Ethics Final

Ethical Frameworks

• Utilitarianism

• Kantianism

• Justice & Fairness

• Rights

• Virtue Ethics

Utilitarianism

which option produces the best total outcome? making decisions based on consequences, choosing an action that generates the greatest amount of good for the greatest number of people

Utilitariansim Challenges

hard to quantify satisfaction, limited knowledge, hard to predict outcomes, ignores rights/justice

Kantianism

could i will this as a universal rule + am I respecting autonomy? making decisions based on rules and duties as opposed to consequences, human beings are rational, respect autonomy, first and second formulations

Kantianism - First Formulation

universalbility vs reversibility, what if everyone did that vs acts how you want to be treated

Kantianism - Second Formulation

humanity / treating as ends not means, am I using a person to better myself or respecting their autonomy?

Kantianism Challenges

sets a very high standard that may be difficult to follow, duty above everything (happiness, well being)

Justice & Fairness

is the distribution/process fair? making decisions based on comparative treatment to members of a group, benefits/burdens are equally distributed

Justice & Fairness Challenges

conflicting duties, limited scope, strictly following rules can skew decision making

Rights

does this violate anyone’s rights? making decisions baed on fundamental rights (human/legal) as constraints on what we’re allowed to do, even if violating them would increase total welfare

Rights Challenges

different rights can conflict, hard to agree on all ethics based rights

Virtue Ethics

what does this choice say about my character and what habits it builds? making decisions based on core virtues, i.e., who that person is compared to what they should do, focuses on habit/character over time

Types of Virtues

honesty, courage, fairness, integrity, compassion, responsibility, prudence

Virtue Ethics Challenges

how to make sense of good people doing bad things, what to do when virtues conflict, lack of agreement on universal virtues/guidelines

Five Business Myths (Trevino & Brown)

1. Myth #1 - It’s easy to be ethical

2. Myth #2 - unethical behaviour in business is simply the result of bad apples

3. Myth #3 - ethics can be managed through formal ethics codes and programs

4. Myth #4 - ethical leadership is mostly about leader integrity

5. Myth #5 - People are less ethical than they used to be

Myth #1 - It’s Easy to be Ethical

ethical decision making is a complex multi-stage process, decision makers may not recognize that they are facing an ethical issue, process: moral awareness, judgement, motivation, character

Myth #2 - Unethical Behaviour in Business is Simply the Result of Bad Apples

ethical/unethical behaviour is influenced by individual characteristics and contextual factors, culture is an important contextual factor, corrupt sub units + social cocoons exist

Myth #3 - Ethics can be Managed through Formal Ethics Codes and Programs

corporate culture (sets expectations and norms) vs ethical cultures (employees understanding of the culture in relation to ethics)

Myth #4 - Ethical Leadership is mostly about Leader Integrity

distinguishing between the effective leader and the ethical effective leader, ethical leadership embodies utilitarianism (greater good) and deontological frameworks (how they do so)

Consequences of Organizational Dishonesty - Cialdini

1. Malignancy #1 - reputation degradation

2. Malignancy #2 - mis(matches) between values of employee and organization

3. Malignancy #3 - increased surveillance

Characteristics of Ethical Business Cultures

• long-term perspective: long term stakeholder goals over short term

• stakeholder balance: involve all stakeholders in decisions

• leadership effectiveness: leaders at every level demand and role model ethical conduct

• process integrity: mission/values are integrated into the organization

Shareholder Theory Author

Milton Friedman

Stakeholder Theory Author

Ed Freeman

Shareholder Theory

the social responsibility of business is to pursue max profit while engaging in open and free competition within the law and without deception or fraud, businesses cannot have responsibilities, people do (duty to the people who own the business), managers of a publicity traded company are agent of principal (shareholder), the shareholders want maximum profit

Stakeholder Theory

focus on value creation, away from profits, stakeholders interests are joint, the primary responsibility of the executive is to create as much value as possible for stakeholders (more common today)