Download for print-disabled. Check nearby libraries Library. Share this book Facebook. Last edited by ImportBot. November 26, History. An edition of Business ethics Written in English — pages. Business ethics , NJ: Prentice Hall. Not in Library. Libraries near you: WorldCat. Business ethics: concepts and cases , Prentice Hall. Paperback in English - 5 edition.
Business ethics: concepts and cases , Prentice-Hall International. Business ethics: concepts and cases , Prentice-Hall. Business ethics: concepts and cases Publisher unknown. A moral rule is correct if and only if the sum of total utilities produced if everyone were to follow that rule is greater than the sum of total utilities produced if everyone were to follow some alternative rule.
So according to this theory, the fact that an action maximizes utility does not mean that the action is right. First we must find out what the correct moral rule is and then evaluate the actions involved. Some critics argue that rule-utilitarianism is traditional utilitarianism in disguise. They argue that rules that allow exceptions will produce more utility than rules that do not allow any exceptions. Rule-utilitarians do not agree with this critique of course. They say that humans would take advantage of these exceptions and that it would leave everyone worse off instead of better off.
In business ethics the concept of right is crucial in many of the moral arguments and claims. For example, employees find that they have the right to equal pay for equal work. The U. In this declaration all human beings were entitled to several rights. A legal right is an entitlement that derives from a legal system that permits or empowers a person to act in a specified way or that requires others to act in certain ways toward that person. These rights are limited to the particular jurisdiction within which the legal system is.
Moral rights or human rights are rights that all human beings everywhere possess to an equal extent simply by virtue of being human beings. These are seen as universal rights and are not limited to a particular jurisdiction. A right enables a person to freely choose whether he will pursue an interest or activity and to protect his choices about it.
In this aspect rights are different from wrongdoing in utilitarianism. Wrongdoing in utilitarianism always involves injuries. The most important moral rights are the ones that impose prohibitions or requirements on others and allow or empower individuals to pursue certain interests or activities. These rights have three important characteristics:.
Because of these characteristics moral rights form the basis for moral judgements. Moral rights focus on securing the interests of an individual while utilitarianism standards focus on securing the utility of everyone in society. If someone has a right to do something then it is wrong for anyone to interfere even if many people would gain much utility from it. Negative rights are duties others have to not interfere in certain activities of the person who holds the right.
An example is the right to privacy. Positive rights are duties of other agents it is not always clear who to provide the holder of the right with whatever he or she needs to freely pursue his or her interests. Examples are the right to education, the right to work and the right to social security. There is a debate about whether we should give priority to negative or positive rights.
The ones that argue that negative rights should be more important are called conservative thinkers. The ones that argue that priority should be given to positive rights are called liberals.
Contractual rights and duties are the limited rights and duties that arise when a person enters an agreement with someone else.
These rights are attached to specific individuals involved in the agreement. These contractual rights arise from a specific transaction between specific individuals. Someone cannot have any contractual rights over you without an actual promise or agreement.
The contractual rights depend on a publicly accepted system of rules. Both parties must agree and recognize the same system of conventions. By taking the agreement, one person has the obligation to do what the other person agrees to do.
Without these rights modern business societies could not operate. These contractual rights also contain special rights and duties one faces when accepting a position or role in an organization or institution. Doctors have for instance the special duty to care for the health of their patients. Immanuel Kant has provided a foundation for moral rights based on a moral principle called the categorical imperative.
This is a moral principle that obligates everyone regardless of their desires and that is based on the idea that everyone should be treated as a free person equal to everyone else. Kant defines a maxim as the reason a person in a certain situation has for doing something he or she plans to do.
When everyone chooses to do the same thing in the same situation it would become a universal law. However, sometimes it is not possible or preferable that everyone should act the same in a similar situation. Universalizability: the reasons for acting of a person must be reasons that, in principle, should be possible to do for everyone.
An action is wrong if it does not pass the test of universalizability. Reversibility: the reasons for acting of a person must be reasons that the person would be willing to have all others use, even as a basis of how they treat him or her. According to Kent an action is morally wrong when the person only does the action out of self-interest because it gives him or her pleasure.
