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LECTURE 3
Business Ethics
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ETHICAL CONCEPTS
Ethical Subjectivism
Ethical relativism
Consequnetialism Ethics of virtue
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ETHICAL SUBJECTIVISM
It argues that what is ethically right or wrong
for an individual depends on the ethical
principles he or she has chosen
In other words for people who subscribe to
ethical subjectivism, what is ethically right or
wrong is entirely a personal matter
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ETHICAL RELATIVISM
People who support the concept of ethical
relativism argue that there is no universal set
of principles by which to judge morality
Each society has its rules and it is
inappropriate to compare the ethical rules of
one society with that of another
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CONSEQUENTIALISM*
Whether an act is good or not depends only onthe results of the act. The more good an actproduces, the better or more right that act
A person should choose the action thatmaximizes good consequences
Different forms of consequentialism:
Utilitarianismmaximize human welfare
Hedonism
maximize human pleasure* Source: bbc.co.ukethics guide
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ETHICS OF VIRTUE
Virtue is a quality considered morally good or
desirable in a person (Source: Oxford
Dictionary)
A person acts virtuously if they possess and
live the virtues*
The way to build a good society to help its
members to be good people*
* Source: bbc.co.ukEthics Guide
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ETHICS OF VIRTUE
This concept emphasizes the role of individual
traits. It explores those traits that would help
individuals lead a better life from an ethical point
of view Virtuous acts are done willfully and not by
chance
Also virtuous acts are not done out of self-interest or because they maximize pleasure
A right act is an action a virtuous person would
do in the same circumstances
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THREE APPROACHES TO ETHICS
The field of ethics, also called moral
philosophy, involves systematizing,
defending, and recommending concepts of
right and wrong behavior. Philosophers todaytakethree main approaches to ethics -
Normative Ethics, Descriptive Ethics and
Meta-Ethics
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DESCRIPTIVE ETHICS
Also called comparative ethics
Empirical/observational study (source:Encyclopedia Britannica)
Description of the moral code prevailing indifferent societies.
There is no judgment or verdict on if the
existing morals are right or wrong
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META ETHICS
Meta ethics is the most abstract area of
moral philosophy.
It doesnt ask what acts or what kind of acts
are good or bad, right or wrong; rather, it
asks about the nature of goodness and
badness, what it is to be morally right or
wrong.
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3 APPROACHES TO ETHICS
For example:
Descriptive Ethics askwhat do people think
is right?
Normative Ethics askhow should people
behave?
Meta Ethics askwhat does right even
mean?
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"Business ethics," the old joke goes, "Isn't
that a contradiction in terms?"
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BUSINESS ETHICS
Businesscan be defined as a primary
economic institution through which people in
modern societies carry on the task of
producing and distributing goods andservices
Business ethics refers to the application of
ethical judgments to business activities
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BUSINESS ETHICS
The concept of Business Ethics has come to
mean various things to various people, but
generally it's coming to know what it right or
wrong in the workplace and doing what'sright
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RELATIONSHIP BETWEEN BUSINESS AND
ETHICS
Different economists like Milton Friedman
and Talcott Parsons expressed different
views about the relationship between ethics
and business. The result was:
Unitarian view of ethics
Separatist view of ethics
Integration view of ethics
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DIFFERENT VIEWS OF ETHICS
The Unitarian View-Business is a part of
moral structure and moral ethics . If business
wants to exist flourish and survive in the long
run, morality and ethics cannot be separatedfrom the operation of the business. Business
has to concentrate in the society and usher
in society welfare.
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DIFFERENT VIEWS OF ETHICS
The Separatist View of Ethics Classical Economistslike Adam Smith and Milton Friedman held theseparatist view.
These economists were of the opinion that business
should concentrate on profit maximization. Businessis a distinct entity and does not contain ethics andmorality.
Milton maintained that business should concentrate
on production and distribution of goods and services.This view lays emphasis on business concerns likereducing production costs, optimizing labor etc
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DIFFERENT VIEWS OF ETHICS
The Integration view of Ethics- TalcottParsons (1902-1979) professor of sociology
at Harvard proposed a view called the Integrationview.
He was of the opinion that ethical behavior andbusiness should be integrated or combined in a newarea called Business Ethics.
He argued that Business being economic entity hasthe right to make profits, but at the same time itshould discharge the social obligations.
According to this view , business and morality areinterrelated and are guided by external factors likegovernment, market system, law and society
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