MORAL

REASONING IN
BUSINESS
Moral Reasoning

Isa process in which ethical issues

& problems are benchmarked
against a moral standard so that a
moral judgment is made possible
Framework of Moral Reasoning
Moral Norm
Ethical
Reality Moral Standard Moral
Issues/
Check Company Policy Standard
Problems
Ethical Principle

Situation Problem Decision

Resolution
Analysis Analysis Analysis
Example
Gravity of offense
Graft
Frequency of offense Company rules Moral or
Sexual
Harm done Ethical principles Immoral
Harassment
Codes of conduct
Theft Number of people
affected
Legal or
Moral Norms
Bribery cost
Illegal
Characteristics of a Good
Moral Standard (Shaw, 1999)
1. A good moral standard is one that
looks at the issue as something that
is very serious
2. A good standard must be grounded
on good moral argument.
Characteristics of a Good
Moral Standard (Shaw, 1999)
3. A good standard should be objective
and not subjective. It should be
universally accepted & should apply to
all.
4. A good standard, when violated,
brings about feelings of guilt, shame &
remorse of conscience
Requirements for a Good
Moral Judgment
1. A good moral judgment must be
logical.
2. Must be based on facts and solid
evidence
3. Must be based on sound & defensible
moral principles
MORALITY OF
PROFIT MOTIVE
Profit
Considered by businessmen as a form
of anticipated reward
Compensation for the efforts they
spend, skills they apply and returns
for the capital they invested in putting
up & organizing the business.
Profit Motive
Most important aspect of business
Milton Friedman (Economist)
“Only responsibility of business is to make profit so
long as one stays within the rules of the game &
engages in open & free competition without deception
or fraud”
Peter Drucker (Management Guru)
“The primary responsibility of business is to look for
customers & satisfy their needs & wants”
Assumption of Profit Motive
1. Profit-motive in business is an
ethical issue
2. Profit-motive operates within the
two important aspects of human
conduct
2.1 Freedom
2.2 Structure of business
THE GOOD & BAD SIDE
OF PROFIT MOTIVE
THE GOOD SIDE OF PROFIT-MOTIVE
1. Profit-motive motivates people to do
something meaningful
2. Profit-motive promotes ingenuity &
cleverness in running a business
3. Profit-motive makes people
productive
THE GOOD SIDE OF PROFIT-MOTIVE
4. Profit-motive generates potential
capital for the business
THE BAD SIDE OF PROFIT-MOTIVE
1. Profit-motive promotes rivalry
among competitors
2. Profit-motive makes people focus
only on making money
THE BAD SIDE OF PROFIT-MOTIVE
3. Profit-motive turns the
businessman from being a reflective
& a questioning person because he
focuses his attention only on the
practical activity of making money
THE BAD SIDE OF PROFIT-MOTIVE
4. Profit-motive promotes self-
interest rather than the common
good. To some extent, benefited some
businessmen but it has also created
some social costs that many people
have to bear
ETHICAL
CONSIDERATIONS OF
PROFIT MOTIVE IN
BUSINESS
ETHICAL CONSIDERATIONS OF PROFIT-MOTIVE

1. Earning profit is good and valid

activity in business
Is my profit fair enough for me &
my customers?
Did I consider important factors
& parameters in making profit?
ETHICAL CONSIDERATIONS OF PROFIT-MOTIVE

2. Making excessive profits is totally

wrong.
3. Profit is not the “be-all and the end-
all” of doing business.
ETHICAL CONSIDERATIONS OF PROFIT-MOTIVE

4. The teachings of the Catholic Church

do not totally condemn profit as part of
business activity.
Man by nature is a being and a creature who is
supposed to be responsible and accountable for his
actions.
1. MAN IS A RATIONAL BEING
• He is capable of moral judgment
• Is a thinking being, he is aware of his
intentions as well as the consequences of
his actions
• Knows what he is doing