ADMS 3660 Lecture Notes - Cultural Relativism, Capital Market, Institute For Operations Research And The Management Sciences
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Points from lt 1
Business Ethics is a specialized study of moral right or wrong. It concentrates on moral standards as they
apply to business policies, institutions, and behaviour.
Why business ethics is so important
Financial risks, Reputation and competitive advantage, Consumer boycotts, Efficiency and effectiveness
Employee trust, loyalty, commitment and initiative, Increased regulation
Relativism Thesis: The rightness or wrongness of beliefs can be determined only relatively to the culture
or moral tradition of a group
Morals standards give the ultimate criteria that make any action or person morally right or wrong: e.g.
“Those actions are right that treat human beings, whether you or another person, as an end and not
simply as a means.” or “Those actions are morally right that maximize overall good (happiness) more
than alternative actions”
Moral principles, or rules, make evaluations of types or classes of actions or individuals: e. g. “Violation
of the freedom of speech is wrong” or “Offending others is wrong.”
Moral judgements give moral evaluations of specific actions or individuals: e. g. “Filming and releasing
“Innocence of Muslims” is wrong (or right).”
Psychological egoism is the view that all individuals ultimately act only for selfish reasons and are not
capable of other motivations.
Aristotle (384–322 BC) believed that humans are fundamentally rational and being such they use their
reason to seek happiness and well-being (over a lifetime).
The ethical theory of egoism maintains that the moral rightness or wrongness of action/rule depends on
whether it serves the interests of the person or promotes their own well-being. The only moral
obligations one has is to oneself.
Those actions (or rules) are right for a person if and only if they promote the person’s self-interest at
least as much as any alternative action (or rule) or if they harm their interests the least.
One of the paradoxes of egoism is that unrestrained pursuit of self-interest can come into conflict with
others and lead to the state of affairs that are contrary to the selfish interests of the egoist.
It is rational, therefore, to restrain one’s self-interest so that others do so in return. Thus, egoist can
justify rules like “Do not steal,” “Do not harm,” which make orderly society possible.
Such state would ensure security (against crime), but it would not enforce:
benevolence (helping others through welfare, universal education, health care) or
b) paternalism (forcing people to do things for the their own good: regulation of safety, health, drugs,
narcotics, employment, homosexuality etc…)
I am going to be arguing from this perspective
According to Utilitarianism, we can determine the ethical significance of an act by looking to the
consequences of that act. Utilitarianism is typically identified with the policy of “maximizing the overall
good,” or producing “the greatest good for the greatest number.” Roots of utilitarian thinking can be
found in Thomas Hobbes (1588-1679), David Hume (1711-1776), and Adam Smith (1723-1790).
According to Utilitarianism, the only intrinsic (in itself) good is the satisfaction of one’s preferences or
maximization of one’s happiness. Its moral standard (MS) is based on this value: no act is bad or good in
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itself--it is bad or good only in so far as it fails/succeeds to produce the good consequences for the
greatest number of people.
Deongionlogical perspective Weak Paternalism: Several circumstances (ignorance, intellectual
immaturity, emotional disturbance, social pressures) could decrease a person’s ability to make free and
informed (autonomous) decisions. Weak paternalism is compatible with the theory’s positive obligations
to assist in special circumstances (e.g. children, patients), but it applies only when a special relationship
Argue that their focus is from a utliatrian perspective(how they conduct their business)
Free market encourages efficiency in the market place, which leads to optimal distribution of costs and
benefits within the society. Society benefits overall. Business is a private property, therefore, owners
have the right to decide what to do with it, whether it is to pursue public or private ends
I will arge from a deontological perspective Corporate executive is an employee of the business owners.
She has a direct responsibility to her employers to conduct business in accordance with their interests.
This is my argument: Unlike private property, corporate property was a legal creation for specific social
goal: financial investment in exchange for limited legal liability. Perhaps the relationship between
investors and corporate managers is not one of employer and employee but one of a corporate manager
and a client (labour market; financial market; capital market, etc…).
Stating the objections of utillian perspective
Allocating/Measuring Public Goods: No pricing mechanism exists for estimating costs of public goods
(clean air, fisheries, friendly communities, or scenic views) to ensure optimal allocation
Individual/Social Rationality: Pursuit of self-interest can lead to worse outcomes than would have been
achieved through cooperation or regulation (prisoner’s dilemma), resulting public harm
The moral minimum approach According to the Moral Minimum Approach, the responsibility to the
stockholders is overridden by the moral duty not to cause harm (to others) but not overridden by the
duty to prevent harm (to others). Responsibilities will shrink or increase depending on definition of
An individual is morally responsible for those wrongful acts which he/she performed (or wrongly
omitted) and for those injurious effects he/she brought about (or wrongly failed to prevent) when this
was done knowingly and freely. Can be mitigated by: uncertainty; difficulty; degree of involvement;
non-seriousness of the wrong
Worker often face coercive choices (not as free)
Lt6 discrimination using a genuine equality argumentEquality requires treatment of likes alike – it is
violated when identical items are treated differently, and different items are treated the same way.
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Hostile Work Environment: Hostile work environment occurs when a pattern of sexual harassment
within the workplace prevents a women from doing her job.
Henson v. Dundee, 682 F.2d 897,902 (1982):“Sexual harassment which creates a hostile or offensive
environment for members of one sex is every bit the arbitrary barrier to sexual equality at the
workplace that racial harassment is to racial equality.”
US Equal Opportunity Employment Commission (EEOC) has established a guideline that defines hostile
work environment as conduct of sexual nature which “… has the purpose or effect of unreasonably
interfering with an individual’s work performance or creating an intimidating, hostile, or offensive work
If the effect of the act is determined by the alleged victim, then any innocent flirtation might be viewed
as harassment as long as it offends the victim
Arguments for Women-based Standard: 1) Reasonable person standard is simply a disguised version of a
reasonable “man” standard (standard fashioned by offender). It will simply preserve the status quo2)
Men and women simply perceive sexual experiences differently: what is normal for man might be
harassment for a women.
Lt7 Narrow (classical stockholder) View
The responsibilities of an individual at a workplace derive only from the employment relationship
between the individual and the employer. The responsibility of the employee is to conduct business in
accordance with the wishes of the employer because employees are agents of the employer. (Friedman
Their view2) Deontological Defense (Agent)Employers are often in a vulnerable position in relation to
their employees (e.g. managers).
To protect their property rights against possible harm at the hands of employees, employees must have
strong fiduciary duties towards employers, which override other ethical considerations.
Non-managerial employees are required to do specific tasks, which need supervision. Hence, they
consent to obeying employers when they take the job, leaving other duties at the door.
Employees as agents: Employees have a duty to perform certain tasks (work), act on behalf of the
employer, and owe to the employer fiduciary duties of loyalty, trust, obedience, and confidentiality
(among others). These duties are primary for the employee, trumping others (within law and ethical
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