Business Ethics

Ethical Principles in Business

 Basic Principles
• Utilitarianism: A general term for any view that holds
that actions and policies should be evaluated on the
basis of the benefits and costs they will impose on
society. (Consequences)
• Rights: An individual's entitlement to something.
• Justice: distributing benefits and burdens fairly among
people.
• Ethic of care: An ethic that emphasizes caring for the
concrete well being of those near to us.
• Ethic of virtue: An ethic based on evaluations of the
moral character of persons or groups/ Institutions.
 Utilitarianism
• Actions and policies should be evaluated on the basis of the benefits and
costs they will impose on society. (Consequentialist approach)
• The only morally right action in any situation is that whose utility is
greatest by comparison to the utility of all the other alternatives .
• Utility is the inclusive term used to refer to any net benefits or desirable
good like pleasure, health, lives, satisfaction, knowledge, happiness and
cost or undesirable evil or harm like medical cost, loss of income, pain,
dissatisfaction, ignorance, unhappiness) produced by an action.
• Hence, Utilitarianism is any theory that advocates selection of that action
or policy that maximizes utility.
• Leading utilitarian theorists:
– Jeremy Bentham
– John Stuart Mill
 Misunderstandings in applying
Utilitarian Principles
• Assumption that we can measure all benefits and harms
• First, an action is right if it produces most utility for all
persons affected by the action, including of course, the
person who performed the action. (Strictly impartial as a
disinterested and benevolent spectator)
• Second, both immediate and all foreseeable future costs
and benefits that each alternative will provide for each
individual must be taken into account, as well as any
significant indirect effect.
• Third, to determine the morally right action combined
benefits and costs of every other action the agent could
carry out must be calculated and select the action that
provides maximum utility.
How to Apply Utilitarian Principles
• First, determine what alternative actions or policies are
available to me in that situation.
• Second, for each alternative action, estimate the direct
and indirect benefits and costs that the action will
probably produce for all persons affected.
• Third, for each action, subtract the costs from the
benefits to determine the net utility of each action.
• Fourth, the action that produces the greatest sum total
of utility must be chosen as the ethically appropriate
course of action.
 Attractiveness of Utilitarian
Principles
• Objective basis for judging social policy and social legislation.
• Fit in rather neatly to intuitive criteria that people employ when discussing
moral conduct. (benefit and harms)
• Requires us to be impartial
• Able to explain why we hold certain type of activities as morally wrong (lying,
adultery, killing) and others as morally right (telling the truth, fidelity, keeping
one’s promises)
• Highly influential in economics - economic behavior can be explained by
assuming that humans always attempt to maximize their utility and utilities of
commodities can be measured by prices people are willing to pay.
• Basis of the technique of economic cost-benefit analysis- desirability of
investing in a project
• Fits nicely with the value many people prize: efficiency- operating in such a
way that one produces a desired output with the lowest resource input.
 Criticisms of Utilitarianism
• Measurement Problems: Critics say not all values can be
measured.
– How can the utilities different actions have for different people
be measured and compared?
– Some benefits and costs seem impossible to measure, Ex. value
of health or life.
– Many of the benefits and costs of an action can not be reliably
predicted, they also can not be adequately measured. Ex. Basic
scientific knowledge
– It is unclear exactly what is to count as benefit and what is to
count as cost. Different groups
– Assumption that all goods can be traded for equivalents of each
other may not be true. (Non economic goods- love, freedom,
health, fatherhood, can not be measured in economic terms)
 Criticisms of Utilitarianism
• Utilitarian respond that requirement of accurate, quantifiable measurement can
be relaxed when such measurements are not possible. May rely on shared or
other commonsense measures of the comparative value.
• Commonsense criteria that can be used to determine relative values
– Instrumental goods: Things that are considered valuable because they lead to other good
things.
– Intrinsic goods: things that are desirable independent of any other benefits they may produce.
• Distinction between needs and wants: satisfying person’s basic need is more
important than satisfying his or her mere wants.

• In reality consequences of majority are relatively amenable to quantification.

• The most flexible method of providing a common quantitative measure for
benefits and costs associated with a decision is in terms of their monetary
equivalents -- measured by the price person is willing to pay for.
• Some goods specially health and life can not be priced but we do almost daily.

• Where market prices are incapable of providing quantitative data other sorts of
quantitative measure like political vote or survey are available.
 Criticisms of Utilitarianism
• Critics say utilitarianism fails with rights and
justice.
– Utilitarianism has led us to approve acts that is an
obvious violation of an individual’s most
important rights. (Individuals entitlement to
freedom of choice and wellbeing)
– Utilitarianism can also go wrong when it is applied
to situations that involve social justice. (Only looks
at how much utility is produced but fails to
account of how it is distributed)
 Criticisms of Utilitarianism
• Utilitarian respond that rule-utilitarianism can deal
with issues of rights and justice.
• Rule-utilitarianism: the basic strategy of limiting
utilitarian analysis to evaluation of moral rules.
– An action is right from an ethical point of view if and only
if the action would be required by those moral rules that
are correct.
– The correct moral rules are those that would produce
greatest amount of utility if everyone were to follow them
(as compared to some alternative rule).

– Rule utilitarianism is traditional utilitarianism in disguise.

