BUL 4421 - Chapter 2
Universalization Test
A third general guideline shares with the other two a focus on the "other" - the stakeholders whom our actions affect. Before we act, consider what the world would be like were our decision copied by everyone else. Applying this test causes us to wonder aloud: "Is what I am about to do the king of action that, were others to follow my example, makes the world a better place for me and those I love?"
Six ways the Golden Rule can be interpreted:
1. Do to others as you want them to gratify you. 2. Be considerate of others' feelings as you want them to be considerate of yours. 3. Treat others as persons of rational dignity like you. 4. Extend brotherly or sisterly love to others, as you would want them to do to you. 5. Treat others according to moral insight, as you would have others treat you. 6. Do to others as God wants you to do to them. This guideline urges us to be aware that other people -- their rights and needs -- matter.
Ethical Dilemma
A problem about what a firm should do for which no clear, right decision is available
WPH Process
A set of ethical guidelines that urges us to consider whom an action affects, the purpose of the action, and how we view its morality. Practical approach to business ethics that they can use to avoid costs, the three-step approach: The WPH Process of Ethical Decision Making.
Ethical Relativism
A theory of ethics that denies the existence of objective moral standards. Rather, according to ethical relativism, individuals must evaluate actions based on what they feel is best for themselves. When two individuals disagree over a question about morality, bot individuals are correct because no objective standard exists to evaluate their actions. Manny people find it attractive because it promotes tolerance.
WPH Approach Summary
Business managers can apply the WPH approach to most ethical dilemas. The WPH framework provides a practical process suited to the frequently complete ethical dilemmas that business managers must address quickly in today's society.
The "WPH" Process of Ethical Decision Making: (1) W—WHO (Stakeholders)
Consumers Owners or Investors Management Employees Community Future Generations
Consequentialism
Does not provide a rigid set of rules to follow regardless of the situation. This ethical approach "depends on the consequences." A general approach to ethical dilemmas that requires that we inquire about the consequences to relevant people of our making a decision.
The WPH Framework for Business Ethics
Ethical guidelines requires recognition that managerial decisions must meet the following primary criteria: The decisions affect particular groups of stakeholders in the operation of the firm. Whom would this decision affect? The decisions are made in pursuit of a particular purpose. Business decisions are instruments toward an ethical end. The decisions must meet the standards of action-oriented business behaviors. Managers need a doable set of guidelines for how to make ethical decisions.
The "WPH" Process of Ethical Decision Making: (2) P—PURPOSE (Values)
Freedom Security Justice Efficiency
Business Law and Business Ethics
In December 2008, multinational giant Siemens AG was ordered to pay the larges Foreign Corrupt Practices Act (FCPA) fin in history after admitting to acts of bribery worldwide. The company had been using off-the-book slush funds, middlemen posing as agents or company consultants, and even money-filled briefcases to bribe government officials and secure contracts overseas. As a result, $1.6 billion later, Siemens AG is now forced to restructure itself to do business ethically and legally.
Situational Ethics
Is a theory that at first appears similar to ethical relativism but is actually different. SE requires that we evaluate the morality of an action by imagining ourselves in the position of the person facing the ethical dilemma. SE allows us to judge other peoples actions. Once we put ourselves in other person's shoes, we can evaluate whether that person's action was ethical.
Deontology
Is an alternative theoretical approach to consequentialism. Consists of acting on the basis or the recognition that certain actions are right or wrong regardless of their consequences.
Utilitarianism
Is one form of consequentialism that business managers may find useful. Urges managers to take actions that provide the greatest pleasure after having subtracted the pain or harm associated with the action in question.
Cost-Benefit Analysis
One form of utilitarianism commonly applied by firms and government. When a business makes decisions based on cost-benefits analysis, it is comparing the pleasure and pain of its optional choices, as that pleasure and pain are measured in monetary terms.
Values
Positive abstractions that capture our sense of what is good or desirable. They are ideas that underlie conversations about business ethics. Values represent our understanding of the purposes we will fulfill by making particular decisions.
