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132243 Business & Social Responsibilities Ethical Principles in - - PowerPoint PPT Presentation
132243 Business & Social Responsibilities Ethical Principles in - - PowerPoint PPT Presentation
132243 Business & Social Responsibilities Ethical Principles in Business 1 Caltex Case Caltex should stop operating in South Africa because of 3 moral principles Justice: fair ways of distributing benefits and burdens among the
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Caltex Case
Caltex should stop operating in South Africa because of 3 moral principles
Justice: fair ways of distributing benefits and burdens among the members of society. Rights: the areas in which people’s rights to freedom and well-being must be respected. Ethic of virtue: an ethic based on evaluations
- f the moral character of persons or groups.
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Caltex Case (cont.)
Caltex should continue operating because
- f 2 moral principles
Utilitarian standard: an action is morally right if it diminishes social costs and increases social benefits. Ethic of care: an ethic that emphasizes caring for the concrete well-being of those near to us.
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Utilitarianism
Any theory that advocates selection of that action or policy that maximizes benefits (minimizes costs). Example: Should Ford modify one of its designs, the Pinto?
Costs = $11*12.5m autos = $137m Benefits = (180 deaths*$200,000) + (180 injuries*$67,000) + (2,100 burned vehicles*$700) = $49.15m
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Traditional Utilitarianism
Jeremy Bentham (1748-1832) is the founder.
An action is ethically right if ad only if the sum total of utilities produced by that act is greater than the sum total of utilities produced by its alternatives. TU does not consider only the utility produced for the person performing the action but the utility produced for all persons affected by the action.
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Pros of TU
TU matches well with moral evaluations of public policy.
The proper government policies are those that would have the greatest measurable utility for people.
TU appears intuitive to many people
Actions satisfied by TU are selfless.
TU helps explain why some actions are generally wrong and others are generally right.
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Pros of TU (cont.)
TU is very influential in economics.
E.g. TU is one of many assumptions that helps derive an equilibrium, and explains why perfect competition is desirable.
TU fits nicely with efficiency.
A right action is the one that produces the most benefits at the lowest costs.
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Measurement Problems of TU
How can the utilities different actions have for different people be measured and compared? Some benefits and costs are difficult to measure.
E.g. health and life
Some future benefits and costs are difficult to predict.
E.g. some theory are not immediately usable, yet its implementation costs may be very high.
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Measurement Problems (cont.)
Sometimes, it is unclear what is to count as a benefit and what is to count as a cost.
An extension of a loan to the manager of a local pornographic theater.
TU implies that all goods can be traded for equivalents of each other but there are noneconomic goods such as life, health, freedom, beauty, equality that no quantity of any economic good is equal in value. Resolving these measurement problems may rely on one social group or another, and is thus biased.
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Utilitarian’ Reply
Commonsense can compare values.
Cancer VS cold
Intrinsic goods > instrumental goods
Intrinsic goods: things that are considered valuable because they lead to other good things, e.g. a painful visit to the dentist. Intrinsic goods: things that are desirable independent of any other benefits they may produce, e.g. life and health.
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Utilitarian’ Reply (cont.)
Needs > wants Anything can be priced in auctions. The use of expectation in uncertain situations. We can actually deduce the price of noneconomic goods.
E.g. pay $5 for reducing the probability of being killed by .00001 life is worth 5/.0001
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Problems with Rights and Justice
Some actions satisfy TU but are unjust and violate people’s rights.
Killing a corrupted politician Consumers’ right to choose whether to accept the Pinto design
Utilitarianism allows benefits and burdens to be distributed among the members of society in any way whatsoever, so long as the total amount of benefits is maximized.
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Rule-Utilitarianism
An action is ethically right if
It is required by those moral rules that are correct; and A moral rule is correct if and only if the sum total of utilities produced if everyone were to follow that rule is greater than the sum total
- f utilities produced if everyone were to
follow some alternative rules.
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Cons of RU
In RU which utility maximization is still the focal point, exceptions to the rule are permitted.
E.g. people should not be killed except when doing so will produce more utility than not doing so.
Rule utilitarians argues that if everyone take advantage of any allowable exceptions, ultimately society will be worse off.
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The Concept of a Right
A person has a right when that person is entitled to act in a certain way or is entitled to have others act in a certain way toward him or her. Legal rights: rights derived from a legal system, and are limited to the particular jurisdiction within which the legal system is in force.
E.g. rights in contracts
Moral rights: rights based on moral norms and are not limited by jurisdiction.
