ethical dilemmas

ethical dilemmas - Transcript

Issues in Business Ethics

Systemic issues
• Systemic issues─questions raised about
the economic, political, legal, or other
social systems within which businesses
operate.
• These include questions about the
morality of capitalism or of the laws,
regulations, industrial structures, and
social practices within which businesses
operate.

Corporate issues
• Corporate issues─questions raised about
a particular company.
• These include questions about the
morality of the
– activities,
– policies,
– practices, or
– organizational structure of an individual
company taken as a whole

Individual issues
• Individual issues─questions about a
particular individual within an
organization and their behaviors and
decisions.
• These include questions about the
morality of the
– decisions,
– actions, or
– character of an individual.

Some theorists maintain that moral notions apply only to individuals, not to
corporations themselves.
Others counter that corporations do act like individuals, having objectives and
actions, which can be moral or immoral just as an individual's action might be.
In 2002, for example, the Justice Department charged the accounting firm of
Arthur Andersen for obstruction of justice.
Arthur Andersen was caught shredding documents showing how they helped
Enron hide its debt through the use of several accounting tricks.
Critics afterward claimed that the Justice Department should have charged the
individual employees of Arthur Andersen, not the company, because
"Companies don't commit crimes, people do."

Perhaps neither extreme view is correct.
Corporate actions do depend on human individuals who should be held
accountable for their actions.
However, they also have policies and culture that direct individuals, and should
therefore be held accountable for the effects of these corporate artifacts.

Globalization and business ethics
• Virtually all of the 500 largest U.S. industrial corporations today are
multinationals.
• Operating in more than one country at once produces a new set of
ethical dilemmas.
• Multinationals can escape environmental regulations and labor laws
by shifting to another country, for example.
• They can shift raw materials, goods, and capital so that they escape
taxes.
• In addition, because they have new technologies and products that
less developed countries do not, multinationals must decide when a
particular country is ready to assimilate these new things.
• They are also faced with the different moral codes and laws of
different countries. Even if a particular norm is not unethical, they
must still decide between competing standards in their many
operations.

Ethical relativism is the theory that, because different societies have different
ethical beliefs, there is no rational way of determining whether an action is morally
right or wrong other than by asking whether the people of this or that society believe it
to be right or wrong

Finally, new technologies developed in the closing decades of the 20th century and
the opening years of the 21st century are again transforming society and business
and creating the potential for new ethical problems.

They bring with them questions of risks, which may be unpredictable and/or irreversible.
Who should decide whether the benefits of a particular technology are worth the risks?
How will victims of bad technology be compensated for their loss?

How will risk be distributed?
How will privacy be maintained?
How will property rights be protected?

Moral Developments and Moral Reasoning

Lawrence Kohlberg identified six stages of moral development
Level One: Pre-conventional Stages
1. Punishment and Obedience Orientation
2. Instrument and Relativity

Level Two: Conventional Stages
1. Interpersonal Concordance Orientation
2. Law and Order Orientation

Level Three: Post-conventional, Autonomous, or Principled Stages
1. Social Contract Orientation
2. Universal Ethical Principles Orientation

Arguments For and Against Business Ethics

Some people object to the entire notion
They make three general objections:
First, they argue that the pursuit of profit in perfectly competitive free markets will,
benefit the society
(Producing what the buying public wants may not be the same as producing
what the entirety of society needs.)
Second, they claim that employees, as "loyal agents," are obligated to
serve their employers single-mindedly
(But this argument itself rests on an unproven moral standard that the
employee has a duty to serve his or her employer and there is no reason to
assume that this standard is acceptable)
Third, they say that obeying the law is sufficient for businesses and that business
ethics is, essentially, nothing more than obeying the law
(However, the law and morality do not always coincide
again, slavery and Nazi Germany are relevant examples).

Low-cost, small-car: Big trouble

Ultra-cheap small cars will tilt the balance against public transport.
Urban congestion, unsustainable fuel load, air pollution and
health problems will follow.


Thus, none of the arguments for keeping ethics out of business seems forceful.
In contrast, there are fairly strong arguments for bringing ethics into business.

Arguments for ethics
• One argument points out that since ethics should govern
all human activity, there is no reason to exempt business
activity from ethical scrutiny.
• Another more developed argument points out that no
activity, business included, could be carried out in an
ethical vacuum.
• One interesting argument actually claims that ethical
considerations are consistent with business activities
such as the pursuit of profit. Indeed, the argument claims
that ethical companies are more profitable than other
companies.
• Most interesting is the “Prisoners Dilemma”

Prisoners Dilemma
• Is a situation in which two parties are each faced with a
choice between two options: Either cooperate with the
other party or do not cooperate.
• If both parties cooperate, they will both gain some
benefit.
• If both choose not to cooperate, neither gets the benefit.
• If one cooperates while the other chooses not to
cooperate, the one who cooperates suffers a loss while
the one who chooses not to cooperate gains a benefit.
• The prisoner's dilemma demonstrates that cooperation is
more advantageous

Win win situation

Moral Responsibility and Blame
• Directed at determining whether a person or
organization is morally responsible for having
done something wrong
• Ignorance and inability to do otherwise are two
conditions, called excusing condition, that
completely eliminate a person's moral
responsibility for causing wrongful injury
• Ignorance and inability do not always excuse a
person, however.
• When one deliberately keeps oneself ignorant to
escape responsibility, that ignorance does not
excuse the wrongful injury.

Moral Responsibility and Blame 2
• A person is NOT morally responsible for
an injury or a wrong if:
• 1. The person did not cause and could
not prevent the injury or wrong;
• 2. The person did not know he was
inflicting the injury or the wrong;
• 3. The person did not inflict the injury or
the wrong of his own free will

Mitigating Factors
• there are also three mitigating factors that
diminish moral responsibility. They are:
• 1. Circumstances that leave a person uncertain
(but not unsure) about what he or she is doing;
• 2. Circumstances that make it difficult (but not
impossible) for the person to avoid doing it;
• 3. Circumstances that minimize (but do not
remove) a person's involvement in an act.