Theories of Business Ethics | Immanuel Kant | Capitalism

Theories of Business Ethics

1 . Categorical Imperative of Immanuel Kant Kantianism is an ethic of duty . Deontology is the science of duty . Categorical means positive or absolutely . Imperative means excessive of command .

Categorical imperative in the ethics of Kant is the absolute command of the moral law . 12/19/09

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Categorical imperative in the ethics of Kant , the absolute conditional command of the law , irrespective of ulterior end or aim .

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The German Philosopher Immanuel Kant ( 1724 - 1804) developed the most persuasive and fully articulated vision of ethics as measured by the rightness of rules, rather than by consequences .

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Kant believed that the moral person is one of goodwill, and that person renders ethical decisions based on what is right , regardless of the consequences of the decision . Eg : Student writing exam.

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But how does the person of goodwill know what is right? Here , Kant propounded the categorical imperative , the notion that every person should act on only those principles that she or he , as a rational person , would prescribe as universal laws to be applied to the whole of mankind. 12/19/09

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To Kant, what is right for me is right for all , and each of us can discover the “ right” by exercising our rational faculties . Kantian universal

rules rights

recognise such as

freedom of speech, the right of privacy, or freedom of conscience . Problem exist , when an individual does not know which rules to follow. 12/19/09

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Good governance is doing the right thing and good management is doing things right. 12/19/09

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Discussion Do you consider copying ethical? If No , do it? 12/19/09

why

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do

we

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Ethical Relativism, Absolutism, and Pluralism

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Ethical relativism Ethical Relativism has several important insights: ■The need for tolerance and understanding ■The fact of moral diversity ■We should not pass judgment on practices in other cultures when we don’t understand them ■Sometimes reasonable people may differ on what’s morally acceptable

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Three Questions about the Meaning of Relativism What part of morality is relative? •Behavior •Peripheral values •Fundamental values

How much of morality is relative? •All •Most •Some

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Morality is relative. Relative to what? •Individuals •Cultures •Nations •Groups

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What is relative? Behavior Different behaviors may exemplify the

same value The same behavior may exemplify different values in different culture

Peripheral values Obviously some culturally-specific values

Core values Are there central values found in all

cultures?

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Ethical Relativism: Solipsism  Sometimes we say that

we can’t judge other cultures because we can’t fully understand them.  Do we need full understanding to judge something?  Do we even have full understanding of ourselves?  Does it deny a main goal of multiculturalism?  12/19/09

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Ethical Relativism: Overlapping Cultures Ethical relativism

suggests that we let each culture live as it sees fit This is only feasible when cultures don’t have to interact with one another. 12/19/09

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Ethical Relativism: Overlapping Cultures The actual

situation in today’s world is much closer to the diagram at the right.

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Ethical Relativism: A Self-Defensive Position Ethical relativism maintains that we

cannot make moral judgments about other cultures The corollary of this is that we are protected in principle against the judgments made by other cultures Shares this characteristic with absolutism

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Ethical Absolutism Absolutism comes in

many versions-including the divine right of kings Absolutism is less about what we believe and more about how we believe it Common elements:  There is a single Truth  Their position

embodies that truth 12/19/09

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Ethical Absolutism Ethical absolutism gets some things right We need to make judgments (at least sometimes) Certain things are intolerable But it gets some things wrong, including: Our truth is the truth We can’t learn from others 12/19/09

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Ethical Pluralism Combines insights of both relativism and absolutism: The central challenge: how to live together with differing and conflicting values Fallibilism: recognizes that we might be mistaken Sees disagreement as a possible strength: 12/19/09

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Ethical Pluralism Ethical pluralism offers three categories to describe actions: Prohibited: those actions which are not seen as permissible at all 

Absolutism sees the importance of this

Tolerated: those actions and values in which legitimate differences are possible Relativism sees the importance of this

Ideal: a moral vision of what the ideal society would be like 12/19/09

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Ethical Pluralism For each action or

policy, we can place it in one of three regions: Ideal--Center Permitted--

Middle Respected  Tolerated 

Prohibited--

Outside

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Five Questions What is the present state? What is the ideal state? What is the minimally acceptable

state? How do we get from the present to the minimally acceptable state? How do we get from the minimum to the ideal state? 12/19/09

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Developing a Moral Stance Here’s a way of visualizing these issues:



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Conventional Ethics of Albert Z Cars

Is Business Bluffing Ethical ? Carr ’ s article asserts that bluffing in business may be ethical . Carr explains how bluffing ( deceiving ) in certain situations may be more acceptable than in others .