Rules that allow (beneficial) exceptions will produce more
utility than rules that do not allow any exceptions.
On May 17, 2009 a 17-year-old boy, Yiu Wah, who had been hired at the age of 15,
was crushed and killed while trying to clear a jammed machine in the factory of a
Chinese supplier that was making products for the Walt Disney Company, the
world’s second-largest media conglomerate. Witnesses claimed that the use of
child labor was a human rights violation that was common at the factory of Disney’s
supplier.
This was not the first time that WD had been accused of having Human Rights
Violations in its supply chain. On March 3, 2004, executives of Walt Disney, the
world's second largest media conglomerate, were confronted with a group of
stockholders concerned about the company's human rights record in China. Walt
Disney markets merchandise based on its characters and films, including toys,
apparel, watches, consumer electronics and accessories. Much of this
merchandise is manufactured in China in factories that contract with Disney to
produce the merchandise according to Disney's specifications. The Congressional-
Executive Commission on China, a group established by the U.S. Congress
reported in 2003, that: China's poor record of protecting the internationally
recognized rights of its workers has not changed significantly in the past year.
Chinese workers cannot form or join independent trade unions, and workers who
seek redress for wrongs committed by their employers often face harassment and
criminal charges. Moreover, child labor continues to be a problem in some sectors
of the economy, and forced labor by prisoners is common." In its March 2003
Country Reports on Human Rights Practices, the U.S. State Department said
China's economy also made massive use of prison or forced labor.
 The Concept of a Right
• Right = an individual’s entitlement to something.
– A person has a right when that person is entitled to act in certain way
or is entitled to have others act in a certain way.
• Legal right = An entitlement that derives from a legal system
that permits or empowers a person to act in a specified way
or that requires others to act in certain ways toward that
person. Confer entitlements only where the particular legal
system is in force.
• Moral (or human) rights = rights that all human beings
everywhere possess to an equal extent simply by virtue of
being human. Confer entitlements to all persons regardless of
their legal system.
 The Concept of a Right
• Rights are powerful devices whose main purpose is to enable the
individual to choose freely whether to pursue certain interests or
activities and to protect those choices.
• In our ordinary discourse, we use the term right to cover a variety
of situations in which individuals are enabled to make such choices
in very different ways:-
• First, we sometimes use the term right to indicate the mere
absence of prohibitions against pursuing some interest or activity.
(Privileges or Liberties)
• Second, we sometimes use the term right to indicate that a person
is authorized or empowered to do something either to secure the
interests of others or to secure one's interests. (Claim and Powers)
• Third, the term right is sometimes used to indicate the existence of
prohibitions or requirements on others that enable the individual
to pursue certain interests or activities. (Immunities)
 The Concept of a Right
• Moral rights are rights that impose prohibitions or
requirements on others and that thereby enable
individuals to choose freely whether to pursue certain
interests or activities.
• Features
– Can’t be violated even when “no one is hurt”.
– Tightly correlated with duties others have toward the person
with the right. (either duties of noninterference or duties of
positive performance)
– Provide individuals with autonomy and equality in the free
pursuit of their interests. (within which we stands autonomous
equal)
– Provide a basis for justifying one’s actions and for invoking the
protection or aid of others.
 Moral Rights
• Because of these features, moral rights provide basis
for making moral judgments that differ substantially
from utilitarian standards.
– Express the requirements of morality from the point of
view of individual.
– Limit the validity of appeals to social benefits and to
numbers.
• Focus on securing the interests of the individual
unlike utilitarian standards which focus on securing
the aggregate utility of everyone in society.
• Rights erect higher walls around more important
interests, and so the level of social benefits or costs
needed to breach the walls must be greater.
 Moral Rights
• The concept of a right plays a crucial role in many
of the moral arguments and moral claims
invoked in business discussions. Employees, for
example, argue that they have a “right to equal
pay for equal work”; managers assert that
unions violate their “right to manage”; investors
complain that taxation violates their “property
rights”; and consumers claim that they have a
“right to know.”
 Kinds of Moral Rights
• Negative rights require others leave us alone.
– Duties others have to not interfere in certain activities
of the person who holds a given right. Ex. Privacy
• Positive rights require others help us.
– Some other agents have the positive duty of providing
the holders of right with whatever they need to freely
pursue their interest. Ex. Right to life, food, education
etc.
• Contractual or special rights require others keep
their agreements.
 Contractual Rights and Duties
• Created by specific agreements and conferred only on the
parties involved.
• They are sometimes called special rights and duties or
special obligations. These rights and duties attach only to
specific individuals.
• Require publicly accepted rules on what constitutes
agreements and what obligations agreements impose.
• Underlie the special rights and duties imposed by accepting
a position or role in an institution or organization.
• Require (1) the parties know what they are agreeing to, (2)
no intentional misrepresentation, (3) no duress or
coercion,(4) no agreement to an immoral act.
 A Basis of Moral Rights: Kant
• Kant attempts to show that there are certain moral rights and duties that all
human beings possess regardless of any utilitarian benefits that the exercise
of those rights and duties may provide for others.
• Kant’s theory is based on a moral principle called the CATEGORICAL
IMPERATIVE, that requires that everyone should be treated as a free person
equal to everyone else. Every one has a moral right to such treatment, and
everyone has the correlative duty to treat others in such a way.

