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York University
MGMT 1040
William(bill) Woof

Moral Issues in Business: Chapter 2 – Normative Theories of Ethics • Chapter discusses normative perspectives and rival ethical principles that are our heritage Pros and cons relating to moral decision making in an organizational context: 1. Egoism, both as an ethical theory and as a psychological theory 2. Utilitarianism, the theory that the morally right action is the one that achieves the greatest total amount of happiness for everyone concerned 3. Kant’s ethics, with his categorical imperative and his emphasis on moral motivation and respect for persons 4. Other nonconsequentialist normative themes: duties, moral rights, and prima facie principles CONSEQUENTIALIST AND NONCONSEQUENTIALIST THEORIES • Normative theories propose some principle or principles for distinguishing right actions from wrong actions o There theories are divided into consequentialist and nonconsequentialist • Moral theorists argue that the moral rightness of an action is determined solely by its results; if its consequences are good, then act is right; if they are bad, the act is wrong o These moral theorists are called consequentialists o Determine what is right by weighing the ratio of good to bad that an action produces • Two most important consequentialist theories are egoism and utilitarianism • Egoism advocated individual self-interest as its guiding principle • Utilitarianism holds that one must take into account everyone affected by the action • Nonconsequentialist (or deontological) theories contend that right and wrong are determined by more than the likely consequences of an action • These theorists do not necessarily deny that consequences are morally significant, but they believe that other factors are also relevant to the moral assessment of an action Egoism • The view that equates morality with self-interest is egoism • Contends that an act is morally right if and only if it best promotes the agent’s own long-term interests (“agent” can be a single person or an organization) • Use their best long-term advantage as the standard for measuring action’s rightness • Two kinds of egoism: personal and impersonal o Personal: claim they should pursue their own best long-term interests, but they do not say what others should do o Impersonal: claim that everyone should follow his or her best long-term interests Misconceptions about Egoism • One is that egoists do only what they like, that they believe in “eat, drink, and be merry” – not so. o Undergoing unpleasant, even painful, experience would be consistent with egoism, provided that such temporary sacrifice is necessary for the advancement of one’s long-term interests • Another misconception is that all egoists endorse hedonism, the view that pleasure (or happiness) is the only thing that is good in itself • Final misconception is that egoists cannot act honestly, be gracious and helpful, or otherwise promote other people’s interests o Egoism, however, requires us to do whatever will best further our own interests o In particular, egoism tells us to benefit others, if we expect that our doing so will be reciprocated, or that the act will bring us pleasure Psychological Egoism • Followers of egoism generally attempt to derive their basic moral principle from the alleged fact that human beings are by nature selfish creatures o Termed psychological egoism, people are, as a matter of fact, so constructed that they must behave selfishly o Psychological egoism asserts that all actions are selfishly motivated and that truly unselfish actions are impossible Problems with Egoism 1. Psychological egoism is not a sound theory. Self-interest motivates all of us to some extent, and we all know of situations in which someone pretended to be acting morally but was really only motivated by self-interest – theory of psychological egoism contends self-interest is the only that ever motivates anyone. 2. Ethical egoism is not really a moral theory at all. Many critics of egoism as an ethical standard contend that it misunderstands the nature and point of morality. Morality serves to restrain our purely self-interested desires so we can all live together. If our interests never came into conflict – that is, if it were never advantageous for one person to deceive or cheat another – then we would have no need for morality. 3. Ethical egoism ignores blatant wrongs. The most common objection to egoism as an ethical doctrine is that by reducing everything to the standard of best long-term self- interest, egoism takes no stand against such seemingly immoral acts as theft, murder, racial and sexual discrimination, deliberately false advertising, and wanton pollution. All such actions are morally neutral until the test of self-interest is applied. UTILITARIANISM • Is the moral doctrine that we should always act to produce the greatest possible balance of good over bad for everyone affected by our actions. o “Good”, utilitarians understand happiness or pleasure. Thus, the greatest happiness of all constitutes the standard that determines whether an action is right or wrong • Earlier thinkers, Jeremy Bentham (1748-1832) and John Stuart Mill (1806-1873) were first to develop the theory o Used the utilitarian standard to evaluate and criticize the social and political institutions of their day Six Points about Utilitarianism 1. When deciding which action will produce the greatest happiness, we must consider unhappiness or pain as well as happiness. 