Ethical Theories and Decision-Making PDF

Critical Approach & Business Ethics Ethical Theories and Decision-Making Hein Schellekens www.fhnw.ch  WEEK 2: OBJECTIVES UNDERSTAND AND APPLY DIFFERENT ETHICAL THEORIES DESCRIBE THEIR ADVANTAGES AND DISADVANTAGES UNDERSTAND THE SOCIAL ORIG...

Critical Approach & Business Ethics Ethical Theories and Decision-Making Hein Schellekens www.fhnw.ch  WEEK 2: OBJECTIVES UNDERSTAND AND APPLY DIFFERENT ETHICAL THEORIES DESCRIBE THEIR ADVANTAGES AND DISADVANTAGES UNDERSTAND THE SOCIAL ORIGINS OF ETHICAL DECISION-MAKING www.fhnw.ch 2 Ethical theories: a moral compass for decision-making Compared to our individual lives, ethical decisions in a business context are characteristed by a high degree of complexity and a demand for transparency. In order to provide systematic and consistent answers to ethical questions in a business context, ethical theories can be used as a moral compass. Starting point: ethical pluralism. Acknowledgment of different moral convictions and (cultural) backgrounds, belief in a consensus on basic principles and rules. Ethical theories (should) work in a complementary rather than a mutually excluding fashion. Critical Approach & Business Ethics - Ethical Theories and Decision-Making www.fhnw.ch 3 Consequentialist and non-consequentialist theories Motivation Action Outcome Non-consequentialist ethics Consequentialist ethics Critical Approach & Business Ethics - Ethical Theories and Decision-Making www.fhnw.ch 4 Utilitarianism Consequentialism is the normative theory according to which the rightness of an act is determined solely by the goodness of its consequences. Combining consequentialism with welfarism - the view that well-being is the only source of value - yields utilitarianism, the theory that an act is morally right if and only if it maximizes well-being. According to utilitarianism one ought to choose the action which results in the greatest happiness for the greatest number of beings (greatest happiness principle). Maximizing one’s own happiness or profit is NOT a utilitarian principle (but simple egoism)! Critical Approach & Business Ethics - Ethical Theories and Decision-Making www.fhnw.ch 5 Utilitarianism: key characteristics Consequentialism Welfarism Maximalism Universalism Critical Approach & Business Ethics - Ethical Theories and Decision-Making www.fhnw.ch 6  The impartial spectator «The happiness which forms the utilitarian standard of what is right in conduct, is not...(one's) own happiness, but that of all concerned. As between his own happiness and that of others, utilitarianism requires him to be as strictly impartial as a disinterested and benevolent spectator.» - John Stuart Mill Critical Approach & Business Ethics - Ethical Theories and Decision-Making www.fhnw.ch 7 Utilitarianism: pros and cons It provides clear and practical guidance for moral decision-making It is impartial and universal; it does not favour a particular agent, group over others It is flexible and adaptable, as it can accommodate different values, preferences, and circumstances It is empirically grounded and testable, as it bases its judgments on observable and measurable results It can be difficult to predict or measure the consequences of actions. It can be in stark conflict with moral convictions such as the violation of human rights. It ignores other factors that are typically relevant for ethical choices, such as motives, intentions, character. Critical Approach & Business Ethics - Ethical Theories and Decision-Making www.fhnw.ch 8 The costs and benefits of calculating costs and benefits In Switzerland, a single human life is “worth” an estimated 6.7 million Swiss Francs. This amount is typically used in policy analysis to weigh costs against prevented deaths. Such a cost-benefit analysis was also used during the Covid19-pandemic: Is it worth losing 15 billion Swiss Francs every month (estimated economic damage as a consequences of a lock-down) to slow down the spread of the Covid19-virus? If one life is worth 6.7 million, 2,000 people must be saved per month from certain death due to the virus to make it a “worthwhile investment”. => What are your thoughts on this utilitarian policy analysis? Critical Approach & Business Ethics - Ethical Theories and Decision-Making www.fhnw.ch 9 The Summers memo In an (in)famous memorandum, economist Lawrence Summers argued in favour of the migration of polluting industries and toxic waste to the Global South:  Assuming we calculate the costs of pollution in terms of foregone earnings, “a given amount of health impairing pollution should be