• Individuals generally must be left equally free to pursue their interests.

• Moral rights identify the specific interests individuals should be entitled to
freely pursue.
• An interest is important enough to raise to be a right if:
– we would not be willing to have everyone deprived of the freedom to pursue that
interest
– the freedom to pursue that interest is needed to live as free and rational beings.

• Kant provides at least two ways of formulating this basic moral principle.
 Kant’s Categorical
Imperative (First Version)
• It states, "I ought never to act except in such a
way that I can also will that my maxim should
become a universal law."
• A maxim, according to Kant, is the reason a
person has for doing what he plans to do in
certain situation.
• A maxim would become the ‘universal law’ if
every person in a similar situation choose to do
the same thing for the same reason.
• It comes down to following principle:
Unlike utilitarianism, which focuses on consequences, Kantian focuses on interior motivations
 Kant’s Categorical
Imperative (First Version)
• An action is morally right for a person in a certain situation
if, and only if, the person’s reason for carrying out the
action is a reason that he or she would be willing to have
every person act on, in any similar situation.
• The first formulation of the categorical imperative, then,
incorporates two criteria for determining moral right and
wrong:
– Universalizability: The person’s reasons for acting must be
reasons that everyone could act on at least in principle.
• “What if everyone did that?”
– Reversibility: The person’s reasons for acting must be reasons
that he or she would be willing to have all others use, even as a
basis of how they treat him or her.
• “How would you like it if someone did that to you?”

Unlike utilitarianism, which focuses on consequences, Kantian focuses on interior motivations

