ADMS 1000 Chapter Notes - Chapter 10: Immanuel Kant, Business Ethics, Categorical Imperative

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Chapter 10 ADMS 1000
Defining Business Ethics
Managing ethical behavior in business organizations requires an in-depth
understanding of the many factors that contribute to employee’s decisions to
behave ethically or unethically
Ethics- The study of morality or moral judgments , standards, and rules of
conduct
Business ethics- The rules, standards, principles, or codes giving guidelines
for morally right behavior in certain contexts
Unethical Behaviour: Behaviour that in some way has a harmful effect of
others and is either illegal or morally unacceptable to the larger community
Ethical Behaviour as a Social Phenomenon
Categorical imperative: The assertion by philosopher Immanuel Kant that
moral actions are, by definition, actions that respect others
Kant asserted that actions, to be moral, must respect others- to function in
society, individuals recognize that they must restrict their actions, just as
they expect others to restrict others
Business ethics requires the organization or individual to behave in
accordance with some carefully throughout rules of moral philosophy
One can readily think of unethical business practices based on our views of
what constitutes ethical or unethical behavior
What is legal is not necessarily ethical
Unethical behavior may be directed against the organization itself, or it may
be an activity that is consistent with the organization’s goals but inconsistent
with commonly accepted ethical principles
Business Ethics as Managing Stakeholders Interests
We can think of business ethics as standards, rules, and principles used to
judge the rightness or wrongness of behavior
Mark Pastin  Managers today manage interests as much or more than they
manage people or assets
Work place can be viewed in Pastin’s terms as tangled web of conflicting
interests vying for scarce resources
A basic issue of business ethics is really all about balancing the interests of
shareholders, employees, customers, creditors , many of which may be
competing
Models for Judging the Ethics of Decisions
Pastin stated that in the field of business ethics is to apply what appears to
be esoteric, philosophical concepts to the real concerns of business
organizations
We consider two central models that have been used to describe the basis of
judging the ethics of organizational decisions:
1. Utilitarian, or end-point ethics
2. Rule ethics
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The models identify the logic or rationale a manager might employ in dealing
with organizational issues that posses ethical implications
End- Point Ethics
End-point ethics: Assessing the rightness or wrongness of an action by its
outcomes. Its modern counterparts are cost-benefit and risk-benefit analysis
Utilitarianism: First articulated by John Stuart Mills in response to the
Industrial Revolution, a way to determine if an action is right or wrong by
assessing the likely consequences of the action, including tangible economic
outcomes (shareholder profit) or intangible outcomes (happiness and
friendship)
Utilitarianism posits that an ethical person acts as so as to produce the
greatest ratio of good to evil
Actions themselves are neither ethical nor unethical, rather, ethics are judged
based on the outcomes of such actions
Utilitarianism ideally requires an examination of the fairness of the
outcomes, given the consequences experienced by all affected parties
ultimately determine whether or not an action is ethical
The Consequences of Our Actions
Where we have a number of different of interests at play, we need to
consider what action will benefit most of the parties
It is an ethical analysis that considers the relative gains and costs for all
parties affected by a decision or action
We compare the costs and benefits to each stakeholder by considering a
number of possible factors including social (how it affects society or the
public as a whole), human (psychological or emotional impact), or
economic (what is the dollar impact of our decision)
Limitations
It is difficult estimating and comparing relative benefits and costs to the
stakeholders
End point ethics report just looks at the endpoint or result, without
considering the implications of what it takes to achieve those results
Even if end-point ethics helped generate a solution that resulted in a
maximization of the greatest food for all those affected, it ignores what
happens in between to get that point or outcome
Endpoint ethics essentially asks two questions:
Who will be significantly affected by this decision?
What is the impact of this decision as perceived by each of the affected
groups?
Endpoint ethics gives managers a tool for analyzing business decisions
Rule Ethics
Rule Ethics: Judging actions to be right or wrong according to absolute rules
regardless of the consequences. Such rules may be based on religious beliefs,
family values, education, experience and so on
Ethical behavior is behavior that can be deemed as morally right regardless
of the consequences
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There are a variety of beliefs or rules regarding what is ethical and society
has tended to permit rules to change in many areas of behavior
Right Versus Wrong
Rule ethics asserts that an individual should do what is required by
valid, ethical principles and should not do anything that violates those
principles
Given the diverse nature of society, there is no one clear set of rule
ethics that is followed by all individuals
Utilitarian and rule ethics consider the social aspect of ethics:
Unethical behavior is behavior that has harmful effect on others and is
either illegal, or morally unacceptable to the larger community
Do Organizations Make us Unethical?
Self-interest is a major influence on ethical behavior
Ex, based on agency theory, it is argued that when agents (employees)
possess more information that principals (employers) and their goals
conflict, agents may have been in accordance with their self interest
Some have accused individuals human agents of being pureegosits whose
behavior typically reflects a desire to maximize their own utility
From a normative perspective, business ethics advocates that individuals
should be motivated by more that a complete focus on self-interest
Managing ethical behavior in business organizations requires an in-depth
understanding of the many factors that contribute to employee’s decisions to
behave ethically or unethically
Organizational factors play a role in ethical decision making and behavior at
two points: establishing moral intent and engaging in moral behavior
Elements that play a critical role in individual ethical behavior within the
organization are culture, organizational decoupling, routinization of work,
organizational identity, and work roles
The influence of these factors on behavior arises through their impact on the
following
Perceptions or recognition of the ethical dimension or ethical
implications of the work situation
Critical evaluation of the ethical implications or consequences of work
behavior
Final decision to engage in the behavior
Unethical Behaviour as a Consequence of Corporate Culture
Organizational culture: A set of shared beliefs regarding how members of
the organization should behave and what goals they should seek
Organizational culture provides an organizational reality within which
ethically relevant actions are discussed, judged, and legitimized
Ex. Culture through its transmission of organizational beliefs, can
provide employees with legitimate or non-legitimate approaches to
ethical decision making and behavior
Rituals and Myths
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ADMS 1000 Full Course Notes
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Document Summary

End- point ethics: end-point ethics: assessing the rightness or wrongness of an action by its outcomes. Its modern counterparts are cost-benefit and risk-benefit analysis: utilitarianism: first articulated by john stuart mills in response to the. Where we have a number of different of interests at play, we need to consider what action will benefit most of the parties. It is an ethical analysis that considers the relative gains and costs for all parties affected by a decision or action. It is difficult estimating and comparing relative benefits and costs to the stakeholders. End point ethics report just looks at the endpoint or result, without maximization of the greatest food for all those affected, it ignores what considering the implications of what it takes to achieve those results. Even if end-point ethics helped generate a solution that resulted in a happens (cid:498)in between(cid:499) to get that point or outcome. Endpoint ethics gives managers a tool for analyzing business decisions.

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