Theories of

Business Ethics
 1 . Categorical Imperative
of Immanuel Kant
Kantianism is an ethic of duty .
Deontology is the science of duty .
Categorical means positive or
absolutely .
Imperative means excessive of
command .
Categorical imperative in the
ethics of Kant is the absolute
command of the moral law .
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 Categorical imperative
in the ethics of Kant ,
the absolute conditional
command of the law ,
irrespective of ulterior
end or aim .

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 The German Philosopher
Immanuel Kant ( 1724 - 1804)
developed the most
persuasive and fully
articulated vision of
ethics as measured by the
rightness of rules, rather
than by consequences .

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 Kant believed that the
moral person is one of
goodwill, and that
person renders ethical
decisions based on what
is right , regardless of
the consequences of the
decision .
Eg : Student writing
exam.
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But how does the person of
goodwill know what is
right?
Here , Kant propounded the
categorical imperative , the
notion that every person should
act on only those principles
that she or he , as a rational
person , would prescribe as
universal laws to be applied to
the whole of mankind.
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 To Kant, what is right for me
is right for all , and each of
us can discover the “ right” by
exercising our rational
faculties .
Kantian rules recognise
universal rights such as
freedom of speech, the right
of privacy, or freedom of
conscience . Problem exist ,
when an individual does not
know which rules to follow.
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Good governance
is doing the
right thing and
good management
is doing things
right.
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Discussion
Do you consider
copying ethical?
If No , why do we
do it?

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 Ethical Relativism,
Absolutism,
and Pluralism

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 Ethical relativism
Ethical Relativism has several important insights:
■The need for tolerance and understanding
■The fact of moral diversity
■We should not pass judgment on practices in other
cultures when we don’t understand them
■Sometimes reasonable people may differ on
what’s morally acceptable

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Three Questions about the Meaning of
Relativism
What part of morality is
relative?
•Behavior
•Peripheral values
•Fundamental values  Morality is
relative.
How much of Relative to what?
morality is •Individuals
relative? •Cultures
•All •Nations
•Most •Groups
•Some

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What is relative?
Behavior
Different behaviors may exemplify the
same value
The same behavior may exemplify
different values in different culture
Peripheral values
Obviously some culturally-specific values
Core values
Are there central values found in all
cultures?

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 Ethical Relativism:
Solipsism
 Sometimes we say that
we can’t judge other
cultures because we
can’t fully understand
them.
 Do we need full
understanding to judge
something?
 Do we even have full
understanding of
ourselves?
 Does it deny a main goal
of multiculturalism?


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 Ethical Relativism:
Overlapping Cultures
Ethical relativism
suggests that we
let each culture
live as it sees fit
This is only
feasible when
cultures don’t
have to interact
with one
another.
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 Ethical Relativism:
Overlapping Cultures
The actual
situation in
today’s world is
much closer to
the diagram at
the right.

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Ethical Relativism:
A Self-Defensive Position
Ethical relativism maintains that we
cannot make moral judgments about
other cultures
The corollary of this is that we are
protected in principle against the
judgments made by other cultures
Shares this characteristic with absolutism

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 Ethical Absolutism
Absolutism comes in
many versions--
including the divine
right of kings
Absolutism is less about
what we believe and
more about how we
believe it
Common elements:
 There is a single Truth
 Their position
embodies that truth
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Ethical Absolutism
Ethical absolutism gets some things
right
We need to make judgments (at
least sometimes)
Certain things are intolerable
But it gets some things wrong,
including:
Our truth is the truth
We can’t learn from others
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Ethical Pluralism
Combines insights of both relativism
and absolutism:
The central challenge: how to live
together with differing and conflicting
values
Fallibilism: recognizes that we might
be mistaken
Sees disagreement as a possible
strength:

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 Ethical Pluralism
Ethical pluralism offers three categories to


describe actions:
Prohibited: those actions which are not
seen as permissible at all
Absolutism sees the importance of this
Tolerated: those actions and values in
which legitimate differences are possible
Relativism sees the importance of this
Ideal: a moral vision of what the ideal
society would be like

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 Ethical Pluralism

For each action or

policy, we can
place it in one of
three regions:
Ideal--Center
Permitted--
Middle
 Respected
 Tolerated

Prohibited--
Outside
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Five Questions
What is the present state?
What is the ideal state?
What is the minimally acceptable
state?
How do we get from the present to
the minimally acceptable state?
How do we get from the minimum
to the ideal state?