To be motivated to undertake a duty is to be motivated by reasons that you believe everyone should act on when they are in a similar situation. Kant gives another, second, formulation of the categorical imperative; act in such a way that you always treat humanity.
Never use people only as means to your ends but always respect their freedom. One should also help the person to pursue his chosen ends. This second formulation is based on the idea that humans have a dignity that makes them different from mere objects.
He argues that it is wrong to make fraudulent contracts to deceive others or to intentionally not help others when they need help. Many authors see that the theory of Kant, the categorical imperative, explains why people have moral rights. Moral rights identify the areas in which we as free and rational persons deal with each other. Being provided with food, work, clothing, housing and medical care when they cannot provide it themselves.
Being free from fraud and being able to think freely, have privacy and associate with whoever they want. The objections of critics are:. Both versions of the categorical imperative are not clear enough to always be used. The theory is too vague according to them. There is a disagreement about what the limits of each right are.
There are counterexamples that prove that the theory sometimes is wrong. There are some philosophers that have proposed important views that are different than the theories we have discussed so far. Some of these philosophers are libertarian philosophers. They believe that freedom from human constraint is necessarily good and that all constraints imposed by others are necessarily evil, except when needed to prevent the imposition of greater human constraints.
The only basic right that every person possesses is the negative right to freedom. This implies that restrictions on freedom are unjustified except when they prevent greater restrictions on freedom. The right to freedom requires private property, freedom of contact, free markets and the elimination of taxes to pay for social welfare programs.
Nozick ignores the fact that freedom of one person puts constraints on the freedom of others. Since Nozick claims that restrictions on freedom are unjustified, freedom itself then would be unjustified.
In business people often refer to terms as justice and fairness. This is especially used when someone is accused of unjustly discriminating or acting unfairly.
Justice is to some extent based on individual moral rights. Retributive justice: requires fairness when blaming or punishing persons for doing wrong. Compensatory justice: requires restoring to a person what the person lost when he or she was wronged by someone. Issues of distributive justice arise when there is a scarcity of benefits such as work, food, income, medical care and health or when there are too many burdens.
A fundamental principle of this is that equals should be treated equally and unequals should be treated unequally. One must be consistent in the way we treat people in similar situations. There are different views that provide a principle of distributive justice. We will discuss some of them:. Egalitarianism implies that there are no relevant differences among people that can justify unequal treatment. Everyone in a society should receive exactly equal shares of the benefits and burdens.
Goods should be allocated to people in exactly equal proportions. This principle of egalitarianism is not only applied in society but also in smaller groups or organizations. Many people view equality as a social ideal. However, there are also people that criticize this principle. These critics claim that there is no quality that all humans possess and therefore it is not possible that all human beings are equal. Other critics argue that this principle ignores need, ability and effort in the distribution of goods.
When everyone in society is given exactly the same goods then there is no incentive to put more effort in work.
Political equality: equal participation in and treatment by the political system. The critics that others have had on egalitarians are against economic equality and not against political equality. This view argues that each individual should receive benefits in proportion to its contribution to the society, group, task or exchange.
The more a person contributes the more benefits he should receive. This principle is the most widely used principle of fairness to establish salaries and wages. To determine what each individual gets we have to determine what the value of contribution of each individual is. This can be measured in terms of work effort.
The more effort people put in their work, the greater the share of benefits they receive will be. Puritan ethic: the view that every individual has a religious obligation to work hard at his or her calling and that God rewards hard work with wealth and success and punishes laziness.
Work ethic: the view that places a high value on individual effort and believes that hard work does and should lead to success. Another way to measure the value of contribution is in terms of productivity. Productivity is the amount an individual produces or that a group produced per person. The greater the productivity of an individual, the greater the benefits received.
There are also some authors that argue that the value of contribution can be measured by the market forces of supply and demand. The value of a product then depends on the extent to which it is scarce or not. Therefore this method with market prices is by many seen as unjust. Work should be redistributed so that each person can be as productive as possible.
