1. BUSINESS, LAW & ETHICS
misbahuddin azzuhri

2. Ethical Dilemmas Venn Diagram for Ethical Decision Making 2b 3 1 2a
Area 3: Legal and ethical, but not profitable. Find ways to seek profitability
Area 2a: Profitable and legal. Proceed cautiously
Area 2b: Profitable and ethical. Probably legal too. Proceed cautiously
Area 1: Profitable, legal, ethical. Go for it!
Ethical Responsibility
Legal Responsibility
Economic Responsibility 1 3 2b 2a

3. Business, Law and Ethics
Ethics – A set of moral principles or values that governs the conduct of an individual or a group.
What is business and/or lawful conduct is not always ethical conduct.
The business and/or law may permit something that would be ethically wrong.

4. Moral Theories and Business Ethics
Ethical Relativism
Ethical Fundamentalism
Utilitarianism
Kantian Ethics
Rawls’s Social Justice Theory

5. Ethical Fundamentalism
Ethical fundamentalism - When a person looks to an outside source for ethical rules or commands.
Critics argue that ethical fundamentalism does not permit people to determine right and wrong for themselves.

6. Utilitarianism
A moral theory that dictates that people must choose the action or follow the rule that provides the greatest good to society.
This does not mean the greatest good for the greatest number of people.
Has been criticized because it is difficult to estimate the “good” that will result from different actions.

7. Kantian Ethics (Duty Ethics)
A moral theory that says people owe moral duties that are based on universal rules.
Based on the premise that people can use reasoning to reach ethical decisions.

8. Kantian Ethics (Duty Ethics) (continued)
Deontology’s universal rules are based on two important principles:
Consistency – all cases are treated alike with no exceptions.
Reversibility – the actor must abide by the rule he or she uses to judge the morality of someone else’s conduct.

9. Kantian Ethics (Duty Ethics) (continued)
Thus, if you are going to make an exception for yourself, that exception becomes a universal rule that applies to all others.
A criticism of this theory is that it is hard to reach a consensus as to what the universal rules should be.

10. Rawls’s Social Justice Theory
Rawls’s social contract
A moral theory that says each person is presumed to have entered into a social contract, with all others in society, to obey moral rules that are necessary for people to live in peace and harmony.

11. Rawls’s Social Justice Theory (continued)
Rawls’s Distributive Justice Theory
Fairness is considered the essence of justice.
The principles of justice should be chosen by persons who do not yet know their station in society.
This “veil of ignorance” would permit the fairest possible principles to be selected.

12. Rawls’s Social Justice Theory (continued)
There are two major criticisms of this theory:
Establishing the blind “original position” for choosing moral principles is impossible in the real world.
Many persons in society would choose not to maximize the benefit to the least advantaged persons in society.

13. Ethical Relativism
A moral theory that holds that individuals must decide what is ethical based on their own feelings as to what is right or wrong.
There are no universal ethical rules to guide a person’s conduct.
If a person meets his or her own moral standard in making a decision, no one can criticize him or her for it.

14. Ethical Relativism (continued)
A criticism of this theory is that an action usually thought to be unethical would not be unethical if the perpetrator thought it was in fact ethical.

15. Theories of Ethics – Summary (1 of 2)
Theory
Description
Ethical fundamentalism
Persons look to an outside source or central figure for ethical guidelines.
Utilitarianism
Persons choose the alternative that would provide the greatest good to society.
Kantian ethics
A set of universal rules establishes ethical duties. The rules are based on reasoning and require (1) consistency in application and (2) reversibility.

16. Theories of Ethics – Summary (2 of 2)
Theory
Description
Rawls’s social justice theory
Moral duties are based on an implied social contract. Fairness is justice. Rules are established from an original position.
Ethical relativism
Individuals decide what is ethical based on their own feelings as to what is right or wrong.