Ethics Day 9_Honorable Business and Prudence

Foundations of Ethical Behavior Day 9: Prudence: Blind Spots and Bright Spots

Page 1

  • Title: Foundations of Ethical Behavior

  • Focus: Prudence, Blind Spots, and Bright Spots

Page 2

Agenda

  1. Overview: Otteson on Businesses and Political Economy

  2. Prudence, Blind Spots, and Bright Spots

Page 3

Context

  • James R. Otteson: A philosopher, political economist, and business ethicist at the University of Notre Dame.

  • Book Reference: Honorable Business: A Framework for Business in a Just and Humane Society

    • Argues for a political economy view related to Adam Smith's work.

    • Examines the roles of governments, societies, and individuals.

Page 4

Honorable Business

  • Business is not merely a selfish enterprise; it is a profession needing skill and expertise.

  • Purpose: Human flourishing and value creation.

    • Otteson defines honorable business as creation and exchange meant to generate benefit.

    • Opposite: Extraction (involuntary actions like conquest or theft).

Page 5

Market Complexity

  • Wealth disparities in societies:

    • Not due to resources or luck but through complex human cooperation.

  • Key Concepts:

    1. Division of Labor: Breaking down tasks into simpler steps.

    2. Specialization: Focusing on specific tasks.

    3. Trade: Enhances consumer and producer surplus.

    • Example: Buying a t-shirt often yields more value than the price paid.

Page 6

3 Arguments for Economic Cooperation

  1. Economizer Argument: Minimize inputs to maximize outputs.

  2. Local Knowledge Argument: Individuals understand their interests best.

  3. Invisible Hand Argument: Self-interest leads to beneficial opportunities for all.

Page 7

Smith on the Duties of the State (1 of 3)

  • Three Protections:

    1. Person

    2. Property

    3. Promise

  • Justice should be accessible to all citizens, not just the wealthy.

  • Beneficence should be managed by individuals, not distant legislators.

Page 8

Smithianism About the State

  • Government’s Role:

    1. Protect citizens from malefactors.

    2. Protect citizens from external threats.

    3. Create public institutions only when necessary.

  • Justice is a negative duty; we must not infringe on others’ rights.

Page 9

Smithianism About the State (Cont'd)

  • Caution Against State Beneficence:

    • Too much control could be dangerous, leading to potential abuses of power.

Page 10

The Duties of Members of Society

  • Individual roles in securing justice and social value are crucial.

  • Thriving cultures foster trust and actively support charitable actions.

Page 11

The Duties of the Individual (1 of 2)

  • Individuals’ moral character enables societal flourishing.

  • Focus on behaviors that enhance cooperative opportunities.

Page 12

The Duties of the Individual (Cont'd)

  • Key Aspects for Trust:

    1. Mutual sympathy of sentiments.

    2. Reputation benefits: Trustworthiness encourages cooperation.

Page 13

Conclusion: The State (1 of 2)

  • Justice is primarily about non-interference.

  • Positive duties of beneficence cannot be forcibly imposed.

Page 14

Conclusion: Businesses (2 of 2)

  • The Otteson Code: Foundational principles for honorable business practices:

    1. Moral responsibility.

    2. No coercion.

    3. Avoidance of fraud.

    4. Equal respect for parties’ autonomy.

    5. Honoring promises and contracts.

Page 15

Plan for the Day

  • Introduce concepts of prudence, blind spots, and their implications.

Page 16

Cardinal and Theological Virtues

  • Cardinal: Prudence, temperance, justice, fortitude.

  • Theological: Faith, hope, love.

Page 17

Definition of Prudence

  • Prudence is the ability to discern truthfully and act rightly, particularly in business contexts.

  • Quote from St. Thomas Aquinas: "The good presupposes the true."

Page 18

Prudent Decision-Making Steps

  1. Facts

  2. Issue(s)

  3. Stakeholders

  4. Solutions

  5. Perspectives/Principles/Frameworks

  6. New Solutions

  7. Act

  8. Assess

Page 19

Process Overview

  • Similar steps to above; recognizing that the process can be messy.

Page 20

Nature of Prudence

  • Disposes practical reason to discern true good and choose appropriate means.

  • Quote from Aquinas: "right reason in action."

Page 21

Role of Prudence

  • Charioteer of virtues; guides moral judgment and application to specific scenarios.

Page 22

Vices Opposed to Prudence

  1. Thoughtlessness or Rashness: Acting without considering circumstances.

  2. Irresoluteness: Over deliberation without action.

  • Considerations: Are swift actions always positive? Is indecision neutral?

Page 23

Prudence and the Golden Mean

  • Prudence guides appropriate actions at the right times and toward the right reasons.

Page 24

Examples of Appropriate vs. Imprudent Anger

  • Prudent: Addressing theft in a serious but measured manner.

  • Imprudent Lack: No anger after significant harm.

  • Imprudent Excess: Rage over trivial offenses.

Page 25

Ethical Fading During Decision-Making

  • Ethical fading affects perception in decision contexts; how predictions differ from actual actions.

Page 26

After Decision: Recollection Biases

  • Common biases that distort recollections of past actions, impacting integrity and decision-making.

Page 27

Enhancing Business Integrity

  • Considerations for ethical insights based on church teachings and responsibility toward stakeholders.

Page 28

Good News

  • Individuals as "choice architects" can foster ethical systems and structures.

Page 29

Prudence as Right Reason (1 of 2)

  • Emphasizes truthful seeing, thinking, and acting for good.

Page 30

Choice Map Concept

  • Decision structures guide thoughtful and responsible choices while avoiding blame.

Page 31

Behavioral Ethics Overview

  • Empirical study of how people behave regarding ethics, highlighting bounded ethicality.

Page 32

Case Study: Ford Pinto

  • Examination of ethical dilemmas faced by corporations (profit vs. safety).

Page 33

Bounded Ethicality Detailed

  • Factors causing ethical blind spots, including self-perception and unconscious biases.

Page 34

Ethical Decision Reflection

  • Examination of the conflict between obligations and desires, and its ethical justifications.

Page 35

Key Concepts in Ethical Decision-Making

  • Prediction vs. Recollection: Differences in how decisions are anticipated versus remembered.

Page 36

Group Discussion Prompts

  • Exploring gaps between desires and ethical obligations and strategies to narrow these gaps.

Page 37

Improving Decision Structures

  • Techniques to enhance ethical decision-making in practice.

Page 38

Avoiding Ethical “Sinkholes”

  • Identifying conditions that typically compromise ethical decision-making.

Page 39

Implementing Ethical Nudges

  • Small environmental changes that positively influence decisions without coercion.

Page 40

Setting Good Defaults

  • Making preferred choices the easiest option in decision-making contexts.

Page 41

Importance of Culture

  • Culture significantly influences ethical behavior in societies and firms.

Page 42

Redefining Behavior

  • Encouraging ethical practices by designing environments that reduce temptations.

Page 43

Role of Reminders

  • The effectiveness of subtle cues in reinforcing ethical behavior.

Page 44

Increase Visibility

  • Social monitoring cues promote accountability and honesty.

Page 45

Promote Self-Engagement

  • Personal commitment to maintain a positive self-image drives ethical behavior.

Page 46

Reflective Questions for Improvement

  • Exploring gaps between actual and virtuous practices in business environments.

Page 47

Questions for Personal & Professional Growth

  • Reflect on the development and acquisition of practical wisdom in business contexts.