CH-3 Philosophical Ethics and Business – Business Ethics: Decision Making for Personal Integrity and Social Responsibility : Book Guide

Chapter 3: Philosophical Ethics and Business Questions, Projects, and Exercises 1. Using the distinction between theoretical reason and practical reason introduced in Chapter One, identify which of your other business courses have practical goals. Which courses aim to help student learn how to make responsible decisions about what they should do and how they should act. Can you identify the values that are either implicitly or explicitly taught in these classes? Practical Reasoning – reasoning about what we should do; Theoretical Reasoning – reasoning about what we should believe. In identifying which business courses have practical goals aimed at helping students learn how to make responsible decisions about what they should do and how they should act, we can look at courses that focus on applied skills and decision-making processes. Courses such as Business Ethics, Corporate Social Responsibility, Leadership, and Management would likely fall into this category. In these courses, values such as integrity, accountability, fairness, and social responsibility are often explicitly taught. Students are encouraged to consider the ethical implications of their decisions and actions, both personally and within the context of their organizations. Case studies, discussions, and simulations are often used to help students develop their ethical reasoning and decision-making skills. Other courses, such as Marketing, Finance, and Operations Management, may also have practical goals but focus more on technical skills and knowledge. However, even in these courses, ethical considerations are important, and instructors may incorporate discussions or assignments that encourage students to think about the ethical dimensions of their field. Overall, courses that aim to help students make responsible decisions about what they should do and how they should act tend to emphasize values such as ethical conduct, social responsibility, and the importance of considering the impact of one's actions on others and society as a whole. 2. What makes an ethical decision or issue, ethical? How would you explain the differences between ethical/nonethical and ethical/unethical? What ethical issues or dilemmas have you experienced in the workplace? Are any ethical issues or dilemmas presently being discussed at your school? Identifying an issue as an ethical issue is more of a challenge than many student might initially think. Simply reviewing the morning newspaper with students at the start of class can be a beneficial exercise in identifying ethical issues. Are there any ethical issues on the front page? Asking students to name the one biggest ethical debate on-campus can be an eye-opening exercise. An ethical decision or issue is considered ethical when it involves a choice between alternative actions that have moral implications. These implications typically involve considerations of right and wrong, fairness, justice, and the well-being of individuals or groups affected by the decision. The differences between ethical/nonethical and ethical/unethical can be explained as follows: • Ethical/nonethical: An ethical decision is one that aligns with moral principles or standards. A nonethical decision, on the other hand, is one that does not involve moral considerations or is morally neutral. • Ethical/unethical: An ethical decision is one that is considered morally right or good. An unethical decision, on the other hand, is one that is considered morally wrong or bad. In the workplace, I have experienced ethical issues or dilemmas related to conflicts of interest, fairness in promotions and hiring, and integrity in reporting financial information. These issues required careful consideration of ethical principles and values to ensure that the right decisions were made. At my school, there are ongoing discussions about various ethical issues, such as academic integrity, diversity and inclusion, and environmental sustainability. These discussions provide opportunities for students and faculty to engage with ethical dilemmas and consider the ethical implications of their actions and decisions. 3. What ethical issues or dilemmas have you ever experienced in the workplace? How were they resolved? Are there any ethical issues or dilemmas presently being discussed at your school? Ask students to reflect on how their own experiences and examine an ethical dilemma they’ve faced at work and/or school. Have students share these dilemmas and discuss options for addressing these dilemmas. In the workplace, I have experienced several ethical issues and dilemmas. One such dilemma involved a conflict of interest between a colleague's personal relationship and their professional responsibilities. This situation required careful consideration of the ethical implications and potential impact on the organization's reputation and relationships. Ultimately, the issue was resolved through open communication, transparency, and a commitment to upholding ethical standards. Another ethical issue I encountered was related to diversity and inclusion. There were instances where certain practices or policies seemed to favor one group over others, leading to concerns about fairness and equality. This issue was addressed through discussions and initiatives aimed at promoting diversity and inclusivity in the workplace. At my school, there are ongoing discussions about various ethical issues, such as academic integrity, privacy and data protection, and sustainability. These discussions involve students, faculty, and staff and aim to raise awareness, promote ethical behavior, and address any concerns or dilemmas that may arise. 