Business Ethics 3e

• Khalidah Khalid Ali

• Zulkufly Ramly
• Lau Teck Chai

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CHAPTER
3
Ethical Theories and
Principles

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 Learning outcomes

❑ Explain the fundamentals of moral philosophy

❑ Differentiate between teleological and deontological theories of ethics
❑ Explain influential ethical theories and/or principles applied in today’s global era
❑ Discuss the important features of each ethical theory
❑ List and analyse the strengths and limitations of each theory, where appropriate
❑ Apply the ethical theories to make sound business decisions
❑ Comprehend Al-Ghazali’s ethical principles
❑ Discuss the concept of social justice from Islamic perspectives

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 Understanding the Fundamentals
of Moral Philosophy

There are five branches of

philosophy:

Ethics is also a branch of philosophy.

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Understanding the Fundamentals of Moral
Philosophy ( Cont.)

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 Understanding the Fundamentals of
Moral Philosophy (Cont.)

❑ Ethics may be divided into two branches: meta-ethics and

normative ethics.

❑ Meta-ethics is the study about where ethical concepts came from

and what they mean.

❑ It has two main forms: moral/ethical relativism and moral/ethical

objectivism.
– Moral relativism considers what is right or wrong is not
absolute. It is relative and variable depending on the person,
circumstances and social situation.
– Moral objectivism considers certain acts as objectively right or
wrong, independent of human opinion.

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 Understanding the Fundamentals of
Moral Philosophy (Cont.)

❑ Normative ethics is ‘a set of principles that guide or regulate human

conduct’ (Rahayu, 2012). It provides general guidelines for deciding what
is morally right or wrong.

❑ Moral philosophers have classified two types of ethical theories:

– Teleological theories: also referred to as consequential theories. This
theory holds that the rightness of actions is determined solely by the
amount of good consequences they produce.
– Deontological theories: also referred to as non-consequential theories.
It denies that consequences are relevant to determining what we ought
to do.

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 Utilitarian Theory of Ethics
(UTILITARIANISM)

❑ A prominent teleological theory of ethics. It is a

theory applied widely by economists in making
objective and rational economic decisions.

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 The Roots of Utilitarianism-
Bentham & Mills

❑ Jeremy Bentham (1748- 1832) and his pupil, John

Stuart Mill (1806- 1873) defined the principles of
utilitarianism - although maybe it was Adam Smith's
tutor, at Glasgow University (Professor Hutcheson)
who first coined the phrase "the greatest happiness
of the greatest number”.

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 Utilitarianism - What is it?

Utilitarianism – a theory to provide an answer to the

practical question;
what ought a man do?

Its answer is that he ought to act so as to produce the

best consequences possible – the common good -
utility.

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 Utilitarian Theory of Ethics

The utilitarian principles involves four distinct theses:

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 Forms of Utilitarianism

❑ Classical or Act Utilitarianism – Developed by Jeremy

Bentham (1748 -1832).

❑ Rule Utilitarianism – Developed by John Stuart Mill

( 1806 -1873)

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 Classical or Act Utilitarianism

❑ The principle that requires consequences to be measured in

some way so that the pleasure and pain of different
individuals can be added together and the results of different
courses of action compared.

❑ An action is right if and only if it produces the greatest

balance of pleasure over pain for everyone.

❑ In classical utilitarian, an action is judged to be right by virtue

of the consequences of performing that action. Pleasure is
taken to be ultimately the only good and evil is the opposite
of pleasure, or pain.

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 Rule Utilitarianism

❑ An action is right if and only if it conforms to a set of

rules the general acceptance of which will produce
the greatest balance of pleasure over pain for
everyone.

❑ This principle relates to the importance of complying

to rules while assessing the rightness of actions. It
seems to give firmer ground to the rules of morality
and role obligations.

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 Calculating Utility

❑ Classical Utilitarianism requires that we be able to determine

:

i) the amount of utility (i.e. the balance

between pleasure over pain) for each
individual affected by an action

ii) the amount of utility for the whole society.

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 Cost Benefit Analysis

❑ Bentham’s idea of precise quantitative method for decision

making.

❑ Choose the action that promises the greatest net benefit

(measured in dollars)!

❑ From economic point of view, cost - benefit analysis simply

means achieving an efficient allocation of resources.

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 Six Points about Utilitarianism

1. When deciding which action will produce the greatest

happiness, we must consider unhappiness or pain as well as
happiness.

