Unit 305 Operations Management

Business Values and Ethics

Topic 3 Ethical Principles

Unit Objectives
Students will understand in greater
depth:
Utilitarianism
Rights
Justice and Fairness

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Utilitarianism
Remember this?

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Utilitarianism Defined
Utility means benefit
Greatest good for the greatest
number
The end not the means
Good can be measured by both
present and future results
From a business perspective, useful
for decisions about maximizing
resource usage
Examples from your own work

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Objections to Utilitarianism
1. Can be difficult to measure different
impact for different people
2. Some specific benefits hard to
quantify
3. Difficult to predict future benefits
4. Benefits and Costs mean different
things different people
5. How do you compare equally one
benefit to another to decide which is
better.
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Objections to Utilitarianism
A drug company is trying to decide what it
should do the following with its recent profits:
1. Pay it out to shareholders
2. Build a new gym for employees
3. Build a daycare for employees children
4. Spend on marketing
5. Spend on drug research.
What issues does it face if it wants to take a
Utilitarian approach to deciding where to spend
the money?
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Utilitarian Reply to
Objections
Cant measure? No problem use
common sense!
Choose intrinsic goods before
instrumental goods
Choose needs over wants
Monetize it! (Even if it seems hard to
do)
Dont be afraid to ask.
Does this solve any of the problems
you faced in the previous example?
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Problem with Rights and

Justice
What about my individual rights?
What if I am the collateral damage?!
What happens to the rights of minority
groups?
An employee wants a different day off for
religious reasons
Do I feel good about getting fired so
shareholders can get a bigger dividend?
I dont like the new working hours!
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Utilitarians Reply Again!

Enter Rule-utilitarianism!
Action correct if (and only if) required
action correct according to moral rules
Anda moral rule is correct if sum total of
utility produced if EVERYONE were to follow
that rule is greater than an alternative
action (sounds like Rights approach? Kant?)
Dont focus on one specific situation, focus
on the moral rule
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Testing out RuleUtilitarianism

OK to bribe someone to win a big
contract?
Extending paid maternity leave for 2
years?
Hire someone well above usual
salary in your organization if they
possess a specific skill-set?
Lie to an employee to avoid conflict?
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Rights
A moral, social, or legal entitlement
to have or obtain something is a
certain way
Freedom of action
Natural rights: fundamentally
accepted part of human nature, from
duty, from God
Positive rights: a permission to do
something
Negative rights right not to do
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Moral Rights

Think of as separate from a legal system

Concept of universality
Moral rights and Duties go together.
Provide freedom and Equality for pursuit
of rights.
Allow to justify ones actions
Opposite of Utilitarianism? Rights of
individual v. Rights of Majority?
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Different Rights

Right
Right
Right
Right
Right
Right

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to
to
to
to
to
to

Life
Liberty
Property
Pursuit of Happiness
Free Speech
Self Defense

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Price of Having Rights

Rights are considered inalienable,
cant be violated by others
Duty to respect rights of others
Do you give up some rights to
respect rights of others? Is this part
of the Common Good?
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Rights at Work
1. Is the concept of moral rights
relevant in your organization? Why
or why not?

2. Imagine you had to create a bill of

rights for your organization. What
would you include?
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Legal Rights/ Contractual

Rights
Legal rights are limited to a given
jurisdiction
Gives a specific person (natural or artificial)
to act/not act a particular way
Contractual agreements: what both parties
agree to perform; situation specific; affects
only those relevant to contract; society
needs to support concept for contracts to
be relevant
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Ethics in Contracts
1. Both parties must have full
knowledge of nature of agreement
2. Neither party must intentionally
misrepresent facts of the contract
3. Neither part must be forced to sign
under duress
4. Contract must not bind to an
immoral act
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Justice and Fairness

Principles
What did Aristotle say regarding the
treatment of equals?
How do you distribute resources,
wealth, utility, when there is not enough
to go around for everyone?
Distributive Justice: fair distribution, but
according to what, who or how?
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Distributive Justice
Justice as Equality: Egalitarianism
Everyone shares equally, both
benefits and burden, income and
workload.

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Distributive Justice
Justice Based on Contribution:
Capitalist Justice
What a person gets out should at least
be equal to what they put in.
Contribution= reward
Challenge is to judge by Quality or
Quantity?
Does this ignore Need?
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Distributive Justice
Justice based on Needs and Abilities:
Socialism
Work according to ability
Reward according to need

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Distributive Justice
Justice as Freedom: Libertarianism
People allowed to keep as much as
possible of what they make
Freedom to decide what they do with
their wealth, how they run a business
So what happens to those who find
themselves in a difficult situation?
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Distributive Justice
Justice as Fairness
Treat people equally
But work to help the poor and needy until
that time that they dont require assistance
How could you apply this principle to an
organization?
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Retributive Justice
Purpose of Punishment is to deter
others from committing the same
wrong.
Make punishment relative to wrongdoing

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Compensatory Justice
Restoring to individuals what they
have lost through actions of another
Can you apply this belief to
employment programs that favor
minorities to compensate for
previously perceived injustice?

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Ethics of Care
Rejects the idea of impartiality in
Duty, deciding how and who to
assist.
OK to favor those who you have
relationship with, individuals and
community
Can you consider both positives and
negatives of practicing Ethics of Care
in your organization?
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References

Unit 305 Operations Management

SBS Course Text Book: Business Values & Ethics

A Framework for Thinking Ethically Santa Clara
University. http://
www.scu.edu/ethics/practicing/decision/thinking.htm
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