Introduction to Ethics & Corporate Responsibility PDF

INTRODUCTION TO ETHICS & CORPORATE RESPONSIBILITY week 9 midterm mcq (ECR) week 11 elearning  LEARNING OBJECTIVES What is business ethics? Morality and moral reasoning Consequentialist vs Categorical reasoning Utilitarianism Cost...

INTRODUCTION TO ETHICS & CORPORATE RESPONSIBILITY week 9 midterm mcq (ECR) week 11 elearning  LEARNING OBJECTIVES What is business ethics? Morality and moral reasoning Consequentialist vs Categorical reasoning Utilitarianism Cost benefit analysis  WHAT IS ETHICS? ethics is about DECISION MAKING Practical living sg elections —> ethical argument in itself How we act, choose, behave, do things Normative studies conclude what is good or bad; right or wrong – why should they act in a certain way Descriptive studies provides an account of what people do - how do they act Ethics – is the study of morality practical living through decision making  WHAT IS BUSINESS ETHICS? “Business Ethics” meaning gives u belief and meaning gives.. urself? Meaning will translate into impact to urself, immediate friends, family and society -with meaning—> be at peace with urself (impact physical and mental health positively) Interdisciplinary Covers range of issues in the business world How individuals doing business should behave What principles are acceptable to deal with work place dilemmas What is appropriate for businesses, markets, and society Why is ECR impt? -Ethics govern the way we live -Business ethics help to govern business is done within the specific business environment -Business dealings can be highly ambiguogs -disruption from technology will change how we do business ethically -How we respond to these challenges has a direct impact on our quality of life  HISTORY OF BUSINESS ETHICS EDUCATION Business ethics taught in US business schools in early 1900s But by 1967, no article written on it More focused on justice of redistributing wealth than justice of the creation of wealth (Norman, 2013) 1979 onwards, textbooks published on business ethics  MORALITY & MORAL REASONING Ethics derive meaning from our value structures Value structures are defined by our moral systems We term this as Morality As we age, our value systems change Moral development may be identified at different stages Moral reasoning is the reasoning process by which human behaviours, institutions or policies are judged to be in line with or violation of moral standards.  ANALYZING MORAL REASONING Moral reasoning should be: Logical – understand the evidence and conclusion Accurate, relevant & complete (ARC) – evidence provided must be ARC Consistent – be consistent with each other’s standards and beliefs u operate the train and u cant stop the train in time and itll hit the 4 ppl in orange, but u can turn the train the other track and hit one person instead SCENARIO A WHAT IS THE RIGHT THING TO DO? the train is going straight and it cant stop in time and itll hit the 4 ppl in orange, but u are on the cliff and u can push the fat old man down (he is old and little years left) to stop the train from hitting the ppl SCENARIO B1  all the ppl on the left, are useful ppl of society who are waiting for an organ to be alive, and one healthy guy in red who is rich and useless has all of them and went to the hospital due to minor injury. as a doctor, will u operate on the rich guy and take out his organs to save the innocent and helpful ppl? SCENARIO B2 WHY ARE BOTH SCENARIOS (A&B) DIFFERENT?  Consequentialist – morality is in the consequence of your actions The right thing to do is the result of your actions killing 1 is also wrong the outcome doesnt matter, justice is more impt Categorical – morality is in duties and rights, regardless of consequences Others hesitated to push the old fat man or kill the healthy man for his organs. It was just wrong to kill the innocent to save the 5  TYPES OF MORAL REASONING Consequentialism Most popular – Utilitarianism Jeremy Benthem 18thC English Political Philosopher Kantianism or Kant Ethics Most important categorical philosopher Immanuel Kant 18thC German Philosopher  SUMMARY We looked at explaining morality with the consequences of an action – Consequentialist Moral Reasoning killing the one isnt justified, if this is the process, we just respect it Sometimes, the result is not the issue – the act itself is so important, the results do not matter An action may be categorically wrong – even if it brings about a good result – Categorical Moral Reasoning We now study one of the most important Consequentialists theories Consequentialists—> 3 survived vs Categorical —> not moral in duty, cannibalism wrong 3 guys ate an orphan to survive. when they were rescued, there was a huge debate on canabilism Capt Dudley Lifeboat  UTILITARIANISM maximise pleasure and