Ethics Mid Term Notes PDF

Ethics Mid-Term Notes MAIN POINTS: Three dominate approaches to normative theories of ethics 1. Deontological (rule-based) ethics 2. Teleological or consequential theories 3. Virtue ethics Deontological Ethics (Rule based) - Actions are ethical if done for sake of what is good without reg...

Ethics Mid-Term Notes MAIN POINTS: Three dominate approaches to normative theories of ethics 1. Deontological (rule-based) ethics 2. Teleological or consequential theories 3. Virtue ethics Deontological Ethics (Rule based) - Actions are ethical if done for sake of what is good without regard for consequences of the act - Decisions based upon duty and adherence to universal principles - **Rule Based Ethics** - Individuals have duty to do the right thing even if the consequences of another action are preferable - What would be examples: - The ten commandants - The charter of rights and freedoms - Focuses on outcomes or results of actions - **Utilitarianism**- individuals make decisions based on consequences of the action - How would theft/stealing fit here? - If the consequences are good, then the action is right (either morally permissible (not considered wrong) or obligatory) - If the consequences are bad, then the action is wrong (impermissible) - Decisions should result in the greatest good for the greatest number Utilitarianism : a moral theory that promotes actions that result in the greatest good for the greatest number of people - Suppose you're a train operator and notice someone on a train track who you cannot alert of the oncoming train - If you divert the train, then many will die but if you don't then one will die - What should you do? Virtue Ethics - An approach to ethics that emphasizes the individuals moral character (i.e, traits or virtues) and focuses on being a good person - Morality based on development of good character traits (virtues) - Assumes "good" person will act ethically - Example; nurse who helps a patient - Example: colleague who helps a new employee - Absolute rules unlikely to apply in all situations - What virtues in your view make a good businessperson or leader ? - Courage - Integrity - Humility - Compassion - Passion - Wisdom - Humour Ethics and Capitalism Introduction to the fundamentals of capitalism - Canadian economic system largely composed of business enterprises operating in a market system - Theory of Capitalism examines eight elements: 1. Right of Private Property 2. Equality of Opportunity 3. Competition 4. Individualism and Economic Freedom 5. Profits 6. Work Ethic 7. Consumer Sovereignty 8. Role of Government 1. **Right of Private Property** The legal right to own and use economic\ goods---for example, land and buildings\ (generally tangible items)\ √ Provides a sense of security\ √ Sense of destiny\ √ Pride\ √ Develop a respect for the property of others\ √ Sense of satisfaction Ethical Implications:\ ▫ Uneven distribution of wealth → demands for more equitable\ distribution by government action, i.e., taxation\ ▫ Government control of property / restrictions on foreign\ ownership of property\ ▫ Ownership of natural resources What is Intellectual Property?\ ▫ "An umbrella term for patents, copyrights,\ trademarks, industrial designs, integrated circuit\ topographies, and plant breeders' rights"\ HAVE ANY OF YOU KNOWINGLY OR\ UNKNOWINGLY VIOLATED INTELLECTUAL\ PROPERTY RIGHTS RECENTLY?\ 7 2. **Individualism and Economic Freedom** Individualism: The view that the individual,\ and not society or a collective, is the paramount\ decision maker in society; assumes that the\ individual is inherently decent and rational;\ behaves in their own self-interest with little\ authority being exercised over them\ Linked to freedom\ ▫ **Economic freedoms:** exists when the business\ system operates with few restrictions on its activities;\ the list here is endless Ethical Implications:\ ▫ Desirability of individual versus collective (Unions /\ cooperatives) action\ ▫ Desirability of individual vs. collective action, and the\ extent to which economic freedoms should exist\ 9 3. **Equality of Opportunity** The assumption that all individuals or groups\ have an even chance at responding to some\ condition in society\ ▫ An 'Equal' chance to succeed\ Ethical Implications:\ ▫ Difficult to achieve in a capitalistic system\ ▫ Why?\ Wealth created not distributed equally\ Move towards social, educational and culturally leveling → Equality\ of Results\ Inequities such as layoffs, drops in living standards, excessively high\ executive salaries\ Not everyone has the "equality of opportunity Why is income inequity an important issue for\ business?