2. Actions affect people to some degrees. However, we add up

the various pleasures and pains, and act on the action that
brings the greatest net happiness.

3. Because Utilitarians evaluate actions according to their

consequences, and actions produce different results in
different circumstances, almost everything might in principle,
be morally right in some particular circumstance. This is true
for Classical/ Act Utilitarianism.
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 Continue ……

4. Utilitarians wish to maximize happiness not simply

immediately but in the long run as well. All the direct
implications of an act has to be considered as well.

5. Utilitarians acknowledge that we often do not know with

certainty what the future consequences of our actions will be.
Accordingly, we must act so that the expected happiness is as
great as possible.

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 Continue….

6. When choosing among possible actions, utilitarianism does

not require us to disregard our own pleasure. Nor should we
give it added weight. Rather our own pleasure and pain enter
into calculus equally with the pleasures and pains of others.

We try to assess the good and bad consequences from our

actions before taking an action or decision.

The action must create more happiness / pleasure than

unhappiness/ pain.

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 Utilitarian Theory - Strengths

❑ It is in accordance with much of our moral reasoning and rational

thoughts.

❑ The fact that an action would provide some benefit or inflict (cause) some
harm is generally a morally relevant reason for or against performing it.

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 Utilitarian Theory – Strengths (
Cont.)

❑ Results - oriented. It provides a relatively precise and objective method for

moral decision making.

❑ Act Utilitarianism – simple and provides an easily understood decision

procedure. Assuming that the goodness of consequences can easily be
measured and compared, a teleological decision maker need only to
determine the possible causes of action and calculate the consequences of
each one.

❑ Rule- Utilitarianism gives a firmer ground to rules of morality and to role

obligations, which are problems to all teleological theories. It also
eliminates difficult task of calculating the consequences of each individual
act.
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 Utilitarian theory – Strengths
(Cont.)

❑ Utilitarian reasoning has also found favour among economists, who use
the assumption that individuals seek to maximize their utility or welfare to
explain and predict a wide range of economic phenomena, such as prices
and allocation of resources.
❑ Many of the micro-economic theories are utilitarian in nature.

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 Utilitarian theory - Weaknesses

❑ Because it is in accordance to moral reasoning, sometimes this leads to

ambiguity.

• How can we be objective in calculating utility? Happiness is a subjective

issue. How can we determine the amount of happiness and quality of
happiness?

• The theory does not give an account of the rights we have and what is just
and fair which an ethical theory is expected to give.

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 Kant’s Ethics of Duty Theory

❑ Immanuel Kant’s Ethics of Duty theory is a deontological theory which

insists that moral action requires conformity to moral principles. The
opening words of Kant’s work reads:
‘Nothing can possibly be conceived in the world which can be good
without qualification, except a Good Will.’

❑ According to Kant, it is not a matter of the individual weighing up

consequences. Human actions must be rationalised based on human
intelligence and will power.
‘An Action is morally right only if the actor is motivated by good will.’

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 Kant’s Ethics of Duty Theory

❑ Only an action done for rational principled reasons from a sense of duty
has moral worth, according to Kant.
❑ In other words, if our act is from a sincere obligation to perform a duty
towards others, our act has moral worth.
❑ Kant believed that reasons alone can give us the absolute moral truth and
discover our sense of duty.
❑ He championed two categorical imperatives, the basis of his moral
principle.

– 1st Categorical Imperative

– 2nd Categorical Imperative

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 Kant’s Ethics of Duty Theory

Act only according to that maxim by which you can

1st Categorical at the same time will that it should become a
Imperative
universal law

❑ This imperative reinforces that our moral actions should not be guided by
our own inclinations, but guided by a sense of duty to the universal law.
One’s absolute moral truth must be logically consistent, free from internal
contradiction.
❑ It requires us to put ourselves in the place of the receiving party before
acting.
❑ For example, Robin Hood’s act of stealing from the rich, giving to the poor
is wrong because stealing is a universally accepted a wrong act.

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 Kant’s First Categorical
Imperative….more elaborations..

❑ One’s absolute moral truth must be logically consistent, free from internal
contradiction.

❑ These are the two principles of universalizability and reversibility.

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 Kant’s Ethics of Duty Theory

Act so that you treat humanity, whether in

2nd Categorical
Imperative
your own person or in that of another, always
as an end and never as a means only.

