1 Some Different Views About Business Ethics David Long Canterbury Christ Church University IPW Helsinki Metropolia Business School, Finland May 13 –

2 Aims of this Lecture The aims of this lecture are to introduce:   The difference between ethics and the law   The concepts of Moral Absolutism and Moral Relativism   To contrast Consequentialism and Non- Consequentialism   To understand a range of different views about business ethics.

3 Good people do not need laws to tell them what to do Bad people will always find a way round.

Ethics and the Law Ethics Law grey area Source: Crane & Matten (2010) p7

5 Ethics and the Law A Legal Ethical B Not Legal Ethical C Legal Unethical D Not legal Unethical Ideal state true free market Minimal compliance with the law Difficult decisions ethics influence new laws Worse case scenario © Long & Taylor, 2007

6 If Laws are what you MUST do... Ethics are what you OUGHT to do

7 Moral Absolutism vs Moral Relativism Moral Absolutism Universal notions of right and wrong associated (often) with religious and humanist schools of thought Moral Relativism Notions of right and wrong depend on the circumstances (e.g. Culture, environment, pressure etc.)

8 Consequentialism vs Non-Consequentialism Consequentialism The result of an action determines what is right or wrong. The means (action taken) are justified by the ends achieved e.g. Utilitarianism Non-Consequentialism Right and wrong determined by motives, principles or rules, not outcomes. There is a primary need to respect persons e.g. Deontology/Kantianism

9 Consequentialism: Utilitarianism According to Utilitarianism, an action is morally right if it results in the greatest amount of good for the greatest number of people affected by the action According to Utilitarianism, an action is morally right if it results in the greatest amount of good for the greatest number of people affected by the action  Maximise benefits to society and minimise harms  Net balance of good consequences over bad  Assumes all people are equal  Not a perfect picture, but to bring the greatest pleasure to the greatest number of people, but not all the people.

10 Deontology/Kantianism Proposed by the Greek Philosopher Plato Idealists regard moral values as unchanging Immanuel Kant (German Philosopher ) extended Plato’s ideas – – Categorical Imperatives of Consistency, Dignity & Universality – – Primary Respect for Persons. Non-Consequentialism:

11 Now some Post-Modernist Views about Business Ethics...

12 “Business is Part of Society” Richard De George “Business is not just a matter of economic exchange … it involves human interactions, is basic to human society”   Moral judgements sometimes differ from business judgements   Good ethical practice pays in the long term - -Difficulties with moral pluralism in the world - -Wealth arguments … who deserves profit? - -The importance of moral education and the social impact of decisions. (source: Chryssides & Kaler, 1993, original article 1978)

13 “The Poker Game Analogy” Albert Carr “The ethics of business are not those of society, but rather those of the poker game”   Pressure to deceive in business   Two sets of ethical standards: - -Home - -Office   Duty to obey the laws, not to make them   Self-regulation versus legislation   The ‘game’ of business. (source: Chryssides & Kaler, 1993, original article HBR 1968)

14 “The Social Responsibility of Business is to Increase its Profits” Milton Friedman   Only human beings have a moral responsibility for their actions   It is a manager’s responsibility to act solely in the interests of shareholders   Social issues and problems are the proper province of the state rather than corporate managers. (source: Chryssides & Kaler, 1993, original article NY Times 1970)

15 “The Stakeholder Theory of the Modern Corporation” Edward Freeman   Managers have a fiduciary responsibility to stakeholders of a business   This responsibility goes wider than shareholders, to include employees, customers, the local communities and governments   Each stakeholder has the right not to be treated as a ‘means to an end’. (source: Chryssides & Kaler, 1993, pp )

16 Different Views of Ethics: Summary of Learning   People hold different views about right and wrong, both within and between different national cultures   There appears to be no single right way to resolve ethical issues   Frameworks exist to explain different behaviour.

17 And Finally, Ernest Hemingway Wrote About Ethics I know only that.. What is moral … you feel good after What is immoral … you feel bad after Ethics is what you do … hoping others will feel good after!