done in the country with the lowest cost”  Demand for a clean environment is “highly income- elastic”. From a utilitarian perspective, an overall benefit is derived from transferring pollution to low- income countries. > What arguments can you provide against this line of reasoning? Critical Approach & Business Ethics - Ethical Theories and Decision-Making www.fhnw.ch 10 Effective altruism: utilitarianism goes global Effective altruism is a philosophical and social movement that advocates "using evidence and reason to figure out how to benefit others as much as possible”. One interpretation of effective altruism is the principle of “earning to give”; to make as much money as possible and then donate most of it to charities. The movement was inspired in part by the philosopher Peter Singer, who has argued for an obligation to help those in extreme poverty since the 1970s. Drowning child analogy: inaction is clearly immoral if a child is drowning in a shallow pond and someone can save it but chooses not to. Geographical distance between the person in need and the potential helper does/should not impact the latter's moral obligations. Critical Approach & Business Ethics - Ethical Theories and Decision-Making www.fhnw.ch 11 Deontology: ethics of duties Deontological or duty-based theories are distinct from consequentialist theories insofar as they assess the rightness or wrongness of an action not by looking at consequences, but by asking whether it is in accordance with a moral norm. Such norms usually have to be universal (i.e. be applicable as a general rule) and they are to be obeyed by every moral agent in any situation, no matter what the consequences are. Compared to utilitarianism, deontological theories can be located at the other extreme: the sacrifice of a person (or more generally, the violation of a moral norm) can never be justified by reference to the good it might bring about. The moral norms are usually framed in terms of moral rights and duties. These are further divided into positive and negative rights (duties). Critical Approach & Business Ethics - Ethical Theories and Decision-Making www.fhnw.ch 12 Deontology: ethics of duties Immanuel Kant: humans are rational beings, ethical standards should be derived from the rational mind, independent of the empirical world. Consistency An action can only be regarded as right if the rule guiding that behaviour should be followed consistently by everyone in all cases, without contradiction. Human dignity Humans deserve respect as autonomous, rational actors, and this essential human dignity should never be ignored. Universality The rules guiding our actions should be acceptable to every rational human being because they are rationally acceptable. Categorical imperative: "Act only according to that maxim whereby you can at the same time will that it should become a universal law." Critical Approach & Business Ethics - Ethical Theories and Decision-Making www.fhnw.ch 13 Deontology: pros and cons It respects the intrinsic value and dignity of every person, regardless of consequences or outcomes. It is able to account for strong, widely shared moral intuitions about our duties (better than can consequentialism). It places ethics entirely within our control – we can’t always control or predict the outcomes of our actions, but we are in complete control of our intentions. It can be too absolute and therewith inflexible to the circumstances; the more dramatic the consequences, the more implausible the strict rule following becomes. It can be unclear in the case of conflicting principles; hard to reconcile conflicting duties. It can lead to outcomes which conflict with our moral intuition. Critical Approach & Business Ethics - Ethical Theories and Decision-Making www.fhnw.ch 14 Virtue ethics Virtue ethics is a philosophy developed by Aristotle and other ancient Greeks, focusing on Honesty moral character. Self-control Accordingly, the fundamental question of ethics is Fidelity not "What should I do?" but "What kind of person should I be?