\ 1. If Canadians are better off financially, there will be higher\ consumer spending of the goods and services provided by\ Canadian businesses\ 2. In income inequity is deduced, government would devote fewer\ resources to it in turn reducing the demand for higher\ corporate taxation\ 3. Income inequity could lead to social and economic instability,\ or at least, demands by lower income earners for fairer wages\ or social assistance\ 4. It should be viewed as the right thing to do from a moral\ perspective\ 11 Several approaches proposed to reduce income inequity\ and to reduce poverty,\ 1. Establishing a system of living wages, the minimum earnings\ that allow full-time workers to meet the basic needs of their\ families and to reach past low-income tax thresholds\ 2. Creating a guaranteed minimum income, also known as\ universal basic income, basic income guarantee or negative\ income tax\ 3. Increase minimum wages, that is, the lowest wage rates\ legislated by governments\ 4. Raise taxes paid by high earners, especially the top 1%\ 5. Raise taxes on corporations\ 12 4. **Competition** The condition in a market system in which\ many rival sellers seek to provide goods and\ services to many buyers\ ▫ It's natural /desirable\ ▫ The Invisible hand that is responsible for the orderly\ operation of the market\ ▫ It can be ruthless, but we benefit!\ Advantages\ √ Goods and services are provided at lower costs\ √ Reduces waste / inefficiency and holds profit to a minimum\ √ Widens the choice of goods and services available to consumers\ √ Regulates prices\ 13 Ethical Implications:\ ▫ Oligopolies (few sellers in industry) or even\ monopolies (one seller) can be created\ ▫ More difficult for some firms to enter certain\ industries (plant size to achieve economies of scale)\ ▫ Firms might engage in anti-competitive activity\ 14 5. **Profits** The excess of revenues over expenses\ Closely associated with competition\ Measure of effectiveness\ They can be used as businesses wish\ 15 Ethical Implications:\ ▫ Profits sometimes viewed with disdain or as immoral\ ▫ WHY?\ ▫ How do you feel?\ Are these profits reasonable at a time when consumers\ are paying high service fees, etc.?\ Should excessive profits be taxed by\ governments?\ 16 6. **The Work Ethic\ A code of values, or a body of moral\ principles, claiming that work is\ desirable, a natural activity, and good\ in and of itself\ √ 'Worthy'\ √ 'Admirable'\ √ "Personally & Socially Valuable"\ 18** **\ ** Ethical implications:\ ▫ Government programs and society's expectations have\ influenced individuals' attitudes toward work\ ▫ Individuals now expect more from government and\ business enterprises in terms of working conditions,\ benefits, and salaries\ Do all of you have a good work ethic?\ ▫ How so?\ 19 7. **Consumer Sovereignty** Consumers have and exercise power over\ producers through the decisions they\ make in purchasing the goods and\ services provided by corporations\ Consumers dictate the types, styles, and quality\ of goods and services provided by business\ Have you ever boycotted a product on ethical\ grounds?\ 21 Ethical Implications:\ ▫ Consumers not always aware of alternative products\ available\ ▫ Consumers don't always understand the technical\ complexities of many goods and services\ ▫ Issue of choice, or lack thereof\ ▫ Consumers' preferences are shaped by persuasive\ advertising\ ▫ Too many products / brands, with too little difference\ ▫ Producers have power to ignore consumer wishes\ 22 8. **The Role of Government** Kept to a minimum\ Laissez-faire approach\ "leave us alone"\ It does shift over time\ Government is to provide, however\ National security\ Internal law & order\ System of currency and measures\ Body of law relating to contracts between individuals Ethical implications:\ Government now an influential stakeholder in business\ Government involvement in the economy has always been greater\ in Canada than in the U.S.\ The National Policy\ Response to U.S. cancelling of Reciprocity Treaty (1866), the Panic\ of 1873 (financial crisis) and followed by long agricultural\ depression\ Key element in Macdonald Conservatives' election platform of 1878\ Elements:\ ▫ High protective tariff on manufacturing industries to encourage industrialization; economic\ nationalism\ ▫ Building of transcontinental railroad to link Canada, profoundly facilitated Western settlement\ (nation building) and politics of economic nationalism\ ▫ Settlement of Prairies to provide growing market for Canadian manufactured goods (largely from\ Central Canada)\ 25 Elements:\ Sought to integrate Canada's scattered regions within a\ transcontinental national economy\ Political significance greater than its economic impact: enabled\ Macdonald to appeal to both English-Canadian & French-Canadian\ nationalism by creating an external enemy (the U.S.)