❑ With this imperative, an action is morally right for a person if and only if in
performing the action, the person does not use others merely as a means for
advancing his or her interests, but at the same time respects their capacity to
choose freely what they want.
❑ According to Kant, people, unlike things or objects, humans must never to
be merely used.
❑ For example, employees may be hired for their labour, skills, knowledge
and abilities, but must always be treated with respect as humans.

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 Applying Kant’s Ethics in business
and organisational contexts

❑ Categorical imperative gives us firm rules to follow in moral

decision making. No matter what the consequences may be or who
does it, some actions are always wrong e.g. lying, cheating, greed
etc.

❑ Stress on importance of humanistic dimension, not using / treat

others (humans) as a means to an end but as an end themselves.

❑ Importance of motivation and acting on principles - sense of duty

rather than self - interest.

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 Critiques on Kant’s Theory

❑ What exactly has moral worth? Because if an act is based on

self interest has no moral worth - many moral theorist feel
that Kant is too severe on this point.

❑ Is the categorical imperative an adequate test of rightness?

Kant said moral rules are without exception.

❑ What does it mean to treat people as means? It is not clear

WHEN people are really being treated as ends and merely as
means. Because at times we freely choose to do it!

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 Despite the critiques ...

Kant’s ethics yield two important results that are strengths to his theory;

1. The principles of universalizability

and respect for persons
Universalizalibility - As a matter of logic, must be consistent in our
judgements. No double standards

2. Kantianism also provides strong foundation for rights.

- Individual human rights must be
acknowledged and inviolable.

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 Aristotle and Virtues

❑ Aristotle’s theory focuses on virtues of humans.

❑ Aristotle defines a virtue as “an activity of the soul”, implying

a rational principle.

❑ Underlying the definition of a virtue is a very specific view of

human nature. Aristotle distinguished two dimensions of
humans: the rational and the irrational dimension.

❑ The rational dimension should be dominant.

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 Aristotle and Virtues (cont.)

❑ Aristotle’s Virtue Ethics theory begins with a basic assumption that

morality is both necessary and vital for human beings. It is impossible to
live with human dignity without being a developed moral being.

❑ Morality is not a luxury that one can choose to have or not to have. It is
a pre-condition for a life with human dignity (Quoted from Abdullah and
Mohamad Zainol Abidin, 2011).

❑ According to Aristotle, people who compromise morality are degrading

themselves and they have missed their goal in life. Aristotle strongly
believes that ethics enable mankind to lead successful rewarding lives – a
good life.

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 Aristotle’s Virtue Ethics Theory

❑ Aristotle’s theory focuses on the virtues of humans.

❑ It begins with the basic assumption that morality is both necessary and
vital for human beings.
‘It is impossible to live with human dignity without being a developed moral
being. Morality is not a luxury that one can choose to have or not to have. It is
a pre-condition for a life with human dignity.’
(Abdullah and Mohamad Zainol Abidin, 2011)

❑ The theory recognises the need for one to emulate virtues such as honesty,
courage, self-control and respect.
❑ People who compromise morality are degrading themselves.

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 More elaborations of Virtue Ethics….

❑ Aristotle’s theory throws back at each individual a fundamental

question “what kind of person we should be?

❑ The individual himself must reason this out based on intelligence.

❑ Aristotle believes that everything in life has a specific goal or telos

in Greek. It may also perhaps be referred as “objective or
purpose”.

❑ In order to live as a human with dignity, one should strive to

achieve the telos for a rewarding life.

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 Aristotle’s Theory of Virtue
Ethics

❑ Asks: what kind of person we should be?

❑ According to Aristotle, ethics enable us to lead successful rewarding lives

- good life.

❑ Virtue is a character trait that manifests itself in habitual action. E.g.

honesty cannot consist in telling the truth once; it is rather a trait of a
person who tells the truth as a general practice.

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 Moral virtues…

❑ According to Aristotle, moral virtues are habits that enable a person to live
according to reason.

❑ When a person knows and chooses a reasonable middle ground between

going too far enough his actions, emotions and desires, “ moral virtue ….
is a mean between two vices, one of excess and the other of deficiency and
….. it aims at hitting a mean in feeling (desires) and actions.

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 Moral virtues (cont.)

❑ Therefore, virtues are the "mean", or midway point, between two

extremes. Aristotle called it the Golden Mean.

❑ For example, with respect to the emotion of fear, courage is the virtue of
responding to fear with a reasonable amount of daring, whereas being
coward is a vice of not being daring enough in response to fear, and
recklessness is the vice for being too daring in response to fear.

