Summary of Ethics and the Future of Business, part of the MSc in Business Administration at the University of Amsterdam. Includes lecture notes as well as lecture preparation material. Score achieved: 8.5.
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Exam Ethics and the Future of Business
,Morals & Ethics 1.1 - Crane
Coming to ethical conclusions in business is more complex than in private situations.
Question: What is just different from what we would have done and what is actually wrong?
Here normative (prescribing morally correct way of acting) ethical theories play a role.
Some differ per sector, group or society = descriptive morality.
We focus on normative ethical theories = rules, guidelines, principles and approaches that
determine right and wrong.
Two sides to looking at ethical theory:
1. Ethical absolutism = right and wrong are objective (eternal and universally applicable
moral principles).
2. Ethical relativism = morality is subjective and context-dependent.
Note: ethical relativism is still normative theory (and not descriptive morality) as descriptive
relativism states that groups have different ethics, while ethical relativism states that both
sets of beliefs can be equally right.
Most traditional Western modernist ethical theories: absolutism.
Contemporary ethical theories: more relativistic.
Position of this course: ethical pluralism = Recognizing that incompatible values can be
equally legitimate and therefore tolerate them.
Worry with pluralism: too tolerant, as some ways of life or traditions are deeply misguided
and therefore tolerance is inappropriate.
The value of ethical theories: they rationalize, explain, and understand right and wrong.
Therefore, they help to make a defensible decision on solutions to ethical problems.
Both religious and philosophical ethics have the same aim when applied to business: how to
decide what is right and wrong when facing moral problems in commerce.
The two differences between religious ethics and philosophical ethics:
Religious ethics Philosophical ethics
Source of rules and Organized system of beliefs as the source Human rationality as the source of
principles of determining right and wrong. determining right and wrong.
Consequences of Spiritual consequences for the No specific consequences.
morality and immorality decision-maker (enlightenment,
reincarnation)
Religion is an important part of life for some individuals, but when it comes to business we
do not want to overemphasize differences in religious principles. Therefore, interfaith
organizations focus on business principles based on commonalities across religions.
As a result of global secularization in workplaces, normative ethical theories (based on
philosophical principles rather than religious) are the basis of business ethics.
We refer to Western Modernist ethical theories as these theories are based on philosophical
thinking beginning during the Enlightenment in the 18th century (referred to as ‘Modernity’).
Offer rules or principles applicable to any situation → makes them absolutist.
They are normative as they start with an assumption about the nature of human beings.
, Consequentialist ethics = Focusing on the outcomes and self-interest for the individual
decision-maker (goal-oriented). If outcomes are desirable → action is morally right.
Principle-based ethics = Focusing on the wider social outcomes within a community.
Prioritize what is right rather than what is desirable.
Ethical egoism Utilitarianism Ethics of duties Rights and justice
Leading Thomas Hobbes Jeremy Bentham Immanuel Kant John Locke
contributors Ayn Rand John Stuart Mill Jean-Jacques
Rousseau
John Rawls
Focus Individual desires Outcomes and Duties Rights and the
or interests collective welfare nature of justice
Leading Maximization of Act/rule utilitarianism Respect for Universalizable rules
principles desires/ autonomy and for the nature of
self-interest rational reason (in justice. Respect for
the form of the human beings
Categorical
Imperative)
Concept of Humans are Humans are motivated Humans are Humans are beings
human beings objectively obliged by pleasure and rational moral that are
to serve their avoidance of pain and actors with free will distinguished by
self-interest alone gain dignity
Type Consequentialist Consequentialist Principle-based Principle-based
Ethical egoism (ethics of self-interest) = Action is morally right if all decision-makers freely
decide to pursue their (short-term) desires or (long-term) interests.
Note: Egoist can be moved by pity for others, while a selfish person is insensitive to others.
Criticism: Some do not see ethical egoism as a moral theory, because it is internally
inconsistent. And it accepts fundamental ‘wrongs’ (theft or even murder) as anything is
accepted as long as it serves the egoist needs.
Utilitarianism (ethics as outcomes) = Action is morally right if it results in the greatest
amount of good for the greatest amount of people affected by the action.
Essential characteristics:
1. Consequentialism (consequences determine if action is right or wrong)
2. Hedonism (identified by ratio pleasure versus pain) M
3. aximalism (right action has the greatest amount of good consequences while also
taking bad consequences into account)
4. Universalism (consequences for everyone need to be considered).
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