\ Legacy is mixed\ Contributed to moderate rates of economic growth during the 1880s-90s\ High tariffs remained a central feature of Canadian economic policies until the 1940's\ Regarded as a model for government leadership of economic policy and promoting\ economic nationalism\ Governments restrict capital movements and natural resource sales, impose\ product standards, prevent businesses from shutting down plants\ Legislation governs treatment of employees\ 26 Ethical Implications, cont.:\ ▫ Government now extensively involved in the economy through:\ Subsidies (see financial aid to U.S. farmers)\ Taxation (Federal, provincial, property, HST, etc.)\ Tariffs (see current trade spats the U.S. is having with Canada, China\ and the EU)\ Regulations (environmental, etc.)\ Legislation (laws and bills)\ Loans (government steps in to helps firms and businesses)\ Grants (to cultural organizations)\ Ownership (CBC, pipelines)\ ▫ Government can restrict capital movement, impose product\ standards, prevent businesses from shutting down plants\ 27 Capitalism → economic system that allows for\ private ownership of the means of production\ (land, labour, and capital)\ Assumes economic decision-making is in hands of\ individuals or enterprises that make decisions\ expecting to earn a profit\ Canada does not have pure free-enterprise system\ Different forms of capitalism exist throughout\ world Common Forms of Capitalism\ Consumer capitalism → government involvement is\ limited, open borders and profit mentality exists (e.g.\ Canada, U.S., Britain and Australia)\ Producer capitalism → emphasizes production,\ employment and statist policies (e.g. France, Japan)\ Social market economy → regulated capitalist market with\ generous social welfare (e.g. Germany); input from labour\ Family capitalism → extended clans dominate\ business activities and control capital flows (e.g.\ Thailand, Indonesia & Taiwan) Common Forms of Capitalism\ Frontier capitalism → fundamentals of business\ being introduced; capitalism in its beginning stages\ (e.g. Russia, China)\ State capitalism → economic system in which\ governments manipulate market outcomes for\ political and social purposes\ Does not result in most efficient use of resources The Ethics of Capitalism\ The Challenges\ Greed -- excessive and selfish form of self-interest where individuals\ desire more of something than what is needed or fair\ ▫ Is Greed good?\ Economic downturns -- economic cycles are a feature of capitalism, see\ 2008 collapse of financial institutions\ Business failures -- implications for government, employees and\ investors\ Income and wealth inequality\ Corporate crime and wrongdoing -- harms the reputation of\ businesses\ Stagnant incomes vs. increasing CEO salaries\ Damage to the environment\ Reliance on market system that seldom works perfectly\ 35 The Stakeholder Concept and\ Business\ Business in Canada operates in a pluralistic social system where\ a variety of groups and institutions use power or influence to\ represent the interests of particular groups of citizens\ ▫ A Pluralistic Social System is one where influence or power is\ decentralized by dispersing it among a variety of institutions\ ▫ No one institution is completely independent of others; but each\ institution does possess some autonomy to pursue its own interests\ This protects society from the dominance of one group or one\ institution\ Business is subject to the influence of other institutions and must\ respond to the various participants in society\ These participants are referred to as stakeholders\ 3 Stakeholders:\ An individual, or group, who can influence and/or is\ influenced by the achievement of an organization's\ purpose\ Stakeholder connotes Legitimacy!\ ▫ "\...to manage effectively, then you must take your stakeholders into\ account in a systematic fashion."\ All stakeholders have expectations\ ▫ You're all stakeholders of SMU; what are your expectations?\ Relationship with business is a two-way street\ ▫ Corporations must understand how activities influence stakeholders\ ▫ Stakeholders must consider their responsibilities to the corporation\ 4 Civil Society: Definition\ Civil Society comprises the voluntary,\ community, and social organizations or\ institutions that contribute to the functioning of\ society but are not related to or supported by\ government\ E.g.; Non-governmental Organizations (NGOs), the\ media, community-based organizations, civic clubs,\ trade unions, charities, social and sports clubs,\ cooperatives, environmental groups, professional\ associations, etc.