BUSINESS ETHICS

AN INTRODUCTION

ETHICS

Ethics is a branch of philosophy that examines the moral standards of an individual or society, and asking how these standards apply to our lives and whether these are reasonable or unreasonable.

Business Ethics

Business Ethics: The application of ordinary human moral and ethical considerations in a business setting.

“Application”: Like medical ethics, environmental ethics, business ethics is applied ethics. Business: any or all-economic transactions between individuals, between individuals and profit-making organizations, and between profit-making organizations and other such organizations.

“Moral (Latin) and ethical (Greek) considerations”: How people ought to behave (to each other). Values of honesty, fairness, loyalty, justice, respect, etc.

“Morality” refers to the standards that an individual or group has about what is right and wrong conduct, good and evil, and the values embedded, fostered or pursued in the act.

Ethics

Ethics is the “discipline that examines one’s moral standards or the moral standards of a society.”Ethics “asks how these standards apply to our lives and whether these standards are reasonable or unreasonable—that is, whether they are supported by good reasons or poor ones.”

Two questions arise from this definition:1. What makes a standard moral?

2. What makes a moral standard reasonable?In (1) we enter into questions of individual and

social responsibility.In (2) we enter into moral reasoning (since ethics is

part of philosophy, and philosophy uses reasons or reflection.

Moral Standards

What distinguishes moral standards from amoral standards?1. Moral standards deal with matters that can seriously injure or benefit human beings. E.g. theft, rape, fraud, slander, murder.2. The validity of moral standards rests on the adequacy of reasons to support and justify them, not on decisions of majority or authoritative bodies. E.g. that one ought to tell the truth does not depend on how many people will vote on it nor on the legislature. One indication of justification is the consensus of participants in communication. (Habermas)

3. Moral standards are to be preferred to other values, including self-interest. E.g. honesty is to be preferred than cheating, although cheating can make me graduate.4. Moral standards are based on impartial considerations. Another way of expressing this is ‘universalizable’ or taking the point of view of an ‘ideal observer.’ Still, this impartiality must be balanced with partiality towards those we have a special relationship (family and friends) and the poor and the disabled.

5. Moral standards are associated with special emotions such as ‘guilt,’ ‘shame,’ ‘remorse,’ ‘praise,’ ‘indignation’.What is common to all five characteristics? None other than society taken in its broadest sense, or in philosophical terms, the ‘other.’In other words, individual responsibility cannot be taken in isolation from social responsibility.

Individual and Social Responsibility

In the first place, we acquire our individual moral standards from society: the family, friends, school, church, associations, and media.As we grow up, experience, learning and intellectual development may lead us to revise these standards, adopt new ones, or reinforce existing ones in order to meet moral challenges and dilemmas of adult life.

Maturity can be characterized by the expansion of the horizon of one’s responsibility, from the ego to the other, or what one is originally responsible-to becomes what one is responsible-for. e.g. my being responsible to my parents becomes, when I have my own family, what I am responsible-for, i.e. parenthood.

Morality is not just a question of avoiding evil (individual) but of pro-actively doing good (social). Justice is not just avoiding doing harm to the other person but of responding to the objective demands of the situation, to the call of a higher value.

I am not solely responsible to myself or to my family, but also to others, to the community. I cannot just be moral at home and not in the workplace.The social and the individual interpenetrate.At times, the individual and the social come in conflict, and there is need to apply moral reasoning.

Moral Reasoning

Moral reasoning is the reasoning process by which human behaviors, policies, institutions are judged to be in accordance with or in violation of moral standards.

Moral reasoning involves two essential components:1. Moral standards that requires, prohibits, values, or

condemns, and2. The factual evidence or information that a particular

person, behavior, policy or institution has the kind of features that the moral standard requires, prohibits, values or condemns.

In argument form, (1) forms the major premise, (2) the second premise, and the conclusion is the moral judgment.

Example: (1) A firm is unjust if it does not treat women

equal to men. (2) In Starbank, men are given preference for

promotion than women.______________________ Therefore, Starbank’s policy is unjust.

To evaluate the adequacy of moral reasoning, various criteria are used by ethicians:1. Moral reasoning must be logical, that is, the premises must be true and the reasoning valid.2. The factual evidence cited must be accurate, relevant, and complete.3. The moral standards involved in the person’s moral reasoning must be consistent. Consistency means that the moral standards involved in the reasoning are consistent with each other and with other beliefs the person holds. Consistency also means that one is willing to accept the consequences of applying one’s moral standards to all persons in similar circumstances.

Summary:“Business ethics is a specialized study of moral

right and wrong. It concentrates on moral standards as they apply particularly to business policies, institutions and behavior.” (Velasquez, p. 13).

The case of Baby Jane Doe

In late 1983 there was a great public controversy over an infant known to the public only as Baby Jane Doe. This unfortunate baby, born in New York State, suffered from multiple defects including spina bifida (a broken and protruding spine), hydrocephaly (excess fluid on the brain), and perhaps worst of all, microcephaly (an abnormally small head, suggesting that part of the brain was missing. Surgery was needed for the spina befida; however, the doctors who examined the baby disagreed about whether the operation should be performed.

Dr. George Newman believed that surgery would be pointless because the baby could never have a meaningful human life. Another physician, Dr. Arjen Keuskamp, did not think the baby’s condition was hopeless and advocated immediate surgery. (Both were pediatric neurologists). The parents decided to accept Dr. Newman’s recommendation, and refused permission for surgery. Dr. Keuskamp then withdrew from the case.

Because such cases have become common, the plight of Baby Jane Doe would not have received much attention had it not been for the intervention of third parties. Shortly after the parents made their decision, Lawrence Washburn, a lawyer associated with some conservative right-to-life groups, petitioned the courts to set aside the parents’ wishes and order that surgery be performed. The New York State Supreme Court granted that request, but a higher court quickly overturned the order, calling Washburn’s suit “offensive.”

The court was impressed by Dr. Newman’s testimony: he told the court, The decision made by the parents is that it would be unkind to have the surgery performed on this child…on the basis of the combination that are present in this child, she is not likely to ever achieve any meaningful interaction with her environment, nor ever achieve any interpersonal relationships, the very qualities which we consider human.

After Mr. Washburn’s suit was dismissed, the federal government got in the act. The Department of Justice filed suit demanding access to the hospital’s records in order to determine whether a “handicapped person”—the infant—was being discriminated against. This suit was also dismissed, with the judge declaring that the parents’ decision “was a reasonable one based on due consideration of the medical opinions available and on a genuine concern for the best interests of the child.”

The parents did eventually agree to the use of a shunt to remove the excess fluid from the child’s brain. But the major surgery, for the spina befida, was not performed.

Was the parents’ decision correct?