E.g. rights not to be killed
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The Concept of a Right (cont.)
Right indicates
Absence of prohibitions against pursuing some interest or activity Empowerment to do something either to secure the interests of others or to secure
- ne’s interests
Existence of prohibitions or requirements on
- thers that enable the individual to pursue
certain interests or activities
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Moral Rights
Moral rights are tightly correlated with duties.
Duties that other people have toward that person, e.g. not to intervene with one’s actions, must provide standard of living.
Moral rights provide individuals with autonomy and equality in the free pursuit
- f their interests.
E.g. I don’t like Thai movies, even watching it will benefit the whole industry.
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Moral Rights (cont.)
Moral rights can justify one’s actions and can appeal the protection or aid of others. Moral rights justify actions based on individual basis, whilst utilitarianism justify actions based on society as a whole.
If the utilitarian benefits become great enough, rights may be restricted.
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Negative Rights VS Positive Rights
Negative Rights require others leave us alone.
E.g. property rights
Positive rights require others help us.
E.g. rights to acquire standard of livings
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Contractual Rights and Duties
Arise when one person enters an agreement with another person.
If I contract to do something for you, then you acquire a contractual right to whatever I promise, and I have a contractual duty to perform as I promised.
Attach to specific individuals. Arise out of a specific transaction between particular individual. Depend on a publicly accepted system of rules. Provide a basis for the special duties or
- bligations that people acquire when they
accept a position or role within a legitimate social institution or an organization.
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General Rules in Contracts
Both parties in a contract must have full knowledge of the nature of the agreement. Neither must intentionally misrepresent the facts of the contractual situation to the other party. Neither must be forced to enter. The contract must not bind the parties to an immoral act.
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Kantian Rights
Developed by Immanuel Kent (1724- 1804), and called categorical imperative. Categorical imperative formulas:
Never do something unless you are willing to have everyone do it.
Universalizability: what if everyone did that? Reversibility: how would you like it if you were in her place?
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Kantian Rights (cont.)
Categorical imperative formulas (cont.)
Never use people merely as means but always respect and develop their ability to choose for themselves
E.g. wrong to deceive a person into making a contract that that person would not otherwise freely choose to make. E.g. by failing to lend help to another person, I limit what that person is free to choose to do.
Both formulations come down to the same thing: people are to treat each other as free and equal in the pursuit of their interests.
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Kantian Rights (cont.)
Positive rights defended by Kant’s theory:
Rights to work, food, clothing, housing, and medical care
Negative rights defended by Kant’s theory:
Rights to freedom from injury or fraud, freedom of thought, freedom of association, freedom of speech (unless conflicts with another human interest that can be shown to be of equal or greater importance), privacy
Kant’s theory also defends contractual rights, and rights to be left free and fully informed when contracts are made.
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Problems with Kant
Kant’s theory is too unclear.
E.g. a murderer and a public policy that all murderers should be punished, a choice to work under unacceptable conditions or work somewhere else
Kant’s theory fails to suggest solutions when conflicts arise
E.g. right to form a group of trombone players VS right to be left free from disturbance which right should be limited in favor of the other?
The theory is sometimes wrong
E.g. a person who really hates Blacks to a degree that he/she is willing to have other hate him/her if her skin turns black.
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Defenders of Kant
To decide whether one right should be limited in favor of a second right, one has to examine the relative importance of the interests that each right protects. If a person is genuinely and conscientiously willing to universalize the principles on which he is acting, then the action is morally right.
That person who really hates Blacks would be morally right.
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Libertarian Objection to Kant
Libertarian philosophy:
Freedom from human constraint is necessarily good and that all constraints imposed by others are necessarily evil except when needed to prevent the imposition of greater human constraints.
Robert Nozick is a libertarian who believes that the only basic right that every individual possesses is the negative right.
E.g. free use of property, freedom of contract, free market system
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Problems with Libertarianisms
Allowing one kind of freedom to one group often requires restricting some
- ther kind of freedom for some other
group.
E.g. freedom to unionize VS freedom to choose nonunion workers
Not only negative rights, but people really do have some positive rights.
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Justice and Fairness
Distributive justice: just distribution of benefits and burdens Redistributive justice: blaming or punishing persons fairly for doing wrong Compensatory justice: restoring to a person what the person lost when he or she was wronged by someone Correcting extreme injustices may justify restricting some individuals’ rights.