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 How does one determine what is
reasonable?

❑ According to Aristotle, prudence is the virtue that

enables one to know what is reasonable in a given
situation.
Prudence – being careful and sensible.

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 Aristotle’s definition of a virtuous
person

❑ He is the man who has taken rational control of his

life, cultivated his natural dispositions into moral
virtues, and has always throughout his lifetime found
happiness/pleasure/satisfaction in his actions based
on these developed virtues.

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 Virtues that are universally accepted

❑ Honesty, sincerity, reliable, trustworthy, dependable,

patience, prudence, benevolence (kind and helpful),
compassion, courage, courtesy, friendliness, moderation, self
control, toleration.

❑ Aristotle also included pride as well as shame as virtues.

We should be proud of our accomplishments ( not arrogant)
and shame of our failures.

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 How to lead rewarding life?

❑ According to Aristotle, in order to achieve a rewarding life,

firstly, one has to live in a society which promotes justice.

❑ It is the responsibility of politicians and social scientists to

develop a just society and ensure social order to attain
eudaimonia, a Greek word to signify ultimate happiness or
overall well being.

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 Aristotle’s Virtue Ethics Theory

❑ According to Aristotle, in order to achieve a rewarding life:

– Firstly, one has to live in a just society.

– Secondly, individuals must engage themselves with good friends to
support them.
– Thirdly, individuals need material and physical provisions.
– Finally, they need to develop and cultivate their potential.
❑ The first three conditions are external factors.
❑ This theory focuses on the last internal factor, where he or she is
accountable for his/her development.

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 Applying Virtue Ethics in business ...

❑ Virtue ethics could be applied to business directly by holding that the

virtues of a good businessperson are the same as those of a good person.
❑ Business is a part of life … why not apply good virtues of living in it?
However, businesspeople need to engage themselves in business-related
character traits. E.g. caring, a good business manager must care for their
employees and customer but only to certain extent since he has to make
decisions from various dimensions /levels: i.e. individual, organizational
and business systems .
❑ Actions must appear to be fair and just . Also reflect a sense of respect
for others.

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 Al-Ghazali’S Principles of Ethics

❑ Imam Al Ghazali has linked ethics with religion and defined it as akhlaq. Akhlaq
broadly subsumes all virtuous actions (amal salih). Al- Ghazali further advocates
that action or behaviour can be analysed from four levels;
i. those directed toward God
ii. fellow human beings
iii. other members of creation
iv. one’s individual self

❖ Comparing Aristotle’s Virtue Ethics theory with AlGhazali’s ethical principles,

Aristotle’s theory does not link with any religion, whereas AlGhazali’s principles
are directly linked with Islam. He has deeply explored the Islamic concepts of
akhlaq (ethics) and adab (manners).

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ETHICS OF CARE THEORY
( Topic 3)

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 Ethics of Care Theory

❑ In all the ethical theories that we have learnt so far, it is assumed that we
should be impartial to make ethical decisions.

❑ Consequently, we should set aside any special relationships that we have

with particular individuals, relatives, friends etc in determining what we
should do.

❑ Contrary to these theories is Ethics of Care, developed by feminist

ethicists (a new approach to moral development, worked out by
psychologist Carol Gilligan), which requires us to be partial in resolving
ethical issues.

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 Ethics of Care

❑ An ethic that emphasises caring for the concrete well-being of those near
to us.

❑ Preserving and nurturing concrete valuable relationships.

❑ We should care for those dependent and related to us.

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 Arguments to Support an Ethic of
Care

1. The identity of oneself ( i.e. who I am) is based on

relationships with other people.
2. The individual cannot exist, in isolation from caring relationships with
others.
3. To start with, we were born and cared by our parents; we were taught by
our teachers in schools.
4. We live in a community sharing the same language, tradition, culture and
other benefits that defines our needs.
5. It is also these concrete relationships that make us understand our own
self.
6. The value of oneself is ultimately derived from the value of the
community.

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 Ethics of Care

❑ Ethics of care classifies three forms of caring:

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 Three different forms of caring….. An
elaboration

❖ Caring about something – the kind of concern and interest that one can have for things or
ideas where there is no second person in whose subjective reality one becomes engrossed.
E.g. the “care” seen in bureaucratic service institutions, social and welfare departments, etc.
Though they “care” for the needs of the people concerned, the “care” remains “objective”
and “distant”.
Caring after people in this way is however not considered as
“caring” from the ethics of care perspective.