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 Developing a Moral
Stance
Here’s a way of visualizing these


issues:

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Conventional Ethics of Albert
Z Cars
Is Business Bluffing Ethical ?
Carr ’ s article asserts that
bluffing in business may be
ethical . Carr explains how
bluffing ( deceiving ) in certain
situations may be more acceptable
than in others .
On the other hand there is a
true benefit from a reputation
for honesty in business as
well.
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 Eg : In the criminal court , where
the criminal is not expected to
tell the truth when he pleads not
guilty .
Eg : Millions of businessmen feel
constrained every day to say yes
to their bosses when they
secretly believe no and that this
is generally accepted as
permissible strategy when the
alternative might be the loss of
a job .
The essential point here is , that
the ethics of business are game
ethics , different from the ethics
of religion .
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 A m a n w h o in te n d s to b e a w in n e r in
th e b u sin e ss g a m e m u st h a ve a g a m e
p la ye rs a ttitu d e .
A n a p p le d istrib u to r q u e stio n s h im se lf
w h e th e r h e h a s to h id e ro tte n a p p le s
co ve re d b e lo w g o o d a p p le s exp o se d .
W h a te ve r th e fo rm o f b lu ff, it is a n
in te g ra l p a rt o f th e g a m e , a n d th e
exe cu tive w h o d o e s n o t m a ste r its
te ch n iq u e s is n o t like ly to a ccu m u la te
m u ch m o n e y o r p o w e r.
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 Aristotelian Ethics

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Ari stotle ’ s
ethics is a theory
based on the concept of virtue.
Virtue means moral excellence .
Aristotle described virtue as a
character trait that manifests
itself in habit action .
 Virtue ethics
It is concerned with pursuing a certain
type of morally inclusive excellence.
Aristotle called it eudaimonia, which can
be roughly translated as 'happiness', or
'human flourishing'. It has four
attributes

vIts primary attribute is a strong

emphasis on the importance of certain
generally accepted virtues of character;
indeed it is through honing and
perfecting these virtues that an
individual becomes truly ethical.
Virtue Ethics
vSecondly, a strong emphasis is placed on the
existence of an active community that nurtures
these virtues.
vThirdly, virtue-ethics theory makes clear that
in the moral life one cannot rely merely on
rules or guidelines, in addition an ability to
exercise sound moral judgement is requisite.
vFinally, the successful identification and
emulation of moral exemplars or role models is
essential for the dissemination of morality
within the aforementioned nurturing community.

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A second claim Aristotle asserts that
before one can even begin to inquire
into the nature of the good “ one must
first have received a proper upbringing
in moral conduct ”. It would appear
that in order to become good , it is
necessary to be good already .
Experience is the product of a long
time . And the experience can not be
gotten secondhandedlly , in other words ,
it can not be thought or learned in an
academic manner .
To be wise requires experience , yet
one first needs to be wise in order to
reflect upon and understand one ’ s
various experiences , making sense of
them .
Practical wisdom itself is a form of
“perception”- that is the ability to
see what kind of action is called for
under particular circumstances .
Practical wisdom is concerned
with particulars , and knowledge of
particulars come form experience .

One of the essential tragedies of life

and at the same time , one of its
cosmic jokes that when we need wisdom
the most ( when we are young ), we are
the least likely to have it .
When we do seem to have wisdom ,
we no longer need it as
desperately .
The life ’ s ultimate paradox
is the more we know that we
know so very little ; and
less we know that of life
the more certain we are .
This is why those who
are experienced so often
try to give their wisdom to
those who need it most but
are also the least likely
to want or appreciate it!
 Business Ethics can be taught in a framework of
Global Eudemonia introduced by Aristotle, meaning
the material and the spiritual wellbeing of a
community, the ultimate goal, the telos, of the
society.

Business ethics programs need to teach that the

global corporation must not just seek profits for
its stockholders and big bonuses for its senior
management, but also enhance the opportunities for a
society where people can contribute in a business
environment in a free economy for the benefit of the
global corporation's stockholders and managers and
other stakeholders, labor and the world community.

Global harmony and global eudemonia must become the

ultimate goal.