 Kant’s Categorical
Imperative (Second Version)
• It states "Act in such a way that you always treat
humanity, whether in your own person or in the
person of any other, never simply as a means,
but always at the same time as an end."
• Never use people only as a means to your ends,
but always treat them as they freely and
rationally consent to be treated and help them
pursue their freely and rationally chosen ends.
• Based on the idea that humans have a dignity
that makes them different from mere objects.
 Kant’s Categorical
Imperative (Second Version)
• For Kant, this means two things:
– Respect each person's freedom by treating people only as they
have freely consented to be treated beforehand, and
– Develop each person's capacity to freely choose for him or
herself the aims he or she will pursue.
• Kant's second version of the categorical imperative can be
expressed in the following principle:
– “An action is morally right for a person if, and only if, in
performing the action, the person does not use others merely
as a means for advancing his or her own interests, but also both
respects and develops their capacity to choose freely for
themselves.”
• It is, according to Kant, equivalent to the first formulation.
 Three Basic Rights that can be defended on
Kantian grounds: (Kantian Rights)
• Humans have a clear interest in being
provided with the work, food, clothing,
housing, and medical care they need to live.
• Humans have a clear interest in being free
from injury and in being free to live and think
as they choose.
• Humans have a clear interest in preserving the
institution of contracts.
 Criticisms of Kant
• Kant's theory is not clear enough to always be useful.
• Whether one would ‘be willing to have everyone follow’ a
certain policy
• Whether one person is using another ‘mealy as a means’
• Agreements on the status of moral rights but did not
address what the limits of each of these rights are and
concerning how each of these rights should be
balanced against other conflicting rights.
• Which right should be limited in favor of other? (Relative
importance of interest protected)
• There are counter examples that show the theory
sometimes goes wrong.
 THE LIBERTANIAN OBJECTION:
NOZICK
• A very different view of rights is based on the work
of libertarian philosophers such as Robert Nozick.
• They claim that freedom from constraint is
necessarily good, and that all constraints imposed
on one by others are necessary evils, except when
they prevent even greater human constraints.
• The only basic right we all possess is the negative
right to be free from the coercion of other human
beings.
• Though libertarians tend to use Kant to support
their views, there is no consensus on whether or not
this is actually possible. There is also no good reason
to assume that only negative rights exist.
 Duty Theories
• Duty theories base morality on specific,
foundational principles of obligation.
• These theories are sometimes called
deontological, in view of the foundational
nature of our duty or obligation.
• There are 4 central Duty theories
 THE FIRST DUTY BASED THEORY
• German Philosopher Samuel Pufendorf classified
dozens of duties under three headings:
1. Duties to God
2. Duties to oneself
3. Duties to others.
 THE FIRST DUTY BASED THEORY
• Duties to God:
– Theoretical duty to know the existence & nature of God
– Practical duty to both inwardly & outwardly worship God
• Duties to oneself:
– Duties of the soul, which involve developing one’s skills &
talents.
– Duties of the body, which involves not harming our bodies.
• Duties to others:
– Avoid wronging others
– Treat people as equals
– Promote the good of others
THE SECOND DUTY BASED THEORY
 The second duty–based approach to ethics is RIGHTS
THEORY. There are 4 features associated with moral
rights:-
 Rights are natural insofar as they are not invented or
created by governments.
 They are universal insofar as they do not change from
country to country.
 They are equal as rights are the same for all people,
irrespective of gender, race, or handicap.
 They are inalienable which means that I cannot hand over
my rights to another person, such as by selling myself into
slavery.
 THE THIRD DUTY BASED THEORY
• The third duty based theory is given by Kant which
emphasizes a single principle of duty.
• Influenced by Pufendorf, Kant agreed that we have moral
duties to oneself & others, such as developing one’s
talents & keeping our promises to others .
• However, Kant argued that there is a more foundational
principle of duty that encompasses our particular duties. It
is a single, self – evident principle of reason that he calls
the “categorical imperative.”
THE FOURTH DUTY BASED THEORY
The fourth and more recent duty – based theory is that by British
Philosopher W. D. Ross, which emphasizes prima facie duties. Ross
argues that our duties are “part of the fundamental nature of the
Universe.”
Ross’s list of duties which he believes reflects our actual moral
convictions:
• Fidelity: the duty to keep promises.
• Reparation: the duty to compensate others when we harm them.
• Gratitude: the duty to thank those who help us.
• Justice: the duty to recognize merit.
• Beneficence: the duty to improve the conditions of others.
• Self-improvement: the duty to improve our virtue & intelligence.
• Nonmaleficence: the duty to not injure others.
Senator Strom Thurmond:
A number of people have talked to me about this and they feel that if the federal
government enters the field of black lung, it should enter the field of brown lung;
and if those who have suffered from black lung are to receive federal
consideration, then it seems fair that those who have suffered from brown lung
receive federal consideration……….. If our [state’s cotton mill] workers have
been injured and have not been properly compensated, then steps should be
taken to see that is done. We want to see them treated fairly and squarely and
properly, and so we look forward to ……. The testimony here today.
 Justice
• Disputes among individual are often interlaced with
references to Justice or Fairness. This is the case when one
person accuses another of unjustly discriminating against him
or her, showing unjust favoritism towards someone else, or
not taking up a fair share in of the burdens involved in some
cooperative venture.
• Concerned with the comparative treatment given to the
members of a group
– when benefits and burdens are distributed,
– when rules and laws are administered,
– when members cooperate or compete with each other,
– when people are punished for the wrongs they have done or
compensated for the wrongs they have suffered.
 Justice
• Although, the term justice and fairness are used
interchangeably,
– we tend to reserve the word justice for matters that are
especially serious,
– some authors have held that the concept of fairness is
more fundamental.
• Standards of Justice are generally taken to be more
important than Utilitarian consideration.
• greater benefits for some do not justify injustices to others
• Standards of justice do not generally override the
moral rights of individual. (to be treated as a free and
equal person)
 Kinds of Justice
• Distributive Justice
– requires the just and fair distribution of society’s
benefits and burdens. (equals should be treated
equal)
• Retributive Justice
– requires the just imposition of punishments and
penalties on those who do wrong.
• Compensatory Justice
– requires just compensation for wrongs or injuries by
others.
 Principles of Distributive Justice
• Fundamental
– Scarcity of benefits or too many burdens
– Develop principles of distribution which are just and
resolve the conflict in a fair way
– distribute benefits and burdens equally to equals
and unequally to unequal's in all respects relevant.
– Based on the logical idea that we must be consistent
in the way we treat similar situations.
– But the principle does not specify the “relevant
respect” that may legitimately provide the basis for
similarity and dissimilarity.
 Principles of Distributive Justice
• Justice as equality: Egalitarian
– there are no relevant difference among people that can justify
unequal treatment.
– Every person should be given exactly equal shares of a society’s
or group’s benefits and burdens.
– People become more cooperative with each other and feel
greater solidarity with each other.
– Criticism
– there is no quality that all human beings possess in precisely the same degree.
– Ignores some characteristics that should be taken into account in distributing
goods both in society and in smaller groups: need, ability and effort.
– Political equality- Equal participation in, and treatment by, the
means of controlling and directing the political system and
Economic equality- equality of income and wealth and equality
of opportunity
 Principles of Distributive Justice
• Justice based on contribution: Capitalist
– distribute according to the value of contribution individuals makes to a
society, a task, a group, or an exchange.
– How the “value of contribution of each individual” to be measured?
– Work effort- Puritan Ethic/ Work Ethic
– Places higher value on individual effort and assumes that, whereas hard work does and
should lead to success, loafing is and should be punished.
– Ignores the value of produce and abilities and relative productivity
– Productivity (intrinsic value)
– Greater the quantity of a person’s contributed product, the more that person should be
rewarded.
– Ignores needs and abilities, difficult to place an objective measure on the value of
person’s effort in fields like sciences, arts, entertainment, athletics education, etc.
– Market forces of supply and demand
– desirability by buyers and scarcity
– Ignores needs; in many situations market prices are unjust
 Principles of Distributive Justice
• Justice based on Needs and Abilities: Socialist
– From each according to his ability to each according to his
need
– Based on the idea that people realize their potential by
exercising their abilities in productive work and Benefits
produced through this work should be used to promote
human happiness and well-being.
– Fundamental notion is that societies should be communities.
– Critics:
• No relationship between amount of effort and reward (no
incentive, a stagnating economy with declining productivity )
• It obliterates individual freedom and substitutes paternalism for
freedom
 Principles of Distributive Justice
• Justice as freedom: Libertarian
• No way of distributing goods can be just or unjust apart from an
individual's free choice.
• Robert Nozick, a leading libertarian, suggests this principle as the
basic principle of distributive justice:
– “From each according to what he chooses to do, to each according to what he
makes for himself (perhaps with the contracted aid of others) and what others
choose to do for him and choose to give him of what they've been given previously
(under this maxim) and haven't yet expended or transferred.”
– “From each as they choose, to each as they are chosen.”
– Criticism:
– Enshrines a certain value- freedom from coercion of others- and sacrifices all other
rights and values without giving any persuasive reason.
– Principle will generate unjust treatment to disadvantaged.
 Principles of Distributive Justice
• Justice as Fairness: Rawls (Comprehensive
theory)
– Rawals theory is based on the assumption that
• Conflicts involving justice should be settled by first devising a
fair method for choosing the principles by which the
conflicts are resolved.
• Once a fair method of choosing principles is devised, the
principles we choose by using that method should serve as
our own principle of distributive justice.
– Rawals proposes two basic principles that, he argues, we
would select if we were to use a fair method of choosing
principles to resolve our social conflicts.
 Principles of Distributive Justice
• Justice as Fairness: Rawls (Comprehensive theory)
The distribution of benefits and burdens in a society is just if and only if:
1. Each person has an equal right to the most extensive basic liberties
compatible with equal liberties for all (the principle of equal liberty);
and
2. Social and economic inequalities are arranged so that they are both:
a. To the greatest benefit of the least advantaged person (the difference
principle), and
b. Attached to offices and positions open fairly and equally to all (the
principle of equal opportunity).
– Principle 1 is supposed to take priority over Principle 2 should the two of
them ever come into conflict, and within Principle 2, Part b is supposed to
take priority over Part a.
– distribute by equal liberty, equal opportunity, and needs of
disadvantaged.
 Principles of Distributive Justice
• Justice as Fairness: Rawls
– Principle 1 is called the principle of equal liberty. Essentially, it says that each
citizen's liberties must be protected from invasion by others and must be equal to
those of others. These basic liberties include the right to vote, freedom of speech
and conscience and the other civil liberties, freedom to hold personal property, and
freedom from arbitrary arrest.
– Part a of Principle 2 is called the difference principle. It assumes that a productive
society will incorporate inequalities, but it then asserts that steps must be taken to
improve the position of the most needy members of society, such as the sick and
the disabled, unless such improvements would so burden society that they make
everyone, including the needy, worse off than before.
– Part b of Principle 2 is called the principle of fair equality of opportunity. It says
that everyone should be given an equal opportunity to qualify for the more
privileged positions in society's institutions.
 Principles of Distributive Justice
• Justice as Fairness: Rawls
– Proposes a general method for evaluating in a fair way the adequacy
of any moral principles.
– According to Rawls, a principle is moral if it would be acceptable to a
group of rational, self-interested persons who know they will live
under it themselves but do not know what sex, race, abilities, religion,
interests, social position, income, or other particular characteristics
each of them will possess in that future society.
– Rawls calls this hypothetical circumstance of rational persons the
original position. He refers to the ignorance of any particulars about
themselves as the veil of ignorance. According to Rawls, the parties of
the original position will be morally justified because the parties to the
original position had accepted the principles before knowing what
characteristics they would have. This would ensure that none of them
can protect his or her special interests.
– Also justified as it incorporates Kantian moral ideas of reversibility,
universalizability and treating people as ends.
 Retributive Justice
• Retributive Justice: concerns blaming or punishing
those who do wrong;
• however, there are some major conditions under
which people could not be held morally responsible:
– If people do not know or do not freely choose what they
are doing. (Ignorance and inability)
– If a person being punished actually did no wrong.
(Certitude that the person being punished actually did
wrong)
– The punishment must be consistent and proportioned to
the wrong
– everybody get the same punishment and it no greater in
magnitude than the harm wrongdoer inflicted.
 Compensatory Justice
• Compensatory Justice: fairness when restoring to a person what
the person lost when he or she was wronged by someone else.
– Should restore whatever was taken
– Some losses are impossible to measure (at least pay for the material
damages the loss inflicts on the injured person and the immediate
family)
– Traditionally, theorists have held that a person has a moral obligation
to compensate an injured party only if three conditions pertain:
• The action that inflicted the injury was wrong or negligent.
• The action was the real cause of the injury.
• The person did the action voluntarily.

