McGraw-Hill/Irwin Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Transcription

1 Chapter 8 Making Ethical Decisions in Business McGraw-Hill/Irwin Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

2 David Geffen o David Geffen the son of poor Russian immigrants o Geffen was coming of age as an entrepreneur, he still had to face school o Geffen graduated from high school wanting to get rich in show business o From the mailroom a 21-year-old Geffen launched the career that made him the richest man in Hollywood 8-2

3 David Geffen o Irrespective of moral admonitions Geffen was now on his way o His extraordinary qualities in a business that rewards such traits o Geffen s achievements and atonements can be weighed against his early indiscretions 8-3

4 Principles of Ethical Conduct o The following 14 principles are fundamental guides or rules for behavior o These principles distill basic wisdom that spans 2,000 years of ethical thought 8-4

5 The Categorical Imperative o Origination: Immanuel Kant o Basic premise: Act only according to that maxim by which you can at the same time will that it should become a universal law o Criticism: Theory is dogmatic and inflexible 8-5

6 The Conventionalist Ethic o Origination: Albert Z. Carr o Basic premise: Business is like a game with permissive ethics and any action that does not violate the law is permitted o Criticism: Commerce defines the life changes of millions and is not a game to be taken lightly 8-6

7 The Disclosure Rule o Basic premise: Test an ethical decision by asking how you would feel explaining it to a wider audience such as newspaper readers, television viewers, or your family 8-7

8 The Disclosure Rule o Criticism: o Does not always give clear guidance for ethical dilemmas in which strong arguments exist for several alternatives o An action that sounds acceptable if disclosed may not, upon reflection, be the most ethical 8-8

9 The Doctrine of the Mean o Origination: Aristotle o Basic premise: Virtue is achieved through moderation o Avoid behavior that is excessive or deficient of a virtue o Criticism: The doctrine itself is inexact 8-9

10 The Ends-Mean Ethic o Origination: Ancient Roman proverb, but often associated with Niccolò Machiavelli o Basic premise: The end justifies the means o Criticism: o In solving ethical problems, means may be as important, or more so, that ends o The process of ethical character development can never be furthered by the use of expedient means 8-10

11 The Golden Rule o Origination: Found in the great religions and in works of philosophy o Basic premise: Do unto others what you would have them do unto you o Criticism: o People s ethical values differ, and they may mistakenly assume that their preferences are universal o It is primarily a perfectionist rule for interpersonal relations 8-11

12 The Intuition Ethic o Origination: Defined by G.E. Moore in Principia Ethica o Basic premise: What is good or right is understood by an inner moral sense based on character development and felt as intuition 8-12

13 The Intuition Ethic o Criticism: o Ethical intuition is reliable, but not infallible o Self-interest may be confused with ethical insight o No standard of validation exists outside the individual o Intuition may fail to give a clear answer when ethical norms are in conflict 8-13

14 The Might-Equals-Right Ethic o Origination: Thracymachus o Basic premise: Justice is the interest of the stronger o Criticism: o Confusion of ethics with force o Invites retaliation and censure, and is not conducive to long-term advantage 8-14

15 The Organization Ethic o Origination: Not credited o Basic premise: Be loyal to the organization o Criticism: Many employees have such deep loyalty to an organization that it transcends self-interest 8-15

16 The Principle of Equal Freedom o Origination: Herbert Spencer o Basic premise: A person has the right to freedom of action unless such action deprives another person of a proper freedom o Criticism: Lacks a tie breaker for situations in which two rights conflict 8-16

17 The Proportionality Ethic o Origination: Medieval Catholic theology o Basic premise: A set of rules for making decisions having both good and evil consequences o Criticism: These are intricate principles, requiring consideration of many factors 8-17

18 The Rights Ethic o Origination: Western Europe during the Enlightenment o Basic premise: Each person has protections and entitlements that others have a duty to respect o Criticism: o Rights are sometimes stretched into selfish demands or entitlements o Rights are not absolute and their limits may be hard to define 8-18

19 The Theory of Justice o Originator: Contemporary, John Rawls o Basic premise: Each person should act fairly toward others in order to maintain the bonds of community o Criticism: Rawl s principles are resplendent in theory and may even inspire some business decisions, but they are best applied to an analysis of broad societal issues 8-19

20 Figure Three Spheres of Justice 8-20

21 The Utilitarian Ethic o Origination: Line of English philosophers, including Jeremy Bentham and John Stuart Mill o Basic premise: The greatest good for the greatest number 8-21

22 The Utilitarian Ethic o Criticism: o In practice it has led to self-interested reasoning o Because decisions are to be made for the greatest good of all, utilitarian thinking has led to decisions that permit the abridgement of individual or minority group rights 8-22

23 Reasoning with Principles o The use of ethical principles, as opposed to the intuitive use of ethical common sense, may improve reasoning, especially in complex situations o Based on the application of utility, rights, and justice, the manager s decision in the text example to remain silent is acceptable 8-23

24 Reasoning with Principles o Some judgment is required in balancing rights, but the combined weight of reasoning with all three principles supports the manger s decision 8-24

25 Character Development o Character development is a source of ethical behavior separate from the use of principles reasoning o Virtue ethic: Ethical behavior stems from character virtues built up by habit o Aristotle believed that by their nature ethical decisions require choice, and we build virtue, or ethical character, by habitually making the right choices 8-25

26 The Neural Basis of Ethical Decisions o A fast, unconscious, and automatic process in neural circuits causes ethical judgments to appear in our awareness without any feeling of having gone through a reasoning process o There is no specific part of the brain that makes ethical decisions 8-26

27 The Neural Basis of Ethical Decisions o Functional magnetic resonance imaging: A method used to map activity in neural networks during ethical decision making o Emotions have a central role in ethical thought because of their importance to adaptive behavior o Moral intuition creates awareness of a moral judgment without any memory of having gone through a step-by-step reasoning process 8-27

28 The Neural Basis of Ethical Decisions o Moral intuition is a form of social intuition that is adaptive to the social environment and predominates in individual ethical decisions o There is considerable individual variation in perceptions of right and wrong o Neuroscience, as it removes physiological mysteries, reinforces the ethical teachings of centuries 8-28

29 Practical Suggestions for Making Ethical Decisions o Pay attention to your ethical intuition o Consider tactics that illuminate alternatives o Critical questions approach: A method of ethical reasoning in which insight comes from answering a list of questions o Sort out ethical priorities early 8-29

30 Practical Suggestions for Making Ethical o Set an example Decisions o Thoughts must be translated into action, and ethical deeds often require courage o Cultivate sympathy and charity toward others o Ethical perfection is illusory 8-30

31 Concluding Observations o There are many paths to ethical behavior o Not all managers appreciate the repertoire of principles and ideas that exist to resolve the ethical problems of business life 8-31