Transcript Business Ethics: An Introduction

Business Ethics: An
Introduction
Mgmt 621
Contemporary Ethical Issues in Management
Jeffery D. Smith
Customary vs. Normative Ethics
• Customary Ethics
The moral values, principles, norms, and
methods used to evaluate individual
conduct and social arrangements.
Developed and fostered through sociocultural practices and institutions
• Normative Ethics
An attempt to identify, clarify, explain, and
justify the moral values, principles, norms,
and methods used to evaluate individual
conduct and social arrangements.
• Customary Ethics describes what social
groups and individuals do value and what
principles they do accept.
• Normative Ethics evaluates and attempts
to justify certain values and principles
apart from what is customarily accepted
and practiced.
“[Normative] ethics requires us to abstract
ourselves from what is normally or typically done
and reflect upon whether or not what is done,
should be done, and whether what is valued,
should be valued. The difference between what
is valued and what ought to be valued is the
difference between [customary ethics] and
[normative] ethics.”
Joseph DesJardins (2003). An Introduction to
Business Ethics (
:McGraw Hill), p. 8.
• Questions posed by Normative Ethics…
How should I lead my life?
What kind of person should I be?
What principles ought to guide my actions?
How should we live/work together in society?
Distinguishing Normative Ethics
LAW
ETHICS
RELIGION
SELF
INTEREST
Basic Ethical Values for Business
Trust
Honesty
Fairness
Dignity and Respect for Humanity
Respect for Legitimate Law
Respect for Property
Autonomy and Freedom
Impartiality/Objectivity
Compassion
Correlative Principles
One ought to negotiate in good faith
Live up to your agreements
Provide each employee with equal opportunity
Do not work with suppliers that use child labor
Obey all environmental regulations
Respect the trade secrets of competitors
Require employee drug testing only for safety
Provide sound advice to clients
Support local communities before downsizing
Are Ethics and Business Compatible?
Alan Wolfe, Professor of Political Science at Boston
College, Washington and Lee Law Review, 1993:
“[The corporation is] a device through which human
beings, who have moral obligations, come together for the
purpose of ridding themselves of their capacity to exercise
their moral obligations.”
“mechanism of responsibility displacement”
“If chimpanzees could be trained to count, they would be just
as good, if not better, managers than human beings.”
“No one expects poker to be played on the ethical principles
preached in churches. In poker it is right and proper to bluff a friend
out of the rewards of being dealt a good hand…
Poker’s own brand of ethics is different from the ethical ideals of
civilized human relationships. The game calls for distrust of the
other fellow. It ignores the claim of friendship. Cunning, deception
and concealment of one’s strengths and intentions, not kindness
and open-heartedness, are vital in poker. Not one thinks any worse
of poker on that account. And no one should think any worse of the
game of business because its standards of right and wrong differ
from the prevailing traditions of morality in our society.”
Albert Carr, “Is Business Bluffing Ethical?” p. 245.
The purpose of business is to maximize the wealth of shareholders,
i.e., maximize profits, not to be “socially responsible” to members of
society
Milton Friedman (1970). “The Social Responsibility of Business is to
Increase Profits,” pp. 7-11.
1. Managers ought to “conduct the business in accordance with the
desires [of shareholders]”
2. Corporate social endeavors function like a “tax” on the property of
shareholders, customers and employees.
What are the assumptions are guiding Friedman’s claims?