4. Are there some ethical values or principles that you believe are relative to one’s own culture, religion, or personal opinion? Are there some that you believe are not? What makes them different? Ask students to reflect on how their own values and perceptions have changed since coming to college. Oftentimes students will acknowledge that issues that they previously considered settled are now more ambiguous. Students who have participated in study abroad programs often have a lot to add on this point. Yes, there are ethical values or principles that are often considered relative to one's own culture, religion, or personal opinion. These values may vary based on cultural norms, religious beliefs, and individual perspectives. Examples of such values include attitudes towards punctuality, honesty, modesty, and social hierarchies. In some cultures, punctuality may be highly valued as a sign of respect, while in others, it may be more acceptable to be flexible with time. On the other hand, there are ethical values or principles that are often considered more universal and not as dependent on cultural, religious, or personal factors. These values are often based on fundamental principles of human rights, justice, fairness, and respect for others. For example, the belief in the inherent dignity and worth of every human being is a value that is commonly seen as universal, transcending cultural and religious differences. The difference between these two types of values lies in their scope and applicability. While some values may be more context-specific and dependent on cultural or personal factors, others are seen as fundamental principles that apply to all individuals regardless of their cultural or religious background. 5. Do an Internet search on international human rights and/or fundamental moral rights. Can you make the argument that any moral rights are universally acknowledged? A sampling of websites where students can find information on international human rights and/or fundamental moral rights: • Amnesty International: http://www.amnesty.org • International Labour Organization, Rights at Work: http://www.ilo.org/global/lang--en/index.htm • United Nations: http://www.un.org/rights/ Yes, it can be argued that certain moral rights are universally acknowledged. International human rights instruments, such as the Universal Declaration of Human Rights (UDHR) adopted by the United Nations General Assembly in 1948, provide a framework for understanding these universal rights. The UDHR outlines fundamental rights and freedoms that are considered inherent to all human beings, regardless of nationality, ethnicity, or cultural background. Some examples of universally acknowledged moral rights include the right to life, liberty, and security of person; the right to freedom of thought, conscience, and religion; the right to work and to just and favorable conditions of work; and the right to education. These rights are seen as essential to human dignity and are recognized as such by countries around the world. While there may be differences in how these rights are interpreted and implemented across cultures and societies, the underlying principle of their universality remains. They are based on the idea that all individuals, by virtue of being human, are entitled to certain basic rights and freedoms that should be protected and respected by governments and societies worldwide. 6. Why might the political goal of economic growth be considered a utilitarian goal? Use the globalization debate as an example that not everyone agrees with the idea of a globalized economy. Some helpful websites to show the arguments for and against globalization are: • World Trade Organization: http://www.gatt.org/globalization.html • Globalization101.org, A Project of SUNI Levin Institute: http://www.globalization101.org/ • International Forum on Globalization: http://www.ifg.org • Global Policy Forum, Globalization Section: http://www.globalpolicy.org/globaliz/index.htm The political goal of economic growth can be considered a utilitarian goal because it aims to maximize overall societal welfare or happiness. Utilitarianism is a moral theory that suggests that the best action is the one that maximizes utility, which is often understood as maximizing happiness or well-being and minimizing suffering or harm. In the context of economic growth, policymakers often argue that increasing the size of the economy leads to higher standards of living, increased employment opportunities, and improved infrastructure and services, all of which contribute to overall societal well-being. From a utilitarian perspective, these outcomes are desirable because they are believed to result in a net increase in happiness or well-being for the majority of people. However, it is important to note that the utilitarian approach to economic growth is not without its critics. Some argue that focusing solely on economic growth can lead to negative consequences, such as environmental degradation, income inequality, and social unrest, which may ultimately reduce overall well-being. Therefore, while economic growth may be considered a utilitarian goal, it is important to carefully consider its impacts and ensure that it is pursued in a way that maximizes overall societal welfare. 7. Some political philosophers understand the ethical foundations of legislatures to be utilitarian, while the ethical foundation of the judiciary is rights-based (deontological). How would you explain this distinction? Ask students to discuss the role of the legislature in a democratic society. Why use majority rule as a decision procedure and proportionate representation to determine membership in the legislature? By and large, majority rule serves the end of maximizing overall happiness. But constitutional democracies set limits to what the majority and the legislature can do. In the U.S., the Bill of Rights explicitly begin with a limitation on the will of the majority: “Congress shall make no law . . . .” In a constitutional democracy, it becomes the judiciary’s role to enforce the in-principle limits on the will of the majority. The courts’ role is to protect rights, enforce duties, and protect fundamental principles from the whims of the majority. It becomes the role of the courts to prevent the legislature from using just any means to accomplish its ends. The distinction between the ethical foundations of legislatures being utilitarian and the judiciary being rights-based (deontological) is rooted in the different roles and functions of these institutions within a political system. Utilitarianism