Buss+Ethics+Chapter 1

8/8/2019 Buss+Ethics+Chapter 1

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Ethics & BusinessEthics & Business

Paul L. Schumann, Ph.D.Paul L. Schumann, Ph.D.

2003 by Paul L. Schumann. All rights reserved. 2003 by Paul L. Schumann. All rights reserved.


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TerminologyTerminology

P o s i t iv e S t a t e m e n t


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P o s it iv e S ta tem e n t N orm a tiv e J u d g m en t


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M o ra l J ud gm e nt N on m o ra l J ud gm e n t


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M o ra l J ud gm e nt N on m ora l J u dg m en t

L e g a lJ u d g m e n t

u s e s

L e g a lS t a n d a r d s


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G r a m m a t i c a lJ u d g m e n t

u s e s u s e s


G r a m m a t i c a lS t a n d a r d s


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A es the t i cS t a n d a r d s





A es the t i cJ u d g m e n t

u s e s u s e s u s e s




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u s e s u s e s u s e s u s e s

M o r a lS t a n d a r d s




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M o r a lN o r m s


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M o r a lN o r m s

M o r a lP r inc ip l e s


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Ethical RelativismEthical Relativism

jj Theory of Ethical Relativism:Theory of Ethical Relativism: There are noThere are nouniversal moral principlesuniversal moral principles

Different societies have different moral beliefsDifferent societies have different moral beliefs No way to judge a societys moral principles as No way to judge a societys moral principles as being right or wrong being right or wrong

O nly possible judgment: Does a society live upO nly possible judgment: Does a society live up

to its own moral principles?to its own moral principles?


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Ethical Relativism Is FalseEthical Relativism Is False

jj Some moral principles are required if theSome moral principles are required if thesociety is to survivesociety is to survive

jj What appear to be differences in moralWhat appear to be differences in moral principles may only be surface differences principles may only be surface differencesjj Just because two people have differentJust because two people have different

moral beliefs doesnt mean theyre bothmoral beliefs doesnt mean theyre bothrightright


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jj The theory produces unacceptableThe theory produces unacceptableconclusions.conclusions.Examples:Examples: Slavery in the United StatesSlavery in the United States Treatment of Jews in Nazi GermanyTreatment of Jews in Nazi Germany


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jj The theory must be false because itThe theory must be false because itcontradicts itself contradicts itself

Consider the following statement:Consider the following statement: There are no absolute truths. There are no absolute truths.Apply the statement to itself Apply the statement to itself what does it saywhat does it sayabout itself?about itself?

Apply the Theory of Ethical Relativism to itself Apply the Theory of Ethical Relativism to itself Is it ethical for someone who believes in ethicalIs it ethical for someone who believes in ethicalrelativism to advocate ethical relativism?relativism to advocate ethical relativism?


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jj A writer who says that there are no truths,A writer who says that there are no truths,or that all truth is merely relative,or that all truth is merely relative,is asking you not to believe him.is asking you not to believe him.So dont.So dont. Roger Scruton,Roger Scruton, M odern Philosophy: An M odern Philosophy: An

Introduction and Survey, Introduction and Survey, NY: Allen Lane, NY: Allen Lane,

1994.1994.jj If there are universal moral principles, howIf there are universal moral principles, how

do individuals learn them?do individuals learn them?


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Moral DevelopmentMoral Development

jj Kohlberg identified a sequence of 6 stagesKohlberg identified a sequence of 6 stagesof moral developmentof moral development

jj

The six stages are divided into 3 levelsThe six stages are divided into 3 levels 2 stages in each level2 stages in each level The 2 stages in each level have something inThe 2 stages in each level have something in

commoncommon


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jj Level 1: PreLevel 1: Pre- -Conventional MoralityConventional Morality 2 stages2 stages

Common element: Self Common element: Self- -focusedfocused Motivation is self Motivation is self- -interest:interest:

W hats in it for me?W hats in it for me?


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Level 1: PreLevel 1: Pre- -Conventional MoralityConventional Morality

jj Stage 1: Punishment & O bedience StageStage 1: Punishment & O bedience Stage Person acts to avoid punishmentPerson acts to avoid punishment

Example: children sharing toysExample: children sharing toys The only crime is getting caught.The only crime is getting caught.


