Business Ethics

Normative Account and Ethics

A normative account or assessment of something attempts to say�usually on the basis of some universal normative ethical theory or belief--whether that thing is actually good or bad, right or wrong.
Normative ethics attempts to say, or at least find theori

Descriptive Account and Ethics

A descriptive account or assessment of something (also known as an observational account) merely describes or observes or says what that thing is, or what people hold it to be, without saying whether it is actually right or wrong, good or bad.
Ethics can

Utilitarianism

� Utilitarianism (a consequentialist theory). Holds that what is good is what produces the greatest happiness (or pleasure or benefit) for the greatest number of people. British legal reformer Jeremy Bentham (1748-1832) was a great proponent of this view.

� Kantian Ethics

and other forms of Deontological Ethics (nonconsequentialist theories). Ethics is based on or primarily concerned with ethical rules. Instead of being based on consequences, these rules are derived from logic, from reasoning, or from the nature of human b

� Virtue Ethics

Most important ancient source: the Nichomachean Ethics of Aristotle (384-322 B.C.) Virtue ethics focuses not on ethical rules or consequences, but on the moral status of the person or agent. The purpose of ethics is to develop the individual's moral/ethic

� Moral Sense Theory and Ethical Intuitionism.

Holds that humans have a moral sense (analogous to the physical senses) or intuition - a faculty or perception-device - by which we can and do distinguish between right and wrong. Important proponents: 18th century: Third Earl of Shaftesbury, Francis Hutc

� Ethics based on or emphasizing Human Rights

Examples: Bill of Rights in the U.S. Constitution. (First 10 amendments.) Human rights "basket" in the Helsinki Accords. See the website of the UN Commission on Human Rights and others on this approach.

� Pragmatic ethics

Pragmatism as a philosophical view or stance rejects unchanging or transcendent principles and views and norms, holding instead that principles and views and norms both are and need to be bent or changed in light of actual events or discoveries or situati

� Ethics based on Nature or "Natural Law

(This is often based on a religious view, but does not need to be so.) Holds that humans are beings of nature and have a nature, that this nature can be known, and that ethics can be derived from laws or principles found in that nature. Some examples: Rom

� Contractarian

Ethics is based on an (imagined or hypothetical) contract or agreement among the members of a society. Most important recent example is A Theory of Justice (1971) by the late Harvard professor John Rawls (1921- 2002). Rawls used a "veil of ignorance" and

� Socialist, Communist, Communitarian, and Marxist Ethics

(There are important differences among those, but for our purposes now I am lumping them together because of their similarities.) Claims that values (and usually attitudes, as well as success and failure) are socially derived and/or determined. Emphasizes

� Libertarian Ethics

More-or-less directly opposite to the socialist/communist/communitarian view. Holds that the best political, social, and/or governmental system is the one that governs least, that provides for the greatest individual liberty, initiative, entrepreneurship,

� Ethics Based on Religion

Often called the Divine Command Theory of Ethics) For many people, their ethics is based on their religion. In this view, right and wrong, good and evil, just and unjust are determined not (primarily or even at all, depending on the particular view) by hu

� Ethical Egoism

. Identifies what is ethically right with the agent's self-interest. Claims that something is ethically right if and only if it promotes the agent's (long-term) self-interest. There are at least two versions of this: (1) Descriptive ethical egoism. This c

distinguish between ethics and law.

Laws are the regulations established, and usually written, by a governing power. Ethics are the morals of a culture, and often times, they inform the laws that are made. The distinction is that, while you may obey the law, you might not always act ethical

Observational or cultural or descriptive ethical relativism is...?

is a statement (or observation) of the fact that different people, groups, societies, or (especially) cultures do, in fact, have different ethical views, relative to that person, group, or society

. Normative ethical relativism is....?

is the theory that people ought to or should accept the ethical views that their culture actually holds. It is sometimes put, "What they think is right for them, is right for them." It also (usually) claims that no universal ethical standards or norms can

4. Know and be able to describe briefly at least five criteria for a good or adequate normative ethical theory: Universality, consistency, culpability, importance, fairness

1. Universality. Unless I can show that the circumstances of a given case are significantly different, an ethical judgment should apply to me as well as others, and to all others.
2. Consistency. Ethical judgments should not conflict with one another.
3.