“ (person rather than action Courage based). …. Virtues are attitudes, dispositions, or character traits that enable us to be and to act in ways that develop human flourishing (eudaimonia). Virtues are habitual and developed through learning and practice. Virtues are not developed in isolation, but within and by communities. Critical Approach & Business Ethics - Ethical Theories and Decision-Making www.fhnw.ch 15 Virtue ethics: pros and cons It is flexible and adaptable to different situations because it doesn’t rely on rigid rules. It encourages individuals to act out of genuine moral motivation rather than merely following rules or seeking to avoid punishment. It has an optimistic and self-affirming interpretation of ethics: a virtuous character can be developed within all of us through the right habits. It doesn’t always provide clear guidance on what to do in moral dilemmas or when virtues conflict with each other. It’s reliance on individual judgment and personal interpretation of what constitutes a virtuous character can result in inconsistent moral evaluations and actions. Critical Approach & Business Ethics - Ethical Theories and Decision-Making www.fhnw.ch 16 Ethics of rights Human beings are entitled to a set of rights, such as the right to life, freedom and property. Builds on a certain notion of individual human life, with accompanying religious and/or political assumptions. The notion of rights implies a duty of others to respect them. Rights theories laid the foundation for constitutional rights and treaties such as the Universal Declaration of Human Rights. Human rights: basic, inalienable, and unconditional entitlements that are inherent to all human beings, regardless of "nationality, place of residence, sex, national Eleanor Roosevelt holding poster of the Universal or ethnic origin, colour, religion, language, or any other Declaration of Human Rights - New York. November 1949. status“ (UDHR Booklet) Critical Approach & Business Ethics - Ethical Theories and Decision-Making www.fhnw.ch 17 Example: the right to property “Everyone has the right to own property alone as well as in association with others.” (UN Declaration of Human Rights, Article 17) John Locke: "everyman has a property in his person; this nobody has a right to but himself. The labor of his body and the work of his hand, we may say, are properly his..“ But: "...at least where there is enough, and as good, left in common for others". (Second Treatise of Civil Government, § 27) o When is there left enough for others? o What about other types of labor and land use (hunter- L. Prang & Co. (1893) Columbus Taking Possession of the New Country. gather communities)? Critical Approach & Business Ethics - Ethical Theories and Decision-Making www.fhnw.ch 18 Ethics of rights The entitlement to rights can be justified through certain fundamental beliefs about human nature (“All men are created equal”) > “natural rights” approach A more pragmatic (political) justification formulates rights as the rational outcome of a social contract between individuals and the state > rights allow us to live together peacefully. For example, the political philosopher John Rawls formulated a theory of justice – and an accompanying set of rights – through his thought experiment of “the veil of ignorance”. Critical Approach & Business Ethics - Ethical Theories and Decision-Making www.fhnw.ch 19 John Rawls: Justice as Fairness Task: We are about to define the most basic principles of (distributive) justice of our society: Who should have which rights and liberties, how should valuable goods be distributed, what are the rules for accessing these goods? Valuable Goods: Rights and Liberties, Social Positions (Jobs and Offices), Income & Wealth “Among the essential features of this situation is that no one knows his place in society, his class position or social status, nor does anyone know his fortune in the distribution of natural assets and abilities, his intelligence, strength, and the like. The principles of justice are chosen behind a veil of ignorance.” ― John Rawls, A Theory of Justice www.fhnw.ch Combining ethical theories: a pluralist approach Consideration Question Theory Social If I consider all of the possible consequences of my actions, for Utilitarianism consequences everyone that is affected, will we be better or worse off overall? How likely are these consequences and how significant are they? Duties to others Who do I have obligations to in this situation? What would Ethics of duty happen if everybody acted in the same way as me? Am I treating people only to get what I want for myself (or my organization) or am I thinking also of what they might want too? Entitlements of Whose rights do I need to consider here? Am I respecting Ethics of rights others fundamental human rights and people’s need for dignity? Fairness Am I treating everyone fairly here? Have processes been set up Theories of justice to allow everyone an equal chance? Are there major disparities between the “winners” and “losers” that could be avoided? Critical Approach & Business Ethics - Ethical Theories and Decision-Making www.fhnw.ch 21 Applying the theory: case studies – week 11 In week 11 (25.11 – 29.11), we will apply the theories to ethical dilemmas you have encountered in your professional life. As a preparation for these case studies, please do the following:  Form a group of four to five people.  