ETHICS IN BUSINESS

Instructor: Ms Xuân Vương

FOUR ETHICAL THEORIES
§ Teleological theories: the rightness of actions is
determined solely by the amount of good
consequences they produce. Actions are justified on
teleological theories by virtue of the end they
achieve, rather than some feature of the actions
themselves.
§ Deontological theories: people have a duty to
perform certain acts not because of some benefit to
ourselves or others, but because of the nature of
these actions or the inherent value of the principles
from which they follow.
I. UTILITARIANISM
§ Classical utilitarianism: An action is right if and only if it produces the greatest balance of
pleasure over pain for everyone.
§ Four distinct theses:
Ø Consequentialism: The rightness of actions is determined solely by their consequences à
Utilitarianism is a teleological theory.
Ø Hedonism: Pleasure and only pleasure is ultimately good. Utility is identified with pleasure
and the absence of pain.
Ø Maximalism: A right action is one that has not merely some good consequences but also the
greatest amount of good consequences possible when the bad consequences are also taken
into consideration.
Ø Universalism: The consequences to be considered are those of everyone.
DISCUSSION QUESTIONS
§ What problems might someone have with
the four elements of utilitarianism?

§ How might any one of these theses be

modified to create a different form of
utilitarianism?
Act-Utilitarianism vs Rule-Utilitarianism
§ An action is right if and only if
Ø it produces the greatest balance of pleasure over pain for everyone. (Act-Utilitarianism)
Ø it conforms to a set of rules the general acceptance of which would produce the greatest
balance of pleasure over pain for everyone. (Rule-Utilitarianism)
§ There is little difficulty in calculating that some actions produce more pleasure for us than
others.
§ Moreover, utilitarianism requires that we calculate utility not only for ourselves but also for
all persons affected by an action.
Cost–Benefit Analysis
Classical Utilitarianism
• Not a quantitative method
• Measures pleasure and pain
• Problems arise when we attempt to determine
exactly how much pleasure each course of action
will produce, because pleasure cannot be
measured precisely in terms of quantity, much
less quality.
Cost–Benefit Analysis
• Quantitative method
• Uses monetary units to express the consequences
of various alternatives.
• In cost–benefit analysis, decision makers have an
analytic framework that enables them to decide
among such disparate projects in a rational,
objective manner.
Pros and Cons of Cost–Benefit Analysis
How to Do a Cost Benefit Analysis
1. Establish a framework to outline the parameters of the analysis
2. Identify costs and benefits so they can be categorized by type, and intent
3. Calculate costs and benefits across the assumed life of a project or initiative
4. Compare cost and benefits using aggregate information
5. Analyze results and make an informed, final recommendation
II. KANTIAN ETHICS
§ Two intuitive principles: universalizability and respect for persons.
§ Universalizability:
Ø Act only according to that maxim by which you can at the same time will that it should
become a universal law à Act only on rules (or maxims) that you would be willing to have
everyone follow.
Ø The principle of universalizability expresses the simple point that, as a matter of logic, we
must be consistent in the judgments we make.
§ Respect for Persons:
Ø Act so that you treat humanity, whether in your own person or that of another, always as
an end and never as a means only à We should respect other people (and ourselves!) as
human beings.
Universalizability
Respect for Persons
§ What is distinctive about human beings is the possession of reason, or the ability to
posit ends and to act purposefully to achieve them.
§ In acting to achieve ends, human beings also have free will that enables them to
create rules to govern their own conduct. This idea of acting on self-devised rules is
conveyed by the term autonomy. A rational being is a being who is autonomous.
§ To respect other people is to fully respect their capacity for acting freely, that is, their
autonomy.
§ When individuals are deceived, seriously harmed, or treated unfairly their autonomy is
disrespected.
III. VIRTUE ETHICS
§ Virtue is described as a character trait that manifests itself in habitual action.
§ A virtue is also something that we actually practice.
§ Finally, a virtue is something that we admire in a person; a virtue is an excellence of
some kind that is worth having for its own sake.
è Virtue is integrally related to what he calls practical wisdom, which may be described
roughly as the whole of what a person needs in order to live well. (Aristotle)
Virtues That Support Business Transactions
IV. RIGHTS
§ Rights can be understood as entitlements.
§ To have rights is to be entitled to act on our own or to be treated by others in certain
ways without asking permission of anyone or being dependent on other people’s
good- will.
§ Rights entitle us to make claims on other people either to refrain from interfering in
what we do or to contribute actively to our well-being—not as beggars, who can only
entreat others to be generous, but as creditors, who can demand what is owed to
them.
Kinds of Rights
V. JUSTICE
§ Justice is an important moral concept with a wide range of applications.
§ We use it to evaluate not only the actions of individuals but also social, legal, political,
and economic practices and institutions.
§ Three kinds of justice:
Ø Distributive justice, which deals with the distribution of benefits and burdens.
Ø Compensatory justice, which is a matter of compensating persons for wrongs done
to them.
Ø Retributive justice, which involves the punishment of wrongdoers.
Types of Justice
WRAP-UP:
A Comparison of the Philosophies used in Business Decisions
GROUP WORK: CASE STUDY ANALYSIS
§ According to Utilitarians, what might be some consequences of
acts of cheating?
§ How can cheating violate the virtue ethics?
§ Why is cheating attractive? Why is it wrong? How does cheating
harm anyone?
§ Identify the pressures that have made the teacher’s decision an
ethical issue.
§ Which option shows care for those that are vulnerable (= Which
option implements the nature of distributive justice?)
§ What should be the teacher’s final decision?