Chapter 4 – Ethics and Business Decision Making Copyright © 2011- Jeffrey Pittman.

Chapter 4 – Ethics and Business Decision Making

Copyright © 2011- Jeffrey Pittman

Section 1 – Business Ethics

Ethics in the News

• After the recent bank and corporate failures and government takeovers, ethics continues to be in the news

Jeffrey Pittman - Legal Environment of Business

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Ethics

• Ethics pertains to the study of good versus evil, and to moral behavior

• Western philosophy regarding ethics was shaped by ancient Greek philosophers, and by Christianity


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Greek Philosophers

• Leading Greek philosophers include:

• Socrates• Plato• Aristotle• The Cynics• The Epicureans• The Stoics


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Plato (c. 428 B.C. - c. 347 B.C.)

Why is Business Ethics Important?• Note the difference

between the textbook examples of “illegal” behavior versus “unethical” behavior

• What does the large number of convicted business executives tell you?


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Ethical versus Legal Standards of Behavior• Laws are promulgated by the

government – the law is a mandatory system of rules from an external source

• Ethical principles are voluntary, except to the extent the principles are duplicated by the law – ethical principles are shaped by external sources (e.g., religion), but are ultimately defined by internal decisions

• A majority of the material in Chapter 4 is legal – for example, all court cases analyze law only, not ethics


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Section 2 – Approaches to Ethical Reasoning

Duty-Based Ethics

• Deontology – Following absolute standards of moral behavior, such standards generally coming from religious sources

• Kantian Ethics - Kant’s categorical imperative

• The Principle of Rights – Application of rights corresponding to duties of others


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Outcome-Based Ethics

• Utilitarianism – Ethical behavior as identified through analyzing the consequences of such behavior

• “The greatest good for the greatest number” summarizes this ethical theory

• Jeremy Bentham and John Stuart Mill are philosophers associated with utilitarianism


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Lifeboat Example

• Compare duty-based ethics to outcome-based ethics in analyzing a lifeboat example discussed in class – the Nineteenth Century British case, Regina v. Dudley and Stephens (14 Q.B.D. 273 (1884))


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http://en.wikipedia.org/wiki/R_v_Dudley_and_Stephens

http://en.wikipedia.org/wiki/R_v_Dudley_and_Stephens

Regina v. Dudley and Stephens• On July 25, 1884, Captain

Dudley, seamen Stephens and Brooks, and cabin boy Parker were in a lifeboat 1000 miles from land

• After their ship sunk, the men had been 20 days in the lifeboat, 8 without food

• Dudley killed Parker for food; murder charges later followed


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Miscellaneous

Strategy for Ethical Decision Making

• Facts – Gather all necessary facts• Stakeholders – Which stakeholder

groups will be affected by the company decision in question

• Values – What are your personal values and the company values

• Alternative actions – What alternatives actions are possible

• Choose and prioritize – Make a decision based on values and impact on stakeholders

• Decision and implementation strategy


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Stakeholder Analysis

Community

Government Supply Chain

Employees

Investors

Management


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Chapter 4 – Ethics and Business Decision Making Copyright © 2011- Jeffrey Pittman.

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Transcript of Chapter 4 – Ethics and Business Decision Making Copyright © 2011- Jeffrey Pittman.