Chapter 3
Philosophical Ethics and Business
Introduction: Ethical Frameworks—Consequences,
Principles, Character
The reasons to defend or criticize any ethical
issue fall into three general categories:
1. Consequences
2. Principles
3. Personal Character
Introduction: Ethical Frameworks—Consequences,
Principles, Character
Three ethical frameworks of business ethics:
1. Utilitarianism
2. Principle- based framework
3. Virtue ethics
Introduction: Ethical Frameworks—Consequences,
Principles, Character
Utilitarianism: An ethical theory that tells us
that we can determine the ethical significance of
any action by looking to the consequences of
that act.
Introduction: Ethical Frameworks—Consequences,
Principles, Character
Utilitarianism is identified with two policies:
• Maximizing the overall good
• Producing the greatest good for the greatest
number
Introduction: Ethical Frameworks—Consequences,
Principles, Character
Principle- based framework: directs us to act on
the basis of moral principles such as:
• Respecting human rights
• Justice
• Liberty
• Autonomy
• Fairness
Introduction: Ethical Frameworks—Consequences,
Principles, Character
• Virtue ethics: tells us to consider the moral
character of individuals and how various
character traits can contribute to, or obstruct,
a happy and meaningful human life.
• The virtues provide answers to the basic
ethical question “What kind of person should I
be?”
Utilitarianism: Making Decisions Based on
Ethical Consequences
Utilitarianism’s fundamental insight is that
outcomes matter, and so we should decide what
to do by considering the overall consequences of
our actions.
Utilitarianism: Making Decisions Based on
Ethical Consequences
Utilitarianism has been called consequentialist
approach to ethics and social policy: We should
act in ways that produce better consequences
than the alternatives we are considering.
Utilitarianism: Making Decisions Based on
Ethical Consequences
“Better consequences” are those that promote
human well-being:
– Happiness
– Health
– Dignity
– Integrity
– Freedom
– Respect of all the people affected
Utilitarianism: Making Decisions Based on
Ethical Consequences
A decision that promotes the greatest amount
of these values for the greatest number of
people is the most reasonable decision from an
ethical point of view.
Utilitarianism: Making Decisions Based on
Ethical Consequences
1 . 1)
Utilitarianism is commonly identified with the
rule of producing “the greatest good for the
Leir consequences for the
greatest number.” (judges actions by
general and overall good)
* it is identified with two
policies :
1) maximizing the overall good for a great amount of people .
number.
2) producing the greatest good for the greated
Utilitarianism: Making Decisions Based on
Ethical Consequences
• Egoism is also a consequentialist theory, but it
focuses exclusively on the happiness of the
individual making the decision.
• Instead of determining the “greatest good for
the greatest number,” egoism seeks “the
greatest good for me!”
from self-interest .
* it holds
that all people out
only
Utilitarianism and Business
reading/achieving
What is the best mean for attaining the
utilitarian goal of maximizing the overall good?
81. Free and competitive markets are the best
means for attaining utilitarian goals.
z
2. Determine which public policy will maximize the
overall good.
Utilitarianism and Business
(
Free and competitive markets are the best means for
attaining utilitarian goals. to sell something both sides benefit. no
exchanges where people crosse freely buy or ,
one is forced
• Voluntary transactions make people better off,
.
and so a system of such transactions—a free
market—is going to maximize benefit overall.
explanation :
( Free and competitive markets achieve the most overall
Utilitarianism and Business
This version of utilitarianism would promote
policies that:
– Deregulate private industry
– Protect property rights
– Allow for free exchanges
– Encourage competition
Utilitarianism and Business
Determine which public policy will maximize the
overall good.
• The legislative body (from Congress to local
city councils) establishes the public goals that
they believe will maximize overall happiness.
• The administrative side (presidents,
governors, mayors) executes (administers)
policies to fulfill these goals.
Challenges to Utilitarian Ethics
General challenges to utilitarianism
The need for utilitarian reasoning to:
– Count consequences
– Measure consequences
– Compare consequences
– Quantify consequences
Challenges to Utilitarian Ethics
For Utilitarians the end justifies the means. But
this seems to deny one of the earliest ethical
principles: the end does not always justify the
means.
