7/31/2019 Theories in Business Ethics

1/20

THEORIES IN BUSINESS ETHICS

http://images.google.co.in/imgres?imgurl=http://sites.google.com/site/rnjkings/ethics-9651.jpg&imgrefurl=http://sites.google.com/site/rnjkings/ethicsfoundation2&usg=__lg_fwOXfDYzFc2KkZ0_RyALiSxg=&h=300&w=276&sz=30&hl=en&start=22&itbs=1&tbnid=J3fCZwQvlaJ1nM:&tbnh=116&tbnw=107&prev=/images?q=theories+in+ethics&start=21&hl=en&sa=N&gbv=2&ndsp=21&tbs=isch:1

7/31/2019 Theories in Business Ethics

2/20

INTRODUCTION

Business ethics can be both a normative( relating toor deriving from a standard or norm) and a

descriptive discipline. As a corporate practice and acareer specialization, the field is primarily normative.In academia descriptive approaches are also taken.

http://en.wikipedia.org/wiki/Norm_(philosophy)http://en.wikipedia.org/wiki/Descriptivehttp://en.wikipedia.org/wiki/Descriptivehttp://en.wikipedia.org/wiki/Norm_(philosophy)

7/31/2019 Theories in Business Ethics

3/20

DIFFERENTTYPESOFTHEORIES.

1) Deontological Theory - family of ethical theoriesencompassing moral rules - nonconsequentialist approach

when the consequences of an action are not taken into

account for the decision.

The word "deontological" comes from the Greek word 'deon

or duty. According to some deontological approaches,

some moral principles are binding, regardless of theconsequences.

7/31/2019 Theories in Business Ethics

4/20

2) Teleological Ethics - Concept of goodness over and

above the concepts of rightness and obligation orduty / the concepts of rightness and obligation are

defined in terms of goodness.

Utilitarianism- teleological approachthe greatesthappiness for the greatest number

(What decision would bring the greatest happiness

for the greatest number)

7/31/2019 Theories in Business Ethics

5/20

Utilitarianism - takes its cue from teleological theoriesand hence according to utilitarianism, our obligation or

duty, in any situation, is to perform the action that willresult in the greatest possible balance of good overevil.

Utilitarianism is committed to the maximization of thegood and minimization of harm and evil.

Society ought to produce the greatest balance of positivevalue or minimum balance of negative value for all

affected Ex: Cost and benefit analysis

Risk assessment

7/31/2019 Theories in Business Ethics

6/20

PROBLEMSWITH UTILITARIANISM

1. Not always possible to calculate utility or to analyzemassive amounts of information

2. Ignores distribution of good is it uniformlydistributed or favours specific groups?

3. No common definition of what is good?

4. Assumes that all can be measured in a commonnumerical scale

7/31/2019 Theories in Business Ethics

7/20

MAJORISSUESWITHUTILITARIANISM

Action that produces the greatest balance of value forthe greatest number of people.

What about the minority?

Ex: What if society decides that it is in the best interestof the public to deny health insurance to those testingpositive for AIDS?

7/31/2019 Theories in Business Ethics

8/20

KANTIAN ETHICS

Consequences are regarded as morally irrelevant.

What matters is respect for the human being.

People must NOT be treated exclusively as a means to

an end.

This theory is developed by Immanual Kant.

7/31/2019 Theories in Business Ethics

9/20

HOW DOES IT WORK?

For an action to be moral

1. It has to be universal something that is moral for oneperson has to be moral for everyone.

For example: Dishonesty cannot be justified as a valid moralprinciple.

2. Respect for rational beings people should be treated withdignity; and not as means to ends.

3. Autonomy (Independence) action has to respect peoplesfreedom to choose; people are to treat each other fairly andequally.

