ETHICS & SOCIAL RESPONSIBILITY Seminar 3

sept 2012

Ethical Frameworks
Virtue Ethics, Religious Ethics, Moral Relativism & Decision-making
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Aristotles Nichomachean Ethics Ethics as the practical science of human happiness Emphasizes personal character, eg, courage, loyalty, benevolence etc. Not pure knowledge. The end of life is human happiness which is good in itself Intellectual virtues (eg, wisdom, intelligence) and moral virtues (eg, liberality and temperance) Allows for personal development and selfevaluation
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Virtue Theory: Aristotle

Virtue Theory
Character trait that manifests in habitual action. Become just by performing just acts Acquired trait Person becomes honest by proper upbringing Virtue is something that we practise

(action)

Virtue is something that we admire in a person

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How do we define Virtue?

Purposive disposition: Voluntary choice Lying in a mean: Moderation Relative to us: Subjective Determined by rational principle: Objective
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Virtue Theory

A List of Virtues
Benevolence Compassion Courage Courtesy Dependability Friendliness Honesty Loyalty Moderation Self-control Tolerance

Virtue Theory & Business

How do we apply it to business?

Is happiness an objective of business? Are there virtues that the companies should follow? Does it have a role in business?

Virtue Ethics: Robert Solomon

Aristotelian Approach to Business Ethics Focus on achieving holistic happiness Cooperation Not on competition

Solomons 6 Parameters of Virtues in Business

1.

2.
3. 4. 5.

6.

Community. Member thereof. Excellence. Not mediocrity. Membership. Focus on individual. Integrity. Comprehensive: Openness, affection, flexibility. Judgment. Making best ethical decision. Holism. Stakeholders+ Social Responsibility.
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Virtue Ethics
Problems: No straightforward rules to apply Virtues not fixed

Can these problems be a virtue?

Ethics of Care
Focus on human emotions in decisionmaking It is relational. Need not be impartial Based on empathy, compassion, love Alternative to emphasis on abstract moral principles as guides Aims for concrete cooperative business relationships

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Confucian Ethics
Focuses on Virtues, Humanity, Selfdevelopment Against profit-making as sole goal of business The golden rule or principle of reciprocity: Do not do unto others what you do not want others to do unto you. Subject to familial priority. Hence, not impartial.

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Confucian Ethics
Similarities to Aristotles Virtue theory: Stress on Virtues, subjective+Moral exemplars. No doctrine of individual rights. Communitarian. Focuses on duties, but does arguably give humans dignity and respect. Important, as Asian Business use Confucian Ethics. E.g. guanxi

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Religious Ethics and Business

Islamic Ethics Buddhist Ethics Hindu Ethics

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Islamic Ethics
Focuses on Value-maximisation not profit. Equity and Justice Distributive Justice: Zakat, against wealth hoarding Trustees of the Earth No Caveat Emptor Prohibits interest on loans: Riba Prohibits uncertainty in contracts: Gharar Prohibits speculation: Maisir

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Buddhist Ethics
Happiness comes from giving up cravings through the Noble Eightfold Path ( or Middle Path) 1. Wisdom (Right View, Intention) 2. Virtue (Right Speech, Action, Livelihood) 3. Meditation (Right Effort, Mindfulness, Concentration) Abandonment of self..lead to nibbana/nirvana.

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Hindu Ethics
Salvation through knowledge & realisation Causation and effects of karma Reduction of bad karma 10 Moral values of Dharma. E.g. Patience, forgiveness, wisdom, truthfulness etc Yamas (to rein) and Niyamas (to unleash) E.g. Ahimsa: to be non-violent Santosha:seek contentment, love fellowman Caste issues.

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Moral Relativism
No Universal Norms Norms generated by individual, societies/culture Can be issue-dependent Moral Relativism - A multicultural multi-ethical world

Relativism poses a serious challenge to ethics (Metaethical Moral Relativism) Relativism denies that we can make rational or objective ethical decisions There is nothing right or wrong, moral or immoral except in terms of a particular society

Ethical Relativism: Critiques

Are the societies really so different? Exaggeration of moral differences among societies Validates horrendous conduct No such thing as moral progress? Cant hold societies practices as unethical? Implication: Anything goes in Business

Cognitivism
Possible to know moral truths Two contrary opinions does not mean objective truth does not exist

Religion as a source - The Texts

Does religious morality rest upon foundations independent of religion? Same moral viewpoint based on reason Whatever your stand; Tolerate & respect.

Other Codes & Resources

Universal Declaration of Human Rights UNGlobal The Ten Principles UN Convention Against Corruption ILOs Declaration on Fundamental Principles and Rights at Work United States Bill of Rights Caux Round Table Principles of Business Clarkson Principles of Stakeholder Management SA (Social Accountability) 8000 Codes of Conduct of various Corporations Numerous Websites you can check

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Ethics and Decision Making

Ethics is one of the dimensions in decision making when moral issue surfaces Factors affecting ethical dimension of business decisions:

Ethical issues defined by the type of management position held

personal organizational

Higher-level managers: strategic ethical issues Lower-level managers: tactical ethical issues Underlying decision process appears to be common to all issues

Ethics and Decision Making

Decision process model

Personal traits
Business decisions made by individuals or committees Ethics of individuals who make business decisions relevant

Organizational Culture Decision process

Provides rationale and direction for behavior

Stakeholders
Role of stakeholders both internal and external in the process of ethical decision making Stakeholders may influence decisions in both ethical and unethical directions

A brief decision-making model

1.

2.
3. 4.

5.

Determine the facts Identify ethical issues Identify stakeholders & their perspective Consider alternatives Consider how stakeholders affected by alternative decisions, based on Consequences Duties, rights, principles Implications for personal integrity
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A brief decision-making model

6. Make decision 7. Monitor Outcomes.

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Determine the facts

Honest effort to understand facts Perceptual difference Not ethical disagreement, but disagreement over facts. E.g. statistics

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Identify ethical issues

Economic/ethical not mutually exclusive Be sensitive, needs cultivation Beware of Normative Myopia Ethical? Think of the impact on all the people involved. Does it affect their well-being or happiness?

Ethical issues
Issues that deal with what is morally right or wrong with a decision alternative Moral norms and moral principles A decision contains an ethical component when it violates a moral standard
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Identify stakeholders & their perspectives

Identify all of the people affected by a decision/policy Do not reason from a narrow/personal perspective Role-shift Legitimate if decision acceptable from all points of view.

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Consider alternatives
Key to have moral imagination, more likely to make ethically responsible decisions Consider both obvious as well as more subtle options IPOD possibilities?

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Consider how stakeholders affected by alternative decisions

Compare and weigh the alternatives Consider degrees of likelihood Possibility of mitigating negative effects? Justifiable to all? Factors to consider: duties, consequences, your own integrity, company rules, codes of conduct, business roles, legal duties, culture

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Questions you could ask:

What are the consequences? Who gets the benefits/ bears the costs? What duties, rights, principles involved? What does the law say? What principles are obligatory?

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Questions you could ask:

How are people being treated? What is impartial and fair? What type of person am I becoming? Can I live with public disclosure? Are there guidelines or codes I could look to for guidance? Others opinions?

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Final step

After you make your decision, do monitor the outcome so that you can assess your decision and learn from it.

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Barriers to responsible decision-making

Rationalisation Simplified decision rules Satisfied with minimum criteria No motivation to do right No courage e.g. Enron Money, decision distance etc

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