is a moral theory that emphasizes the consequences of actions as the basis for determining their ethical value. In the context of legislatures, which are responsible for creating laws and policies, the utilitarian approach suggests that laws should be designed to maximize overall societal welfare or happiness. This means that legislators may consider the potential benefits and harms of a law to determine its ethical justification, with the goal of achieving the greatest good for the greatest number of people. On the other hand, deontology is a moral theory that emphasizes the intrinsic rightness or wrongness of actions, regardless of their consequences. In the context of the judiciary, which is responsible for interpreting and applying laws, the deontological approach suggests that judges should focus on upholding individual rights and fulfilling their duty to apply the law impartially and fairly. This means that judges may prioritize principles such as justice, fairness, and individual rights when making decisions, even if it does not always lead to the best overall outcome for society as a whole. In summary, the distinction between the utilitarian ethical foundation of legislatures and the rights-based (deontological) ethical foundation of the judiciary reflects the different roles and responsibilities of these institutions in promoting the ethical functioning of a political system. 8. Do people have a right to do whatever they want? If not, in what sense can people have a right to liberty or personal freedom? Explore with students possible lines or boundaries to freedom. It is helpful in a business ethics class to examine the limits of the libertarian commitment to individual freedom because this ethical perspective can easily be embedded within some economic theories. Can you do just anything you want with your own property? What justifiable limits should exist for personal liberty and property rights. Examples of zoning laws are often useful – should a city be allowed to prevent me from renting out my own home to a group of college students? Can a neighborhood legitimately restrict the size of the fence I build around my own home? Can a cit prevent me from running a business out of my home? Such questions get students to understand that there must be limits to even such a basic right as freedom. Extending this example to corporate freedom and corporate property rights raises more challenges. No, people do not have a right to do whatever they want. While individuals do have certain rights to liberty or personal freedom, these rights are not absolute and must be balanced with the rights and well-being of others, as well as with societal interests and the common good. The right to liberty or personal freedom is typically understood as the right to make choices about one's own life and actions without interference from others, as long as these choices do not harm others or infringe on their rights. This right is often considered fundamental to human dignity and autonomy. However, this right is not unlimited. It is subject to legal and ethical constraints that are necessary to protect the rights and well-being of others and to maintain order in society. For example, individuals may not have the right to engage in actions that harm others, such as violence or theft. Similarly, individuals may be required to follow certain rules and regulations that are necessary for the functioning of society, such as traffic laws or building codes. In this sense, the right to liberty or personal freedom is understood as a qualified right, meaning that it is subject to limitations that are deemed necessary to protect the rights and well-being of others and to promote the common good. 9. The right of private property is often described as a “bundle” of rights. What rights are involved in ownership or property? Discuss the “bundle” of rights (see About.com’s explanation at: http://realestate.about.com/od/ownershipandrights/f/bundle_of_right.htm for more information). Explore why these rights are important and the costs when someone violates these rights. The right of private property is often described as a "bundle" of rights because it encompasses a variety of rights that are associated with ownership. These rights can include: 1. The right to possess: This is the right to physically control and use the property. 2. The right to use: This is the right to use the property in any way that is not prohibited by law or by any agreements or restrictions. 3. The right to exclude: This is the right to exclude others from using or entering the property without permission. 4. The right to transfer: This is the right to sell, give away, or otherwise transfer ownership of the property to another person. 5. The right to destroy: This is the right to destroy or dispose of the property as the owner sees fit, as long as it does not violate any laws or regulations. 6. The right to profit: This is the right to benefit financially from the property, such as by renting it out or selling products produced on the property. These rights can vary depending on the legal and regulatory framework in place, as well as any agreements or contracts that may affect the property. Overall, the bundle of rights associated with private property is intended to provide owners with a degree of control and autonomy over their possessions. 10. Relying on the description of virtue ethics, how would you describe Aaron Feuerstein’s character? What type of person would make the decision he made? Engage students in a discussion about what they view as admirable character traits and how they would describe Feuerstein’s character. Also discuss whether the decision he made is something to be admired and what qualities/character traits allowed him to make the decision he made. Would they be able to do the same? Why or why not? Aaron Feuerstein, the former CEO of Malden Mills, demonstrated characteristics of virtuous character in his actions following a devastating fire at his factory. Feuerstein chose to prioritize the well-being of his employees over short-term financial gains by continuing to pay them their full wages and benefits despite the factory being out of operation. From a virtue ethics perspective, Feuerstein can be described as a person of great integrity, compassion, and courage. His decision to support his employees, even at great personal and financial cost, reflects his commitment to ethical principles such as justice, benevolence, and loyalty. The decision Feuerstein made is characteristic of someone who values principles such as fairness, kindness, and responsibility. A person who would make a similar decision would likely possess virtues such as empathy, integrity, and a strong sense of duty towards others. They would prioritize the well-being of individuals and communities over purely self-interested motives, demonstrating a commitment to ethical behavior rooted in virtuous character. 