Benefits are used to promote human happiness and well-being. It seems logical that we should take needs and abilities into account when distributing benefits and burdens. People should work in a company that fits their ability and people that are less healthy should receive more contributions. However, there are opponents to this socialist principle. One critique they have is that the according to the principle there would be no relation between the effort of a worker and the remuneration the worker receives.
They argue that workers would have no incentive to work harder if there is no relation between effort and remuneration. Another objection is that if the socialist principle would hold then it would destroy freedom. The occupation that a person would enter would depend on his ability according to his principle, and not on free choice. Also the goods the individual receives are not determined by free choice.
According to this view there is no specific way of distributing goods that can said to be just or unjust apart from the free choices individuals make. A distribution is just as it is the result of individuals that can freely choose and trade the goods they want. This principle argues that the right to freedom from coercion is the most important right a person has. Opponents of this view argue that also other forms of freedom must be secured.
They also claim that the libertarianism principle will generate unjust treatment of the disadvantaged. The principles that John Rawls proposes can be summarized by saying that a distribution of benefits and burdens is just if:. This is called the principle of equal liberty. Social and economic inequalities are arranged so that they improve the position of the least advantaged person.
This is called the difference principle. This is called the principle of fair equality and opportunity. The principles of John Rawls bring the approaches of justice discussed so far together. With his principle he provides us with a general method for evaluating the adequacy of moral principles.
Rawls defines an original position as an imaginary meeting of rational self-interested persons who must choose the principles of justice by which their society will be governed. The veil of ignorance is defined as the requirement that persons in the original position must not know particulars about themselves which might bias their choices such as their sex, race, religion, income, social status etc.
Rawls says that the principles that the imaginary parties to the original position accept will turn out to be morally justified. The parties to the original position would choose the principles that he states.
With these two claims it follows that his principles are morally justified to serve as our own principles of justice. Critics argue that the original position is not a good method for choosing moral principles.
Others argue that the parties to the original position would not choose the principles of Rawls. The theory preserves the basic values embedded in our moral beliefs: freedom, equality of opportunity and concern for the disadvantaged.
Ignorance and inability are two important things in determining whether a person is morally responsible for something and in determining whether the punishment is just. When people do not know or cannot freely choose what they are doing, they cannot justly be punished for the action. There are no specific rules for determining how much compensation a victim should receive from the wrongdoer. The compensation should leave the victim as well of as before the injury.
But it is very hard to measure what the exact losses of a victim are. There are also injuries that do not deserve compensation.
Traditional moralists argue that a person only has the obligation to compensate the injured party if the following three conditions are met:. The ethics of care states that ethics need not to be impartial, unlike the traditional ethical theories which assume that ethics has to be impartial. Ethic of care is defined as an ethic that requires caring for the concrete well-being of those particular persons with whom we have valuable close relationships, particularly those dependent on us.
This ethics emphasizes two moral things:. Every person exists in a web of relationships and should preserve and nurture these concrete valuable relationships. An ethic of care can be seen as encompassing the obligations that a communitarian ethic advocates. A communitarian ethic is an ethic that sees concrete communities and communal relationships as having a fundamental value that should be preserved and maintained.
The community, in which individuals develop and discover who they are, is very important. The broad relationship of the community is just as important as the interpersonal relationships between individuals. We can distinguish between caring about something, caring after someone and caring for someone. With ethic of care we mean caring for someone.
It is based on the well-being of other persons and not on things. Not all relationships are valuable. A relationship is not valuable when it is characterized by domination, oppression, harm, hatred, violence, disrespect, viciousness, injustice or exploitation. The demands of caring can be in conflict with the demands of justice. Such conflicts should be resolved in ways that do not betray our voluntary commitments to others and relationships with them.
The development of ethics of care is primarily leaded by feminist ethics. This is because women approach moral issues from a view based on relationships and caring.
There are several objections to the ethics of care. We will discuss two of them including the response of ethics of care on these objections. The first objection is that an ethic of care can degenerate into favouritism. Proponents of ethics of care response that conflicting moral demands are an inherent characteristic of moral choices. The second objection is that an ethic of care can lead to a burnout.
