Part 1:
Choose an ethical dilemma (Please indicate the one you choose)
a. On a business trip, the taxi driver asks if he should leave the amount of the fare blank on your receipt. You can claim expenses. Do you indicate that he should?
. A friend who is minimally qualified and who needs a job applies at your business. Someone who is more qualified also applies. Do you hire your friend?
1) What would you do and why? (1 point)
2) Using Kohlberg’s theory first defend your behavior choice (why is it the ethical choice). (2 points)
3) Now, also using Kohlberg’s theory – argue against your choice (why might someone else say it would be unethical). (2 points)
Part 2:
Ethical dilemma:
During lunch, a valued client makes some offensive racist remarks. Do you make an issue of it?
4) What would you do and why? (1 point)
5) Using one of the theories in the ethical perspectives in the lecture (anything but Kohlberg) defend your choice (why is it the ethical choice). (2 points)
6) Now, again using one of the theories in the ethical perspectives (anything but Kohlberg), argue against your choice (why might someone else say it would be unethical). (2 points)
Ethics in Business
Ethics in Business
Ethics - the study of moral values and moral behavio
Derives from the Greek word ethos which refers to “character”
Business Ethics
The study of ethical principles and moral or ethical problems that arise in a business environment.
It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations.
Employees are confronted with ethical challenges throughout their careers. Poor ethical behavior damages relationships, erodes trust, reduces cooperation/loyalty, and diminishes contributions leading to poor performance. There are 5 major causes of unethical behavior in business. The first deals with goal setting – we set goals and incentives to promote desired behavior, but they can often encourage negative behavior. Second, motivated blindness is when we overlook the unethical behavior of another when it is in our personal/professional interest to remain ignorant. Third, indirect blindness is when we hold others less accountable because the unethical behavior is ca
iers out through a third party (ex: a company deflects attention from a price increase by selling the rights to another company which imposes the increase). Fourth, the “slippery-slope” situation where it is more difficult to identify unethical behavior when it develops gradually. Lastly, overcoming values occurs when we allow/accept/promote unethical behavior because the outcome is beneficial/good.
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Ethical Perspectives
Consequential
Theories
Ethical theories
that
emphasize the
consequences o
esults
of behavio
Rule-Based
Theories
Ethical theories
that
emphasize the
character of the act
itself rather than its
effects
Characte
Theories
Ethical theories
that emphasize
the character,
personal virtues,
and integrity of the
individual
0
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Consequential Theories
John Stuart Mill – Utilitarianism
“Good” is the ultimate moral value
Greatest good for greatest number of people
Egoism/Individualism
Behavior that maximizes consequences for the individuals
Greatest good for oneself in the long-term – if everyone follows their long-term self-interests then the total wealth of society will be maximized
Problems
What is the greatest good?
Typically takes a short-term orientation instead of long-term
Becomes a numbers game – should the minority group be ignored?
Is good the same thing as right?
When does one individual’s good interfere with another’s good?
In consequential theories - right and wrong are determined by the consequences of the actions not the character of the act or person.
Utilitarian Example:
Several years ago, the State University of New York System was sued. When students were applying for college and seeking financial aid, they were given options of “prefe
ed” vendors. These vendors charged students slightly higher fees
ates than other options. In return for being on the prefe
ed list, the system would receive monetary compensation that was distributed to the schools for renovations/updates/etc. This information was not given to students. While there were numerous considerations in the case from whether paying to be on the list was a kickback, to students not being required to use those vendors but trusting the school to have their best interests in mind… The question here is if this behavior ethical? The utilitarian argument would say it is… a few students had to pay more, but more students benefited from the money received from those companies in the improvements to the campuses…
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Rule-Based Theories
Immanuel Kant
Categorical Imperative
Absolute, unconditional requirement that must be obeyed in all circumstances
Universal standard of behavio
Universalism
All people should uphold certain values that society needs to function
E.g. – rules against murder, deceit, torture, oppression
Theological ethics
Religion based ethics – follow rules for higher reward or a reward after death
Problems:
Rigidity in the rules make it difficult to adapt as society changes
Ambiguity in situations not covered by the rules
Should behavior always be the same in all situations?
In rule-based theories – it is the intention of the act that matters, not the end result. The action itself is not a means to an end.
The categorical imperative is best known in its first formulation: “Act only according to that maxim whereby you can, at the same time, will that it should become a universal law.” Kant argues that individuals should be treated with respect and dignity – that they should not be used as a mean to an end. People should put themselves in the other person’s position and ask if we would make the same decision if we were in his/her situation.
In many cultures, theological ethics serves as the basis for legal rights.