Challenges to Utilitarian Ethics
• Utilitarianism seems willing to sacrifice the
good of some individuals for the greater
overall good.
• For example, If it turns out that slavery and
child labor increase the net overall happiness,
utilitarianism would have to support these
practices.
An Ethics of Principles and Rights
Consideration of the consequences of the
available options certainly should be part of
responsible ethical decision making. But some
decisions should be a matter of principle, not
consequences.
An Ethics of Principles and Rights
• How do we know what principles we should
follow and how do we decide when a principle
should outweigh our desire to produce
beneficial consequences?
• Principle-based ethical frameworks work out
the details of such questions.
An Ethics of Principles and Rights
• We should make some ethical decisions as a
matter of principle rather than consequences.
An Ethics of Principles and Rights
• Ethical principles can be thought of as a type
of rule, and this approach to ethics tells us
that there are some rules that we ought to
follow even if doing so prevents good
consequences from happening or even if it
results in some bad consequences.
An Ethics of Principles and Rights
• Principles are ethical rules that put values into
action.
• Principles (e.g., “obey the law,” “keep your
promises,”) create ethical duties that bind us
to act or decide in certain ways.
An Ethics of Principles and Rights
• Duties: Are obligations that one is bound to
perform, regardless of consequences.
• Duties might be derived from:
– Basic ethical principles
– The law
– From one’s institutional or professional role
An Ethics of Principles and Rights
• What principles or rules should guide our
decisions?
– Legal rules
– Organizational rules
– Role-based rules
– Professional rules
An Ethics of Principles and Rights
• Legal rules are one major set of rules that we
ought to follow.
• Example: We have a duty to pay our taxes,
even if we think the money might be more
efficiently spent on our children’s college
education.
An Ethics of Principles and Rights
• Other rules are derived from various
institutions in which we participate.
• Example: As a teacher, I ought to read each
student’s assignment carefully even if they will
never know the difference and their final
grade will not be affected.
An Ethics of Principles and Rights
Role-based duties
• Example: As an employee, one takes on a
certain role that creates duties. Every business
will have a set of rules that employees are
expected to follow.
An Ethics of Principles and Rights
Professional rules
• Example: While examining Enron’s financial reports,
the auditors at Arthur Andersen knew that diligent
application of strict auditing standards required one
particular decision, but also that the consequences of
this diligent application would be harmful to Arthur
Andersen’s business interests.
• Andersen’s auditors failed their ethical duties precisely
because they did not follow the rules governing their
professional responsibilities and allowed beneficial
consequences to override their professional principles.
An Ethics of Principles and Rights
• Ethical duties should be categorical
imperatives rather than hypothetical.
• Categorical imperative: act so as the maxim
implicit in your acts could be willed to be a
universal law; treat persons as ends and never
as means only treat others as subjects, not
objects.
Human Rights and Duties
Every human being possesses a fundamental
human right to be treated with respect, and that
this right creates duties on the part of every
human to respect the rights of others.
Human Rights and Duties
Humans are said to have a fundamental human
right of autonomy , or “self-rule.”
Human Rights and Social Justice
• If autonomy, or self-rule, is a fundamental
characteristic of human nature, then the
liberty to make our own choices deserves
special protection as a basic right.
• Equal treatment and equal consideration must
also be fundamental rights.
Human Rights and Social Justice
Liberty and equality are also the core elements
of most modern conceptions of social justice.
Human Rights and Legal Rights
• Human rights: The moral rights that
individuals have simply in virtue of being a
human being.
• Legal rights: They are established by the legal
system and are part of the price of doing
business.
Human Rights and Legal Rights
Human rights lie outside of the bargaining that
occurs between employers and employees.
Virtue Ethics: Making Decisions Based on
Integrity and Character
Virtues: Are character traits that would constitute
parts of a good and meaningful human life. These
include:
– Being Friendly And Cheerful
– Having Integrity
– Being Honest
– Forthright
– Truthful
– Having Modest Wants
– Being Tolerant