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Level 1: PreLevel 1: Pre- -Conventional MoralityConventional Morality

jj Stage 2: Instrument & Relativity StageStage 2: Instrument & Relativity Stage Person uses others as a tool to self Person uses others as a tool to self- -satisfactionsatisfaction

Example: children sharing toysExample: children sharing toys You scratch my back and Ill scratch yours.You scratch my back and Ill scratch yours. Example: a friend is moving, do you help?Example: a friend is moving, do you help?


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jj Level 2: Conventional MoralityLevel 2: Conventional Morality 2 stages2 stages

Common element: GroupCommon element: Group- -focusedfocused Group norms are important: what does theGroup norms are important: what does thegroup expect of me?group expect of me?


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Level 2: Conventional MoralityLevel 2: Conventional Morality

jj Stage 3: Interpersonal Concordance StageStage 3: Interpersonal Concordance Stage Relevant groups: family, friends, coRelevant groups: family, friends, co- -workersworkers

Group norms and expectations affect behavior Group norms and expectations affect behavior Person is motivated by a desire to be seen as aPerson is motivated by a desire to be seen as agood son or daughter, a good brother or sister, agood son or daughter, a good brother or sister, agood friend, a good cogood friend, a good co- -worker worker

Example: a friend is moving, do you help?Example: a friend is moving, do you help?


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Level 2: Conventional MoralityLevel 2: Conventional Morality

jj Stage 4: Law & O rder StageStage 4: Law & O rder Stage Relevant group: society at largeRelevant group: society at large

Norms, expectations, and laws of society Norms, expectations, and laws of societyaffects behavior affects behavior Person is motivated by a desire to be seen as aPerson is motivated by a desire to be seen as a

good citizengood citizen

Its my duty as a citizen.Its my duty as a citizen.


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jj Level 3: Autonomous (or Principled or Level 3: Autonomous (or Principled or PostPost--Conventional) MoralityConventional) Morality 2 stages2 stages Common element: UniversalCommon element: Universal- -focusedfocused Person takes a impartial viewpointPerson takes a impartial viewpoint

Not just whats best for me Not just whats best for me

Not just what groups expect of me Not just what groups expect of me


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Level 3: Autonomous MoralityLevel 3: Autonomous Moralityjj Stage 5: Social Contract StageStage 5: Social Contract Stage

Social Contract: The rules members of a societySocial Contract: The rules members of a societyagree to follow to govern relationships withinagree to follow to govern relationships within

the societythe society H ow are the rules of society decided?H ow are the rules of society decided?Example: the King makes up the rulesExample: the King makes up the rulesExample: DemocracyExample: Democracy majority rulesmajority rules

Person is motivated by a desire to maintain thePerson is motivated by a desire to maintain thesocial contractsocial contract

Im satisfied even though I lost the vote.Im satisfied even though I lost the vote.


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Level 3: Autonomous MoralityLevel 3: Autonomous Morality

jj Stage 6: Universal Ethical Principles StageStage 6: Universal Ethical Principles Stage Person develops a set of comprehensive,Person develops a set of comprehensive,

coherent, and consistent moral principlescoherent, and consistent moral principles Person follows the moral principles even if itPerson follows the moral principles even if it

means self means self--sacrificesacrifice


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jj Individuals go through stages of moralIndividuals go through stages of moraldevelopmentdevelopment

jj

Different individuals may develop atDifferent individuals may develop atdifferent ratesdifferent ratesjj Cant skip stagesCant skip stagesjj

Can go backwardsCan go backwardsjj Different individuals may end up inDifferent individuals may end up in

different stagesdifferent stages


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jj Implications for managers:Implications for managers: May have employees at different stagesMay have employees at different stages

What motivates ethical behavior for oneWhat motivates ethical behavior for oneemployee may not motivate ethical behavior for employee may not motivate ethical behavior for another employeeanother employee


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jj H ow do you motivate an employee to actH ow do you motivate an employee to actethically if the employee is in:ethically if the employee is in: Stage 1 (Punishment & O bedience)?Stage 1 (Punishment & O bedience)? Stage 2 (Instrument & Relativity)?Stage 2 (Instrument & Relativity)? Stage 3 (Interpersonal Concordance)?Stage 3 (Interpersonal Concordance)? Stage 4 (Law & O rder)?Stage 4 (Law & O rder)? Stage 5 (Social Contract)?Stage 5 (Social Contract)? Stage 6 (Universal Ethical Principles)?Stage 6 (Universal Ethical Principles)?