Proponents of ethics of care reply to this with the argument that adequate understanding of ethic of care will acknowledge the need of the caregiver to care for him or herself. Maximizing the net utility of our actions. It is important that we do not waste the resources that we have. Our morality consists of these four basic moral considerations. Moral standards related to justice are more important than moral standards of utilitarian considerations and moral standards of caring are more important than moral standards of impartiality.
The criteria for which moral standards are most important remain rough and intuitive. When the moral standards are determined you have to search for the factual information concerning the party involved.
When this is done you can make a moral judgment. The approaches we discussed so far all focused on the action. Virtue ethics looks at moral issues from another point of view than the action-based ethics. An example of a moral virtue is honesty. A moral virtue is a characteristic that is not just natural but that one must acquire.
Aristotle defined a moral virtue as a habit that enables a human being to live according to reason by habitually choosing the mean between extremes in action and emotions.
Courage is the virtue of feeling fear and recklessness is the virtue of feeling less fear than one should have. Justice is the virtue of giving people exactly what they deserve. Virtues can be acquired through repetition. Aquinas defined moral virtue as habits that enable a person to live reasonably in this world and be united with God in the next. The purpose of a person would not be the happiness in this life but the happiness in the next life. The American philosopher Alasdair MacIntyre defined moral virtues as dispositions that enable a person to achieve the good at which human practices aim.
However, many have argued that his approach is not correct. Pincoffs argues that it is incorrect because he claims that virtues include only those traits required by our social practices. Pincoffs says that moral virtues are dispositions we use when choosing between persons or potential future selves.
One should look at virtues based on the role they play in human life. It seems to be that the theory of Pincoffs is more adequate that the theory of MacIntyre. A question we have not answered yet is how this moral virtue helps us decide what to do.
Virtue theory argues that the aim of the moral life is to develop those general dispositions called moral virtues, and to exercise and exhibit them in the many situations that human life sets before us. A key implication of this theory is that an action is morally right if the agent exercises, exhibits or develops a morally virtuous character when carrying out the action. An action is morally wrong if the agent exercises, exhibits or develops a morally vicious character.
The virtue theory also helps us to evaluate our social institutions and practices. Institutions should instill virtues and not vices. There are some philosophers that do not agree with the virtue theory.
The theory would not be consistent with the findings of modern psychology in the Milgram and Princeton studies. These Milgram and Princeton studies showed that behaviour is determined by the external situation and not by the moral character. Also recent psychology has been supportive of the virtue theory. Now that we have discussed theories of ethics and theories of virtues we need to look at the relationship between those two.
Moral virtues support or facilitate adherence to moral principles. Moral virtues make it possible for people to do what their moral principles require. Even though there are differences between the theories of ethics and theories of virtues there are no conflicts between those two. Both identify where moral life is about. In ethics of principles actions are primary while in theories of virtue dispositions are primary.
Every day we go to a process of moral reasoning; applying our moral principles to a situation and making a judgement of the situation. Many of these ethical decisions throughout the day are unconscious. People often tell the truth without the need to think it over for example. Psychological studies of the brain have suggested that there are two ways of making ethical decisions:. It seems to be that the majority of our moral decisions are unconscious decisions.
These unconscious processes are automatic and therefore they are unrelated to the conscious and logical reasoning processes we have studies so far. Scott Reynolds calls the unconscious process the X-system and the conscious process the C-system. The X-system is based on the use of schemas or prototypes to automatically and unconsciously identify what it perceives and what it should do.
The brain uses stored information to identify what kind of behaviour is appropriate in the situation. Our brain matches the information with the current situation and when this has happened we become aware and recognize the kind of situation we are in. With every situation and through life experience new information is added into our brain and the prototypes in our brain change.
Because we have very many prototypes in our brain we are able to know how to behave without thinking about it consciously. Once we are aware of the situation we come into the C-system of the process. Someone can for instance during a conversation with a friend decide to consciously not tell the truth. The processes in the C-system are more complicated than the simple processes in the X-system. If we are in a new, strange and unusual situation we cannot rely on our information in the X-system but we rely on or C-system.