On the other hand there is a true benefit from a reputation for honesty in business as well.

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Eg : In the criminal court , where the criminal is not expected to tell the truth when he pleads not guilty . Eg : Millions of businessmen feel constrained every day to say yes to their bosses when they secretly believe no and that this is generally accepted as permissible strategy when the alternative might be the loss of a job . The essential point here is , that the ethics of business are game ethics , different from the ethics of religion .

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A m a n w h o in te n d s to b e a w in n e r in th e b u sin e ss g a m e m u st h a ve a g a m e p la ye rs a ttitu d e . A n a p p le d istrib u to r q u e stio n s h im se lf w h e th e r h e h a s to h id e ro tte n a p p le s co ve re d b e lo w g o o d a p p le s exp o se d . W h a te ve r th e fo rm o f b lu ff, it is a n in te g ra l p a rt o f th e g a m e , a n d th e exe cu tive w h o d o e s n o t m a ste r its te ch n iq u e s is n o t like ly to a ccu m u la te m u ch m o n e y o r p o w e r. 12/19/09

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Aristotelian Ethics

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Ari stotle ’ s

ethics is a theory based on the concept of virtue. Virtue means moral excellence . Aristotle described virtue as a character trait that manifests itself in habit action .

Virtue ethics It is concerned with pursuing a certain type of morally inclusive excellence. Aristotle called it eudaimonia, which can be roughly translated as 'happiness', or 'human flourishing'. It has four attributes vIts primary attribute is a strong emphasis on the importance of certain generally accepted virtues of character; indeed it is through honing and perfecting these virtues that an individual becomes truly ethical.

Virtue Ethics vSecondly, a strong emphasis is placed on the existence of an active community that nurtures these virtues. vThirdly, virtue-ethics theory makes clear that in the moral life one cannot rely merely on rules or guidelines, in addition an ability to exercise sound moral judgement is requisite. vFinally, the successful identification and emulation of moral exemplars or role models is essential for the dissemination of morality within the aforementioned nurturing community.

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A second claim Aristotle asserts that before one can even begin to inquire into the nature of the good “ one must first have received a proper upbringing in moral conduct ”. It would appear that in order to become good , it is necessary to be good already . Experience is the product of a long time . And the experience can not be gotten secondhandedlly , in other words , it can not be thought or learned in an academic manner . To be wise requires experience , yet one first needs to be wise in order to reflect upon and understand one ’ s various experiences , making sense of them .

Practical wisdom itself is a form of “perception”- that is the ability to see what kind of action is called for under particular circumstances .

Practical wisdom is concerned with particulars , and knowledge of particulars come form experience . One of the essential tragedies and at the same time , one cosmic jokes that when we need the most ( when we are young ), the least likely to have it .

of life of its wisdom we are

When we do seem to have wisdom , we no longer need it as desperately .

The life ’ s ultimate paradox is the more we know that we know so very little ; and less we know that of life the more certain we are . This is why those who are experienced so often try to give their wisdom to those who need it most but are also the least likely to want or appreciate it!

Business Ethics can be taught in a framework of Global Eudemonia introduced by Aristotle, meaning the material and the spiritual wellbeing of a community, the ultimate goal, the telos, of the society. Business ethics programs need to teach that the global corporation must not just seek profits for its stockholders and big bonuses for its senior management, but also enhance the opportunities for a society where people can contribute in a business environment in a free economy for the benefit of the global corporation's stockholders and managers and other stakeholders, labor and the world community. Global harmony and global eudemonia must become the ultimate goal. 12/19/09

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Aristotle's list of virtues for corporate world are : Wisdom Aristotle's virtue of wisdom contains the combination of "scientific knowledge and intuitive intelligence" and the capacity to differentiate between actions that one should or should not pursue. The virtue of wisdom in the business arena is one of the keys and shields to ethically process complex ambiguous challenges. Courage Aristotle's second virtue, in the global business is the courageous man daring to invent, create, build, and to navigate between extremes and avoid the temptation to be reckless and unethical.

