Ethics in Business: Key Concepts and Theories

A collection of flashcards summarizing key concepts from a lecture on ethics in business, preparing students for understanding various ethical theories, principles, and applications.

Morality

Beliefs about what is right and wrong.

Ethical Theory

A system that evaluates and organizes beliefs about morality.

Behavioral Business Ethics

Combines psychology and management studies to understand ethical behavior in business.

Prudence

What benefits you, distinct from what is morally right or just.

Example of Aligned Morality and Prudence

BB&T avoided unethical practices and succeeded.

Conflicts Between Prudence and Morality

Examples include pollution, false advertising, and forced labor.

Law vs. Morality

Not the same; some laws can be immoral and vice versa.

Example of Legal but Immoral Law

Gender-based laws in Saudi Arabia.

Example of Illegal but Moral Action

Companies may lose asbestos lawsuits without acting immorally.

Conscience

Relying on personal beliefs about right and wrong, varying by culture.

Descriptive Ethics

Studies how people actually behave morally.

Conceptual (Meta-ethics)

Focuses on the meaning of moral terms like 'just' or 'good'.

Normative Ethics

Asks what we ought to do and how we should act.

Deontology

An ethical system based on duty (associated with Kant).

Utilitarianism

An ethical system focused on the outcomes of actions (associated with Mill).

Cultural Relativism

Claims morality depends on cultural beliefs.

Franz Boas

Associated with the idea of cultural relativism.

Moral Relativism Example

Abortion may be considered moral in Sweden but immoral in Mexico.

Support for Moral Relativism

To avoid privileging one culture’s values over another.

Criticism of Relativism

‘Don’t impose values’ assumes an objective moral rule.

David Hume's View on Morality

Doubted that moral truths can ever be fully objective.

Cultural Differences in Moral Practices

Caused by different factual beliefs or applications of shared principles.

Relativism of Judgments vs. Standards

Judgments - same values, different applications; Standards - different systems.

Moral Disagreement and Objectivity

Disagreement does not prove there’s no objective truth.

Plato’s Problem with Moral Concepts

Real-world examples differ, making definitions unreliable.

Plato's Solution

Existence of perfect, unchanging Forms in another realm.

Knowledge of the Forms

Humans have a dim recollection of them from before birth.

Plato’s Cave Analogy

Most people see only shadows; true knowledge is knowledge of the Forms.

Modern Platonism

Reflected in Mathematics, belief in perfect, abstract entities.

G.E. Moore

Philosopher whose intuitionism was similar to Plato's ideas.

David Hume's Rejection of Moral Objectivity

Completely rejected the notion of moral objectivity.

Comparison of Moral and Aesthetic Judgment

Both based on feelings; pleasurable actions receive approval.

‘Reason is the Slave of the Passions’

Emotion and desire, not reason, motivate actions.

Source of Morality According to Hume

Stems from our emotions, especially sympathy.

Concept of Sympathy in Hume's Ethics

Feeling others’ emotions naturally.

Hume's Explanation of Justice

Justice is useful for maintaining social order.

Hume and Utilitarianism

His view of justice resembles utilitarianism based on usefulness.

Immanuel Kant's Rejection

Believed ethics should be rational, universal, and objective.

Psychological Egoism

Claims people act always in their own self-interest.

Explanation of Altruism by Psychological Egoists

Selfless acts are motivated by personal satisfaction.

Problem with Psychological Egoism

It can explain any behavior, making it unfalsifiable.

Ethical Egoism

States people ought to act in their own self-interest.

Hobbes’ View on Life Without Rules

Described as 'nasty, brutish, and short' without government.

Free Rider Problem

Benefiting from others’ cooperation without contributing.

Adam Smith’s Invisible Hand

Self-interest in a free market benefits society overall.

Utilitarianism Core Idea

Actions are right if they promote happiness.

Founder of Utilitarianism

Jeremy Bentham.

Bentham's Hedonism

Pleasure serves as the basis of the good.

Egoism in Bentham's Terms

Agent’s own happiness is the ultimate object of desire.

Mill's Refinement of Utilitarianism

Distinguished higher pleasures from lower pleasures.