– The most controversial forms of compensation undoubtedly are the

preferential treatment programs that attempt to remedy past
injustices against groups.
 Ethic of Care
• An approach to ethics that many feminist ethicists have recently
advanced.
• According to this view, the moral task is not to follow universal and
impartial moral principle, but instead to attend and respond to the good of
particular concrete person with whom we are in a valuable and close
relationships.
• Compassion, concern, love, friendship, and kindness are all sentiments or
virtues that normally manifest this dimension of morality.
• Thus, an ethic of care emphasizes two moral demands:
– We each exist in a web of relationships and should preserve and nurture
those concrete and valuable relationships we have with specific persons.
– We each should exercise special care for those with whom we are concretely
related by attending to their particular needs, values, desires, and concrete
well-being as seen from their own personal perspective, and by responding
positively to these needs, values, desires, and concrete well-being, particularly
of those who are vulnerable and dependent on our care.
 Ethic of Care
• Can be extended to larger system of relationships
that makeup concrete communities.
• An ethic of care, therefore, can be seen as
encompassing the kinds of obligations that a so
called communitarian ethic advocates.
• A communitarian ethic is an ethic that sees
concrete communities and communal
relationships as having a fundamental value that
should be preserved and maintained.
 Ethic of Care
• Argument in support of ethics of care:

• Based on the claim that identity of the self- Who I am- is

based on the relationship the self have with other selves.
• Three different forms of caring: caring about something,
caring after someone and caring for someone.
– Concern and interest that one can have for things or ideas.
– Taking care of people that looks after their needs but remains
objective and distant from them.
– Caring that a mother extends toward her child- focused on
persons and their well-being; does not seek to foster dependence,
but nurture the development of person to make them capable of
making their own choices and living one’s own life.
 Issues and Objections to Care
Approach in Ethics
• Not all relationships have value, and so not all would generate the duties
of care.- relationships that exhibit the virtues of compassion, concern,
love, friendship, and loyalty
• Demand of caring is sometimes in conflict with demand for justice – No
fixed rule to resolve all such conflicts.

• can degenerate into favoritism.

– Response: conflicting moral demands are an inherent characteristic of moral
choices
• An ethic of care can lead to “burnout”.
– Response: adequate understanding of ethic of care will acknowledge the need
of the caregiver to care for him or herself.

• Main advantage of theory:

– it is a corrective to the other approaches that are impartial and universal
“Utilitarianism is a civilization of
production and of use, a civilization of
‘things’ and not of ‘persons,’ a
civilization in which persons are used
in the same way as things are used.”

Pope Paul II put it succinctly in 1995

Integrating Utility, Rights, Justice, and
Caring
• Utilitarian standards - must be used when we
do not have the resources to attain
everyone's objectives, so we are forced to
consider the net social benefits and social
costs consequent on the actions (or policies or
institutions) by which we can attain these
objectives.
 Integrating Utility, Rights, Justice, and
Caring
• Standards that specify how individuals must be treated - must be
employed when our actions and policies will substantially affect the
welfare and freedom of specifiable individuals. Moral reasoning of
this type forces consideration of whether the behavior respects the
basic rights of the individuals involved and whether the behavior is
consistent with one's agreements and special duties.
• These sorts of standards must be employed when the actions we
choose are likely to affect people’s positive or negative rights.
When choosing whether to carry out such actions, our moral
reasoning must identify the rights of the people our actions will
affect, the agreements or expectations that are in place and that
impose special obligations on us, and whether our actions treat
everyone affected as free and rational persons.
Integrating Utility, Rights, Justice, and
Caring
• Standards of justice - indicate how benefits and
burdens should be distributed among the members of
a group. These sorts of standards must be employed
when evaluating actions whose distributive effects
differ in important ways.
• Standards of caring - indicate the kind of care that is
owed to those with whom we have special concrete
relationships. Standards of caring are essential when
moral questions arise that involve persons embedded
in a web of relationships, particularly persons with
whom one has close relationships, especially those of
dependency.
 Integrating Utility, Rights, Justice, and
Caring
• One simple strategy for ensuring that all four kinds of
considerations are incorporated into one's moral reasoning
is to inquire systematically into the utility, rights, justice,
and caring involved in a given moral judgment.
Moral
Standards: Moral
(1) Maximise Social Factual Judgment
Utility Information: On the rightness
(2) Respect moral Concerning the Or wrongness of
rights, Policy, institution, The policy,
(3) Distribute Or behaviour institution,
Benefits and Under consideration Or behaviour
Burdens Justly
(4) Exercise Caring
 Integrating Utility, Rights, Justice, and
Caring
• One might, for example, ask a series of questions about an action that one
is considering:
a. Does the action, as far as possible, maximize social benefits and minimize
social injuries?
b. Is the action consistent with the moral rights of those whom it will affect?
c. Will the action lead to a just distribution of benefits and burdens?
d. Does the action exhibit appropriate care for the well-being of those who
are closely related to or dependent on oneself?
• Bringing together different moral standards in this way, however, requires
that one keep in mind how they relate to each other.
• Generally speaking:
• Moral Rights> Utilitarian Justice> Utilitarian
• Care > impartiality in situations that involve close relationships and privately
owned resources
Integrating Utility, Rights, Justice, and
Caring
• But these relationships hold only in general.
• If certain action promises to generate sufficiently large
social benefits or prevent sufficiently large social harm, the
enormity of these utilitarian consequences may justify
limited infringements on the rights of some individual.
• Sufficiently large social costs and benefits may also be
significant enough to justify some departures from
standards of justice.
• The correction of large and widespread injustices may be
important enough to justify limited infringements on some
individual rights.
• When a large injustice or large violation of rights, or even
large social costs, are at stake, the demands of caring may
have to give way to the demands of impartiality.
Integrating Utility, Rights, Justice, and
Caring
• How to determine precisely when utilitarian
considerations become sufficiently large to
outweigh narrow infringements on a
conflicting right, a standard of justice, or the
demands of caring?
Ivan F. Boesky, born into a family of modest means, moved to New York City when as a young
lawyer, he was turned down for jobs by Detroit’s top law firms. By the mid 1980s, the hard
working Boesky had accumulated a personal fortune estimated over $400 million and was CEO
of a large financial services company. He was famous in financial circles for his extraordinary
skills in arbitrage, the art of spotting differences in the prices at which financial securities are
selling on different world markets and profiting by buying the securities where they are priced
low and selling them where they are priced high. As a prominent member of New York society,
Boesky enjoyed a reputation as a generous philanthropist.
However, on December 18, 1987, Boesky was sentenced to 3 years in prison and paid a
penalty of $100 million for illegally profiting from insider information. According to court records,
Boesky paid David Levine, a friend who worked inside a firm that arranged mergers and
acquisitions, to provide him with information about companies that were about to be purchased
by another party (usually corporation) for much more than the current price of their stock on the
stock market. Relying on this insider's information and before it became public, Boesky would
buy up the stock of the companies on the stock market-in effect buying the stock from
stockholders who did not realize that their companies were about to be purchased for much
more than the current stock market price. When the purchase of the company was announced,
the stock price rose and Boesky would sell his stock at a handsome profit. Buying and selling
stock on the basis of insider information at the time was legal in many countries (e.g., Italy,
Switzerland, Hong Kong). Many economists argue that the economic benefits of the practice (it
tends to make the price of a company's stock reflect the true value of the company) outweigh
its harms it tends to discourage non-insiders from participating in the stock market).
Nevertheless, the practice is illegal in the United States due to its perceived unfairness rod its
potential to harm the stock market.
What drove a man who already had hundreds of millions of dollars and every-
thing else most people could ever want or need, to become so obsessed with
making money that he deliberately broke the law? Much of the answer, it was
claimed, lay in his character. A former friend is quoted as saying, "Maybe he's
greedy beyond the wildest imaginings of mere mortals like you and me." Boesky
once described his obsession to accumulate ever more money as "a sickness I
have in the face of which I'm helpless. In a speech at the University of California,
Berkeley, he told students, "Greed is alright, by the way. I think greed is healthy. I
want you to know that I think greed is healthy. You can be greedy and still feel
good about yourself."