\ 16 Non-Governmental Organizations\ (NGOs)\ Any group that holds shared values or attitudes\ about an issue confronting society and\ advocates for changes relating to the issue\ ▫ Well-known example: Mothers Against Drunk\ Driving (MADD) -- fighting against impaired\ driving / raising awareness / providing support\ services\ Not new to society\ Usually, but not always, non-profit\ 17 NGO Societal Issues Most\ Relevant to Business\ Animal rights\ Technology\ Economic: often opposed to capitalism\ Social Development: gap between rich and poor\ Workers' / human rights: working conditions\ Environment: one of the most common causes of\ NGO activity\ Religious activism: very prevalent in the U.S.\ 19 NGO Tactics\ ✓ Pressure on governments to\ change policies\ ✓ Damaging publicity\ ✓ Disrupt annual meetings\ ✓ Develop shareholder social\ policy resolutions\ ✓ Damaging physical property\ ✓ Picket managers' homes\ ✓ Sponsor demonstrations or\ picket corporate locations\ ✓ Organize boycotts\ ✓ Launch letter-writing\ campaigns\ ✓ Initiate legal proceedings\ ✓ Non-violent use of the Internet\ (i.e., 'hacktivism')\ ✓ Develop anti-business websites\ ✓ Support anti-business\ documentaries\ ✓ Provide support for alternative\ sources of goods and services The Case for NGOs: Benefits from\ Partnership\ Identifying opportunities and risks\ Influence on public opinion\ Innovation possibilities\ Reputation and trust by the public\ Expertise on specific issues\ Employee engagement\ 21 Strategies for Relationships with\ NGOs\ Proactively engage NGO\ Do not underestimate NGO's influence\ Reversing a decision from a project shouldn't be\ viewed as a defeat\ Sometimes selective concessions are sufficient\ Sometimes better to deal with "realist" NGO,\ not the "radical" and "idealistic" ones\ A pre-emptive strategy may be feasible\ 22 Partnership Relationships with\ NGOs\ Four key ingredients to a successful\ partnership:\ 1. Corporate and NGO leaders must show leadership\ 2. The corporation must be open to change\ 3. Must be a commitment to being committed\ 4. Partners must have a shared goal\ 23 Business-Media Relations\ Business Complaints about the Media\ Reporters are not sufficiently knowledgeable about business and economics and fail to\ do their homework.\ The media is interested only in "bad" news that can be sensationalized.\ The media is unable to place the information into the correct context.\ The media has an inherent bias against business and is dominated by leftist\ journalists who neither support nor understand a market economy.\ Business reporting is not only biased, but also oversimplified and lacking in insight.\ Reporters do not respect "off-the-record" comments.\ Media Complaints about Business\ Businesspersons confuse issues by waffling on details, stonewalling, attempting to\ hide negative information, or by lying.\ Businesspersons use the excuse that they are accountable only to shareholders, not the\ media.\ Businesspersons overreact to the process of reporting events and covering issues. Issues in the Business and Media\ Relationship\ Managers sometimes attempt to manage relationship\ with media to suite their purposes, e.g., via press\ releases\ ▫ Libel Chill → a business threatens legal action if a particular\ article or book is published\ ▫ Media Spin → corporations have access to services of public\ relations experts who are able to put a particular "spin," or\ interpretation, on corporate events or information\ Does fairness and bias in media make a difference?\ ▫ Media is pervasive element in society and appears to be an\ important influence on performance of modern companies Media Ownership &\ Centralization\ Business enterprises now own and operate major media\ outlets\ Related issues:\ 1. Newspaper monopolies held in cities by large corporations\ 2. Interlocking ownership between print and broadcasting media\ 3. Licensing process in broadcasting where some corporations are\ allegedly favoured over others\ 4. Operation of newspaper chains that are concerned more with\ financial performance than professional journalism\ Issue of centralization of media → concern that there\ may be too few voices in media The Challenges of Social Media\ Social media → online technologies and practices that\ people use to share opinions, insights, experiences, and\ perspectives\ ▫ Allow business and society stakeholders to share opinions,\ insights, experiences, and perspectives through networking\ platforms\ ▫ Exchanges of information are instant, often interactive and cover\ all topics, and require minimum knowledge of technology\ ▫ Costs to participants are low or even non-existent, allowing large\ numbers to publish and receive information\ ▫ Can build, or destroy, a corporation's reputation The Challenges of Social Media,\ cont.