The C-system then tries to gather information and trying to find out what is going on. The prototype system of our brain saves us from being continuously jam in the hard processes of conscious moral reasoning. This use of prototypes is similar to the use of paradigms in casuistry or to the use of precedents in common law which are both rational processes. Prototypes in our brain can be changed and corrected by conscious reasoning.
But not all the prototypes result from conscious reasoning. Our moral beliefs about how to act in certain situations are also influenced by culture. Also sheer intuition has a great influence on our prototypes. Finally, they can also be influenced by hardwired moral institutions. According to the psychologist Marc Hauser most people accept these three principles when they make moral judgements about harming people. Globalization is the process by which the economic and social systems of nations are connected together so that goods, services, capital and knowledge move freely between nations.
These flows are facilitated by free trade agreements and international institutions like the World Trade Organization and the World Bank. Globalization forces companies to compete with companies in other parts of the world. Because of this high competition many companies were forced to quit. When a company relocates its company to another country with lower wages this leads to enormous job losses in the home country. There are many people that criticize global free trade because it harms the people who live in poor countries.
It only benefits global business. This negative side of global free trade has led to a worldwide moral debate that has been present for many centuries. The debate is about whether governments should impose restrictions on business activities and economic exchanges or let them trade freely. An economic system is the system a society uses to provide the goods and services it needs to survive and flourish.
This system has two basic economic tasks:. Actually producing the goods and services and determining what must be produced, who will produce it and how it will be produced. Distributing the goods and services among the members of the society and determining who will get what and how much each member will receive.
Tradition-based societies are societies that rely on traditional communal rules and customs to carry out basic economic tasks. The resources of the society are in this case often owned in common. Modern societies carry out the economic tasks in two very distinctive ways of organizing themselves:. Systems primarily based on commands. In a command economy the government authority makes the decisions about what is to be produced, who will produce it and who will get it. Systems primarily based on markets.
In a market economy private individuals make the main decisions about what they will produce and who will get it. Nowadays there are many economies that contain elements of all the three: traditions, commands and markets. An economy based completely based on one of the three would we undesirable. There is a heated debate about whether economies should focus more on commands or on markets.
In this debate the term free markets crosses often. Free markets are markets in which each individual is able to voluntarily exchange goods with others and to decide what will be done with what he or she owns without interference from government. Ideology is a system of normative beliefs shared by member of some social group. This expresses the view of a group about human nature, the purpose of social institutions and how they work.
Free markets are supposed to protect the two natural rights; right to freedom and right to private property. John Locke has developed an idea that is in line with this claim. He says that is there were no governments then people would be in a state of nature. In this state everyone is free and political equal. He also argues that each person owns his own body, its labor and the products of its labor.
Lockean rights are rights to life, liberty and property. These lockean rights are unsafe and insecure and therefore people agree to form a government to protect and preserve their right to life, liberty and property. The existence of lockean rights implies that societies should incorporate private property institutions and free markets.
Neither Locke nor other followers of him have been able to prove that humans have such natural rights. Free markets create unjust inequalities which are in conflict with the principles of justice. Globalization has increased inequality on a global level and enables companies to move their operations leading to countries that keep getting poorer.
Critics claim that the individualistic assumptions of Locke are completely false because they ignore the key role of caring relationships in societies. Adam Smith greatly supports free markets and private property. He argues that when individuals have to seek their own interests in free markets, they will be led to further the public welfare by an invisible hand.
Invisible hand: According to Adam Smith, the market competition that drives self-interested individuals to act in ways that serves society. The invisible hand is market competition. Therefore the best government policy to achieve public welfare is to do nothing. Hayek and von Mises agreed with this argument because they say that governments cannot have enough information to allocate resources as efficiently as free markets do. Adam Smith argues that there is a system of private property.
Private ownership would lead to better care and better use of resources than common ownership. One such an unrealistic assumption is that there are no monopoly companies. Many people say that patents are a form of monopoly. A second critique is that he falsely assumes that all the resources used to produce are paid by the manufacturer, which ignores the costs of pollution.