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Can Ethics Be Taught?Can Ethics Be Taught?

jj Yes, moral development can be encouragedYes, moral development can be encouragedjj Research concludes (Rest, 1988):Research concludes (Rest, 1988):

Deliberate educational efforts to teach ethicsDeliberate educational efforts to teach ethicsaffects actual, real world, behavior affects actual, real world, behavior Dramatic changes in moral reasoning occur intoDramatic changes in moral reasoning occur into

young adulthood (20s and 30s) and beyondyoung adulthood (20s and 30s) and beyondjj But is ethics relevant in business?But is ethics relevant in business?


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Role of Ethics in BusinessRole of Ethics in Business

jj Adam Smith (1790):Adam Smith (1790):W hy do humans behave in generous and W hy do humans behave in generous and noble ways? It is due to reason, principle,noble ways? It is due to reason, principle,conscience, the inhabitant of the breast, theconscience, the inhabitant of the breast, theman within, the quiet judge and arbiter of man within, the quiet judge and arbiter of our conduct.our conduct.


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jj Peter Drucker (1954):Peter Drucker (1954):B ut what is most important is that B ut what is most important is that management realize that it must consider management realize that it must consider the impact of every business policy and the impact of every business policy and business action upon society. It has tobusiness action upon society. It has toconsider whether the action is likely toconsider whether the action is likely to

promote the public good, to advance the promote the public good, to advance thebasic beliefs of our society, to contribute tobasic beliefs of our society, to contribute toits stability, strength, and harmony.its stability, strength, and harmony.


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jj Thompson & Strickland (1995):Thompson & Strickland (1995): A strong corporate culture founded on A strong corporate culture founded onethical principles and sound values is aethical principles and sound values is avital driving force behind continued vital driving force behind continued

strategic success. strategic success.


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jj Milton Friedman (1970):Milton Friedman (1970): It is the responsibility of management to It is the responsibility of management toconduct the business in accordance withconduct the business in accordance with[the desires of the owners of the business],[the desires of the owners of the business],which generally will be to make as muchwhich generally will be to make as muchmoney as possible, while conforming to themoney as possible, while conforming to the

basic rules of society, both those embodied basic rules of society, both those embodied in law and those embodied in ethical in law and those embodied in ethical custom.custom.


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jj Business relationships are repetitive and onBusiness relationships are repetitive and on- -going:going: EmployeesEmployees CustomersCustomers SuppliersSuppliers CreditorsCreditors StockholdersStockholders

jj Unethical behavior results in retaliationUnethical behavior results in retaliation


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Moral ResponsibilityMoral Responsibility

jj Who is responsible for unethical conduct inWho is responsible for unethical conduct in business? business?3 Views:3 Views: 1. The employees who made the unethical1. The employees who made the unethical

decisiondecisionCorporations dont make decisions, people doCorporations dont make decisions, people do

Therefore, the people who made the unethicalTherefore, the people who made the unethicaldecision should be held responsibledecision should be held responsible


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Moral ResponsibilityMoral Responsibility

jj Who is responsible for unethical conduct inWho is responsible for unethical conduct in business? business? 2. The corporation2. The corporation

Employees decisions are made in the context of Employees decisions are made in the context of corporate policies, corporate norms, organizationalcorporate policies, corporate norms, organizationalstructure, and corporate culturestructure, and corporate cultureTherefore, the corporation as a whole should be heldTherefore, the corporation as a whole should be heldresponsibleresponsible

3. Both the corporation and the employees3. Both the corporation and the employeesinvolvedinvolved


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Reduce Moral Responsibility?Reduce Moral Responsibility?

jj True ignorance of factTrue ignorance of fact Not willful ignorance Not willful ignorance Not ignorance due to negligence Not ignorance due to negligence Not ignorance of ethics Not ignorance of ethics

jj True inability to do anything elseTrue inability to do anything else

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Buss+Ethics+Chapter 1