❖ Caring after someone – caring for someone who requires our support due to
some limitations that the person is experiencing.

❖ The kind of caring demanded by ethic of care is “ caring for someone.”

for e.g. caring that a mother shows to her child – i.e. for general well being and nurture the
development of the person.
Not to develop/foster dependence.

❖ The “caring” is not “detached” but “engrossed” in the person and attempts to see the world
through the eyes and values of the person.

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Caring for Someone

❑ The kind of caring demanded by

ethic of care is “ caring for
someone.” for e.g. caring that a
mother shows to her child – i.e.
for general well being and nurture
the development of the person.
Not to develop/foster dependence.

❑ The “caring” is not “detached” but

“engrossed” in the person and
attempts to see the world through
the eyes and values of the person.

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 More elaboration on Ethics of Care
Theory….

❑ the values that manifests “caring” are compassion, concern,

love, friendship and kindness.

❑ Thus, the theory emphasizes on two moral demands:

1) We exist in a web of relationships and we should preserve and nurture

those concrete and valuable relationships.

2) Each one of us must exercise special care for those with whom we are
concretely related by attending to their needs, values, desires and
concrete well-being.

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 Two Moral Issues Related to
Ethics of Care

1. Not all relationships have value, and not all would generate the duties of
care.
The following relationships lack the value that an ethic of care requires:
- Relationships in which one person attempts to dominate,
oppress, or harm another.
- Relationships characterised by hatred, violence, disrespect and
viciousness.
- Relationships characterised by injustice, exploitation and harm
to others.
Therefore, we are not obliged to maintain or nurture these relationships.
❑ However, a relationship that exhibits the virtues of compassion, love, concern,
friendship and loyalty should be maintained and nurtured.

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 Two important issues to note:

2. It is important to recognise that the demands of caring are sometimes in

conflict with the demands of justice.
E.g. Amy is the HRM Manager of ABC Sdn. Bhd. By offering a job to her
relative out of being caring, it may be in conflict with demands of justice
i.e. by offering to someone else who is better qualified than her relative.

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 Criticisms on Ethics of Care

1. Ethics of Care can generate into unjust favouritism.

2. Its demands can lead to “ burn-out”. An ethic of care seems to

demand that people sacrifice their own needs and desires to
care for the well being of others.

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Advantage of the Ethics of Care

❑ It forces us to focus on the moral

value of being partial toward those
concrete persons with whom we
have special and valuable
relationships and the moral
importance of responding to such
persons as particular individuals with
characteristics that demand a
response to them that we do not
extend to others.

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 Theory of Rights

❑ Any ethical theory must also give an account of the rights we have and
also of what is just or fair.
(Boatright JR, 2007)

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 Rights

❑ Rights play an important role in business ethics, as well as in all moral

issues.

❑ Employers, employees, consumers, general public, human, non-human

each have our own rights.

❑ United Nations Universal Declaration of Human Rights in 1948 which set

forth basic human rights for all people.

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 Continue ...

❑ Rights can be understood as

ENTITLEMENTS to something!

❑ To have rights is to be entitled to act on our own or

to be treated by others in certain ways without asking
permission of anyone or being dependent on other
people’s goodwill.

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Theory of Rights in Summary..

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 1. Legal and Moral rights

❑ Legal - recognised and enforced as part of legal system.

❑ Moral – rights that we ought to have out of general ethical

rules and principles. Do not depend on the existence of legal
system.

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 2. Specific and General rights

❑ Specific - involve identifiable individuals or parties e.g. in contracts. It

creates mutual rights or duties for these individuals or parties.

❑ General - involves claims against everyone, or humanity in general. E.g.

Freedom of speech. Enforcement of this right rests with the whole
community.

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 3. Negative and Positive rights

❑ Negative - correlated with obligations on the part of others to refrain from acting in
ways that interfere with our own freedom of action.

❑ It relates to the right of human beings to be free from outside interference. i.e. right
to property, choice of religion, freedom from injury and privacy.

❑ Positive - impose obligations on other people to provide us with some good or

service and thereby to act positively on our behalf.

❑ It reflects the vital interests that human beings have in receiving certain benefits.
E.g. adequate health care, provision of child education., the right to a decent
standard of living as proclaimed by the United Nation’s 1948 Human Rights
Charter.