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Self - control The third Aristotelian virtue, is an extremely important element as individuals are confronted with opportunities to self-inflict greed upon "one's self' and others. Individuals in the global corporations often lose self-control, and embark upon the cowardly path to destruction. Knowing “one's self” and practicing self-restraint is difficult, but a standard and value that must be the individual and corporate goal. Justice Justice is the highest virtue with respect to the many interactions that take place in the corporation with the many stakeholders, clients, customers, employees, vendors and the society at large. An Aristotle proverb emphasizes: "In justice is all virtues found in sum”. Global Harmony and Eudemonia and the wisdom of Aristotelian ethics, is a philosophical proven system that we need to study and indoctrinate into every aspect of business education and offer to global corporations throughout the world. 12/19/09

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In his Nicomachean Ethics, Aristotle concludes that the role of the leader is to create the environment in which all members of an organization have the opportunity to realize their own potential. He says that the ethical role of the leader is not to enhance his or her own power but to create the conditions under which followers can achieve their potential.

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Aristotle raises a set of ethical questions that are directly relevant to corporate leaders who wish to behave in ethical ways. ØAm I behaving in a virtuous way? How would I want to be treated if I were a member of this organization? ØWhat form of social contract would allow all our members to develop their full potential in order that they may each make their greatest contribution to the good of the whole? ØTo what extent are there real opportunities for all employees to develop their talents and their potential? ØTo what extent do employees participate in decisions that effect their work? ØTo what extent do all employees participate in the financial gain resulting from their own ideas and efforts? 12/19/09

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He also raises a lot of useful questions about the distribution of rewards in organizations based on the ethical principle of rewarding people proportionate to their contributions. here are some Aristotelian questions that virtuous leaders might ask: q qAm I taking more than my share of rewards-more than my contribution is worth? q qDoes the distribution of goods preserve the happiness of the community? q qDoes it have a negative effect on morale? Would everyone enter into the employment contract under the current terms if they truly had different choices? q qWould we come to a different principle of allocation if all the parties concerned were represented at the table? 12/19/09

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Might – Equals – Right Approach of Karl Marx

Karl Marx ( 1818 1883) is undoubtedly the harshest and most influential critic of the inequalities about private property institutions and free markets are accused of cheating . Workers cannot produce anything without the involvement of the means of production , they are forced to sell their labour which is the only way to subsist for them . They sell labour to the owner in return for a wage . The owners try to exploit the situation by paying less to the workers .

Thus according to Marx , capitalism promotes injustice and undermines communal relationships . Marx held that human beings should be enabled to realise their nature by freely developing their potential for self expression and satisfying their human needs .

Capitalism and market economy words are used interchangeably . Capitalism is an economic system combining the ‘ private ’ ownership of productive enterprises with ‘ competition ’ between them in the pursuit of ‘ profit ’.

The above definition contains three aspects , which are : •Private ownership •Competition •Profit motive .

In

Marx ’ s

view , capitalism alienated the lower working classes of neither allowing them to develop their productive potential nor satisfying their real human needs .

An ethics of the Communist Manifesto? Consider for a moment one recent effort endeavouring to establish: (1)that the ethics of the Manifesto is simply an expression of the needs, hopes and desires of the modern working class; and (2)that it alone conforms to the necessary and desirable direction of social evolution

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" Capitalism is bad because the proletariat finds it so from the standpoint of its own class needs and interests " and " The struggle of the working class for the overthrow of capitalism is justified and right not only because it expresses their needs and interests , hence their ethics , but because their ethics is the highest or best possible at this stage of history .” The first of these statements correctly stresses the partisanship of Marxism in the class struggle ; the second , its historical perspective and appeal for support from other classes .

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I know for sure that what we dwell on is who we become . - Oprah Winfrey