E.g. progressive tax system
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Distributive Justice
Question: what characteristics are relevant when determining what benefits and burdens people should receive?
first come, first served? If Susan and Bill are both doing the same work for me and there are no relevant differences between them or the work they are doing, then in justice I should pay them equal wages.
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Justice as Equality: Egalitarianism
Every person should be given exactly equal shares of a society’s or a group’s benefits and burdens
No relevant differences among human beings Cooperation is interestingly the consequence
Problem:
Human beings in fact differ in their abilities, intelligence, virtues, needs, desires, physical and mental characteristics. If everyone is given exactly the same, then individuals will have no incentive to exert greater efforts in their work productivity and efficiency in the society will decline.
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Justice as Equality: Egalitarianism (cont.)
Defenders of egalitarianism
Criticisms on egalitarianism only apply to economic equality (equality of income, wealth, and opportunity), and not political equality (equal participation in, and treatment by, the political system). Economic equality is defensible if it is suitably limited.
Income, wealth, and opportunity should be distributed equally until the minimum standard of living is achieved for everyone.
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Capitalist Justice
Benefits should be distributed according to the value of the contribution the individual makes to a society.
E.g. salespeople
Competitive atmosphere is interestingly the consequence. How to measure the value of contribution?
In terms of the amount of efforts may end up rewarding the incompetence and the inefficiency. In terms of productivity may ignore people’s need, and also hard to measure productivity in some subjective fields (e.g. entertainment, arts). Determine productivity by the market force (supply and demand) still ignore people’s need, and may be unfair (e.g. doctors get paid less than entertainers).
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Socialism
Work burdens should be distributed according to people’s abilities.
E.g. a football team
Benefits should be distributed according to people’s needs.
i.e. until people’s basic biological and health needs are met, the leftover can be distributed to meet people’s other nonbasic needs.
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Socialism (cont.)
Criticisms
No incentive to put efforts because there is no relation between efforts and compensation. Unrealistic to think that entire societies can be modeled on familial relationships. People’s freedom is invaded.
I don’t want to be a singer, but because I have great voice, I am forced to be the singer.
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Libertarian Justice
A person’s share of goods will depend wholly on what can be produced through personal efforts or what others choose to give the person out of charity.
A disabled person who is ill and incapable of producing anything through personal efforts, and other people refuse to provide that person with what is needed, then that person shouldn’t get anything.
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Justice as Fairness: Rawls
John Rawls claims that the distribution of benefits and burdens is just if and only if:
- 1. each person has equal right to the most
extensive basic liberties (right to vote, freedom
- f speech, freedom to own property, etc.)
compatible with similar liberties for all; and
- 2. social and economic inequalities are arranged so
that they are both
- A. To the greatest benefit of the least advantaged
persons; and
- B. Attached to offices and positions open to all under
conditions of fair equality of opportunity.
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Justice as Fairness: Rawls (cont.)
1>2b>2a
1 is the principle of equal liberty.
The claim that each citizen’s liberties must be protected from invasion by others and must be equal to those of other.
2a is the difference principle.
Implies efficiency (maximum benefits for the least advantaged).
2b is the principle of fair equality of
- pportunity.
E.g. equal access to training and education needed to qualify for the desirable jobs
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Justice as Fairness: Rawls (cont.)
Rawls says that a moral principle is generally adequate if the original position would choose to live by from his veil of ignorance in the future.
Original position: an imaginary meeting of rational self-interested persons who must choose the principles of justice by which their society will be governed. Veil of ignorance: the requirement that persons in the original position must not know particulars about themselves which might bias their choices such as their sex, race, religion, income, social status, etc. This theory satisfies Kant’s ideas of reversibility and universalizabilty.
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Justice as Fairness: Rawls (cont.)
According to Rawls’ general method of moral evaluation.
1 would be chosen because everyone will want to secure a maximum amount of freedom so that they can pursue whatever interests they have on entering society. 2a would be chosen because all parties will want to protect themselves against the possibility of ending in the worst position in society. 2b would be chosen because all parties to the
- riginal position will want to protect their interests
should they turn out to be among the talented.
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Justice as Fairness: Rawls (cont.)
Advantages of Rawls’s theory:
It preserves the basic moral beliefs: freedom, equality, equality of opportunity, and concern for the disadvantaged. It does not reject the market system, work incentives, nor the inequalities. It incorporates both the communitarian (2a) and individualistic (2b) strains. It takes into account the criteria of need, ability, effort, and contribution. There is the moral justification that the original position provides.