Others said of him that:

He was driven by work, overzealous, and subject to severe mood swings.

Intimates of Mr. Boesky say he vacillated between "being loud, and harsh and
aggressive, to mellifluously soft-spoken, charming and courtly." He was also
fiendish about his pursuit of information. "When somebody got an edge on
something, he would go bananas." When it came to money and business
dealings, he was quite ruthless and pursued his goal with a single-minded
purpose .... Although his first love was money, he hankered for the genteel
respectability and status that are generally denied the nouveau riche."
The story of the fall of Ivan Boesky is the story of a man brought down by
greed. What stands out in this story are the descriptions of his moral
character- the character of a man driven by an obsessive "love" of
money. Boesky is described as being "greedy," "sick," "aggressive,"
"fiendish," and "ruthless." Because what he said of himself did not match
his secret dealings, some said he "lacked integrity" and others that he
was "hypocritical" and "dishonest."

All of these descriptions are judgments about the moral character of the
man, not judgments about the morality of his actions. In fact, although it
is clear that trading on insider information is illegal, the fact that the
practice is legal in many countries and that many economists support it
suggests that the practice is not in itself immoral. What was immoral was
that greed led Boesky to knowingly break the law he had an obligation to
follow.
Virtue Ethics:
An Alternative to Moral Principles
• Ethicists argued
– There is need to not only look at the kinds of actions ought to be
performed but also; Pay attention to the kind of person (character)
performing the actions.
– An ‘agent-based’ focus on what one ought to be against an ‘action-based’
focus on how one ought to act would look carefully on a person’s moral
character, including, in particular, whether a person’s moral character
exhibits virtue or vice.
– A more adequate approach to ethics, would take the virtues (such as
honesty, courage, temperance, integrity, compassion, self-control) and
the vices (such as dishonesty, ruthlessness, greed, lack of integrity,
cowardliness) as the basic starting point of ethical reasoning.
– There are virtues related to utility, rights, justice and caring. So, virtues,
should not be seen as providing fifth alternative, instead, as providing a
different approach to survey the same ground.
 The Nature of Moral Virtue
• A moral virtue is an acquired disposition that is a valued as
part of the character of a morally good person and exhibited
in the person's habitual behavior.
• A person has a moral virtue when the person is disposed to
behave habitually in the way and with reasons, feelings, and
desires that are characteristic of morally good person.
• A moral virtue must be acquired and not merely a natural
characteristic such as intelligence, or beauty, or natural
strength.
• A moral virtue is praiseworthy in part because it is an
achievement- its development requires efforts.
 The Moral Virtues
• What are traits of character that make a person morally good?
• Which traits of character are moral virtues?
• Aristotle
– virtues are habits that enable a person to live according to reason. A person
lives according to reason when he knows and chooses the reasonable middle
ground between going too far and not going far enough in his actions,
emotions, and desires.
– The virtuous habit of action is always an intermediate state between the
opposed vices of excess and deficiency: too much and too little are always
wrong; the right kind of action always lies in the mean.
Sphere Of Action Or Feeling Mean Deficiency Excess
Emotion of fear Courage Cowardliness recklessness
Desire of Food Temperance Austerity Gluttony
Giving people external goods they deserve Justice Injustice Injustice

