All lectures and articles from Ethics and the Future of Business summary (6314M0507Y, Master Business Administration, UVA)

Ethics and the future of business
Content
Ethics and the future of business....................................................................1
Week 1 – Morals & Ethics................................................................................................ 2
Session 1 Moral & Ethics................................................................................................. 4
Week 1 – Behaviors & Actions......................................................................................... 7
Lecture 2 – Behaviours & Actions..................................................................................12
Week 2 – Strategies & Stakeholders.............................................................................15
Lecture 3 Strategies & Stakeholders.............................................................................21
Week 2 - Challenges & Solutions..................................................................................24
Lecture 4 – Challenges & Solutions...............................................................................28

,Week 1 – Morals & Ethics
Evaluating Business Ethics – Normatice Ethical Theories (Crane, 2019)
- Normative ethical theories: ethical theories that aim to prescribe the morally correct way of acting,
how we ought to behave, all rational beings would adhere to those theories, i.e. rules, guidelines,
principles
- Descriptive morality: ethical theories that are adopted by a particular group or society, i.e. religion
- Ethical absolutism: claims there are eternal, universally applicable moral principles  right and
wrong are objective qualities that can be rationally determined (most Western modernist)
- Ethical relativism: claims that morality is context-dependent and subjective (contemporary ethical
theories)
- Ethical pluralism: incompatible values can be equally legitimate, it neither puts all ethical
perspectives on an equal footing, nor favours one approach over the others
- Religious view on business looks like normative ethical theory: both focused on ensuring that the
business is responsible, avoids doing harm, and contribute to societal benefits, but also difference 
in religion the critical requisite for acting ethically is faith, in NET its rationality & in religion there is
a heaven which has consequences on ethical decisions, in NET there is not
- Religion has its effects on businesses and their ethical decisions
- Western modernist ethical theories: start with an assumption about nature of the world and human
beings, the outcome depends on the degree to which we share the underlying assumptions, two kinds;

 Consequentialist theories: judge actions by outcomes
o Ethical egoism: right if it serves self-interest, all decision-makers decide freely to
pursue their short- or long-term desires
 For example, Thomas Hobbes and Ayn Rand
 Criticized for overlooking selfishness and harm to others
o Utilitarianism: right if it produces the greatest good for the greatest amount of
people, “the greatest happiness principle”, focus on collective welfare
 For example, Jeremy Bentham & John Stuart Mill
 In business similar to cost-benefit analysis (pain-pleasure)
 Challenges: subjectivity, equal weighting, quantification, distribution of utility
(short vs. long-term impacts)
 Act utilitarianism (looks at single action) vs rule utilitarianism (principles,
long-term)
 Principle based theories: judge actions by duties and rights
o Ethics of duty: morality is about acting from duty, based on a priori rational
principles  motivation matters, choices driven by sentiment are immoral
 Kantianism (Immanuel Kant)
 Categorical imperative: act only according to rules or principles that you want
that everybody else follows at the same time
 Challenges: undervalues motivation and outcomes, assumes full rationality
o Ethics of rights and justice (rights & duties flipside same coin)
 Human rights: basic unconditional entitlements that are inherent to all human
beings, without exception (freedom, work)  businesses are expected to
respect them
 Justice: how fairly individuals are treated so that they get what they deserve,
two aspects;
 Procedural justice: fair processes

,  Distributive justice: fair outcomes based on need/merit

- Utility: measurement for ethics, greater utility means greater morality
- Justice use fairness, able to measure with; fair procedures: fairness is determined on whether
everyone has been free to acquire rewards for their efforts & fair outcomes: fairness is determined
according to whether the consequences are distributed in a just manner, according to some underlying
principle such as need or merit  would want to achieve both types of fairness to be justice
- Social contract theory: an agreement between members of a society and those who govern it
- John Rawls came with A theory of justice: veil of ignorance (people don’t know their role in
society), society is just when;

1. Each person has an equal right to the most extensive total system of basic liberties compatible
with a similar system of liberty for all
2. Social and economic inequalities are arranged so that they are both to the greatest benefit of
the least advantaged (difference principle  when an CEO gets more salary, people at bottom
of company should also get more) & attached to offices and positions open to all under
condition of fair equality (principle of equal opportunity  everyone has fair chance to be
CEO)

Limits of western modernist theories
- They have the disadvantage that their view of the world only presents one aspect of human life, while
reality normally tends to be more complex
- Main criticism on these theories compared to business:

 Too abstract: managers are unlikely to apply abstract principles derived from long-dead
philosophers when dealing with concrete problems of business
 Too narrow: each theory is focused on one aspect of morality  why choose consequences,
duties, justice or rights when all are important?
 Too objective and elitist: no subjective look on the situation, so how do those philosophers
know whether a product manager in Thailand is doing the right thing?
 Too impersonal: personal bonds and relationships that shape our thoughts and feelings are left
out
 Too rational and codified: we need better moral imagination and not moral reasoning
 Too imperialist: why assume that ethical theories from the West are suitable for businesses
everywhere in the world?

Alternative perspectives on ethical theory
- Not so much used in business ethics, but give a totally different view, four types;

 Ethical approaches based on character and integrity (virtue ethics): look at integrity of the
decision-maker, a virtuous person is a morally good and wise person  intellectual virtues
(wisdom) & moral virtues (all kinds of characteristics such as honesty)
 Ethical approaches based on relationships and responsibility (ethics of care): focus on
relationships instead of character, feminist ethics, difference in gender and ethics  we have a
willingness to act on behalf of those we have a relationship with; we are not autonomous; we
are bound by circumstance, relations and position; we have restricted information and choices;
we are in positions of unequal power
 Ethical approaches arrived at through a deliberative process (discourse ethics): process of
norm generation including rational reflection and open communication on the real-life
experience of all relevant participants