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Character Theories
Aristotle
Virtues come from inner character – Ideals that define good character
Virtues: Honesty, loyalty, courage, reliability, civility, trustworthiness, benevolence, sensitivity, helpfulness, cooperativeness, decency, modesty, openness, common sense, gracefulness
Good people who act out of virtuous intentions ultimately have good ethical standards
Problems
Assumes rationality
Avoids legalistic realities – can you always behave ‘right’?
Consistency of behavior vs. right behavior for a situation
In character theories, the character of the individual and the intent of the actor, not the act itself or the consequence determines the ethical nature.
Business Ethics Theory (built on Aristotle's definition and explanation of virtues) – corporations are embedded in a community, and that corporate values (e.g., fairness, honesty) are meaningless until transformed into action. Values, when they become actions, are virtues. Virtues are imperative to good corporate relationships. Without virtues and good relationships business falls apart. Virtue and profit must thrive together. 6 virtue-ethics: community, excellence, role identity, integrity, judgement, and holism (maintaining personal values at work)
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Levels of Ethics
The level of ethics is not independent, nor is it necessarily interdependent. The values held at each level may be inline with some and not with others. We often find that individuals who are mismatched with their professional and organizational ethics, typically are not te
ibly satisfied in their job.
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Individual
Professional
Organizational
Societal
Personal code of conduct when dealing with others
Standards that outline appropriate conduct in a given profession
Values and principles that an organization has chosen that guide the behavior of people in the organization
Principles and standards that guide members of a society in day-to-day behavior with one anothe
Moral Development
Cognitive Moral Development - the process of moving through stages of maturity in terms of making ethical decisions
Lawrence Kohlberg
Influences of character formation
Associations: family, friends, role models, social media
Media: books, movies, TV
Self-Concept: avoidance of cognitive dissonance
Want congruence between beliefs/values and behavior
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9
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We start developing morals when we are young children. Our first exposure to morals is typically fairy tales. (Why should you not cry wolf?). These stories we get from family, religion, peers, etc. begin to shape our understanding of the world and what is ‘right’ behavior. As we get older and engage more with society and popular culture (through movies, TV, books) our understanding of societal values will affect our personal values.
Lawrence Kohlberg suggested that as individuals mature, they move through several stages of moral development. With each successive stage, they become less dependent on other’s opinions of right and wrong, and less self-centered. His model focuses on the decision-making process, how individuals justify ethical decisions, and how that changes through interaction with peers and the environment.
Cognitive Model of Ethics
Judgment Situation
Ethical Dilemma
Situation
Individual Preferences
Behavio
We make a judgement about an ethical dilemma, eventually to enact a particular behavior. However, this process may be influenced by both the situation and our individual preferences both before we make the decision and before we enact the behavior.
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Kohlberg: Cognitive Moral Development
Level I: Pre-conventional Level
Ethical decisions based on rewards, punishments, and self-interest
Level ll: Conventional Level
Ethical decisions based on expectations of others or society
Level lll: Post-conventional Level
Ethical decisions based on what is “right” as determined by universal values
0
11
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Lawrence Kohlberg believed that while ethical dilemmas may have emotional components, as we age, we cognitively rationalize co
ect behavior. He argued for internalization - the developmental change from behavior that is externally controlled to behavior that is controlled by internal, self-generated standards & principles. Moral reasoning develops by being exposed to morally advanced behavior, open discussion of moral dilemmas with someone who reasons at least one stage higher (particularly helpful if that person can highlight the inconsistencies of the argument or alternative manner of thinking about the situation), and community
eligious involvement who enact desired behavior. Ultimately, Kohlberg argued it is not the behavior itself, the outcome, or the character of a person that determine morality of an act – it is the rationale behind. If a behavior committed successfully accomplishes one of his identified 6 stages, the behavior could be argued as moral.
Pre-conventional stage – people make decisions based on the consequence on an act – the concrete rewards and punishments, as well as their immediate self-interest. We tend to operate at this level in our childhood to teens
Conventional stage – people conform to the expectations of ethical behavior held by groups or institutions (e.g., society, family, friends). We tend to operate at this levels from our teens through adulthood
Post-conventional stage – people see beyond authority , laws, and norms and follow their self-chosen ethical principles – what is “right” is determined by universal values. People in this sage are less likely to cheat, more likely to be a whistleblower, and make ethical business decisions. Not all people reach this stage, those that do tend to reach it during middle adulthood.
Level I: Pre-conventional Level
Stage 1: Punishment & Obedience Orientation Stage 2: Individualism & Purpose
Level ll: Conventional Level
Stage 3: Interpersonal Norms Stage 4: Social System