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Redistributive Justic
Blaming or punishment is just when:
It is not placed on people with ignorance and inability; and It is not placed on people on the basis of flimsy or incomplete evidence; and It is consistent and proportioned to the wrong.
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Compensatory Justice
The amount of restitution should be equal to the loss the wrongdoer knowingly inflicted on the victim.
However some losses are impossible to measure (e.g. reputation, health, life).
A person has a moral obligation to compensate an injured party when
His action was wrong or negligent; and His action was the real cause of the injury; and His action was voluntarily.
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Partiality and Care
All previous approaches assume that ethics should be impartial and that close relationship with particular individuals is irrelevant.
E.g. Saving your mom or a stranger from drowning.
Ethic of care
Emphasizes preserving and nurturing concrete valuable relationship. Says we should care for those dependent on and related to us.
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Partiality and Care (cont.)
Communitarian ethic
An ethic that sees concrete communities and communal relationships as having a fundamental value that should be preserved and maintained. The value of the self is derived from the value of the community.
Note:
Not all relationships have value (e.g. you and your enemy). Demands of caring are sometimes in conflict with the demands of justice (e.g. you are managing your friend). Conflicts can be resolved based on the level of significance of the wrong. Managers who feels that she cannot be impartial to her friends should resign.
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Integrating 4 principles
Conflicts:
Utilitarian standards ignore rights and justice. Moral rights ignore utilitarian benefits and justice. Standards of justice ignore utilitarian benefits and individual rights. Standard of caring ignore demands of impartiality.
Figure 2.1
Moral standards: utilitarianism, rights, justice, ethic of care. Fact: concerning the policy institution or behavior under consideration. Moral judgment: such behaviors or such policies are right or wrong.
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Integrating 4 principles (cont.)
Weighting the importance of each principle:
Whether the kinds of utilitarian values involved are clearly more important than the kinds of values protected by the right (or distributed by the standard of justice)? Whether the more important kind of value also involves substantially more people? Whether the actual injuries sustained by the persons whose rights are violated will be minor? Whether the potential breakdown in trusting relationships is more or less important?
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Virtue Ethics
Moral virtue is an acquired disposition that is valued as part of the character of a morally good human being and that is exhibited in the person’s habitual behavior.
E.g. honesty is a moral character of a person who always tells the truth. A moral virtue is praiseworthy because its development requires effort.
Principles of utility, rights, justice, and caring judge actions, but an ethic of virtue judge
- characters. However conclusions of virtue ethics
are not much different from conclusions of action- based ethics.
E.g. the virtue of respect is consistent with rights.
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Virtue Ethics (cont.)
What are characters that make a person a morally good human being?
Aristotle: habits that enable a person to live according to reason Aquinas: habits that enable a person to live reasonably in this world and be united with God in the next Maclntyre: dispositions that enables a person to achieve the good at which human “practices” aim Pincoff: dispositions we use when choosing between persons or potential future selves
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Virtue Ethics (cont.)
Virtue theory:
An action is morally right (wrong) if in carrying
- ut the action the agent exercises, exhibits, or
develops a morally virtuous (vicious) character. From another point of view, virtue theory condemns certain actions because they are the
- utcome of a morally vicious character (e.g. lies
are products of a dishonest character).
Virtue theory can be used to evaluate social institutions and practices:
E.g. some economic institutions make people greedy, some government policies make people lazy.
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Virtue Ethics (cont.)
Virtues and other principles of ethics
A theory of virtue judges action in terms of the dispositions that are associated with those actions. An ethic of principles judges dispositions in terms of the actions associated with those dispositions. Ethics of virtue fills out and adds to utilitarianism, rights, justice, and caring by looking not at the actions people are required to perform, but at the character they are required to have (e.g. some virtues enable people to do what moral principles require, some consist of a readiness to act on moral principles, and some are dispositions that moral principles require us to develop).
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Morality in International Contexts
Local practices VS practices of more developed home country
Is the local practice consistent with 4 moral principles and virtue theory? Can the practice of more developed country be implemented without damage to locals? Is the ethical violation significant enough to require operational withdrawal? Is it possible to operate without engaging local practices that are unethical?
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CONTACT
Nattawoot Krongkajonsook Email: fbusnwk@ku.ac.th Homepage :
http://fin.bus.ku.ac.th/16/nattawoot.htm
Mobile: 01- 6394990 Office:
Department of Finance, 4th Floor of Faculty of Business Administration, Kasetsart University Tel: 02-9428777 Ext. 356
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