2. Actions affect different people to different degrees. 3. Because utilitarians evaluate actions according to their consequences, and actions produce different results in difference circumstances, almost anything might, in principle, be morally right in some particular circumstance. 4. Utilitarians wish to maximize happiness not simply immediately but in the long run as well. 5. Utilitarians acknowledge that we often do not know with certainty what the future consequences of our actions will be. 6. When choosing among possible actions, utilitarianism does not require use to disregard our own pleasure. Nor should we give it added weight. Rather, our own pleasure and pain enter into the calculus equally with the pleasures and pains of others. Utilitarianism in an Organizational Context • Utilitarianism provides a clear and straightforward basis for formulating and testing policies. By utilitarian standards, an organizational policy, decision, or action is good if it promotes the general welfare more than any other alternative. • Secondly, it provides an objective and attractive way of resolving conflicts of self- interest o This feature of utilitarianism dramatically contrasts with egoism, which seems incapable of resolving such conflicts • Lastly, utilitarianism provides a flexible, result-oriented approach to moral decision making By recognizing no actions of a general kind as inherently right or wrong, utilitarianism encourages organizations to focus on the results of their actions and policies, and it allows them to tailor decisions to suit complexities of their situations. Critical Inquiries of Utilitarianism 1. Is utilitarianism really workable? Utilitarianism instructs us to maximize happiness, but in difficult cases we may be very uncertain about the likely results of the alternative courses of action open to us. 2. Are some actions wrong, even if they produce good? Utilitarianism focuses on the results of an action, not on the character of the action itself. 3. Is utilitarianism unjust? Utilitarianism concerns itself with the sum total of happiness produced, not with how that happiness is distributed. If policy X brings two units of happiness to each of five people and policy Y brings nine units of happiness to one person, one unit each to two others, and none to the remaining two, then Y is to be preferred (eleven units of happiness versus ten), even though it distributes that happiness very unequally. The Interplay Between Self-Interest and Utility • Self-interest and utility play important roles in organizational decisions, and the views of many businesspeople blend these two theories o To the extent that each business pursues its own interests and each businessperson tries to maximize personal success, business practice can be called egoistic • Adam Smith held such a classical capitalist economist view: o Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command o As every individual, therefore, endeavours as much as he can to employ his capital • Many would agree with Smith, conceding that business is part of a social system that cooperation is necessary, and that certain competitive ground rules are needed and should be followed. At the same time, they would argue that the social system is best served by the active pursuit of self-interest within the context of established rules. KANT’S ETHICS • German philosopher Immanuel Kant (1724-1804) provides an excellent example of a thoroughly nonconsequentialist approach to ethics • Kant sought moral principles that do not rest on contingencies and that define actions as inherently right or wrong apart from any particular circumstances. He believed that moral rules can, in principle, be known as a result of reason alone and are not based on observation • His theory holds that we do not have to know anything about the likely results of my telling a lie to my boss in order to know that it is immoral Good Will • Such laws in effect give legal protection to the humanitarian impulse behind emergency interventions • Formally recognize interventionist’s heart was in the right place, that the person’s intention was irreproachable • The widely observable human tendency to introduce a person’s intentions in assigning blame or praise is a good springboard for engaging Kant’s ethics • Kant believed that their goodness depends on the will that makes use of them. Intelligence for instance is not good when used by an evil person • By will Kant meant the uniquely human capacity to act from principle • Contained in the notion of good will is the concept of duty: only when we act from duty does our action have moral worth. When we act only out of feeling, inclination, or self-interest, our actions – although they may be otherwise identical with the ones that
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