Morality, Ethics, Business Ethics: Basic Definitions and Aspects

1. BUSI 211: ETHICS

CHAPTER 1
Morality, Ethics, Business Ethics:
Basic Definitions and Aspects

2. Major Issues

What is Morality? What is Ethics?
Who sets them?
Business Ethics: Three Levels
Responsibility
Moral Development
Global Standards
Technology and Business Ethics

3. Merck Case: River Blindness

Why did Merck (CEO) finally decide to produce the
‘river blindness’ medicine?
What would you have done as Merck’s CEO?
Discuss Pro’s and Con’s for the development of the
drug and make a final proposal.
Should corporations be required to act as Merck did?

4. Merck and River Blindness

Victims as potential Customers
Business and implications
Cost benefits : Profitability
For-profit organization
Shareholders
Long-term strategy
Marketing and Economic infrastructure (Africa,
Latin America)
Technology risk/ Legal infrastructure/ Property
rights

5. Merck Case: Lessons

Ethical business behavior might be….
very expensive and unprofitable for a
company in the short-term….but it can be
very profitable and beneficial for a company
in the long-term…and it takes sometimes a lot
of guts to behave ethically

6. What is Morality?

Standards about what is ‘right or wrong’ or
what is ‘good or evil’
Standards are set by
Individuals (take care of family)
Social Groups (Neighborhood, Sports clubs)
Professional Groups (Hippocratic Oath)
Religions (making money out of interest)
Societies

7. Characteristics of Moral Standards

Not established or changed by authoritative bodies
Preferred to other values including self-interest
Based on impartial considerations

8. What is Ethics?

Ethics the study of morality
Ethics refers to the process of describing,
analyzing moral standards and moral
dilemmas
Ethics can be a descriptive and/ or normative
discipline

9. Business Ethics: Three Levels

Moral standards that apply to:
Countries/ Societies: Systemic
Corporate and Business policies: Corporate
Top Managers, Employees, Owners, Shareholders:
Individuals

10. Business Ethics: Three Levels

Corporate
Systemic
Individual

11. Corporate and Business Level: Examples

Competition (Price fixing, Anti-trust)
Accounting Information (Insider trading, Compensation,
Bribery)
Human Resource Management (Discrimination)
Ethics of Sales and Marketing (Children, Immoral)
Production (Addictive: Drugs, Glue; Pollution)
Intellectual Property (ownership, industrial espionage)

12. Case: Gun Manufacturers

Are manufacturers/ dealers ever morally
responsible for deaths caused by the use of
their products? Why or why not?

13. Moral Standards: Corporations or Individuals?

Are corporations to be treated like human beings?
Can corporations be said to be ‘responsible’ and
what does it mean in a practical sense?
Yes: to the extent that corps. have objectives, they are
morally responsible and have moral duties
No: Corps. have no ‘moral duties’, therefore may not be
said to be “morally responsible”
Compromise: Corps. are not human beings but
individuals are the primary ‘carriers’ of moral
responsibility so they ‘partially’ have moral duties

14. Moral Responsibility and Blame

Whether someone is to blame for an act. Depends
upon:
Whether the person freely and knowingly committed the
act although it was morally wrong
Whether the person freely and knowingly failed to prevent
the act although it was morally wrong to fail to do so
Ignorance and inability are excusing conditions
Except when ignorance is willful
Minimal involvement (a softening factor)
Subordinate carrying out unethical order ( ‘loyal agent’)

15. Whistleblowers

When should an employee who learns of
something that seems illegal and/or immoral
at his/her place of employment expose it to
the government or media?
Are whistleblowers courageous? What might
happen to their careers?
Are they disloyal?
Ex: Iraq War, Mattel, Ford

16. Stages of Moral Development (Kohlberg 1976)

Pre-Conventional Stages: Responding to
Rules
Conventional Stages: Meeting Social
Expectations
Post-Conventional Stages: Autonomous
Development of Principles

17. Moral Development ONE

Pre- Conventional Stages: Responding to
RULES
Stage 1: Punishment / Obedience Orientation
Physical consequences (for ex. stealing)
Stage 2: Instrument / Relativity Orientation
Instruments for satisfaction/ rewards (sweets)

18. Moral Development TWO

Conventional Stages: Meeting social expectations
Stage 3: Interpersonal Concordance Orientation
Living to the expectations of those to whom one is
closely attached, loyal (affection, good performer)
Stage 4: Law and Order Orientation
Loyalty social systems (groups, societies, country);
sometimes in contrast to own motives

19. Moral Development THREE

Post-Conventional: Autonomous, Critical Stages
Stage 5:
Social Contract Orientation
Effort to be impartial, critical, rational, fair approach
toward consensus (everything is relative, everything
to be tolerated)
Stage 6: Universal Ethical Principles Orientation
Right action is now defined in terms of logical
comprehensiveness, consistency, universality, and
reason

20. Kohlberg vs. Gilligan

Gilligan (1982): Kohlberg’s theory applies to males, not
females
Male approach impersonal, impartial, abstract
Female approach caring, being responsible, sustaining
relationships
Females follow different stages of moral development:
caring for oneself only, caring for others, achieving a
balance

21. Business Ethics: Global Standards and Approach

Standards have to be applied everywhere the same
Legal infrastructure (business laws: corruption, collusion
etc.)
Economic infrastructure (labor laws: hiring-firing; labor
costs: minimum wage/ health insurance)
Political infrastructure (regulation, de-regulation)

22. Divergent Societies/Business Cultures: Ethical Relativists or ‘Local Approach’

Different countries/ societies and different codes
No absolute standards about ‘right or wrong’
Accept all rules from different societies (‘Do as
the Romans do’)

23. Global Society with local Business Cultures: ‘Glocal’ Approach

Set of major standards have to be applied
everywhere the same….but
…specific standards to be decided and applied
locally

24. Technology and Business Ethics

Risks of new technologies (nuclear power)
Costs / Benefits (hip operation)
Social costs (basic jobs done by computers)
Privacy (consumer data)
Property (computer software and codes)
Genetic Engineering (animal testing/ testing
with human beings, new plants/ animals)