11. Can such character traits as honesty, loyalty, trustworthiness, compassion, and humility be taught? Do people learn to be selfish, greedy, and aggressive, or do these traits come naturally? This is the concept of nature vs. nurture. How do we teach? Can ethics be taught? Once again, ask students to discuss their own ideas for raising children. Are people “naturally” selfish? If so, what implications follow for such social institutions as the law, courts, police, economics? If not, what social conditions encourage selfishness? The question of whether character traits such as honesty, loyalty, trustworthiness, compassion, and humility can be taught is a complex one. While some aspects of these traits may be influenced by upbringing, education, and socialization, there is also evidence to suggest that certain personality traits have a genetic or innate component. For example, research in psychology suggests that traits like honesty and trustworthiness may be influenced by early childhood experiences and the values instilled by caregivers and society. Similarly, compassion and humility may be fostered through exposure to diverse perspectives and experiences that promote empathy and a sense of humility. On the other hand, traits like selfishness, greed, and aggression are often attributed to a combination of genetic, environmental, and situational factors. While some individuals may have a predisposition towards these traits, they can also be learned or reinforced through experiences that prioritize self-interest, competition, and material gain. Ultimately, the development of character traits is likely influenced by a complex interplay of genetic, environmental, and personal factors. While individuals may have inherent tendencies towards certain traits, they can also be influenced and shaped by their experiences, upbringing, and the values they are exposed to. This suggests that while character traits may have a natural component, they are also malleable and can be influenced by external factors. 12. Do professional such as accountants and lawyers have duties and obligations that other people do not? From where would such duties come? Expand this question to ask whether teachers also have duties beyond other people. For instance, can a teacher go out to a bar and get drunk, or are teachers bound by a duty to set a good example for students? Explore the topic of professional responsibilities with students who plan careers in law, accounting, auditing, etc. Ask students to distinguish between professions and jobs. Yes, professionals such as accountants and lawyers have duties and obligations that may differ from those of other people, and these duties often come from professional codes of ethics, standards, and legal regulations specific to their professions. For example, accountants have a duty to maintain confidentiality, avoid conflicts of interest, and provide accurate and reliable financial information. These duties are outlined in professional codes of conduct, such as the International Federation of Accountants' (IFAC) Code of Ethics for Professional Accountants. Similarly, lawyers have duties to uphold the law, act in the best interests of their clients, maintain client confidentiality, and avoid conflicts of interest. These duties are outlined in the rules of professional conduct established by bar associations and legal regulatory bodies. These duties and obligations are considered essential for maintaining the integrity and trustworthiness of the professions and for protecting the interests of clients, the public, and the broader society. They reflect the unique roles and responsibilities that professionals such as accountants and lawyers have in society and the importance of upholding ethical standards in their work. Chapter 3 Readings Summaries & Main Points Reading 3-1 “The U.N. Guiding Principles on Business and Human Rights: Analysis and Implementation” by Kenan Institute for Ethics, Duke University Main Points: • The Universal Declaration of Human Rights was created to articulate a set of rights and freedoms that states would commit to protecting and fulfilling. • The 2003 “Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights” (the Norms) asserted that businesses should bear responsibility for promoting, ensuring respect for and protecting human rights. • In 2008, John Ruggie presented to the Human Rights Council the “Protect, Respect and Remedy” framework, which emphasized the multi-stakeholder nature of the issue and avoided previous attempts to impose an array of state responsibilities onto business. • In June 2011, Ruggie presented the Guiding Principles to the Human Rights Council after 3 years of work building consensus among stakeholders. These Guiding Principles were built around the three-pillar framework: Protect, Respect and Remedy: o The State Duty is to Protect against human rights abuses by third parties, including business enterprises, through appropriate policies, regulation and adjudication. o The Corporate Responsibility is to Respect human rights, which means that business enterprises should act with due diligence to avoid infringing on the rights of others and to address adverse impacts with which they are involved. o There is a need for greater Access to Remedy by victims of corporate-related abuse, both judicial and non-judicial. • Questions remain about whether the Guiding Principles will be yet another voluntary code of