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MGMT 1040 Chapter Notes -Ethics, Ancient Greek Philosophy, Distributive Justice

Course Code
MGMT 1040
William(bill) Woof

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Chapter 4
Page 87 to 95
Moral Analysis and Ethical Duties
Moral problems arise when financial performance and social performance are in conflict
Financial performance is easy to measure (revenues, costs, profits)
Social performance is difficult to measure but represents overal satisfaction of population
Results of moral problems can benefit, hurt, impose rights of and expand rights of stakeholders
Key is to find equitable balance between financial and social performance and logically
convince others to accept the balance
As we become a global economy, effectively resolving moral problems grows in importance
because stakeholders are more diverse
Impossible to avoid all harms or rights ignored
It is important to find an equitable balance that everyone can accept
In order to find equitable balance, three evaluative methods are used
Evaluative methods study economic outcomes, legal requirements, and ethical duties
Economic outcomes
Based on impartial market choices
Manager should produce with the least wanted (cheapest) resources to produce the most
wanted (highest price) goods
Greatest satisfaction for shareholders of the firm
Greatest satisfaction of members of society
Theoretical and practical problems exist with this approach
Theoretical problem: "optimal benefits for all" can only occur if following conditions are
All input factor and output factor markets are truly competitive
All suppliers and all customers within those markets are fully informed
All external costs are totally included
Legal requirements
Belief is managers must always obey law because law supposedly represents collective moral
standards of society
Theoretical and practical problems exist with this approach
Critical practical problem is that it is hard to write legal requirements that will cover all
current and future moral problems that may come before a court
Critical theoretical problem is that most legal requirements are not wholly representative of
all cultural, religious, economic, and social situations
Ethical duties
Defined as duties you believe you owe to other people based on your own rational thought
No one can tell you your duties
Universal principles help decide ethical duties
Can use them to convince others to support your solution
University principles
Rules for decisions or actions that are:
Not limited to a cultural, religious, economic, or social situation
Thought to lead to overall well-being and satisfaction of society
Easily understood why the principle leads to overall benefit

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Example: an universal principle from Aristotle
Proposed that a person should be open, honest, truthful, and proud of what he did
Reasons that since Greek society at the time composed of groups of citizens who
varied in all aspects
If everyone knew what everyone else was doing, everyone would work together
Pride is important because if one is proud of what they do, they'll inform others on
what they're doing
Application to health care insurance case
If insurance companies were proud of their actions, they'd let everyone
know what exactly they were doing
His principle is universal because it can be applied to all and understood by all
Definition of Moral Philosophy
Universal principles are derived from the study of moral philosophy
Moral philosophy is study of proper thought and conduct
How people normatively should think about issues
Tried to establish logical thought process based on an incontrovertible principle
The principle could determine whether a decision or action was right or wrong
No agreement on incontrovertible principle
Many proposed first principles help to estimate degree of rightness or wrongness of
a given action
Example: sales rep for health care consulting firm received cash payments from health care
insurance companies
Can be considered wrong because
Cash payment not openly and proudly acknowledged
Not economically efficient
What if company sent a case of wine and a thank-you note instead
Is it still right?
All moral problems involve compromises on the nature and extent of those benefits and harms,
and of those rights recognized and denied
There is no "right" thing for all situations
Compromises have to be made
Moral philosophy helps to make the "right" choice and define ethical duties to each other
It is not as extensive as one may wish
Principle of Self-Interests (Protagoras and Democritus)
Developed by Greek philosophers in Athens
Only measure that matters is the life of the individual and the means by which that life can be
made to be satisfying and fulfilling
"better a good life than a pleasant dinner"
Only the long-term goal of a good life matters
Evaluative goals for a good life has to combine comfortable conditions and cheerful companions
Can only achieve this by a moderation in personal lifestyles and accepting public
Necessary to follow these two to avoid irritating others
Justice is seen as a contract where everyone agrees not to harm anyone
Everyone accepts this because it is in everyone's long-term self interests to live
in a society with little probability of harm
"Never take any decision or action that is not in the long-term, or enlightened, self-interests of
yourself and of the organization to which you belong in order to avoid the possibility of future
retribution and harm from others"

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Principle of Personal Virtues (Socrates and Aristotle and Plato)
Moderated or enlightened self-interest not acceptable to these philosophers
Socrates' problem is one can act unethically to reach a position of wealth and power
where he has no fear of retribution
Concluded that everyone should act with honour, pride, and self-worth
Don't have to be kind, concerned for others
Only have to follow the three values set out because human existence’s goal is to
pursue excellence
Excellence requires those values
Rational pursuit of excellence, known as knowledge of the good, is basis of Greek philosophy
Two thousand four hundred years ago, these men in Athens laid the foundation of Western
approach to politics and ethics
Happened because of prosperity and peace in Greece
Effective trade routes and good climate resulted in prosperous trade
Conflicts that arose between nobles (ex-warriors), merchants (ex-sailors), and citizens (current
residents) brought interest in government
Interest in government brought schools
Schools taught rhetoric then logic
Interest in logic led to question, "what is the good life"
Socrates never wrote anything about the good life but Plato recorded his discussions and
published them
Socrates goal was to develop "first rule for a successful life"
Successful then meant happy
No happiness in the pursuit of pleasure or ownership of property unless you knew how to
use them well
Therefore, knowledge of the "good" was the goal of life
However, knowledge came from good and bad and wisdom/foolishness of
It is important to develop both sides so everyone would recognize proposals
that were good for themselves (ethics) and society (politics)
Ethics and politics are synonymous in Greek thinking cannot have one
without other
Plato succeeded Socrates when he died and focused more on politics
Wrote the republic where he discussed justice-- what it is and how to achieve it
Athens was divided into statesment (leaders, men of thought), nobles (warriors, men of
courage), merchants (sailors, men of property)
You need all three for society
Justice defined as harmonious union of all three groups
Aristotle focused on ethics
The need to have good men in order to form a good society
Goal of society had to be happiness for all citizens, not pleasure, wealth, or fame
Since humans are reasoning animals, happiness has to be associated with reason
If active use of reason leads to excellence then happiness is the "pursuit of
Excellence is focused in character of man and can be found in many
Openness, honesty, truthfulness, temperance, friendliness, courage,
modesty, and pride
Consequently if everyone strives for excellence on those
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