Within your group, discuss ethical dilemma’s you have experienced in your working lives.  Collectively select one case you find the most interesting to discuss in greater detail.  Describe the selected cases in a formal case description.  Upload the case descriptions onto Moodle by November 15, using the following file name: Class_Surname Case Author (IM1.31_Schellekens) Participation is a formal requirement for entering the exam. Critical Approach & Business Ethics - Ethical Theories and Decision-Making www.fhnw.ch 22 Applying the theory: case study description Please describe your ethical dilemma in the following way: (1) Describe the situation in a value-neutral manner as concretely and as detailed as possible (anonymise the person and company in the description). (2) Explain briefly why it is an ethical dilemma for you, what questions arise. (3) Then point out the two values that, from your point of view, conflict with each other in your ethical dilemma (e.g. reporting malpractice/mistakes/fraud versus threatening dismissal...). Topics for describing the dilemma (not exhaustive): discrimination/bullying of employees, handling of data, dealing with customers, security, working conditions, harmful products, corruption/fraud, deception, advertising… Critical Approach & Business Ethics - Ethical Theories and Decision-Making www.fhnw.ch 23 (Ethical) decision-making: who is in the drivers seat? Underlying assumption of most (Western) theories: ethics is rooted in rational decisions by inherently asocial beings. The emphasis lies on individual autonomy and rationality, corresponding neglect of emotions and attachment. But human behavior derives above all from fast, automated emotional judgments, and only secondarily from slower conscious processes. Evidence suggests we are born as social creatures with an accompanying innate sense of morality. Critical Approach & Business Ethics - Ethical Theories and Decision-Making www.fhnw.ch 24 The social origins of morality Social animals share a basic system of morality based on the fundamental mechanisms of reciprocity and compassion. Social animals have both a bias for sharing and a bias against not sharing; i.e. both positive and negative feedback aimed at promoting reciprocity. Selfishness only becomes a viable strategy in a situation where social connections have broken down or become ineffective; i.e. where there is none of the negative feedback that social connections would provide. The second pillar of any basic system of morality is empathy, which is the ability to understand and share the feelings of others. Two main characteristics: Synchronization Compassion Consolation Critical Approach & Business Ethics - Ethical Theories and Decision-Making www.fhnw.ch 25 So what “triggers” immoral behaviour? PSYCHOLOGICAL AND/OR PHYSICAL DISTANCE POWER GROUP THINKING Critical Approach & Business Ethics - Ethical Theories and Decision-Making www.fhnw.ch 26 Group thinking and peer pressure Experiments on Conformity by Asch (1956) Task: Identify the line with the same length The aim of the experiment was to test how easily participants get influenced in their judgement by group pressure (= a majority of participants giving the same wrong answer). Critical Approach & Business Ethics - Ethical Theories and Decision-Making www.fhnw.ch Individual factors that influence ethical decision-making National and cultural (Hofstede’s cultural characteristics dimensions) Locus of control Psychological factors Cognitive moral development Personal values Critical Approach & Business Ethics - Ethical Theories and Decision-Making www.fhnw.ch 28 Situational factors that influence ethical decision-making Magnitude of consequences Social consensus The relative importance of the Moral intensity ethical issue Probability of effect Temporal immediacy Issue-related Proximity Concentration of effect The language used to expose or Moral framing mask the ethical nature of the issue The degree to which ethical Context-related Rewards behaviour is rewarded or punished. Authority The level of hierarchical power Suppression of moral autonomy The degree of formalisation through Instrumental morality Bureaucracy rules, procedures and a division of Distancing tasks. Denial of moral status Critical Approach & Business Ethics - Ethical Theories and Decision-Making www.fhnw.ch 29