How Do We Make Ethical Decisions? Ethical Guideline
Provides on path to ethical conduct. Notice that all three ethical guidelines reflect a central principle of business ethics: 1. The Golden Rule 2. Public Disclosure Test 3. Universalization Test
The "WPH" Process of Ethical Decision Making: (3) H—HOW (Guidelines)
Public Disclosure Universalization Golden Rule
Business Ethics (other)
Refers to standards of business conduct. It does not result in a set of correct decisions. Business ethics can improve business decisions by serving as a reminder not to choose the first business option that comes to mind or the one that enriches us in the short run. can never produce a list of correct business decisions that all ethical businesses will make.
Absolutism or Ethical Fundamentalism
Requires that individuals defer to a set of rules to guide them in the ethical decision-making process. Holds that whether an action is moral does not depend on the perspective of the person facing the ethical dilemma. Rather, whether an action is moral depends on whether the action conforms to the given set of ethical rules.
Rule Utilitarianism
See great potential for the abuse of AU. RU holds that general rules on balance produce the greatest amount of pleasure for all involved should be established and followed in each situation. RU underlies many laws in the U.S.
Public Disclosure Test
Sometimes called the "television test," for it requires us to imagine that our actions are being broadcast on national television. The premise behind PDT is that ethics is hard work, labor that we might resist if we did not have frequent reminders that we live in a community.
Principle of Rights
The duties that we owe others imply that human beings have fundamental rights based on the dignity of each individual. Asserts that whether a business decision is ethical depends on how the decision affects the right of all involved.
Social Responsibility of Business
The expectations that the community imposes on firms doing business inside its borders
(1) The Golden Rule
The idea that we should interact with other people in a manner consistent with the way we would like them to interact with us has deep historical roots.
Stakeholders
The stakeholders of a firm are the many groups of people affected by the firm's decisions. Any given managerial decisions affects, in varying degrees, the following stakeholders: 1. Owners or shareholders 2. Employees 3. Customers 4. Management 5. The genera community where the firm operates 6. Future generations
Categorial Imperative
Use to determine whether an action is right or wrong. An action is moral only if it would be consistent for everyone in society to act in the same way. Would lead you to conclude that you should not cheat on a drug test, because if everyone acted in the same way, the drug test would be meaningless.
Virtue of Ethics
An ethical system in which the development of virtues, or positive character acts such as courage, justice, and truthfulness, is the basis for morality. A morally excellent (and thus good) person develops virtues and distinguishes them from vices, or negative character traits, such as cowardice and vanity. Habits of mind that move us toward excellence, the good life, or human flourishing. A difficulty with the application of virtue ethics is the lack of agreement about the meaning of "the good life." Without that agreement, we are not able to agree about what types of behavior are consistent with our achievement of that goal.
Act Utilitarianism
Has two main branches: 1. Act utilitarianism and 2. Rule utilitarianism. AU tells business managers to examine all the potential actions in each situation and choose the action that yields the greatest amount of pleasure over pain for all involved.
Ethics of Care
Holds that the right course of action is the option most consistent with the building and maintaining of human relationships. Those who adhere to an ethic of care argue that traditional moral hierarchies ignore an important element of life: relationships, care for the nurturing of our many relationships serves as a reminder for the importance of responsibility to others. Argue that when one individual, the caregiver, meets the needs of one other person, the cared-for party, the caregiver is actually helping to meet the needs of all the individuals who fall within the cared-for party's web of care.
Ethical Guidelines
Practical steps that provide a dependable stimulus to ethical reasoning in a business context.
Business Ethics
The application of ethics to the special problems and opportunities experienced by businesspeople
Ethics
The study and practice of decisions about what is good, or right
(2) Public Disclosure Test
We tend to care about what others think about us as ethical agents. Stop for a moment and think of corporations that failed to apply the public disclosure test and generated negative reactions as a result. Ex: December 2012, Walgreens was ordered to $16.47 M to settle a lawsuit alleging that over 600 California stores had illegally handled and dumped pesticides, bleach, paint, pharmaceutical waste, and other items. Walgreens was also charged of improper disposal of confidential medical records of customers. They would have behaved differently had it considered the PDT before dumping toxic waste inappropriately. Another way to think of PDT is to view it as a ray of sunlight that makes our actions visible, rather than obscured.
