Group 3

BUSINESS ETHICS
Chapter 3 Philosophical Ethics and Business
Amanda [ 2021071023 ]
Anastasia Theodora [ 2021071025 ]
Deani Dara N. [ 2021071033 ]
Elona Meita [ 2021071035 ]
Ghassan [ 2021071038 ]
Kamelia Vanny [ 2021071042 ]
Muhammad Alim Rafi [ 2021071047 ]

 OPENING DECISION POINT

Are CEOs Paid Too Much, Compared to Their Employees?

Michael Corbat (CEO Citigroup) - $24M/Year & 486x average employee salary
Jamie Dimon (CEO J.P Morgan) - $31M/Year & >900 average employee salary
Bob Iger (CEO Disney) - $65M/Year & 1,424x lowest paid employee
Elon Musk (CEO Tesla Motors Inc) - >100M in 2014
Nicholas Woodman (CEO GoPro Inc) - $285 in 2014
Dan Price (CEO Gravity Payment) - April 2015, when CEO Dan Price of Gravity
Payments made a shocking announcement. Price, who is also founder and co-
owner of Gravity, decided to cut his own salary by 93% and then to use that money—
along with a big chunk of corporate profits—to ensure that every single one of his
employees makes a minimum of $70,000/year
 ARE CEOS PAID TOO MUCH,
COMPARED TO THEIR EMPLOYEES?

2. Q : Gravity Payments is privately owned by

1. Q : Do you think Dan Price is a hero?
Dan Price and his brother. If Gravity were a
Why or why not? Are there any further
publicly traded company with thousands of
facts that you would want to know
shareholders, would that change your view
before making a judgment about this
about the ethics of his decision? If so, in what
case?
way?
A : Menurut kelompok kami, Dan Price merupakan
A : Menurut sudut pandangan ethics kami kedepan
hero karena dapat mensejahterakan karyawannya
nya kurang efektif karena jika perusahaan sudah
dengan meningkatkan gaji karyawan yg low paid.
masuk ke pasar Nasional maka kepemilikan saham
Fakta tambahan yang dibutuhkan yaitu
akan terbagi lebih banyak lagi, dengan peraturan price
presentase dari nilai profit perusahaan yang
akan mempengaruhi dari pembagian hasil kepemilikan
diambil untuk memberikan kenaikan gaji
saham. Lebih baik jika keputusan tsb dibicarakan
karyawan diluar gaji Price.
kembal dengan pemegang saham yang baru.
 ARE CEOS PAID TOO MUCH,
COMPARED TO THEIR EMPLOYEES?
4. Q :Minimum wage laws are common in the
3. Q : If you were an employee at Gravity
U.S., Canada, and many other countries. Should
Payments, already making $70,000, how
there be a maximum wage law (perhaps by
would you feel about employees who
creating an upper limit on wages that can be
made half what you make suddenly
deducted from tax bills)?
making the same amount as you?
A : Menurut kelompok kami tidak setuju.
A : Kalau menurut kelompok kami hal ini
Karena pembatasan nominal gaji dari
merupakan hal yang tidak adil karena,
karyawan akan menghambat motivasi dari
pencapaian dari nilai suatu gaji
karyawan.
melambangkan dari kinerja karyawan atau
proses pencapaian karyawan tsb hingga
mencapai di nominal itu.
ETHICAL FRAMEWORKS - CONSEQUENCES,
PRINCIPLE & CHARACTER

An ethical framework is nothing more than an
attempt to provide a systematic answer to the
fundamental ethical question: How should
human beings live their lives?
Ethics can be understood as the practice of
examining these decisions and thinking about
answers to the question: Why?
Ethics attempts to answer the question of
how we should live, but it also gives reasons
to support the answers.
Ethics seeks to provide a rational
justification for why we should act and
decide in a particular prescribed way
This chapter will introduce three ethical
frameworks that have proven influential in
the development of business ethics and
that have a very practical relevance in
evaluating ethical issues in modern
business.
Utilitarianism
principle-based framework
Virtue ethics
Utilitarianism: Making Decisions
Based on Ethical Consequences

Utilitarianism’s fundamental insight is that outcomes matter,

and so we should decide what to do by considering the overall
consequences of our actions.

Utilitarianism is commonly identified with the rule of producing

“the greatest good for the greatest number.”

The Different between "Utilitarianism" and "Egoism". Example

Utilitarianism seeks “greatest good for the greatest number,”
egoism seeks “the greatest good for me!”
Utilitarianism and Business

Studying ethical theories had a practical relevance for business

ethics. In fact, perhaps utilitarianism’s greatest contribution to
philosophical thought has come through its influence in
economics.

With roots in Adam Smith, the ethical view that underlies much
of 20th-century economics—essentially what we think of as the
free market—is decidedly utilitarian.
Utilitarianism and Business

questions of ethics—for
Utilitarianism answers the fundamental
example:

1. What should we do to maximize the overall good?

2. How do we achieve this goal?
3. What is the best means for attaining the utilitarian end while
maximizing the overall good?

These questions shall be addressed in relevant business ethics.

Utilitarianism and Business

Utilitarianism practices based on Adam Smith, reflects on free and competitive markets.

In classic free-market economics, economic activity aims to satisfy consumer demand. People
are happy when they get what they desire.

Overall human happiness is increased, when the overall satisfaction of consumer demand
increases. We will produce goods and services that consumers most want based on law supply
& demand. Because scarcity and competition prevent everyone from getting all that they want,
the goal of free-market economics is to optimally satisfy wants and thus maximize happiness.