Higher Pleasures Definition

Intellectual, moral, aesthetic pleasures valued more than lower.

Judging Higher Pleasures

Only those familiar with both can judge their higher nature.

Act vs. Rule Utilitarianism

Act: Each action based on happiness maximization; Rule: Adheres to rules that generally promote happiness.

Critique of Rule Utilitarianism

Avoids unjust acts justified by short-term outcomes.

Demanding Nature of Utilitarianism

Can require significant sacrifices from well-off individuals.

Bernard Williams' Critique of Utilitarianism

Endangers personal projects and relationships with meaning.

Founder of Kantian Ethics

Immanuel Kant.

Kant's Unconditional Good Thing

A good will arises from duty, aligned with moral law.

Kant's Categorical Imperative

Universal moral law applying regardless of outcomes.

First Formulation of Categorical Imperative

Universalizability—act on maxims that could be universal laws.

Example of Universalizability

Promise-breaking leads to a meaningless promise-making.

Second Formulation of Categorical Imperative

Treat people as ends, never merely as means.

Kant’s Theory Focus

Morality depends on intention and duty, not consequences.

Criticism of Kant's Ethics

Forbids lying even to save lives; doesn't allow for special relationships.

Reviver of Virtue Ethics

G.E.M. Anscombe.

Anscombe's Criticism of Kant

Moral obligation is outdated without ties to God.

Anscombe's Criticism of Mill

Consequentialism overlooks intention.

Doctrine of Double Effect

Moral significance lies in intending harm vs. merely foreseeing it.

Distinctiveness of Virtue Ethics

Centers on character and virtue rather than rules.

Main Question of Virtue Ethics

What kind of person should I be?

Employment-at-Will Principle

Employers may hire or fire at will unless limited by contract.

Support for Employment-at-Will

Promotes efficiency and respects freedom of contract.

Case Establishing Employment-at-Will View

Payne v. Western & Atlantic Railroad.

Modern Limits on Employment-at-Will

Union contracts and anti-discrimination protections.

Handbook's Impact on Employment-at-Will

May act as implied contracts in wrongful termination cases.

Companies Avoiding Handbooks' Binding Effect

Require waivers from new hires.

Richard Epstein's Work on EAW

In Defense of the Contract at Will.

Epstein’s Arguments for Employment-at-Will

Fairness, utility, and distributional consequences.

Fairness Argument in EAW

If employees can quit, employers should be able to fire.

Government Regulation in Employment According to Epstein

Should be minimal, preserving freedom of contract.

Benefits of At-Will Contracts

Monitoring behavior, reputational losses, risk diversification, and lower costs.

Symmetrical Freedom in Employment-at-Will

Freedom to quit and fire are interrelated.

Criticism of Employment-at-Will

Gives excessive power to employers.

Aspects of Due Process in Employment

Procedural (hearing) and substantive (fairness).

Criticism of EAW by W&R

Employees may face unfair treatment.

Ethics' Impact on Leadership

Leaders' virtues significantly shape employee behavior.

Dimensions of Ethical Leadership

Moral person and moral manager roles.

Strong vs. Weak Corporate Cultures

Strong has internalized values; weak is merely on paper.

Positive Leadership Example

Herb Kelleher (Southwest Airlines).

Diversity vs. Affirmative Action

Diversity represents inclusion, while affirmative action implies preferential treatment.

Legal Stances on Affirmative Action

Some programs constitutional, others not.

Ethics Supporting Affirmative Action

Redress discrimination, ensure opportunity, and improve performance.

Arguments Against Affirmative Action

Reverse discrimination and preference for merit-based fairness.

Rawls' Justice as Fairness

Equal liberty with justified inequalities benefiting the least well-off.

Nozick vs. Rawls on Justice

Nozick favors property rights and criticizes redistribution.

Challenges in Diversity Implementation

Defining criteria and measuring outcomes.

Wells Fargo Scandal Explanation

Employees opened unauthorized accounts due to aggressive culture.

Importance of 'Walking the Talk' in Leadership

Leaders must model ethical behavior to avoid cultural failure.