The Christian Ethics is an example of an ethical system that uses
deontological approach in evaluating the morality of human conduct, the will of God
is expressed in the Bible and in tradition of Roman Catholic Church.

1.

Teleological Ethics or consequentialist theory measures the morality of an action

based on its consequences and not in the motive or intention of the actor. If the
consequences is good, regardless of the motive, then act is always morally good.

2.

Examples:

Hedonism or the view that measures is the only good as an end.

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 Utilitarianism is another example of a consequentialist theory. This school of thought,
maintains that the “greatest good is the greatest happiness or pleasure of the
greatest number.” This means that if the action can provide the greatest happiness
to the greatest number of the people who are affected by the action, the action s to
be considered morally good.

Implications of the Deontological and Teleological Ethics to Decision

Making

These two approaches to the ethical evaluation of the human conduct are
also used by the managers in the decision-making process. Some managers decide
on the basis of their personal principles and convictions. In this regard, managers are
said to be biased towards deontological perspective because of their principle-
oriented decision-making process. On the other hand, some managers could be
result-oriented in terms of decision making. In this regard, they favor the perspective
of Teleological Ethics because they focus on the consequence or the result of the
action regardless of the intention of the motive of the one performing the action.

F. THE “MORAL SENSE” IN US

One of the basic questions in ethics is to determine how people develop their
fundamental concepts of good and evil. Traditional ethics believes that man has a
natural insight to morality, this being the gift the Creator who gave man a “moral
sense.”

1.

The Synthesis of Man According to St. Thomas Aquinas

2.

According to Aquinas, the moral sense in man is manifested and expressed in three
ways;

Man is able to distinguish or to know what is good or what is bad. Of all creatures,
only man has the capacity to know the difference between good and bad action.

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Man is always obligated to do good and to avoid evil. In any given circumstance, man
is the only creature who feels time primary duty to do what is good and to avoid
what is evil.

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Man knows that he is accountable for his actions- good or bad. Of all creatures, only
man realize that the performance if an action entails reward and punishments. If he
does an evil action, he expects punishment.

1.

Freud’s Theory of the Id, Ego, and the Superego

2.

Freud believes that the human mind has three important components, that of the
preconscious, conscious, and unconscious. No other psychologist except Freud has
studied the unconscious part of the human mind.
Freud founded the Psychoanalysis Theory where the approach is to understand
human behaviour which views men and women as constantly between internal
unconscious forces and external social forces. The key points of psychoanalytic
theory are the following;

Man must learn to control his inborn desires.

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Man must achieve fulfilment in ways that are harmonious with others.

Business Application

A businessman may be tempted to cheat to his customer in process of selling.

He realizes however, that to give in to this enticement could be a violation of Code of
Ethics for Businessman and the other positive laws, like Customer Act of the
Philippines. He therefore discerns well and begins to rationalize that it is better not to
fool or cheat the customer. In this case, the perceived good action not fooling the
customer is a decision made by the ego as a result of its interaction with the
enticement of the id and the pressure of the superego.

1.

Kohlberg’s Theory of Moral Development

2.
 Kohlberg believe that the people progressed in their moral reasoning through a series
of stage. His theory of moral development was based on the earlier works of Swiss
psychologist Jean Plaget. Kohlberg help to clarify the general cognitive development
approach of Plaget, through the analysis of changes in moral reasoning or extending
the approaches into a series of stage.

Kohlberg Classification of the Person’s Moral Development

LEVEL STAGE SOCIAL ORIENTATION

Pre- 1 Obedience and Punishment
conventional 2 Individualism, Instrumentalism, and
Exchange
Conventional 3 “Good Boy/Girl Image”
4 Law and Order
Post- 5 Social Contact Rights
conventional 6 Principled Conscience
7 Transcendental Morality

1.

Pre-conventional

2.

This behaviour is generally found in young children and older children. There are two
stages in this level; (1) reaction to punishment, (2) desire for the right behaviour that
will satisfy the person’s self-interest. Stage 1 explains the concept of being good by
following commands and authority and avoiding being punished. Stage 2 is the stage
of individual instrumental Purpose of Exchange.

Business and Organizational Application

Some individuals do the right thing only to avoid punishment or to obtain approval,
an employee who thinks that the only person not to steal money from the employer
is the currently of getting and fired. The person at hi stage has little sense of needs
of the others. At second stage, the persons become aware that others have their
needs also and begins to defer to them to get what the individual wants.

1.

Conventional

2.

This level is generally found in an ideal civilized society, hence, the name
“conventional.” The first stage of this level (Stage 3) is the Stage of Mutual
Interpersonal Expectations, Relationships and Conformity. This is characterized by an
attitude which seeks to do what will gain the approval of others, commonly referred
to us as “Putting oneself in the other person’s shoes.” Stage 3 is also known as the
“good boy and good girl” orientation stage. This implies that a good or bad behaviour
of the person depends on his/her conformity or non-conformity with the norms of
his/her immediate community or environment. Stage 4 on the other hand is the stage
of Social System and Conscience Maintenance wherein one is oriented by the law and
responding to the obligations of duty. A person is considered a law-abiding citizen
when he or she follows the law of society but will be considered deviant when the
same person violates the same law.

Business and Organizational Application

Stage 3 of the second level describes the right behaviour is one that conforms to
conventional expectations, an employee considers the importance of being loyal
follower to avoid conflicts. Stage 4 on the other hand, explains that the right
behaviour consists of performance of duty, respect for authority and maintaining
social order, an employee address to organizational rules and policies and obeys
order from the superior.

1.

Post-Conventional

2.

This third level of moral thinking is one that Kohlberg felt is not reached by majority
of adults. Stage 5 is the Stage of Prior Rights and Social Contract Utility. It is the
stage of understanding of rights and values. It gives the person a sense of
democracy but relativity of rules. This means that people at this stage realize that
there are fundamental concepts of right and wrong but the application of which is
confined to their own culture and environment. Each person’s moral rights however,
must be protected. The last stage (Stage 6) is the Stage of Universal Principles. It is
based on respect of universal principles and the demands of individual conscience. At
this stage Kohlberg believe that people do good and avoid evil because they are
convinced that there are universal ethical principles that govern and justify their
actions.

Business and Organizational Application

Stage 5 maintains that the laws may be important and must be followed but they are
not absolute, they can be changed if necessary. Stage 6 maintains that people could
act in accordance with their conscience and universal ethical principles, the individual
is likely to act in accordance with these principles rather than rules.

References

Business Ethics and Social Responsibility 2 Edition by Fr. Froliano C. Roa,

nd
 https://prezi.com/_mvc-33lomgh/the-philosophical-background-of-business-ethics/
https://www.slideshare.net/NeilDagohoy/the-philosophical-background-of-
business-ethics