happiness, and not pain and suffering—> most An attractive idea govt do this thru cost-benefit analysis The right and just thing to do is to maximise Utility Utility – Pleasure over Pain; Happiness over Suffering Humans have 2 sovereign masters – Pain & Pleasure Morality and Human Laws should be based on maximizing pleasure and happiness Citizens and Legislators must add up benefits of a policy and subtract the cost, that is maximizing utility for a policy Also known as cost-benefit analysis JEREMY BENTHAM Born in 1748, England Went to study at Queen’s College, Oxford University at 12 years old Completed Bachelor’s degree 3 years later At 15 years old, he studied in Law School and got his Master’s degree in 2 years At 19 years old he was called to the Bar but never practiced law  COST BENEFIT ANALYSIS Organisations, governments use cost benefit analysis to calculate utility A dollar value to stand for utility to quantify utility Most areas in life can be quantified by the dollar value Cost of advertising Cost of rental Cost of food wastage Cost of taking MC (medical certificate for sick leave) CAN YOU PUT A PRICE TO UTILITY?  16 July 2001 Philip Morris Co s. officials in the Czech Republic have been distributing an economic analysis concluding that cigarette consumption isn't a drag on the country's budget, in part because smokers' early deaths help offset medical expenses. morality was based on duties and rights , rather than the money savings The report, commissioned by the cigarette maker and produced by consulting firm Arthur D. Little International, totes up smoking's "positive effects" on national finances, including revenue from excise and other taxes on cigarettes and "health-care cost savings due to early mortality." The premature demise of smokers saved the Czech government between 943 million koruna and 1.19 billion koruna (between $23.8 million and $30.1 million or between 20.3 million euros and 25.7 million euros) on health care, pensions and housing for the elderly in 1999, according to the report. The report also calculates the costs of smoking, such as the expense of caring for sick smokers and people made ill by second-hand smoke as well as income taxes lost when smokers die. Weighing the costs and benefits, the report concludes that in 1999 the government had a net gain of 5.82 billion koruna ($147.1 million) from smoking. Government Savings from premature death caused by smoking in Czech Republic smoking causes early death so we encourage smoking, then the money goes to education consequence—> save money—> good for economy US$1,227 per dead smoker  To solve this issue, some utilitarians factor in the value of life This value of life considers the loss of income to family, emotional costs, etc. The value of life can mitigate the Phillip Morris report smoking-related deaths save the government money (through reduced healthcare and pension costs), the value of life can be used to counter or But can the value of life cause controversy? mitigate this argument. CAN YOU PUT A DOLLAR VALUE TO LIFE?  THE FORD PINTO a collision can result in a fireball collision due to the tank at the back.  Ford actually knew of the problem before the car was launched However, they did not stop the sale They justified it by doing a cost-benefit analysis The calculations were thorough and project well budgeted for in case of mishaps  TO REPAIR THE FORD PINTO they put a dollar value to life Cost to Ford Benefit to Ford fate—> that ur car isnt safe $11 per shield eg to recall the vehicles 180 burn deaths x $200,000 per death 11 million cars 180 burns injuries x $67,000 per injury 1.5 million trucks (with same problem) 2100 burned vehicles x $700 per vehicle compensation Total cost: $137.5 million Total benefit: $49,530,000 Cost > Benefit —> didnt repair ford pinto https://users.wfu.edu/palmitar/Law&Valuation/Papers/1999/Leggett-pinto.html  CHALLENGES TO UTILITARIAN VIEW How about the rights of the individual or minority? can we really put all the pain etc into dollars and cents? It is not possible to consider, add, aggregate all values into dollars and cents Edward Thorndike’s study (1937) shows that there are different values to pains, deprivation and frustrations This challenge’s Bentham’s idea that all goods and values can be measured uniformly in single value  CONCLUSION We explored ethics and area of business ethics We gained insight into consequentialist and categorical ways of moral reasoning Introduction to Utilitarianism as a result of Jeremy Bentham Explored the concept of utility Can you put a price to utility? Can you put a dollar value to life?  REFERENCES NORMAN, W. (2013). BUSINESS ETHICS. INTERNATIONAL ENCYCLOPEDIA OF ETHICS. COGNITIVE MORAL DEVELOPMENT. LEVELS AND STAGES OF CMD (BASED ON DESCRIPTION FROM KOHLBERG, 1976).