Paul L. Schumann, Ph.D. Professor of Management MGMT 305: Business Ethics Fundamentals 1© 2008 by Paul L. Schumann. All rights reserved.

Outline Use Five Moral Principles to Make Moral Judgments: Utilitarian Principle Rights Principle Distributive Justice Principle Ethics of Care Principle Virtue Ethics Principle Make the Moral Judgment: Do the 5 moral principles reach the same conclusion? If so, then that’s the moral judgment If not, resolve the conflict of moral principles 2

Utilitarian Moral Principle The ethical action is the one that will maximize everyone’s happiness Method 1: What action will do the most good and the least harm for everyone who is affected by the action? Evaluate the good and harm done to each stakeholder for each possible action The ethical action is the one that does the most good and the least harm to everyone considered together Method 2: What would happen in a competitive free market in which all stakeholders have complete and accurate information and are free to make their own choices in mutually beneficial negotiations with each other 3

Utilitarian Moral Principle Example: Is it ethical to deceive employees about hazardous chemicals they use on their jobs? Method 1: Will deceiving employees maximize everyone’s happiness? No, because … Employees are put at risk of harm because they don’t know about the hazardous chemicals and how to use them safely Neighbors are put at risk of harm because employees don’t know how to safely handle spills or other accidents with the chemicals Stockholders are put at risk of harm because profits would be threatened by a mishandled accident with the chemicals 4

Utilitarian Moral Principle Method 2: The deception is unethical on utilitarian grounds because employees have not voluntarily agreed to work with the hazardous chemicals The deception has led them to accept a job that may not be optimal for them Conclusion: Therefore, the deception is unethical on utilitarian grounds because it does not maximize everyone’s happiness What would be ethical on utilitarian grounds would be for employees to be fully informed and to have the proper equipment and training to safely work with the hazardous chemicals 5

Rights Moral Principle The ethical action is the one that you have the moral right to take, that does not infringe on the moral rights of others, and that advances the moral rights of others Do you have a moral right to take the action in question? Reversibility: Would you be willing to have the action done to you if the roles were reversed? Universalizability: Are you willing to live in a world, can you even conceive of a world, in which everyone did the action all the time? Respect & free consent: Are you treating people with respect and in ways that they’ve freely consented to be treated? 6

Rights Moral Principle What moral rights do other stakeholders have? Reversibility Universalizability Respect & free consent Are there conflicts among the moral rights that you and the other stakeholders have? If there are conflicts of moral rights, whose moral rights should take precedence? What competing interests are being protected by each conflicting right? Which competing interest is more important? Give precedence to the right that protects the more important interest 7

Rights Moral Principle Example: Is it ethical to deceive employees about hazardous chemicals they use on their jobs? Your moral rights as supervisor: Do you (as the supervisor) have a moral right to deceive employees about the hazardous chemicals on their jobs? Reversibility: Reverse roles and put yourself in the shoes of an employee If you wouldn’t like it if you were the employee and your supervisor deceived you about the chemicals you were using on your job, then when you’re the supervisor you don’t have the moral right to deceive your employees 8

Rights Moral Principle Universalizability: Would you want to live in a world, can you even conceive of a world, in which all supervisors in all companies always deceive their employees about hazardous chemicals on the employees’ jobs? Such universal deception of employees would so erode trust as to make people afraid to take jobs If the action can’t be universalized, then you don’t have a moral right to take the action Respect & free consent: The employees have not freely consented to be deceived about the hazardous chemicals To deceive employees therefore does not treat employees with respect 9

Rights Moral Principle Employees’ moral rights: Do employees have a moral right complete and accurate information about chemical hazards on their jobs? Reversibility: Reverse roles and put yourself in the shoes of an employee If you were the employee and you would want to be fully informed, then employees have a moral right to accurate information about the chemical hazards Universalizability: We can imagine a world in which all employees are always given complete and accurate information about job hazards 10

Rights Moral Principle Respect & free consent: To fully inform employees of job hazards is to treat them with respect If employees are fully informed of the job hazards and they still voluntarily agree to do the job, then they have consented Moral rights of other stakeholders? Neighbors: Their interest is in living next door to a safe business that won’t harm them with dangerous chemical leaks Apply reversibility, universalizability, & respect/free consent Deceiving employees thus infringes on the moral rights of the neighbors 11

Rights Moral Principle Conclusions: You (as a manager) do not have a moral right to deceive your employees about the hazardous chemicals that they use on their jobs Employees have a moral right to complete and accurate job information, including about hazardous chemicals Neighbors have a moral right to live next to a business that won’t harm them with dangerous chemical leaks To deceive employees about hazardous chemicals is therefore unethical because it infringes on the moral rights of employees and neighbors 12

