VelasquezEighth

editionChapter2EthicalPrinciplesinBusinessCopyright?2018,2013,2007PearsonEducation,Inc.AllRightsReservedLearningObjectives2.1

Examinethefoundationsofmoraldecision-makinginbusiness2.2

Detailtheconceptofutilitarianismandhowitisappliedtobusinessdecisions2.3

Examinearights-basedapproachtobusinessethics2.4

Explainjusticeandfairnessaskeyethicalprinciples2.5

Analyzeanethicofcareasappliedtobusinessdecisionsandpractices2.6

Evaluateanapproachtobusinessethicsthatcombinesfourmainmoralstandards2.7

Relatevirtueethicstomoraldecision-makinginbusiness2.8

Differentiateunconsciousandconsciousmoraldecision-makingprocessesandimplicationsIntroduction:EthicalPrinciplesinBusiness

KeyQuestionstobeExplored:Approachestodiscussingmoraldecision-makinginthebusinessworld.Approachestodiscussinghowmoraljudgmentsformthebasisforethicalprinciplesinbusiness.2.1:ApproachestoMoralDecisionMaking2.1:Examinethefoundationsofmoraldecision-makinginbusinessMoraldecision-makingclarifiesethicalissues.Strengthsandweaknessesofeachapproachtomoraldecision-making.2.1.1:UnocalandBurmaEthicalissuesinUnocaldecision-makingprocess.Cost-benefitanalysisforcompanyandhostcountry(Burma).ExistinghumanrightsissuesinBurma.2.2:Utilitarianism:WeighingSocialCostsandBenefits(1of4)2.2:DetailtheconceptofutilitarianismandhowitisappliedtobusinessdecisionsEthicalframeworkenlistedbyUnocalinitsdecision-makingprocess.Utilitarianism.2.2.1:UtilitarianismandFordMotorCompany’sPintoThecentralFordPintoethicalerror:Theychosetoignoreadangerousdesignfeature.2.2.2:TraditionalUtilitarianismBenthamandMillFoundersoftraditionalutilitarianism.Asignificantfeatureofutilitarianism:Itattemptstoprovideethicalprinciplethatservesasapubliclyacceptablebasisfordeterminingthebestsocialpolicies,aswellastheethicallybestcoursesofaction.2.2:Utilitarianism:WeighingSocialCostsandBenefits(2of4)Theutilitarianethicalprinciple:Theethicalactionistheonethathadthemostbeneficialconsequencesforsocietyorthatatleastminimizedtheharmfulconsequences.Mill:“Actionsarerightinproportionastheytendtopromotehappiness,wrongastheytendtoproducethereverseofhappiness.”2.2.3:TheAdvantagesofUtilitarianismAdvantagesofutilitarianismItadvocatespoliciesthatprovidethegreatestbenefits.Itimpartiallyconsiderseveryone’sinterests.Itexplainswhysomeactivitiesarerightorwrong.2.2:Utilitarianism:WeighingSocialCostsandBenefits(3of4)2.2.4:Utilitarianism’sMeasurementProblems

Someofutilitarianism’smeasurementproblemsUtilityissubjectiveandcomparisonsaredifficult.Somebenefitsandcostsseemimpossibletomeasure.Benefitsandcostsareunclear.Itassumesthatallgoodsarecommensurable.2.2.5:UtilitarianRepliestoMeasurementObjections

Utilitarianjustifiesitsdecision-makingprocessbyclaimingit:Focusesonmoralestimates,notabsolutes.Appealstointrinsicandinstrumentalgoods.Distinguishesbetweenwantsandneeds.Quantifiesvalueinmonetaryterms.2.2:Utilitarianism:WeighingSocialCostsandBenefits(4of4)2.2.6:UtilitarianProblemswithRightsandJustice

Someproblemswithutilitarianism:Itdoesnottakeintoaccounthowevenlyutilityisdistributedamongmembersofasociety.Itdoesnottakeintoaccountthenegativeimpactontherightsofthosenegativelyimpactedbyitscalculus.2.2.7:UtilitarianRepliestoObjectionsonRightsandJustice

Rule-utilitarianismLimitstheutilitariananalysistomoralrules.Determinesthecorrectnessofarulebythetotalutilityproducedbeinggreaterthanitwouldbeotherwise.Assumeseveryonefollowsthatrule.2.3:RightsandDuties(1of2)2.3:Examinearights-basedapproachtobusinessethicsUnocalofferedautilitariandefenseofitsdecision.Theutilitariandefensedidnotaddresscriticismsofrightsviolations.2.3.1:HumanRightsandWaltDisneyCompany’sSupplierDisneystockholdersrespondedtoamoralproblem.Iturgedthecompanytoadopt11widelyacceptedprinciplesofhumanandlaborrights.2.3.2:TheConceptofaRightArightisanentitlementToactinacertainway.Tohaveothersactinacertainwaytowardtheright-holder.2.3:RightsandDuties(2of2)2.3.4:ABasisforMoralRights:ImmanuelKantKant’scategoricalimperativeandrights.TheCIrequiresthatpeoplebetreatedequally.Thisrequirementallowspeopletoclaimequaltreatmentastheirright.TheCIcommandsrespectforeachperson’sfreedomandrationality.TheCIcommandsconsentfromfreeandrationalbeings.TheCIcommandsthatwecontributetoeachperson’sabilitytopursuetheirfreelyandrationallychosenends.2.3.6:RobertNozickandTheLibertarianObjectionEssentialelementsofNozick’slibertarianism.Therighttofreedomrequiresprivateproperty,freedomofcontract,freemarkets,andtheeliminationoftaxestopayforsocialwelfareprograms.2.4:JusticeandFairness(1of2)2.4:ExplainjusticeandfairnessaskeyethicalprinciplesUnocalandtheBurmesegovernment2.4.1:WagesintheFastFoodIndustryJusticeandfastfoodwagesWhatisalivingwage?2.4.2:StandardsofJusticeandFairnessJusticeandfairnessinbusinessdisputesDiscrimination,favoritism,andunfairworkloads.Formsofjusticetypicallydeployedtoredressorpreventinjustice.Distributivejustice.Retributivejustice.Compensatoryjustice.2.4:JusticeandFairness(2of3)2.4.3:DistributiveJusticeDistributivejusticeJusticethataimstofairlydistributebenefitsandburdens.Figure2.1

