Ethics Midterm

Week 1: Introduction

Key Concepts:

• Three over-arching "principles" that make ethical hiring/training difficult.

• Difference between prescriptive and descriptive ethics:

  • Prescriptive Ethics: How people should behave; influenced by philosophy and moral reasoning.

  • Descriptive Ethics: How people actually behave; influenced by psychology and sociology.

• Milton Friedman's arguments against CSR: Shareholder primacy, business's only social responsibility is profit.

• DesJardins' arguments for sustainability: Ethical responsibility of businesses to consider long-term environmental and social impact.

• REST cognitive model of ethical decision-making:

  1. Moral Awareness (Recognizing an issue as ethical)

  2. Moral Judgment (Evaluating moral principles)

  3. Moral Intention (Deciding a course of action)

  4. Moral Behavior (Following through with action)

• Henokiens: Family-owned businesses operating for 200+ years; relevance to shareholder primacy debates.

• Definition of a moral judgment and what makes something a moral dilemma.

• ABC Analysis: Antecedent, Behavior, Consequence model for analyzing ethical decision-making.

Week 2: Individual Differences and Ethics

Key Concepts:

• Moral disengagement: Psychological mechanisms that allow unethical behavior without guilt.

  • Three categories:

    • Cognitive restructuring (e.g., moral justification, euphemistic labeling)

    • Minimizing responsibility (e.g., diffusion of responsibility)

    • Minimizing consequences (e.g., dehumanization, blaming the victim)

• Machiavellianism: Manipulative, self-serving behavior that negatively impacts ethical decision-making.

• Moral/ethical attentiveness: Degree to which individuals consider ethics in daily life.

• Moral identity:

  • Internalization (ethical values central to identity)

  • Symbolization (publicly displaying moral traits)

• Cognitive biases affecting ethics:

  • Escalation of commitment

  • Egocentric bias

  • Availability bias

  • Illusion of control

• Locus of control: Internal (self-driven) vs. external (fate-driven) and its influence on ethical behavior.

• Ethical amnesia: Forgetting past unethical actions to preserve self-image.

• Trait conscientiousness: High conscientiousness linked to ethical behavior.

• Moral idealism vs. moral relativism:

  • Idealism: Universal moral principles apply.

  • Relativism: Ethics depend on the situation/culture.

• Moral licensing: Engaging in unethical behavior after previous good behavior.

• Situational strength: Influence of external factors on ethical decision-making.

Week 3: Moral Psychology & Ethical Theories

Key Concepts:

• What makes a profession? Specialized knowledge, societal license, ethical responsibilities.

• Moral intensity (Jones, 1991): The degree to which an issue is perceived as morally urgent.

• Three philosophical traditions in prescriptive ethics:

  • Virtue Ethics (Aristotle): Focus on character development.

  • Deontology (Kant): Duty-based ethics.

  • Consequentialism (Utilitarianism - Bentham, Mill): Outcome-based ethics.

• Kant’s categorical imperative: Universal moral rules and treating people as ends, not means.

• Rawls’ veil of ignorance: Making fair ethical decisions without knowing one’s own social position.

• Egoism: Self-interest as the moral guide.

• Utilitarianism: Maximizing the greatest good for the greatest number.

• Post-utilitarian theories: Contractualism (Scanlon) and Justice Theory (Rawls).

• Sacred Values Protection Model (Tetlock, 2000):

  • Responses to sacred value violations: Moral outrage and moral cleansing.

  • Tradeoffs: Taboo, tragic, and ordinary.

  • Forbidden base rates: Ethical dilemmas involving sensitive statistical generalizations.

• Moral Foundations Theory (Haidt):

  • Five foundations: Harm/Care, Fairness, Loyalty, Authority, Purity.

  • Political orientation differences in moral foundations.

• Pros/cons of moralizing issues: Can promote ethical consistency but lead to rigidity and division.

• Moral dumbfounding: Holding strong moral beliefs without rational justification.

Week 4: Organizations, Stakeholders, and Ethics Audits

Key Concepts:

• Four types of organizational structures:

  1. Conventional Corporations (C-Corps, LLCs, LLPs)

  2. For-Profit Social Enterprises (L3Cs, B Corps, Philanthropic Enterprises)

  3. Non-Profit Organizations (501(c)(3), 501(c)(4), 501(c)(6))

  4. Government Agencies

• Four ethical business models:

  • Shareholder Primacy (Friedman)

  • Modified Entity Model (Spinello)

  • Social Entity Model (Handy)

  • Stakeholder Model (Freeman)

• Benefits/limitations of each business model.

• Stakeholders: Direct vs. indirect stakeholders.

  • Three stakeholder classification factors: Power, legitimacy, urgency.

  • Seven “D” model (Mitchell, 1997): Dormant, Discretionary, Dominant, Demanding, Dependent, Dangerous, Definitive.

• What is a social venture?

  • Four traits: Scalable, Replicable, Self-sustaining, Market-sensitive.

• Philanthropic enterprises vs. B-Corps:

  • Philanthropic enterprises donate all profits.

  • B-Corps balance profit with social impact.

• Ethics Audits (Krell, 2010):

  • Six-step process: Compare behavior to policies, develop metrics, create cross-functional team, audit efficiently, assess risks, enforce accountability.

  • Difference between formal systems (rules) and informal systems (culture).

  • Sources for audits: CSR reports, ESG reports, employee feedback.