Distributive Justice Moral Principle The ethical action is the one that produces a fair distribution of benefits (good) and costs (harm) for all of the stakeholders Rawlsian Principles of Distributive Justice: Equal Liberty Principle: What action provides all stakeholders with the same (equal) basic rights and freedoms? Equal Opportunity Principle: What action provides all stakeholders with the same opportunities to be successful in life, and rewards people with benefits and costs based on their contributions? Difference Principle: What action helps those in need as much as possible in a way that the help to the needy is sustainable? 13

Distributive Justice Moral Principle Example: Is it ethical to deceive employees about hazardous chemicals they use on their jobs? Equal Liberty Principle: From the previous analysis of the Rights moral principle, we decided that employees have a moral right to accurate information about job hazards So, all employees should have that basic moral right 14

Distributive Justice Moral Principle Equal Opportunity Principle: For all employees to have an equal opportunity to be successful in life through their efforts and hard work, they need accurate job information so they can make informed decisions about which job to accept Deceiving employees about job hazards thus interferes with equal opportunities Employees who have accurate information about job hazards would have a better chance to be successful than employees who have been deceived about job hazards 15

Distributive Justice Moral Principle Difference Principle: Employees need accurate information about jobs and companies are able to provide such information in a sustainable way Deceiving employees about the hazardous chemicals thus denies employees what they need Conclusion: Deceiving employees about the hazardous chemicals is unethical because it is unfair to employees 16

Ethics of Care Moral Principle The ethical action is the one that appropriate cares for the individuals with whom you have relationships You need to appropriately care for your own needs You need to appropriately care for the needs of the individuals with whom you have relationships Personal relationships: Provide appropriate care to family, friends, coworkers, etc. Professional relationships: Provide appropriate care to employees, customers, stockholders, etc. You do not need to care for relationships involving oppression, exploitation, violence, disrespect, etc. 17

Ethics of Care Moral Principle Example: Is it ethical to deceive employees about hazardous chemicals they use on their jobs? As a manager, you have a relationship with employees, customers, stockholder, and the neighbors of the business If you deceive the employees about the hazardous chemicals, then they don’t have the knowledge, training, or equipment to handle the chemicals safely This puts employees, customers, stockholders, and the neighbors in a vulnerable position You haven’t appropriate cared for them 18

Ethics of Care Moral Principle Appropriate care would be to provide the employees with complete and accurate information about the hazardous chemicals and with the proper safety equipment and training to handle the chemicals safely With the appropriate information, equipment, and training, the employees would be better able to safely handle any chemical spills or other problems that might threaten the business A mishandled spill would threaten employees, customers, stockholders, and the neighbors Conclusions: Deceiving the employees is unethical because it does not appropriate care for the individuals with whom you have relationships 19

Virtue Ethics Moral Principle The ethical action is the one that display good character virtues, and that does not display bad character vices Take the action that displays virtues: benevolence, civility, compassion, conscientiousness, cooperativeness, courage, fairness, generosity, honesty, industriousness, loyalty, moderation, self-control, self-reliance, tolerance, etc. Do not take the action that displays vices: cowardice, deceit, dishonesty, laziness, neglect, selfishness, etc. 20

Virtue Ethics Moral Principle Example: Is it ethical to deceive employees about hazardous chemicals they use on their jobs? How would we describe the character of a manager who deceives employees about dangerous chemicals? Liar, deceiver, dishonest, cheater, uncaring, short-sighted, etc. These character traits are vices, not virtues Conclusions: Deceiving employees about the hazardous chemicals is unethical because it display vices and not virtues as character traits 21

Make the Moral Judgment Do all 5 moral principles reach the same conclusion? All 5 moral principles agree: If all 5 principles conclude the action is ethical, then you are on firmer ground to judge that the action is ethical If all 5 principles conclude the action is unethical, then you are on firmer ground to judge that the action is unethical Example: Is it ethical to deceive employees about hazardous chemicals they use on their jobs? We’ve seen that all 5 moral principles can be used to reach the moral judgment that it is unethical to deceive employees about hazardous chemicals they use on their jobs 22

Make the Moral Judgment The 5 moral principles disagree: Use your moral imagination: use the moral principles, and the nature of the apparent conflict among the moral principles, to try to invent a previously unconsidered action that all 5 moral principles would judge as being ethical If no action can be found that all 5 moral principles would judge as being ethical, then use your values to decide which moral principles should take precedence Example: “The ends can never justify the means” This says that the Rights Principle takes precedence over the Utilitarian Principle 23

Outline Use Five Moral Principles to Make Moral Judgments: Utilitarian Principle Rights Principle Distributive Justice Principle Ethics of Care Principle Virtue Ethics Principle Make the Moral Judgment: Do the 5 moral principles reach the same conclusion? If so, then that’s the moral judgment If not, resolve the conflict of moral principles 24