This assumption does not hold when manufacturers consume resources which they do not try to economize. Another critique is that Smith falsely assumes that human beings are motivated only by a self-interested desire for profit.
According to critics people are born with natural tendency to care for other member of their species. Finally, critics argue that Smith, Hayek and von Mises are wrong when saying that governments should not intervene in the market.
They say that some government planning and regulation of markets is possible and desirable. Economists argue that without government intervention, the demand for goods may not be high enough to absorb the supply.
This would lead to unemployment and an economic depression. Keynes defines the aggregate demand as the sum of the demand of three sectors of the economy: households, business and government. It may happen that aggregate supply is less than the aggregate demand. This can happen when households decide to save their money instead of spending it on goods and services. A government can influence the propensity to save through its influence on interest rates. The government can also affect the amount of money households have available through taxes.
Finally, the government can use its spending to close the gap between aggregate demand and aggregate supply. The post-Keynesian school consists of economists who have sought to challenge and modify Keynesian economics. Some of these have suggested that in many industries today prices and wages are no longer determined by competitive market forces as Keynes assumed.
These post-Keynesians focus more on the oligopolistic nature of most modern industries and unionized labor markets. They also look at the role of social conventions and agreements in these markets. Social Darwinism is the belief that economic competition produces human progress. Charles Darwin has also developed the idea of survival of the fittest : the term for the process of natural selection. The philosopher Herbert Spencer suggests that the evolution theory of Darwin can also be applied to human societies.
The theory of survival of the fittest applied to free competition in the economic world means that only the most capable individuals survive and rise to the top. The individuals that have aggressive business are more likely to succeed and are seen as the fittest. Free competition will make people richer or less poor leading to an improvement of the human race. Spencer also suggests that if a government intervenes in the economy to shield people from competition, the unfit survive and the human race declines.
Thus he concludes that governments should not intervene. They claim that the skills that help individuals survive in business are not the ones that help humanity survive on the planet.
Another critique is towards the assumption that survival of the fittest means survival of the best. This mistake of Spencer is called the naturalistic fallacy ; the assumption that what happens naturally is always what is good. Despite the critics many business people today believe in some sort of social Darwinism.
They believe that only the strong will survive in the economic environment. Proponents of the utilitarian view suggest that free trade between nations is beneficial. Adam Smith said that countries differ in their ability to produce certain goods. He describes the term absolute advantage. Absolute advantage is the situation where the production costs costs in terms of the resources consumed in producing the good of making a commodity are lower for one country than for another.
It can be that a country has an absolute advantage for every product it produces. David Ricardo argues that even when this is the case it is better for the country to specialize and trade. Comparative advantage is the situation where the opportunity costs in terms of other goods given up of making a commodity are lower for one country than for another.
This is the most important concept in international trade theory today. When two countries specialize and then trade with each other they will have more of both products after trade than without specialization. The arguments of specialization and trade of Smith and Ricardo provide support for globalization.
Although there is much support for the theory of Ricardo, there are also economists who have critique. He ignores the influence of international rule-setters. This is the most important objection critics make. Karl Marx is the most well-known critic of private property institutions, free trade, free markets and the inequalities they create. He argues that a capitalist system offers two sources of income:.
Ownership of the means of production ; the buildings, machinery, land and raw materials used in the production of goods and services. Workers are not able to produce anything without access to the means or production and therefore they need to sell their labor to the owner in return for a wage.
The owner is then able to exploit the workers. He argues that it is in the nature of humans to self-determine and satisfy its needs. When the person loses control and is controlled by an external power then this person is alienated from his own nature.
It alienates workers from themselves by making them believe in false views of what their real human needs are. Marx claims that human interactions have commercialized over time and have now turned into commodities so that everyone and everything has its price. Improve Critical Thinking - Business Ethics: Concepts and Cases provides summaries of basic ideas discussed within the text in its margins; presents conceptual materials first, and then offers discussion cases second through standardized chapters; all providing students the chance to critically think about the material they are learning.
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