Free markets accomplish this goal most efficiently, by allowing individuals to decide for
themselves what they most want and then bargain for these goods in a free and competitive
marketplace. This process will, over time and under the right conditions, guarantee the optimal
satisfaction of wants, which this tradition equates with maximizing overall happiness.
Utilitarianism and Business
profits, so that business ensures
that scarce resources are going to
This practice requires that business managers, in turn, seek to maximize

those who most value them and ensures that resources will provide
optimal satisfaction.

Utilitarian reasoning determines what to do on the basis of

consequences, reasonable judgments must take into account the likely
consequences of our actions.

Somehow there will be dispute among utilitarian practices in business

ethics. so the management require to implement policies that will tend
to maximize good outcomes overall.
 CHALLENGES TO
UTILITARIAN ETHICS :
Core of utilitarianism
Reasoning
The essence of utilitarianism is its
The need for utilitarian reasoning
reliance on consequences to
to count, measure, compare, and
achieve greater good, but this
quantify consequences.
practice means willing to sacrifice
the good of some individuals for the
greater overall good.

 AN ETHICS OF
PRINCIPLES AND RIGHTS

Ethical principles can be thought of as a type

of rule, and this approach to ethics tells us
that there are some rules that we ought to
follow even if doing so prevents good overall
consequences from happening or even if it
results in some bad consequences.

HUMAN RIGHTS
AND DUTIES
Human rights protect individuals from being
treated in ways that would violate their dignity
and that would treat them as mere objects or
means. Accordingly, our fundamental moral
duty (the categorical imperative) is to respect
the fundamental human rights of others. Our
rights establish limits on the decisions and
authority of others.
 HUMAN RIGHTS AND
SOCIAL JUSTICE

Liberty and equality are, according to much of

this tradition, “natural rights” that are more
fundamental and persistent than the legal
rights created by governments and
communities.
LIBERTY AND EQUALITY
Liberty
Libertarian understandings of social justice
argue that individual liberty—freedom from
coercion by others—is the most central
element of social justice.

Equality
Egalitarian theories of social justice typically
support greater governmental responsibility
in the economy as a necessary means to
guarantee equality of opportunity
outcomes.
HUMAN RIGHTS

Human rights is the moral rights that

individuals have simply in virtue of being a
human being. Also called natural rights or
moral rights.
LEGAL RIGHTS

Legal rights set the basic legal framework within

which business operates. They are established by
the legal system and, in this sense, are part of the
price of doing business.
THE TEN Human Rights
Principle 1: Businesses should support and respect the

PRINCIPLES protection of internationally proclaimed human rights;

and
Principle 2: make sure that they are not complicit in
human rights abuses.

Labor Standards
Principle 3: Businesses should uphold the freedom of
association and the effective recognition of the right to
collective bargaining;
Principle 4: the elimination of all forms of forced and
compulsory labour;
Principle 5: the effective abolition of child labour; and
Principle 6: the elimination of discrimination in respect of
The UN Global Compact in
employment and occupation.
2000
THE TEN Environment
Principle 7: Businesses should support a precautionary

PRINCIPLES approach to environmental challenges;

Principle 8: undertake initiatives to promote greater
environmental responsibility; and
Principle 9: encourage the development and diffusion of
environmentally friendly technologies.

Anti-Corruption

Principle 10: Businesses should work against corruption in

all its forms, including extortion and bribery.

The UN Global Compact in

2000
 Challenges to an Ethics of Rights
and Duties
The first major challenge to an
ethics based on rights is that
there is no agreement about the
scope and range of such rights
Which good things qualify as rights, and which
are merely things that people want? Critics
charge that there is no uncontroversial way to
answer this. Yet, unless there is some clear way
to distinguish the two, the list of rights will only
grow to unreasonable lengths and the
corresponding duties will unreasonably burden
everyone.
A second challenge also points
to practical problems in
applying a theory of rights to
real-life situations.
With a long list of human rights, all of which are
claimed to be basic and fundamental, how
would we decide between one individual’s right
to medical care and the physician’s right to just
remuneration of her work? Suppose the person
needing medical care could not afford to pay a
just fee for the care?
VIRTUE
ETHICS Character traits that would constitute part of a good and
meaningful human life
Making Decision
Being friendly and cheerful
Based on Integrity
Having integrity
and Characters Being honest, forthright, and truthful
Having modest wants
Being tolerant
Virtue Ethics : Making
Decision Based on
Integrity and Reminds us to examine how
Characters character traits are formed and
conditioned
Look to the actual practices we find
in the business world and to ask
what types of people are being
created by these practices
DECISION-MAKING MODEL FOR
BUSINESS ETHICS REVISITED
1. Determine the facts.
2. Identify the ethical issues involved.
3. Identify stakeholders.
4. Consider the available alternatives.
5. Compare and weigh the alternatives.
Consequences
Beneficial and harmful consequences to all parties affected.
Duties, rights, principles
What does the law say?
Are there professional duties involved?
Which principles are most obligatory?
Are people being treated fairly, with respect for their autonomy and
equality?
Implications for personal integrity and character
What type of person am I becoming through this decision?
What are my own principles and purposes?
Can I live with public disclosure of this decision?
Is this a decision of which I can be proud?
Is this a decision that will prove embarrassing?
6. Make a Decision.
7. Monitor and Learn.
THANK YOU
FOR LISTENING!