Business ethics

Buisness Ethics

Chapter 1 : What is Buisness Ethics?

Business Ethics is philosophical analysis applied to economic institutions at:

• Macro (the market);
• Meso (the corporation); and
• Micro (individual decisions) level  

Business Ethics is a tool to reach an agreement around the moral legitimacy and justification of actions, decisions, policies. (Translating value into actions and decisions)

Business Ethics is a process about creating value (for stakeholders),  AND at the same time doing the right thing, deciding what kind of organization we want to create, what kind of person we want to be.

• What is a stakeholder ?        

A stakeholder is any identifiable groups or individual who can affect or is affected by organisational performance in terms of its products, policies and work processes. (Public interests groups, protest groups, local communities, government agencies, trade associations, competitors, unions, and the press are organisational stakeholders)

Maximizing shareholder to create as much value as possible is a managerial choice and it is their primary responsibility. But it can be counterproductive :

• Shareholder primacy can hurt shareholders themselves. (both individually in the short-term and collectively in the long-term) 
• It takes attention away from the fundamental drivers of value : stakeholder relationships.

Stakeholder theory focuses on how tradeoffs have to be made by the executive to improving them for all sides.

Chapter 2 : Normative Ethical Theories (1/2) and Dilemma Analysis.

• Normative théorie :

• Non consequentialist Ethics (Motivation/principles > Action) -> Deontology (I try to do what is my moral duty)

• Consequentialist Ethics (Action > Outcomes) -> Utilitarianism: (I try to do what generates the best consequences)

• Deontology

« Apart from the consequences an act might have, the NATURE of that act is an important fact bearing on whether there is a moral obligation to perform or not perform it. »

 Immanuel Kant (1724 – 1804)         

The Categorical Imperative

• “Act only in accordance with that maxim through which you can at the same time will that it become a universal law.” (The Autonomy Formula)
• “Never act in such a way that treats Humanity, whether in ourselves or in others, as a means only but always as an end in itself” (The Humanity Formula)

One of the most important deontological décision is human rights. (Life, liberty, justice, education, freedom of belief, association and expression ...)

Arguments against deontologie :

• Many ethical principles are disponible, the difficult is to choose one and we are never sure that they universal moral rules. (Chinese’s moral rules are different that french’s one)
• Two or more principles might conflict with each other. (Right & right situation)

• Utilitarianism

« An action is morally right if it tends to produce the greatest good (Utility/Happiness/net benefit) for the greatest number»

J. S. Mill (1806 – 1873

Two types of Utilitarianism :

• Act: An action is morally right only if doing that precise act maximizes the good(pleasure/happiness). (If lying benefits the greater good in a particular situation, then it’s all right for journalist to lie) 
• Rule: An action is morally right if and only if it does not violate the set of rules of behavior whose general acceptance in the community would have the best consequences—that is, maximize the good. (Lying would damage the reputation of journalism, which would not benefit the greater good, then it is not OK for journalists to lie)

Arguments against Utilitarianism :

• The problem of (distributive) justice. (A society with huge income inequalities – or even with slaves – might be desirable IF it generates the (total) Greatest Happiness. It leaves aside the minorities)
• The problem of inter-personal comparability. (How it is possible to compare and sum up the amount of utility (happiness) that different individuals receive from different outcomes, Listening to Mozart... OR ...Kayaking in the Liffey)

• Two different categories of Ethical Dilemma

• Right versus Wrong => Do the right thing (Moral Temptation)
• Right versus Right => Which value is more important ? (Real dilemma)

Chapter 3: Normative Ethical Theories (2/2): Virtue Ethics and the Parable of the Sadhu.

While Deontology focuses on Principles and Utilitarianism on consequences, Virtue Ethics focuses on the development of the person’s character. Business ethics is about making explicit agreements that can help managers make better decisions.

• Aristotle’s Virtue Ethics (384-322 B.C.)

• Happiness (Eudaimonia) is the ultimate good
• Virtues of Character & Virtues of Thought
• The Golden Mean
• Responsibility and Character
• Virtues and the Community Arguments against Virtue Ethics:
• The application problem
• Cultural relativism

Deontology and Consequentialism forget an essential part of ethics : - THE PERSON’S CHARACTER and how personal moral growth is encouraged.

• Eudaimonia -> happiness or welfare. (human flourishing is the more accurate translation)

What Eudimonia/Happiness is not :

• Money because it can’t be what makes life fulfilling
• Pleasures because a life of pleasure seeking is only fit for beasts.
• These (and others) are subordinate goods

• What is Virtue ?  

The concept of a virtue is the concept of something that makes its possessor good. A virtuous person is a morally good, excellent or admirable. It is a person who acts and feels well, rightly, as she should.

Virtue is not just a single action or a tendency.

Virtue is a disposition than needs to be developed through practice and good reasoning.

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