Chapter 8 Making Ethical Decisions in Business This chapter sets forth a wide range of principles...
-
Upload
diana-wilkinson -
Category
Documents
-
view
226 -
download
5
Transcript of Chapter 8 Making Ethical Decisions in Business This chapter sets forth a wide range of principles...
Chapter 8
Making Ethical Decisions in Business
This chapter sets forth a wide range of principles and methods for making ethical decisions.
McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc. All rights reserved
Realtors in the Wilderness Opening Case
1984 – Client represented by realtor Tom Chapman is offered $200 an acre by the National Park Service. Chapman forced the park service up to $510 an acre.
1992 – Chapman became an investor in TDX, bought 240 acres of inholdings, and coerced the U.S. Forest Service into swapping TDX for land that TDX sold for a huge profit.
1999 – TDX once again bullied the National Park Service into a bad deal near Black Canyon.
The story of TDX reveals an ethically complex situation. Its investors exercise basic property rights, but rights are not absolute. Their methods resonate with free market values, but markets exhibit flaws.
McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc. All rights reserved
Principles of Ethical Conduct
There are dozens, if not hundreds, of ethical principles in the philosophical and religious traditions of East and West.
The following 14 principles are fundamental guides or rules for behavior.
These principles distill basic wisdom that spans 2,000 years of ethical thought.
McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc. All rights reserved
The Categorical Imperative
Origination: Immanuel Kant Basic premise: Act only according to
that maxim by which you can at the same time will that it should become a universal law.
Criticism: Theory is dogmatic and inflexible.
McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc. All rights reserved
The Conventionalist Ethic
Origination: Albert Z. Carr Basic premise: Business is like a
game with permissive ethics and any action that does not violate the law is permitted.
Criticism: Commerce defines the life changes of millions and is not a game to be taken lightly.
McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc. All rights reserved
The Disclosure Rule
Origination: Baxter International’s Global Business Practice Standards
Basic premise: Test an ethical decision by asking how you would feel explaining it to a wider audience such as newspaper readers, television viewers, or your family.
Criticism: Does not always give clear guidance for ethical
dilemmas in which strong arguments exist for several alternatives.
An action that sounds acceptable if disclosed may not, upon reflection, be the most ethical.
McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc. All rights reserved
The Doctrine of the Mean
Origination: Aristotle Basic premise: Virtue is achieved
through moderation. Avoid behavior that is excessive or deficient of a virtue.
Criticism: The doctrine itself is inexact.
McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc. All rights reserved
The Ends-Mean Ethic
Origination: Ancient Roman proverb, but often associated with Niccolò Machiavelli.
Basic premise: The end justifies the means.
Criticism: In solving ethical problems, means may be as
important, or more so, that ends. The process of ethical character development
can never be furthered by the use of expedient means.
McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc. All rights reserved
The Golden Rule
Origination: Found in the great religions and in works of philosophy.
Basic premise: Do unto others what you would have them do unto you.
Criticism: People’s ethical values differ, and they
may mistakenly assume that their preferences are universal.
It is primarily a perfectionist rule for interpersonal relations.
McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc. All rights reserved
The Intuition Ethic
Origination: Defined by G.E. Moore in Principia Ethica.
Basic premise: What is good or right is understood by an inner moral sense based on character development and felt as intuition.
Criticism: The approach is subjective. Self-interest may be confused with ethical
insight. No standard of validation outside the individual
is used. Intuition may fail to give clear answers.
McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc. All rights reserved
The Might-Equals-Right Ethic
Origination: Thracymachus Basic premise: Justice is the interest
of the stronger. Criticism:
Confusion of ethics with force. Invites retaliation and censure, and is not
conducive to long-term advantage.
McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc. All rights reserved
The Organization Ethic
Origination: Not credited. Basic premise: Be loyal to the
organization. Criticism: Many employees have
such deep loyalty to an organization that it transcends self-interest.
McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc. All rights reserved
The Principle of Equal Freedom
Origination: Herbert Spencer Basic premise: A person has the right
to freedom of action unless such action deprives another person of a proper freedom.
Criticism: Lacks a tie breaker for situations in which two rights conflict.
McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc. All rights reserved
The Proportionality Ethic
Origination: Medieval Catholic theology
Basic premise: A set of rules for making decisions having both good and evil consequences.
Criticism: These are intricate principles, requiring consideration of many factors.
McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc. All rights reserved
The Rights Ethic
Origination: Western Europe during the Enlightenment
Basic premise: Each person has protections and entitlements that others have a duty to respect.
Criticism: Rights are sometimes stretched into
selfish demands or entitlements. Rights are not absolute and their limits
may be hard to define.
McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc. All rights reserved
The Theory of Justice
Originator: Contemporary, John Rawls. Basic premise: Each person should act
fairly toward others in order to maintain the bonds of community.
Criticism: Rawl’s principles are resplendent in theory and may even inspire some business decisions, but they are best applied to an analysis of broad societal issues.
McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc. All rights reserved
The Utilitarian Ethic
Origination: Line of English philosophers, including Jeremy Bentham and John Stuart Mill.
Basic premise: The greatest good for the greatest number.
Criticism: In practice it has led to self-interested
reasoning. Because decisions are to be made for the
greatest good of all, utilitarian thinking has led to decisions that permit the abridgement of individual or minority group rights.
McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc. All rights reserved
Reasoning with Principles
The use of ethical principles, as opposed to the intuitive use of ethical common sense, may improve reasoning, especially in complex situations.
Based on the application of utility, rights, and justice, the manager’s decision in the text example to remain silent is acceptable.
Some judgment is required in balancing rights, but the combined weight of reasoning with all three principles supports the manger’s decision.
McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc. All rights reserved
Character Development
Character development is a source of ethical behavior separate from the use of principles reasoning.
The theory that character development is the wellspring of ethical behavior can be called the virtue ethic.
Aristotle believed that by their nature ethical decisions require choice, and we build virtue, or ethical character, by habitually making the right choices.
McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc. All rights reserved
Practical Suggestions for Making
Ethical Decisions Learn to think about ethics in rational terms using
ideas such as universalizability, reversibility, utility, proportionality, or others.
Consider some simple decision-making tactics to illuminate alternatives.
Sort out ethical priorities early. Be publicly committed on ethical issues. Set an example. Thoughts may be translated into action, and ethical
deeds often require courage. Cultivate sympathy and charity toward others.
McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc. All rights reserved
Concluding Observations
There are many paths to ethical behavior.
Not all managers appreciate the repertoire of principles and ideas that exist to resolve the ethical problems of business life.
McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc. All rights reserved