132243 Business & Social Responsibilities Ethical Principles in - - PowerPoint PPT Presentation

132243 business social responsibilities ethical
SMART_READER_LITE
LIVE PREVIEW

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


slide-1
SLIDE 1

1

132243 Business & Social Responsibilities Ethical Principles in Business

slide-2
SLIDE 2

2

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.
slide-3
SLIDE 3

3

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.

slide-4
SLIDE 4

4

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

slide-5
SLIDE 5

5

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.

slide-6
SLIDE 6

6

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.

slide-7
SLIDE 7

7

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.

slide-8
SLIDE 8

8

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.

slide-9
SLIDE 9

9

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.

slide-10
SLIDE 10

10

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.

slide-11
SLIDE 11

11

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

slide-12
SLIDE 12

12

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.

slide-13
SLIDE 13

13

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.

slide-14
SLIDE 14

14

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.

slide-15
SLIDE 15

15

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

slide-16
SLIDE 16

16

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

slide-17
SLIDE 17

17

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.

slide-18
SLIDE 18

18

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.

slide-19
SLIDE 19

19

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

slide-20
SLIDE 20

20

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.

slide-21
SLIDE 21

21

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.

slide-22
SLIDE 22

22

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?

slide-23
SLIDE 23

23

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.

slide-24
SLIDE 24

24

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.

slide-25
SLIDE 25

25

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.

slide-26
SLIDE 26

26

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.

slide-27
SLIDE 27

27

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

slide-28
SLIDE 28

28

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.

slide-29
SLIDE 29

29

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

slide-30
SLIDE 30

30

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.

slide-31
SLIDE 31

31

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.

slide-32
SLIDE 32

32

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.

slide-33
SLIDE 33

33

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).

slide-34
SLIDE 34

34

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.

slide-35
SLIDE 35

35

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.

slide-36
SLIDE 36

36

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.

slide-37
SLIDE 37

37

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.

slide-38
SLIDE 38

38

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

slide-39
SLIDE 39

39

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.

slide-40
SLIDE 40

40

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.

slide-41
SLIDE 41

41

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.

slide-42
SLIDE 42

42

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.

slide-43
SLIDE 43

43

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.

slide-44
SLIDE 44

44

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.

slide-45
SLIDE 45

45

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.

slide-46
SLIDE 46

46

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.

slide-47
SLIDE 47

47

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?

slide-48
SLIDE 48

48

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.

slide-49
SLIDE 49

49

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

slide-50
SLIDE 50

50

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.

slide-51
SLIDE 51

51

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).

slide-52
SLIDE 52

52

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?

slide-53
SLIDE 53

53

slide-54
SLIDE 54

54

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

Office Hours:

Monday and Wednesday, 10 am – 2 pm.