Prudence is the virtue that enables one to know, what is reasonable in a given situation.
 Aristotle’s Virtues
The Virtue of the mean
The emotion or action The Vice of excess in the The Vice of deficiency in the
in the emotion or
involved emotion or action emotion or action
action
Fear Recklessness Courage Cowardliness
Pleasure Self-indulgence Temperance Self-deprivation
Taking one's due Injustice: taking more Justice Injustice: taking less
Donating money Prodigality Generosity Stinginess
Spending money Ostentatiousness Refinement Cheapness
Feeling admired Vanity Confidence Self-abasement
Seeking honor Over-ambition Ambition Unambitiousness
Anger Irascibility Good temper Apathy
Shame Self-consciousness Self-esteem Arrogance
Talking about oneself Boastfulness Honesty False modesty

Entertaining people Buffoonery Wittiness Boorishness

Socializing Obsequ iousness Friendliness Quarrelsomeness
 The Moral Virtues
• Aquinas
– Followed Aristotle in holding that virtues enable people to follow
reason in dealing with their desires, emotions and actions in this world
and in accepting that the four pivotal or cardinal moral virtues are
courage, temperance, justice and prudence.
– He added that purpose of a person is not merely exercise of reason in
this world but also to be united with God in the next.
– Added virtues of faith, hope, and charity- that enable a person to
achieve union with god.
• MacIntyre
– virtues are dispositions that is praised because it enable a person to
achieve the good at which human “practices” aim.

– The moral virtues seems to be those dispositions that enable one to live morally good
human life in general and not merely those that enable one to engage successfully in
some set of human practices.
 The Moral Virtues
• Edmund L. Pincoffs
– Virtues should be understood in terms of the role they play in human life
rather “a mean between extremes.”
– virtues include those dispositions to act, feel, and think in certain ways that
we use when choosing between persons or potential future selves. For
example:
• When deciding, whom to choose as a friend, spouse, employees or manager, we look to
people’s disposition: Are they honest or dishonest, sincere or insincere, greedy or selfish,
reliable or unreliable, trustworthy or untrustworthy, dependable or undependable?
• When thinking about a moral decision, we often think not so much of what we are
obligated to do, but instead of the kind of person we would be by doing it: in carrying out
the action, would I we honest or dishonest, sincere or insincere, selfish or unselfish?
– What makes one disposition a moral virtue and another a moral vice?
• Specific dispositions- provides specific grounds for preferring a person because they
make a person good or bad at a specific task
• Generally desirable dispositions- make a person good at dealing with the kinds of
situations that frequently and typically arise in human dealings.

– The virtues consist of such “generally desirable dispositions” that it is desirable

for people to have in view of the “human situation, of conditions, that is,
under which human beings must live (encounter in living together).
 The Moral Virtues
• The moral virtues, then, include that variety of
dispositions that people in all societies
recognize as desirable because they “serve as
reasons for preference in the ordinary and
not-so-ordinary exigencies of life.”
 Virtues, Actions, and Institutions
• Virtue theory (Guidance for Action)
– How doe it helps us decide what we are to do?
– Can an ethic of virtue do more than tell us the kind of people we should be?
– Is an ethic of virtue able to provide us with little guidance about how we should live our lives, how
we should behave?

• Virtue theory argues that the aim of the moral life is to develop virtues and to exercise
and exhibit them in many situations that human life sets before us.
– The key action guiding implication of virtue theory, then, can be summed up in the claim that:

“An action is morally right if, in carrying out the action, the agent exercises, exhibits, or develops a
morally virtuous character, and it is morally wrong to the extent that by carrying out the action the
agent exercises, exhibits, or develops a morally vicious character.”
• The wrongfulness of an action is determined by examining the kind of character the
actions tend to produce or the kind of character that tends to produce the action.

• Provides a useful criterion for evaluating our social institutions and practices. Any
institution is morally defective if it tend to form morally defective character.
 Objections to Virtue Theories
• It is inconsistent with psychology which
showed that behavior is determined by the
external situation, not moral character.
– Response: moral character determines behavior in
a person’s familiar environment.
– Response: recent psychology shows behavior is
determined by one’s moral identity which
includes one’s virtues and vices.
 Unconscious vs. Conscious
Moral Decisions
• Unconscious Moral Decisions
– Comprise most of our moral decisions.
– Made by the brain’s “X-system” using stored prototypes to
automatically and unconsciously identify what it perceives
and what it should do.
• Conscious Moral Decisions
– Is used in new, strange, or unusual situations for which the
brain has no matching prototypes.
– Consists of the conscious, logical but slow processes of the
brain’s “C-system”.
– Evaluates reasonableness of our intuitions, cultural beliefs,
and the norms stored in our prototypes.
 Morality in International Contexts
• Application in International context – an complex task
– Petty bribery considered unethical in US is a standard practice in
Mexico
– Nepotism and Sexism is a matter of course in some Arabic business
environment
• Four questions help clarify what a MNC to face these
difficulties
– What does the action really mean in the local culture's context?
– Does the action produce consequences that are ethically acceptable
from the point of view of at least one of the four ethical theories?
– Does the local government truly represent the will of all its people?
– If the morally questionable action is a common local practice, is it
possible to conduct business there without engaging in it?