\ Issues exist in HR:\ ▫ Time employees should spend on social media during work hours\ ▫ Action to take when employees make negative comments about\ corporation\ ▫ Scanning social media for information when evaluating potential\ employees for positions\ Issues in marketing and advertising practices:\ ▫ Corporations may distort endorsements by misrepresenting\ credentials, affiliations, and expertise or by placing fake stories\ ▫ Marketers may inappropriately collect data on consumers Social Media and Students\ 31\ A study of 149 undergraduates at the University of Windsor found a\ "moral shallowness" in students\ ▫ Those who texted or used social media heavily are more image conscious\ ▫ They are pleasure seekers placing greater importance on morally shallow life goals\ and have a lower tendency to engage in deeply reflective thoughts\ ▫ Students with goals related to morality such as living life with genuine integrity\ and leading an ethical and principled life texted and used social media less\ frequently\ ▫ The authors concluded that the use of social media could adversely affect\ students' grades, and made it harder for them to build social relationships\ ▫ It was also concluded that excessive use of social media was not the best use of\ time\ ▫ Ninety-five percent of the students belonged to Facebook, 68 percent to Twitter,\ and 64 percent to Instagram\ Thoughts? Social Media Issues and Ethics\ Involvement in social media should be guided by virtues\ such as honesty, trust, openness, respect, and fairness\ Challenges:\ ▫ Rights of privacy for consumers and employees\ ▫ Ascertaining which information should be banned (freedom of\ speech vs. censorship)\ ▫ Collection of data without paying, and its manipulation for profit\ Need to regulate social media has arisen\ ▫ Mostly regulated by industry\ ▫ Increased demands for government intervention Policy Development Institutions\ (Think Tanks)\ Policy Development Institution → organization that\ researches and analyzes important social, economic, and\ political issues confronting business and society\ ▫ Attempt to influence society's, in particular government's,\ position on various business and social issues\ ▫ Bring fresh thinking to an issue to mold government policy\ ▫ Funded by government, corporations, trade unions, wealthy\ individuals, foundations, universities, etc.\ Critics claim lack of transparency; think tanks are public\ relations front and advocates for industry sponsors Religious Institutions\ Influence of religion on business:\ ▫ Impact on managerial decision making\ ▫ Existence of businesses supplying religious goods and services\ ▫ Spirituality in the workplace\ ▫ Corporate response to religious activism\ Spirituality\ → individual's sense of peace or purpose with\ themselves and the connection to others and even nature that\ provides meaning to life and a sense of oneself\ Business must be careful in responding to religious activism\ Should spirituality in the workplace be supported or\ encouraged by an employer? Educational Institutions\ Business involvement in the education system has been\ controversial\ Two views regarding issue:\ ▫ Mutually beneficial partnership; or\ ▫ Educational institutions should be unencumbered from corporate\ influence\ Corporations also have economic, social, and\ environmental responsibilities to primary and secondary\ schools, e.g., marketing soft drinks to children Introducing the Ethics of Business\ Business ethics → rules, standards, codes, or\ principles that provide guidelines for morally\ right behaviour and truthfulness in specific\ situations\ ▫ Means different things to different managers Assessment of Ethical\ Implications in Business Decisions\ Value Judgments → subjective evaluations of what is\ considered important\ ▫ Based on how managers intuitively feel about the\ goodness or rightness of various goals\ Moral Standards → the means by which individuals\ judge their actions and the actions of others\ ▫ Based upon accepted behaviour in society\ HAVE ANY OF YOU EVER MADE A\ VALUE OR MORAL JUDGEMENT? Influences on Ethical Behaviour\ Influences become the bases for an\ individual's value judgments and moral\ standards that determine behaviour\ ▫ Five categories:\ 1. Influences of Individuals\ 2. Corporate or Organizational Influences\ 3. Economic Efficiency Influences\ 4. Government and Legal System Influences\ 5. Social Influences\ 5 - 6 Influences on Ethical Behaviour, cont\ 1. Influences on Individuals - Family, home, religion, education\ 2. Corporate or Organizational Influences - Superiors,\ colleagues, corporate mission statements, codes of conduct,\ business / industry organizations like the Better Business Bureau\ (BBB), professional organizations for professions like lawyers,\ dentists, engineers, doctors have ethical codes that govern their\ behaviour\ 3. Economic Efficiency Influences - Corporation's success = social\ betterment; enhanced public good; not cutting corners and\ producing sub-standard products\ 8 Influences on Ethical Behaviour,\ cont.