conduct, or whether they will be enforced – it is unclear how existing U.N. human rights mechanisms could enforce the Guiding Principles, particularly those aimed at companies, which live outside of the purview of the U.N. system. • One perceived weakness of the Guiding Principles is that they are more practical than aspirational, but companies suggest that fully implementing a human rights due diligence system is indeed ambitious and aspirational. • Some believe that companies and states should be held accountable for outcomes, rather than simply their process as relates to human rights issues. • Many believe the authoritative interpretation for the Guiding Principles should come from the Working Group, serving in the role of Special Representative to the Human Rights Council. • Some question whether the focus should be on breadth (i.e., promoting awareness of the Guiding Principles) or depth (i.e., working with a smaller group of companies who are ready to delve deeply into the challenges of implementing these Guiding Principles). • There are hopes that the Guiding Principles and the discussion surrounding them will bring more attention to issues of business and human rights and the U.N. Working Group will become a focal point and catalyst for convening and engaging in ongoing expert multi-stakeholder dialogue. Reading 3-2 “Caux Principles for Responsible Business” by Caux Roundtable Main Points: • The Caux Round Table believes the world business community should play an important role in improving social and economic conditions. • The principles were created to express a world standard against which business behavior can be measured. • The principles are rooted in two basic ethical ideals, kyoesi and human dignity. Kyosei means living and working together for the common good, while human dignity refers to the sacredness of each person. • The General Principles seek to clarify the spirit of these ideals, while the Stakeholder Principles explain their practical application. • The first emphasis is on putting one’s own house in order. • The Preamble explains the foundation for these Principles. They are meant to affirm the necessity for moral values in business decision making. • The General Principles provide 7 guidelines for responsible business behavior. • The Stakeholder Principles provide guidelines for fair and ethical treatment of all stakeholders. Summary The Caux Round Table believes that the world business community should play an important role in improving economic and social conditions. This documents aims to express a world standard against which business behavior can be measured. The principles discussed in the document are rooted in two basic ethical ideals: kyosei and human dignity. Kysosei means living and working together for the common good, while “human dignity” refer so the sacredness or value of each person as an end, not simply a means. The General Principles seek to clarify the spirit of these ideals, and the Stakeholder Principles are concerned with their practical application. Members of the Caux Round Table place their first emphasis on putting one’s own house in order, and on seeking to establish what is right rather than who is right. The Preamble of the Principles explains these principles as a foundation for dialogue and action by business leaders in search of business responsibility. They are meant to affirm the necessity for moral values in business decision making. The General Principles address: 1) the responsibilities of businesses to shareholders as well as stakeholders, 2) the economic and social impact of businesses, 3) proper business behavior, 4) respect for rules, 5) support for multilateral trade, 6) respect for the environment, and 7) avoidance of illicit operations and corrupt practices. The Stakeholder Principles address the fair and ethical treatment of customers, employees, owners and investors, suppliers, competitors, and communities. Business can act as a powerful agent of positive social and economic change and these Principles were established as a guide for that positive change. Reading 3-3 “It Seems Right in Theory but Does it Work in Practice?” by Norman E Bowie Main Points: • There are three great traditions in ethical theory: the virtue theory of Aristotle, the duty theory of Immanuel Kant, and the utilitarianism of Jeremy Bentham and John Stuart Mill. • Freeman argues that business and ethics are always intertwined in business activity. A manager should strive to make business decisions that are both ethically sound and sound in business terms. • Kant’s reasoning shows why free riding is wrong: a free rider benefits when others follow the rule, but the free rider does not. If everyone behaved as the free rider (if the free riding maxim were made universal), there could be no free riding because you would no longer have the rule. • Kant’s reasoning here is highly practical in business; for example, as in the string of financial scandals in the United States culminating in the subprime lending crisis of 2007-2008. • Financial market work best when there is maximum transparency. The greater the amount of knowledge, the easier it is to assign risk. • Both academics and practitioners concerned with corporate strategy have discovered the role of trust as a significant element of competitive advantage. • Kant argued that only human beings were free and that as a result of being free, they could act rationally by which Kant meant that could act according to laws of their own making. • Kant says that we should act as if we were a member of an ideal kingdom of ends in which we were both subject and sovereign at the same time. Kant’s ideas here are a moral challenge to hierarchical theories of management. • A Kantian who views the organization from the perspective of an ideal kingdom of ends will not treat the organization as a mere instrument for their own personal use. • With Kantian ethics there need be no divergence between good theory and sound practice. Solution Manual for Business Ethics: Decision Making for Personal Integrity and Social Responsibility Laura P. Hartman, Joseph R. Desjardins, Chris MacDonald 9780078029455, 9781259060588, 9781259417856