7/31/2019 Theories in Business Ethics

10/20

WEAKNESSES

1. Does not lend itself to precise method for decisionmaking

2. Difficult to think of all humanity each time a decision

has to be made

3. Places greater emphasis on the welfare of every

person, but does not really draw a line

4. Hard to resolve conflicts when criteria has to treat

everyone equally decisions typically involve conflicts

of interests

7/31/2019 Theories in Business Ethics

11/20

Egalitarianism (RAWLS s THEORY)

Holds that there are no relevant difference among people thatcan justify unequal treatment.

Every person must be given exactly equal share ofsocietys or groups benefits and burdens.

Can two persons be equal?

John Rawls : Each person is to have equal right to the mostextensive social system of basic liberties compatible withsimilar system of liberty for all.

7/31/2019 Theories in Business Ethics

12/20

VIRTUE ETHICSTHEORIES

* Habitual development of sound character traits

determines the ethical value of persons.

* For the virtue ethicist, building character is what life is all

about.

* Character-the pattern of intentions, inclinations and virtuesthat make a person/organization act ethically

Will find persons with strong and weak characters.

7/31/2019 Theories in Business Ethics

13/20

Persons with strong character-possesses a

consciously cultivated ,intellectual, moral, emotional

& social virtues to achieve self-discipline to do the

right thing.

Persons with weak character-do wrong things orwhat is truly harmful to them & make excuses for their

irresponsible choices in life.

7/31/2019 Theories in Business Ethics

14/20

1.Individual character

2.Work character

3.Professional character

Individual Character-holds that identification &

responsible development of human traits of nobility (likecourage, justice, gratitude, self-discipline, reliability,

caring, simplicity etc) determine the value of all human

ethical interactions.

Eg: A person retaining his/her dignity & prospects for

happiness by living a virtuous life even after losing all his

wealth, health & even the loved ones for no fault of him

7/31/2019 Theories in Business Ethics

15/20

Work Character-holds that identification &

development of noble traits at work like competence,

creativity, honesty, fairness, co-worker

appreciation, loyalty, shared work pride, tolerance,

empathy etc) determine the ethical quality of work life.

Eg: a manager has to serve as a role-model for many

of the traits when facing global competition with a

need to higher productivity & effective team work.

7/31/2019 Theories in Business Ethics

16/20

Professional Character ethics-expertise, collegiality (

sharing responsibility), trust, truthfulness, autonomy,

impartiality, independence of judgment, loyalty etc

determine the ethical quality of individuals in associational

communities (workplace or a social service).

SOCIAL CONTRACT THEORIES

7/31/2019 Theories in Business Ethics

17/20

SOCIAL CONTRACT THEORIES

An action is right if it conforms to the terms agreedupon, conditions or rules for social well-being,negotiated by competent parties. This theory followsa deontological approach.

Example:

The relationship that exists between the govt. and thecitizens of a country-by the citizens agreeing to put someof their rights to a common ruler (the govt.) and rulersagreeing to protect the interests of the citizens in turn.Even while no formal agreement exists, it can beconsidered to be a social contract

7/31/2019 Theories in Business Ethics

18/20

SYSTEM DEVELOPMENT ETHICS THEORY

According to these, the nature and extent of the supportive

framework for continuous improvement of ethical conduct

determines the ethical values of actions.

Eg: Managers create a culture supportive of ethical conduct & implement

systems towards achieving this (like JW & Narayana Murthy)

System Development Ethics Theory may target

a. Personal improvement ethicsb. Organizational ethics

c. Extra-organizational ethics

7/31/2019 Theories in Business Ethics

19/20

1. Personal Improvement Ethics by promoting personal

responsibility for continuous learning, moral excellence

directed at companies goals.

2. Organizational Ethics - by promoting formal & informal

processes like systemic justice, caring, innovation in

ethical work cultures etc. (Eg: GE & Infosys)

3. Extra - Organizational Ethics- by promoting collaborative

partnerships ,diversity, social resp. like ecologicalconcerns, social & philanthropic concerns etc (Eg

Infosys Foundation, GE)

7/31/2019 Theories in Business Ethics

20/20

Ethics is not about the way things

are.It is about the way things

OUGHT TO BE..