\ 4. Government and Legal System Influences -\ Enacts legislation and regulations, i.e., a code of laws,\ i.e., Competition Act, i.e., sharing of information to the\ public; government regulation\ 5. Societal Influences - Dominant culture, political\ views, economic status, role of NGOs (non-\ governmental organizations) and their advocacy efforts\ 9 The Theoretical Basis for Ethical\ Conduct\ Moral problems should be defined as resulting in\ harms to some and benefits to others\ This introduces more realism in the business context\ Ethical principles are applied the same way in\ any context\ Not subjective measures rather objective statements\ 11 Self-Interest Ethic (Ethical\ Egoism)\ Individuals or corporations set their own standards for\ judging the ethical implications of their actions; only\ the individual's values and standards are the\ basis for actions\ Motive of Self-interest not necessarily the same as:\ ▫ Selfishness\ ▫ Greed\ ▫ Disregard for the rights and interests of others\ ▫ Hedonism, i.e. the pursuit of pleasure\ ▫ Materialism\ 12 Personal Virtues Ethic\ An individual's or corporation's behaviour is based upon\ being a good person or corporate citizen with traits such\ as courage, honesty, wisdom, temperance, and\ generosity\ ▫ Action = honour, pride, and self-worth\ Ask, how would I feel if my actions were had to\ be explained on television?\ ▫ "Light of Day Test"\ 14 Ethic of Caring\ Gives attention to specific individuals or stakeholders\ harmed or disadvantaged and their particular\ circumstances\ GOLDEN RULE: "Do unto others as you would\ have them do unto you"\ In business organizations, Ethic of Caring demonstrated\ by\ Developing people\ Recognizing effort\ Considering family responsibilities\ Responding to community problems\ Accommodating disadvantaged groups\ 15 Utilitarian Ethic\ Focuses on the distribution of benefits and\ harms to all stakeholders with the view to\ maximizing benefits\ "The greatest good for the greatest number."\ Attempting to understand the impact of an\ action on society and its various stakeholders\ 16 Universal Rules Ethic\ Ensures that managers or corporations have the\ same moral obligations in morally similar\ situations\ ▫ Also referred to as the categorical imperative\ ethics, i.e., it is complete in itself without reference\ to any other ends, in other words, we must always do\ this\ Treat people as means in themselves (i.e., with\ respect) and never as a means to one's own ends\ 17 Individual Rights Ethic\ Relies on a list of agreed upon rights for\ everyone that will be upheld by everyone and\ that becomes the basis for deciding what is\ right, just, or fair\ What Rights do we enjoy as Canadians?\ ▫ Canadian Charter of Rights and Freedoms; United\ Nations Universal Declaration of Human Rights\ Examples: Rights to safety, information,\ privacy, property, freedom of speech, freedom\ of association, etc.\ 18 Ethic of Justice\ Considers that moral decisions are based on the primacy\ of a single value: justice\ Different types of justice:\ Procedural\ Impartial application of rules or procedures\ Free from Bias\ Based on accurate Information\ Compensatory\ Stakeholders are compensated appropriately for wrongs that are suffered\ Retributive justice\ Punishment should fit the crime; controlled by the criminal justice system\ Distributive justice\ Concern for how all stakeholders are treated; outcomes\ 19 Ethical Dilemmas\ Situation or problem where a person has to make a difficult choice\ between two alternatives, neither of which resolves an issue or\ problem in an ethically acceptable fashion\ Many types, the result of a variety of circumstances and are quite\ common\ ▫ Work, personal relationships, societal issues, career, etc.\ Approach to handling:\ ▫ Identify the ethical principles involved\ ▫ Review or analyze the problem using one of the ethical principles outlined above\ ▫ Examine the problem from an ethical perspective different from the one(s) used\ initially