Ethical reasoning 2 Consequentialism: We can decide the right action (alternative, option, in a decision) by considering consequences, rather than just saying “this is wrong”, or intrinsically bad Consequences: if we do this, then this is what will probably happen. ? What good and bad things count as consequences? Money, Happiness, Freedom Friendship, Life, Pain, Death? ? How likely are these consequences? ? Consequences for whom? The decision maker, the company, every person, the planet?

Ethical Egoism (and market) 2 Ayn Rand; USA famous book “The Fountainhead”. Milton Freidman and Alan Greenspan part of same group of thinkers You should decide what is ethically correct by considering consequences for self. This philosophical position is defensible using long term / strategic arguments: If you really think about life consequences, you treat others with care and compassion, etc. The problem is short term, you can gain while harming others. In a dynamic mobile society this can become long term too …fight dirty…then move on.

ethical egoism (cont.) 2 In management decisions, ethical egoism is associated with hard-core profit maximisation by the firm (Since profits and sales growth are generally linked to management’s self-interest). Many “egoistic” strategic decisions knowingly harm other companies, as part of the competitive game. It can be argued (very dubiously) that managers sometimes sacrifice their own interests for the sake of the shareholders, that is, they are being altruistic towards shareholders. We must distinguish “ethical-egoism” (should, normative) from “psychological-egoism” (is, empirical)

Utilitarianism & Cost-Benefit Analysis 2 Mill & J Bentham We should decide by considering consequences for everyone. Cost – Benefit Analysis (cf. Pinto) is based on this principle, with everything estimated in dollar terms (e.g. value of life from actuarial tables). Probabilities can be used. Very widely understood ethical principle. It seems scientific. It is used in government, public policy, because it provides a compelling justification for policies. BUT. (i) ignores minority rights (e.g. slavery) (ii) forecasts of consequences are very unreliable. (iii) What counts as a consequence? UTILIT. IS similar to the STAKEHOLDER model. UTILIT. IS NOT “UTILITY MAX.” or PROFIT MAX in a market of buyers and sellers

Contractarianism (J. Rawls) 2 Ethics and morals are based upon agreements amongst free persons (like a contract). Reflective thinking or deliberation is important. (i.e. agreement within each person) This leads to Rawls’ principles of D-Justice Pluralism Every situation requires the application of a mixture of these “EDM” approaches. Where prescriptions conflict some kind of balanced judgement is needed.

Deontology (Kant) 2 Emphasis on duties and obligations (and to a lesser extent, rights). Non-consequentialist, intrinsic principles and rule. Especially “the golden rule” (i) “act only according to a maxim that you would want to be universalised” (ii) never treat others purely as means to an end, always partly as ends in themselves. First form conflicts with competition. Second form conflicts with “human resources” concept and the idea that managers treat employees solely as a means for profit.

Pluralism, Virtue-ethics, Pragmatism Stakeholder Shareholder Consequentialism Deontology Logic based Golden rule(s) Utilitarianism Egoism Act-ut Rule-ut Utility-max. in markets Justice constraints Distributive justice Free exchange agreements Contractarianism Pluralism, Virtue-ethics, Pragmatism