Business Ethics: Philosophical Foundations

• Module 2 is about Business Ethics and Social Responsibility

Foundations of Business Ethics

• The module focuses on the foundations of business ethics and their implications.
• It is important to understand how classical philosophies, belief systems, and the Filipino value system influence business ethics.
• Universal principles applicable across all cultures emphasize members' responsibility for the well-being of their group.

Unit 1: Philosophical Foundations of Business Ethics

• This unit concentrates on ethical theories rooted in the philosophical principles of classical philosophers.
• These theories highlight different parts of ethical dilemmas.
• Personal life experiences often guide the individual choice of ethical theory.

Key learning objectives

• At the end of the course, students should be able to show an understanding between classical philosophies and belief systems, and the Filipino Value System, to the affect businessmen deal and conduct themselves in this business dealings
• At the end of the course, students should be able to analyse these things mentioned above for business dealing principles and applications

Determinants of Business Ethics

• Ethical relativism, where ideas of right and wrong vary, is attributed to:
  • Individual factors
  • Socio-cultural factors
  • Environment
  • Ethical climate
  • Ethical philosophies

Lawrence Kohlberg's Stages of Development

• Kohlberg's theory has 3 levels of stages of development, they are then split into 6 stages

• Moral considerations are shaped by development stages, like the PRECONVENTIONAL level.

• The PRECONVENTIONAL level focuses on obedience and punishment.

• At stage 2, individuals are free to pursue one's own interests in deals and exchange favors.

• CONVENTIONAL stage 3 and 4 is complying with society's expectations, norms, and values.

• Stage 3 means having helpful motives toward people

• Stage 4 means concern that shifts toward obeying laws to maintain society as a whole

• The POST CONVENTIONAL is the highest level of personal rights and responsibility to a bigger community.

• They emphasizes basic rights, democratic processes, and just principles of agreement.

• Business decision-making is anchored on ethical principles.

• For example Utilitarianism, Rights, Justice, Happiness, Caring etc.

• Ethics are embodied in the teachings of philosophers.

• The philosophy of business has fundamental principles underlying business formation, operation, nature, purpose, and associated moral obligations.

Classical Philosophies and Their Implication To Business

• Socrates (469-399 B.C):
  • Shaped cultural and intellectual development.
  • Key idea: "The unexamined life is not worth living".
  • Concepts like the Socratic Method emphasizes and Dare to Disagree are his
• Plato (427-347 B.C):
  • Known philosopher and student of Socrates.
  • He was the student of Socrates And teacher of Aristotle.
  • Key ideas: Good people don't need laws to tell them to act responsibly, while bad people will find ways around the laws"
• Aristotle (384-322 B.C):
  • Towering figure in ancient Greek philosophy who touched almost all areas of knowledge.
  • His rejection of the Theory of Forms made him Famous.
  • Referred to as "The Philosopher" by St. Thomas Aquinas.
• Immanuel Kant (1724-1804):
  • Influential philosopher advanced the theory of deontology (duty and obligation).
  • Deontology: Actions gain morality dependence on the Scriptures.
• St. Thomas Aquinas:
  • Believes that actions depend on their contribution to our proper human end.
  • Aquinas quote "Greed is a sin against god etc"
• Confucius:
  • Believes in the existence of a Superior Man which has confidence, brave heart, and honesty etc.
  • "What one does not wish for oneself, one ought not to do to anyone else".
• St. Augustine of Hippo:
  • Doctor of the Church and Bishop of Hippo and considered the Greatest Christian philosopher of Antiquity.
  • Says "Business is if itself evil"
• Jeremy Bentham & John Stuart Mill – Utilitarianism:
  • Bentham quote "HAPPINESS is a matter of experiencing pleasure and lack of pain".
  • Moral worth is determined by actions solely based on what outcomes transpire from them.

Utilitarianism vs Kantion

• Utilitarianism Greatest Hapiness Vs Kantian Supreme Principle of Morality
• Act can be deemed good vs An act can be wrong

Pareto Optimality

• Ethical standards evolve.
• This leads to changes over time as human reasoning and experiences shape values.
• Ethical theories have strengths and weaknesses, requiring careful analysis and judgment.
• The "80-20 rule" known as Pareto Optimality.
• Pareto optimality means when economic outcomes (social welfare) make no one worse off, and one person a lot better off
• Challenges the assumption of interventions and raises ethical questions about harm, benefit, and decision-making.

Unit 2: Impact of Belief Systems

Five Commands for Business Ethics - Jerry White

• "Honest weights" means giving full quality for the payment received.
• This involves total honesty with all stakeholders.
• One must put others interests first
• Accept full personal responsibility for every decision that occurs
• Seek neither wages nor profits that are unreasonable

World Religions and Business Practices

• Christianity: Values the Golden Rule, stewardship, trust, and justice and should guide businesses
• Judiasm: Emphasizes on accountability with accurate weights and fair dealing.
• Islam: Ethics focus on no fraud, mutual consent, fairness, and truthfulness.
• Hunduism: Values focus mostly on non-violence, detachment, truthfulness, and non-stealing.
• Confucianism: Ethics that embody the Golden Rule, including respect, integrity, and small profits.
• Buddism: Values focusing on mindfulness, balance, and intention to do no harm.
• Taoism: Principles of Taoism focuses harmony with nature and leadership by example.
• Shintoism: Values centered on the natural essence of the world, sacred essence to everything

Christian Ethics and Spirituality in Leading Business Organizations

• As noted in the document, Christian ethics applied to economics has a long tradition and dates back to the thirteenth century.
• Theologians of the School of Salamanca, such as Francisco de Vitoria and Bartolome de las Casas made a strong defense on universal rights with implication of labour.
• The Gospel Emphasizes the idea of service in leading others.