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 Aristotle's list of virtues for corporate
world are :
Wisdom
Aristotle's virtue of wisdom contains the combination
of "scientific knowledge and intuitive intelligence"
and the capacity to differentiate between actions that
one should or should not pursue. The virtue of wisdom
in the business arena is one of the keys and shields
to ethically process complex ambiguous challenges.
Courage
Aristotle's second virtue, in the global business is
the courageous man daring to invent, create, build, and
to navigate between extremes and avoid the temptation
to be reckless and unethical.

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 Self - control
The third Aristotelian virtue, is an extremely important element
as individuals are confronted with opportunities to self-inflict
greed upon "one's self' and others.
Individuals in the global corporations often lose self-control,
and embark upon the cowardly path to destruction.
Knowing “one's self” and practicing self-restraint is difficult,
but a standard and value that must be the individual and
corporate goal.

Justice
Justice is the highest virtue with respect to the many
interactions that take place in the corporation with the many
stakeholders, clients, customers, employees, vendors and the
society at large.
An Aristotle proverb emphasizes: "In justice is all virtues
found in sum”.
Global Harmony and Eudemonia and the wisdom of Aristotelian
ethics, is a philosophical proven system that we need to study
and indoctrinate into every aspect of business education and
offer to global corporations throughout the world.

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In his Nicomachean Ethics, Aristotle
concludes that the role of the leader is to
create the environment in which all members
of an organization have the opportunity to
realize their own potential. He says that
the ethical role of the leader is not to
enhance his or her own power but to create
the conditions under which followers can
achieve their potential.

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 Aristotle raises a set of ethical questions that are
directly relevant to corporate leaders who wish to
behave in ethical ways.
ØAm I behaving in a virtuous way?
How would I want to be treated if I were a member of
this organization?
ØWhat form of social contract would allow all our
members to develop their full potential in order
that they may each make their greatest contribution
to the good of the whole?
ØTo what extent are there real opportunities for all
employees to develop their talents and their
potential?
ØTo what extent do employees participate in
decisions that effect their work?
ØTo what extent do all employees participate in the
financial gain resulting from their own ideas and
efforts?
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 He also raises a lot of useful questions about the
distribution of rewards in organizations based on the ethical
principle of rewarding people proportionate to their
contributions.

here are some Aristotelian questions that virtuous leaders might

ask:
q
qAm I taking more than my share of rewards-more than my
contribution is worth?
q
qDoes the distribution of goods preserve the happiness of the
community?
q
qDoes it have a negative effect on morale? Would everyone enter
into the employment contract under the current terms if they
truly had different choices?
q
qWould we come to a different principle of allocation if all
the parties concerned were represented at the table?

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Might – Equals –
Right Approach of
Karl Marx
Karl Marx ( 1818 - 1883) is
undoubtedly the harshest and most
influential critic of the
inequalities about private property
institutions and free markets are
accused of cheating .
Workers cannot produce anything
without the involvement of the means
of production , they are forced to
sell their labour which is the only
way to subsist for them .
They sell labour to the owner in
return for a wage . The owners try to
exploit the situation by paying less
to the workers .
Thus according to Marx ,
capitalism promotes
injustice and undermines
communal relationships .
Marx held that human beings
should be enabled to realise
their nature by freely
developing their potential for
self expression and satisfying
their human needs .
Capitalism and market economy words are
used interchangeably .
Capitalism is an economic system
combining the ‘ private ’ ownership of
productive enterprises with
‘ competition ’ between them in the
pursuit of ‘ profit ’.
The above definition contains
three aspects , which are :
•Private ownership
•Competition
•Profit motive .
In Marx ’ s view ,
capitalism alienated
the lower working
classes of neither
allowing them to
develop their
productive potential
nor satisfying their
real human needs .
 An ethics of the Communist Manifesto?
Consider for a moment one recent effort
endeavouring to establish:
(1)that the ethics of the Manifesto is simply
an expression of the needs, hopes and
desires of the modern working class; and
(2)that it alone conforms to the necessary and
desirable direction of social evolution

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" Capitalism is bad because the proletariat
finds it so from the standpoint of its own
class needs and interests " and " The struggle
of the working class for the overthrow of
capitalism is justified and right not only
because it expresses their needs and
interests , hence their ethics , but because
their ethics is the highest or best possible
at this stage of history .”
The first of these statements correctly
stresses the partisanship of Marxism in the
class struggle ; the second , its historical
perspective and appeal for support from other
classes .

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I know for
sure that
what we dwell
on is who we
become .
- Oprah Winfrey