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Ethical Theory and Business Practice - Fundamental Concepts and Problems

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1) Morality and Ethical Theory

a) Distinguishes between morality, defined as the moral customs passed down from generation to generation, and ethical theory or moral philosophy which is defined as systematic reflection on the nature and justification of right action.

2) Morality and Prudence

a) Even though ethical behavior is often in a person or business's self interest, ethical behavior is not the same as self-interest or prudence.

b) Ethics and prudence do not always coincide in business.

3) Morality and Law

a) The law is not the sole repository of moral standards or values.

b) What is legally permissible is not necessarily ethical. So to, what is legally required is not necessarily ethical and illegal activity is not necessarily unethical.

4) The Rule of Conscience

a) Moral justification requires more than mere appeals to conscience.

5) Approaches to the Study of Morality and Ethical Theory

a) Descriptive: Factual description and explanation of moral behavior typical of the social sciences.

c) Conceptual: The study of major terms in ethics like rights, justice, and virtue.

b) Normative: The formulation and defense of basic moral norms and principles.

6) Relativism and Objectivity of Belief

a) Descriptive relativism: the claim that different cultures exhibit different moral norms or standards.

b) Ethical relativism: the claim that questions or right and wrong are relative to particular societies and that there are no objective moral standards.

c) Apparent disagreements regarding ethical issues are often attributable to different judgments rather than to different underlying moral principles. Even when the disagreements reflect differences in principles, this by itself is not a sufficient basis to reject the objectivity of beliefs. Furthermore, relativism is incompatible with core beliefs such as that slavery is wrong no matter what a culture may believe.

7) Moral Disagreements

a) Moral disagreements are genuine and common. In order to resolve moral conflicts it is necessary to make sure one has one's facts right.

b) Moral disagreements can sometimes be helpfully clarified by obtaining definitional clarity regarding the concept at issue (e.g., affirmative action).

c) Examples and counterexamples can be utilized to shore up different points of view.

d) Reasoned analysis of arguments and positions, when done properly and without inappropriate emotion, is often the best means of resolving moral disagreements.

8) The Problem of Egoism

a) Psychological Egoism is the view that everyone always acts in their own perceived self-interest. This is a descriptive or explanatory claim and is thus susceptible to refutation via evidence of altruistic behavior. When egoists are presented with examples of altruistic behavior, such as a mother's devotion to her child or a soldier's devotion to his comrades, they normally retort that such actions are not really altruistic since the mother or soldier gets satisfaction from such actions. By replying in this way the egoist risks making the theory necessarily true.

b) Ethical egoism is the view that everyone ought to always act in their own self-interest. This is a normative claim, one that purports to identify the supreme principle of conduct. Since a society in which people follow basic rules such as keeping promises and not injuring others is typically in the self-interest of most people it makes sense to follow such rules, according to the ethical egoist, unless violating such rules is clearly in one's best interest. Here the egoist is recognizing that behavioral rules can help society avoid anarchy of the sort predicted by Hobbes.

c) Adam Smith is often invoked by defenders of egoism. According to Smith, the pursuit of self-interest tends to promote the overall welfare of society. These utilitarian results, if used to justify egoistic behavior, tend to support utilitarianism and not ethical egoism. Smith's defense of capitalism assumes not only the prudential pursuit of self-interest, but also the benevolent actions of individuals.


a) Utilitarian Theories

Utilitarian theories hold that the moral worth of actions or practices is determined by the consequences of the actions or practices. The view is most commonly associated with the work of Jeremy Bentham and John Stuart Mill. Mill defended the principle of utility that holds that actions are right or wrong insofar as they promote happiness or pain. He argued that morality taps a natural human tendency to be sensitive to the needs of others.

i) Utilitarianism is committed to the maximization of overall welfare in society.

ii) Bentham and Mill were hedonists who believed that only pleasure or happiness is intrinsically good. Utilitarians who believe in multiple intrinsically valuable goods are know as pluralists.

iii) Preference utilitarianism is the view that individual preference satisfaction should be maximized. It is an alternative to hedonist and pluralist utilitarianism and is the view held by most contemporary utilitarians. A problem with this view is that some preferences result in harm to others. If one's preferences are limited so as not to harm others, it is not clear that the resulting theory would rely entirely on preferences.

iv) Utilitarians are committed to mechanisms for measuring and comparing goods.

v) Independent of what conception of the good utilitarians hold



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