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 Natural or Human Rights

❑ A sub-set of moral rights is natural rights. Natural rights are rights that
belong to all persons, being human.
❑ The United Nation’s Universal Declaration of Human Rights in 1948 set
forth basic human rights for all people. This declaration covers natural
rights. It is also called human rights.
❑ These are rights that belong to all persons purely by virtue of being
humans, irrespective of race, gender, nationality and other differences.

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 Natural or Human Rights

❑ Two main features of human rights are:

Universality i.e. rights that are possessed by everyone.
Unconditionally i.e. rights that do not depend on any particular
practice or institutions in society.

❑ Examples of human rights are:

– The right to be treated with fairness
– The right for freedom of speech
– The right to choose one’s way of life, religion, etc.

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 Natural Rights

❑ The idea of natural rights – long been debated in history going back to the
ancient Greeks, who held that there is a “higher” law that applies to all
persons everywhere and serves as a standard for evaluating the laws of the
states.

❑ Both Roman law and the medieval church adopted this idea and developed
it into a comprehensive legal theory.

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 Natural Rights Theory

❑ The most influential natural rights theory – presented by John Locke

(1633-1704) in his famous Second Treatise of Government(1690).

❑ Locke began with the supposition of a state of nature, which is the

condition of human beings in the absence of any government.

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 Locke’s Natural Rights Theory

❑ Presented by John Locke (1633–1704), it stated that human beings have

rights, even in the state of nature, and the justification for uniting into a
state is to protect these rights.
❑ This means a society or nation forms a government as a representative of
all members to protect their individual natural rights as human beings.
❑ The most important natural right for Locke is the right to property.
❑ Although the bounty of the earth is provided by God for the benefit of all,
no one can make use of it without taking some portion as one’s own. This
is done by means of labour, which is a form of property.

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 John Locke’s Theory… (cont.)

“ Every man has property in his own person, so [t] he labour of

his body and the work of his hands…… are properly his.”

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 Human Rights and Islam

❑ The conception of human rights in Islam have to emanate from its own creed,
its own world view, which is founded on the principles of Tawhid or unity of
God the Almighty, Khalifah or vicegerency and al-`adl or justice.

❑ Consequently, human rights in Islam embody his entire needs as an

individual as well as a member of a society or more generally of the human
race.

❑ The complete guarantee of all his needs become essential for the performance
of his duty as the trustee or vicegerent of God on this blessed earth.

❑ This being the objective of human rights in Islam calls for the fulfilment of
the following:

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 Human Rights and Islam

❑ Dignity of Man as Allah’s best creations,

❑ Equality as a fundamental principle,
❑ Unity of the human race,
❑ Religious freedom,
❑ The right of ownership,
❑ The right of individual privacy,
❑ The right to an honourable life,
❑ Freedom of expression and information,
❑ The right to education,
❑ Political right

Reference: retrieved online on 20 Sept, 2022 from

[Link]

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 Rights of individuals under the free market
system

❑ To own private property.

❑ To own a business and to keep all its profits after taxes.
❑ Freedom to compete in wealth accumulation and consumption of goods
and services.
❑ Freedom of choice based on the ability to pay.

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 Justice

❑ An important moral concept with a wide range of

applications.

❑ The concept is used to evaluate not only the actions

of individuals but the society as a whole.

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 What is Justice?

❑ Justice is fairness. It has been used interchangeably

although for serious cases, we always use the term
“justice”.
- The good ones must be recognised and rewarded.
- The bad ones must be punished.

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 Justice is a social process

1. The quality of being morally just or righteousness, fairness and

equity in just conduct and dealing with others. Self - interest is
balanced with altruistic (i.e. concern for needs and feelings of
others above one’s own ) regard, respecting rights of others.

2. Maintenance of ‘right’ via an exercise of authority or power so

that the right can be vindicated (i.e. clear of blame or suspicion)
with distribution of equitable reward / punishment.

3. The process constraints action - by rules, processes and

procedures as well as it defines duties - imperatives to act.

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 Justice and Business Ethics

❖ The concept of justice is relevant to business ethics primarily in the

distribution of benefits and burdens (costs).

❖ A moral right to be treated as a free and equal person; also benefits

and burdens should be distributed equally.

❖ Justice is also an important concept in evaluating various forms of social

organisation, we can also ask about the justice of the economic system in
which business activity takes place.

