Philosophical Approaches to Ethics-4 (1)

8/2/2019 Philosophical Approaches to Ethics-4 (1)

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PHILOSOPHICAL APPROACHES TO

Business ETHICS

Straw men approach: it either denies the

value of business ethics or apply the concept

in a unsatisfactory way

Utilitarian and Kantian Ethics: Moral worth of

actions or practices is determined by their

consequences ( good and bad).

Rights theories: focuses on fundamental rights

Justice theories: focuses on fair and equitable


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Straw Men approaches

It offers inappropriate guidelines for ethical

decision making in business,

Four such approaches are the

Friedman doctrine,

cultural relativism,

the righteous moralist, and

the nave immoralist.


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Ethics in International Business

The Friedman Doctrine:Economists Milton Friedmans position is that the only social responsibility

of business is to increase profits, so long as the company stays within the

rules of law. Any attempt beyond the law to improve working condition will

reduce profit.

Cultural Relativism:

Cultural relativism is the belief that ethics are culturally determined and

that firms should adopt the ethics of the cultures in which they operate, or in

other words, when in Rome, do as the Romans do


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The Righteous Moralist

The righteous moralist approach claims that a multinationalshome country standards of ethics are the appropriate ones forcompanies to follow in foreign countries

The Nave Immoralist

The nave immoralist asserts that if a manager of amultinational sees that firms from other nations are not

following ethical norms in a host nation, that manager shouldnot either


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Kantian ethics

Kantian ethics are based on the philosophy ofImmanuel Kant who argued that people should

be treated as ends and never purely as means

to the ends of others. people are not machine and they should be

treated with dignity.


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Rights Theories

Rights theories recognize that human beings have fundamental rights and

privileges that transcend national boundaries and culture

Moral theorists argue that fundamental human rights form the basis for the

moral compass that managers should navigate by when making decisions that

have an ethical component The idea that some fundamental rights transcend national borders and

cultures was the underlying motivation for the UNs Universal Declaration of

Human Rights (specifies the basic principles that should always be adhered to

irrespective of the culture in which one is doing business)


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Justice Theories

Justice theories focus on the attainment of a

just distribution of economic goods and services

Ajust distribution is one that is considered fair

and equitable


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John Rawls Justice theory

He argued that all economic goods and services should be distributedequally except when an unequal distribution would work to everyonesadvantage.

Impartiality is guaranteed by the veil of ignorance (everyone is imagined tobe ignorant of all his or her particular characteristics) where people would

agree that each person is permitted the maximum amount of basic libertycompatible with a similar liberty for others, and that once equal basic libertyis assured, inequality in basic goods social goods are to be allowed only if theybenefit everyone

Rawls formulates the difference principle, which is that inequalities are

justified if they benefit the position of the least advantaged person


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Ethical Decision Making

IMPLICATIONS FOR MANAGERS for ethical decision making

favor hiring and promoting people with a well grounded sense of personal

ethics

build an organizational culture that places a high value on ethical behavior

makes sure that leaders within the business not only articulate the rhetoric

of ethical behavior, but also act in manner that is consistent with that rhetoric

put decision making processes in place that require people to consider the

ethical dimension of business decisions

develop moral courage


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Hiring and Promotion

Businesses should strive to identify and hirepeople with a strong sense of personal ethics

Prospective employees should find out asmuch as they can about the ethical climate in anorganization


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Organization Culture and Leadership

Businesses need to build an organization culture that places a high value on

ethical behavior:

the business must explicitly articulate values that place a strong emphasis

on ethical behavior, perhaps using a code of ethics (a formal statement of the

ethical priorities a business adheres to)

leaders in the business should give life and meaning to the code of ethics by

repeatedly emphasizing their importance, and then acting on them

the business should put in place a system of incentives and rewards that

recognize people who engage in ethical behavior and sanction those who do

not


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Unilevers code of ethics

Unilever is committed diversity in a working

environment where there is mutual trust and

respect and where everyone feels responsible

for the performance and reputation of our

company

Unilever doesnot give or receive bribes or

other advances for financial gain


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Decision Making Processes

A moral compass can help determine whether a decision isethical. If a manager can answer yes to the followingquestions, the decision is ethically acceptable.

does my decision fall within the accepted values of standardsthat typically apply in the organizational environment?

am I willing to see the decision communicated to allstakeholders affected by it?

would the people with whom I have significant personalrelationships approve of the decision?


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Others have recommended five steps

A five step process can also help managers think through ethicalproblems:

Step-1 business people should identify which stakeholders (the

individuals or groups who have an interest, stake, or claim in theactions and overall performance of a company) a decision wouldaffect and in what ways

Internal stakeholders are people who work for or who own the

business such as employees, the board of directors, andstockholders.

External stakeholders are the individuals or groups who havesome claim on a firm such as customers, suppliers, and unions.


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Step-2 Then, managers need to determine whether aproposed decision would violate the fundamental rights ofany stakeholders

Step-3 Next, managers need to establish moral intent (thebusiness must resolve to place moral concerns ahead ofother concerns in cases where either the fundamentalrights of stakeholders or key moral principles have beenviolated)

Step-4 The company should then engage in ethical behaviorStep-5 Finally, the business must audit its decisions, reviewing

them to make sure that they were consistent with ethicalprinciples


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Ethics in

International Business

Ethics Officers

To ensure ethical behavior in a business, a number offirms now have ethics officers

Moral Courage

It is important to recognize that employees in aninternational business may need significant moralcourage


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Summary of Managerial Actions

In the end, there are clearly things that an

international business should do, and there are

things that an international business should not

do, but there are also actions that present

managers with true dilemmas

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Philosophical Approaches to Ethics-4 (1)