5. An argument in ethics (morality) usually has at least three parts: A factual premise, a premise stating an ethical principle or theory, and a conclusion that brings those two together.

For example (a simple one that can usually be generalized because complex arguments usually can be or reduced to iterations of this simple example):
1. (Premise 1; Factual component) Mary stole money from her employer.
2. (Premise 2; Ethical principle) St

7. In consideration of economic (or distributive justice), you should be able to give criteria or accounts of what justice has been held to be: Some proposals or generally held accounts are or include: fairness (John Rawls), equality, rights, and deserts.

� 6 possible schems or principles for distributing rewards
o �. To each an equal share
o �2. To each according to individual need
o �3. To each according to personal effort
o �4. To each according to social contribution
o �5. To each according to merit
o

� 6 possible schems or principles for distributing rewards

o �. To each an equal share
o �2. To each according to individual need
o �3. To each according to personal effort
o �4. To each according to social contribution
o �5. To each according to merit
o �6. Winner take all

� Nozicks Three Princples

1)A person who acquires a holding in accordance with the principle of justice in acquisition is entitled to that holding
o(2)A person who acquires a holding in accordance with the principle of justice in transfer, from someone else entitled to the holding

Libertarian theory and Free Exchange

Libertarianism identifies justice with liberty. Liberty is the prime value, and justice consists in permitting to live as he or she pleases, free from the interference of others.
� �Rejects utilitarianism's concern for total social well-being.
� �Liberty

9. Know, at least minimally, the contractualist-egalitarian theory of John Rawls, including Rawls's two principles. (S&B pp. 119-127, esp. p. 122)

Rawls theory of justice lies within the social contract tradition . Ask us to image people meeting in original position and what they choose as basic principls that are to govern their society. Although chosen on self interest, they are being a vail of in

10. Know the definition of capitalism (S&B p. 150).

� �According to Shaw & Barry, "Capitalism can be defined ideally as (1) an economic system in which (2) the major portion of production and distribution is in private hands, operating under (3) what is termed a 'profit' or 'market' system."
� �Capitalism

11. Know the four key features of capitalism (S&B pp. 153-156).

1. Companies
� �2. Profit motive
� �3. Competition
� �4. Private property

three ethical justifications of capitalism

� Justifications
� 1. The natural right to property
� 2. Religious justification(s) of private property (e.g. The Ten Commandments)
� �3. Adam Smith's concept of the invisible hand
o �"Every individual is continually exerting himself to find the most adva

three ethical criticisms of capitalism

1. Capitalism leads to inequality (i.e. it's unfair)
o �2. Today's marketplace and business situation are far more complex than Smith's model of getting the stuff for your dinner.
o �3. Capitalism assumes human beings are materialist/consumerists
o �4. Co

the definition of a corporation (S&B p. 200) as well as the main reasons for their formation.

� �"A corporation is a thing that [1] can endure beyond the natural lives of its members and that [2] has incorporators who may sue and be sued as a unit and [3] who are able to consign part of their property to the corporation for [4] ventures of limited

� Narrow view

Narrow view, espoused by Milton Friedman. Profit maximization. The sole social responsibility of a corporation and corporate managers and officials is to "make as much money for their stockholders as possible" so long as the corporation stays within the r

3 arguments in favor of narrow view

Invisible hand, the let government do it argument and business can't handle it argument.
Invisible hand argument: o �"Every individual is continually exerting himself to find the most advantageous employment for whatever capital he can command. It is his

Response against "Business can't handle it" arguement

Corporations lack expertise. and Corporations will impose values on us.

� Broad view,

o Espoused by most commentators on business ethics. Because of its social power, social role, and social "footprint," in addition to making a profit for its shareholders, a corporation has a larger social responsibility
o Companies have other obligations

: Caveat emptor, caveat venditor, strict product liability. Know why there has been a movement away from caveat emptor to strict product liability.

o �(1) Caveat emptor: Let the buyer beware. Era of patent medicines and outrageously false product claims. Consumer was supposed to be knowledgeable about product but this ended after McPherson vs. Buick Motor case. Basically because unrealistic assumptio