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 Aristotle and Justice

❑ In Book V Nicomarchean Ethics, Aristotle divided Justice into two:

1) Universal justice - a just or morally upright person is one who always

does what is morally right and obeys law.

2) Particular justice - concerned with virtue in specific situations, consists

of taking only a proper share of some good.

- An unjust person is thus a grasping person who takes too much wealth,
honour or other benefit that society offers , or a shirker who refuses to
bear a fair share of some burden. ( Boatright, 4th Ed, page 74).

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 Forms of Justice according to
Aristotle

1) Procedural (Universal) Justice - in administering justice, fair,

impartial rules and procedures should be applied.

2) Particular Justice
2.1 Corrective or compensatory - a matter of compensating
persons for wrongs done to them.

2.2 Retributive - the extent of punishment should fit the

offence.

2.3 Distributive - deals with distribution of benefits and burden.

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 Justice, Competitiveness and The
Market System

In a competitive society where members compete to pursue self-interest

with some self-referential altruism , problems of distributive justice
obviously arise especially the issue of inequality of distribution (e.g.
wealth , power, income, etc).

Aristotle’s principles, however, contains much value that lies in its

insistence that different treatment be justified by citing relevant
differences and that difference in treatment be in proportion to these
differences.

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 John Rawls - Theory of Justice or
Egalitarian Theory

❑ Rawl’s theory is related to distributive justice – the distribution of

societie’s benefits and burdens while applying the free market system.

❑ Assumption of the theory – conflicts should be settled by devising a fair

method of choosing the principles by which conflicts are resolved. E.g. by
having a contract between parties involved in the business.

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 The Egalitarian Theory

John Rawls uses the notion of contract - (which assumes that if individuals
in some hypothetical pre-contract situation would unanimously accept
certain terms governing their relations, then those terms are just and all
people have an obligation to abide to them) and formulates an original
position - (a distinct feature of this is ‘veil of ignorance’ whereby the
individuals who are asked to agree on the principles of justice must do so
without knowing many facts about themselves and the situation) to
overcome indeterminacies in defining concepts of justice.

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 The Egalitarian Theory

❑ Rawls proposes TWO basic principles to be applied to select a fair or just

method of making choices/decisions to resolve social conflicts:

1. Principle 1- Principle of Equal Liberty

2. Principle 2 – divided into two parts:

a) Difference Principle
b) Principle of Fair Equality of Opportunity

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 Rawls’s First Principle of Justice:

Equal Liberty Principle - Each person is to have an equal right

to most extensive total system of basic liberties (i.e. freedom)
compatible with a similar system of liberty for all.
- Everyone has basic rights. Equal share of whatever goods are
available is the most that any person may reasonably expect,
given the requirement of unanimous agreement.

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 Rawls’s Second Principle of Justice

Social and economic inequalities are to be arranged so that they are

both:
a) to the greatest benefit of the least advantaged;
(this is Difference Principle)

b) attached to the offices and positions open to all under

conditions of fair equality of opportunity.
( this is Principle of Fair Equality of Opportunity)

However, there are conditions under which rational, self-interest

persons would make exception to the first principle and accept less
than an equal share of some primary goods.

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 Further elaborations on the 2
Principles of Rawls’s Theory

1. Principle of Equal Liberty – the claim that each citizen’s liberties must be
protected from invasion by others and must be equal to those of others.

2 a) Difference Principle - The claim that a productive society will

incorporate inequalities, but takes steps to improve the position of the
most needy members of the society.

b) Principle of Fair Equality of Opportunity – The claim that everyone

should be given an equal opportunity to qualify for the more privileged
positions in society’s institutions.

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 Purposes of theories

❑ Aristotle’s and Rawl’s theories are primarily to

provide a means for evaluating existing and proposed
institutional arrangements.

❑ Insofar as the market system promotes utility and

protects rights, it is doubly- justified.

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 Social Justice from Islamic
Perspective

❑ From Islamic viewpoints, social justice means giving each individual what
he/she deserves, the distribution of financial benefits in the society and
equal provision for basic needs (Chaudhry, 2003).
❑ It is also the egalitarianism in opportunities, i.e., each person has a chance
to climb the social ladder.
❑ Sayyid Qutb, in Social Justice in Islam (2005), identified three basic
elements of social justice from Islamic perspectives; (i) absolute freedom
of conscience; (ii) the complete equality of all men; (iii) the social
interdependence among members of society (Khalidah, 2019).

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