SummaryofPrinciplesofDistributiveJustice2.4:JusticeandFairness(3of3)2.4.4:RetributiveJusticeRetributivejusticeJusticeofblamingorpunishingwrongdoers.2.4.5:CompensatoryJusticeCompensatoryjusticeThejusticebywhichawrongedpersonisrestoredtohisorherinitialcondition.2.5:AnEthicofCare(1of2)2.5:AnalyzeanethicofcareasappliedtobusinessdecisionsandpracticesCareethicsrequireswepayattentiontoconcrete,valuablerelationships2.5.1:MaldenMillsCompanyMaldenMillstextilefactoryburneddown.OneoftheremainingtextilemillsinoperationinNewEngland.Ownercouldhavecollected$100millionininsurance.2.5.2:PartialityandCareMaldenMillsstoryreflectsanethicofcare.Ownerdidnotshutdownfactoryafteritburneddown.Ownerdidnotmoveoperationstoanothercountry.Ownerpaidemployeeswhilefactorywasbeingrebuilt.2.5:AnEthicofCare(2of2)2.5.3:CriticismsofanEthicofCare

CareethicsReflectsunjustfavoritism.Issodemandingthatitleadstoburnout.2.6:IntegratingUtility,Rights,Justice,andCaring(1of2)2.6:Evaluateanapproachtobusinessethicsthatcombinesfourmainmoralstandards

Distinctivestandardsofutility,rights,justice,andcareAnalysesofcostsandbenefitsofusingresources.Prescriptionsforhowindividualsshouldbetreated.Prescriptionsforhowburdensandbenefitsshouldbedistributed.Prescriptionsforwhatweowetothosewithwhomwehavespecialrelationships.2.6.1:TheFourMoralConsiderationsandBehavior

Elementsofthefourmoralmodelsasblueprintsforbehavior.Maximizingbenefitsandminimizingharms.Respectformoralrights.Promotionofjustdistributionofbenefitsandburdens.Exhibitingappropriatecare.Figure2.2

TheProcessofMakingaMoralJudgment2.6:IntegratingUtility,Rights,Justice,andCaring(2of2)2.6.2:RelatingMoralStandardstoEachOther

Moralstandardsrelatetoeachotherwhenmoraljudgmentsarebasedon:Maximizingtheaction’snetutility.Respectingmoralrights.Ensuringjustdistributionofbenefitsandburdens.Caringforthoseinconcreterelationstous.2.7:AnAlternativetoMoralPrinciples:VirtueEthics(1of2)2.7:Relatevirtueethicstomoraldecision-makinginbusiness

Virtueethicsasanalternativetotheprevioustheories.2.7.1:Vices,Virtues,andtheCEOofQwestCommunications

MoralvicesintheQwestcaseGreed.Cultureoffear.2.7.2:VirtueEthicsandAction-BasedEthicsTheJoeNacchiocaserevealsthemoralimportanceofcharacter.2.7.3:MoralVirtues

Moralvirtueasanacquireddisposition.Aristotle’sGoldenMeanisthereasonablemeanbetweenextremes(vices).Table3.1:MoralVirtuesandVicesAccordingtoAristotle

TheEmotionorActionInvolvedTheViceofExcessintheEmotionorActionPercentageofTotalU.S.FinancialWealth(2012)TheViceofDeficiencyintheEmotionorActionFearRecklessnessCourageCowardlinessPleasureSelf-indulgenceTemperanceSelf-deprivationTakingone’sdueInjustice:takingmoreJusticeInjustice:takinglessDonatingmoneyProdigalityGenerosityStinginessSpendingmoneyOstentatiousnessRefinementCheapnessFeelingadmiredVanityConfidenceSelf-abasementSeekinghonorOver-ambitionAmbitionUnambitiousnessAngerIrascibilityGoodtemperApathyShameSelf-consciousnessSelf-esteemArroganceTalkingaboutoneselfBoastfulnessHonestyFalsemodestyEntertainingpeopleBuffooneryWittinessBoorishnessSocializingObsequiousnessFriendlinessQuarrelsomeness2.7:AnAlternativetoMoralPrinciples:VirtueEthics(2of2)2.7.5:Virtues,Actions,andInstitutions

Virtueethicsanddecision-makingTherightnessorwrongnessofanactioninrelationtoagent’svirtuesandvices.2.7.6:StudyingVirtueTheoryintheRealWorld

Virtuetheorydoesn’tseemconsistentwithpsychology.2.7.7:VirtuesandPrinciples

Virtueethicsandutilitarianism,rightstheories,justicetheories,andcaretheories.Characteremphasizedoveraction.2.8:UnconsciousandConsciousMoralDecisions2.8:Differentiateunconsciousandconsciousmoraldecision-makingprocessesandimplications

Unconsciousdecision-makinginfluencesusonadailybasis.2.8.1:X-SystemandC-SystemProcesses

X-andC-SystemprocessesTermsofunconsciousandconsciousmoraldecision-makingprocesses.2.8.2:TheLegitimacyofUnconsciousMoralDecision-Making

Casuistrya