BUSN85 Ch.2 Terms

Consequentialism

a general approach to ethical dilemmas that requires that we inquire about the consequences to relevant people of our making a particular decision. Think of the consequences

Ethical dilemma

a problem concerning what a firm should do for which no clear, right decision is available. Both options suck, so you have to pick the lesser of two evils.

WH process of ethical decision making

A process that considers "Whom would this decision affect?" and "How to make decisions that meet the standards of action-oriented business behavior. W considers the stakeholders in a decision; H considers guidelines for the decision.

Public Disclosure Test

A test in which you check what others think about you as an ethical agent. Basically, would you make this decision if everyone knew?

Absolutism or Ethical fundamentalism

requires that individuals defer to a set of rules to guide them in the ethical decision-making process. Unlike ethical relativism and situational ethics, absolutism holds that whether an action is moral does not depend on the perspective of the person facing the ethical dilemma. There are ethical rules, and they govern if something is moral; gives clear answers more often.

Situational Ethics

requires that we evaluate the morality of an action by imagining ourselves in the position of the person facing the ethical dilemma. But unlike ethical relativism, situational ethics allows us to judge other people's actions.

Act Utilitarianism

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. For example, according to act utilitarianism, a business manager who deceives an employee may be acting morally if the act of deception maximizes pleasure over pain for everyone involved.

Business ethics

the application of ethics to the special problems and opportunities experienced by businesspeople.

Stakeholders of a firm

the many groups of people affected by the firm's decisions. Ex: Owners or shareholders, Employees, Customers, Management, The general community where the firm operates, Future generations.

Ethics

the study and practice of decisions about what is good or right. Ethics guides us when we are wondering what we should be doing in a particular situation.

Utilitarianism

urges managers to take those actions that provide the greatest pleasure after having subtracted the pain or harm associated with the action in question.

Universalization Test

Asks us to consider what the world would be like were our decision copied by everyone else.

Relationship between business law and business ethics

At the same time that business ethics guides decisions within firms, ethics helps guide the law. Law and business ethics serve as an interactive system—informing and assessing each other. Ex: our ethical inclination to encourage trust, dependability, and efficiency in market exchanges shapes many of our business laws.

Categorical Imperative

Holds that an action is moral only if it would be consistent for everyone in society to act in the same way. Ex: applying the categorical imperative 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.

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. One of the biggest ethical guidelines.

Why is business ethics difficult?

You have to choose between two bad outcomes. Business ethics requires a thought process that weighs the benefits of a decision compared to its harm, consideration of the duties we owe other human beings, the characteristics possessed by a virtuous person, and the care we have for the well-being of those affected by business decisions.

Ethical Relativism

a theory of ethics that denies the existence of objective moral standards. Rather, individuals must evaluate actions on the basis of what they feel is best for themselves. When 2 people disagree over a question about morality, both individuals are correct because no objective standard exists to evaluate their actions. Promotes tolerance (This is stupid idea lol)

Virtue Ethics

an ethical system in which the development of virtues, or positive character traits such as courage, justice, and truthfulness, is the basis for morality. Basically, pick the decision that a virtuous person would choose. What Would Jesus Do?

Principle of Rights

asserts that whether a business decision is ethical depends on how the decision affects the rights of all involved. Ex: The declaration of independence asserts that everyone has the right to "life, liberty, and the pursuit of happiness."

Cost-benefit analysis

comparing the pleasure and pain of optional choices, as that pleasure and pain are measured in monetary terms.

Deontology

consists of acting on the basis of the recognition that certain actions are right or wrong, regardless of their consequences. For example, a business leader might consider it wrong to terminate a person whose spouse has terminal cancer because a firm has an obligation to support its employees when they are vulnerable, period. Has a lot of rules saying if stuff is ethical or not.

Social responsibility of business

consists of the expectations that the community imposes on firms doing business inside its borders. This is highly debated. Think of the example surrounding the FBI's request to Apple that they unlock an iPhone used by a shooter in San Bernardino.

Rule Utilitarianism

holds that general rules that on balance produce the greatest amount of pleasure for all involved should be established and followed in each situation. Thus, even if the business manager's decision to deceive an employee maximizes pleasure over pain in a given situation, the act probably would not be consistent with rule utilitarianism because deception does not generally produce the greatest satisfaction.

Ethics of Care

holds that the right course of action is the option most consistent with the building and maintaining of human relationships. Basically, be nice and maintain good relationships (the golden rule).

Values

positive abstractions that capture our sense of what is good or desirable. They are ideas that underlie conversations about business ethics.

Ethical Guidelines

practical steps that provide a dependable stimulus to ethical reasoning in a business context.