KANT’S CATEGORICAL
IMPERATIVE
• UNIVERSAL PRINCIPLE
– A person should act
that the principle of
one’s act could become
a universal law of human
action in a world in
which one would hope to
live.
– A person should treat
other people as having
intrinsic value, and not
merely as a means to
achieve one’s end.
CONTRACTARIAN DEONTOLOGY
• John Locke
– Each individual has
inalienable natural
rights. The purpose of
society is to protect
these rights
• Rawls (Veil of Ignorance)
– Social Justice is
created when rational
people would formulate
rights if they did not
know whether or not
these principles would
apply to them.
CRITICAL QUESTIONS?
• DO ALL HUMANS
HAVE POTENTIAL
FOR GREATNESS?
• WHAT ARE SOME OF
THESE
POTENTIALITIES?
• ARE PEOPLE SOCIAL
BY NATURE?
HUMAN NATURE ETHICS
• ARISTOTLE
– All humans share innate
capacities and desires.
All Humans are social
creatures and
therefore have the
capacity to become
excellent members of
society. This is done by
studying, becoming wise
and participating in
politics.
– Negative behavior is a
result of not being
allowed to reach full
potential
BUSINESS ETHICS AND
ECONOMIC SENSE
• Adam Smith
– The Wealth of Nations
• It is not from the
benevolence of the
butcher, the brewer,or
the baker that we expect
out dinner, but from
their own interest. We
address not heir
humanity but their selflove
ADAM SMITH
IN
The Theory of Moral Sentiments
• There is a need to go beyond profit
maximization to: humanity, justice,
generosity, and public spirit.
ECONOMIC INSTITUTION’S
FOUNDATIONS
• Common Behavior
Patterns
• Shared Trusts
• Mutual Confidence
OTHER FORMS OF
CAPITALISM
• Japanese Ethos
– Honor
– Duty
• Confucian
– Hard Work
– Thrift
– Family
Public Good
• All Benefit
• Non-Competitive
• One’s Consumption
does not exclude
another
• EXTERNALITIES
• Public Ownership
• Public Regulation
• Public Concern in
Private Decisions
CRITICAL QUESTIONS?
• WHAT IS TRUTH?
• WHAT IS A LIE?
TRUTHFULNESS
Emmanuel Kant 1771
• TRUTH TELLING
LEADS TO
• DISCOURSE
WHICH LEADS TO
• FELLOWSHIP
WHICH LEADS TO
• FORMATION OF A
SOCIETY
GENERALLY TO LIE IS EVIL AND TO BE
A LIAR IS TO BE A COWARD
•
•
•
SILENCE
– Not an option because it is
view as unsocial
SECRETS
– Telling secrets is like
giving presents and a
nature inclination.
Strength is in keeping
them.
TRUTH
– Important because one of
two way to gain knowledge.
The other is experience.
• LIE
– When giving impression that you are telling the truth
• FALSE STATEMENTS OK WHEN
– Other person does not have the right to demand the
truth
– Other person may make wrong use of the truth
– Other person may harm you
• FLATTERY
– Can be act of kindness (weakness) or treachery
• FAULT FINDING
– OK for someone in authority when used with love,
goodwill, or sweetness
• SPYING
– We have no right to spy on others
• ANY ACT THAT WORKS AGAINST FRANKNESS
LOWERS THE DIGNITY OF HUMAN KIND
CRITICAL QUESTIONS?
• IS IT APPROPRIATE FOR BUSINESS TO
HAVE ITS OWN ETHICAL RULES?
Is Business Bluffing Ethical?
Albert Carr (1968)
• BUSINESS IS A GAME
WITH ITS OWN ETHICS
• FALSEHOOD IS NOT
FALSHOOD WHEN
TRUTH IS NOT
EXPECTED BY THE OTHER
SIDE
• THE GAME PRESSURES
PEOPLE TO DECEIVE.
DECEPTION MUST BE
WITHIN LIMITS OF THE
RULES OF THE GAME
(LAW)
• ETHICS ARE OF VALUE WHEN
THEY ADD VALUE TO THE
BUSINESS
• TO WIN ONE MUST PLAY TO WIN
• THERE ARE BOUNDARIES TO
BEHAVIORS AND DEFINITIONS
OF HONESTY, INTEGRITY AND
DECENCY WITH THE GAME.
CRITICAL QUESTIONS?
• WHAT ARE THE BASIC “SETTLED”
ETHICS IN BUSINESS DEALINGS?
• WHAT ROLE SHOULD
GOVERNMENT (POLITICS PLAY)?
LIMITS OF BUSINESS ETHICS
Joseph Betz (1999)
• INFORMAL
– You may do unto
others what
experience teaches
us they might do to
us.
• FORMAL
– Law
BUSINESS AND LAW
• SINCE THE
ETHICAL BAR IS
SO LOW,
SOCIETY MUST
CONSTANTLY
WRITE LAWS
REGULATING
BUSINESS.
CRITICAL QUESTIONS?
• How much should you trust another in
business negotiation?
• Is the market place established as a place to
deceive others?
Promoting Honesty in Negotiations
Cramton & Dees
• Foundation Theory
– Most people place a high value on their
own welfare
– There is weakness in all of us
– Others will behave ethically only if they
expect others to do the same
NEGOTIATION
• FALSE
IMPRESSIONS
• PRIVILEDGED
ACCESS TO
INFORMATION
• USE OF THREATS
AND PROMISES
• UNDISCLOSED
SETTLEMENT
PREFERENCES
Factors Affecting Honesty
• Asymmetry of
Information
• Verification is
Difficult
• Intention to Deceive is
difficult to establish
• Insufficient resources
• Interaction is
infrequent
• Ex Post redress is
costly
• Reputation information
not available
• Unique circumstances
• To much to lose to be
honest
LIMITING DECEPTION
• VERIFY CLAIMS
• DEVELOP
CONTRACTS
(Warranties/ Bonds/
\Escrow)
• PRESERVATION OF
REPUTATION
• LIMIT MORAL
HAZARDS (Shirking
Responsibilities)
REAL WORLD LIMITS
• Legal and Regulatory
Protection
• Institutional
Verification Available
• Standard Contracts
• Third Party
Negotiators
• Credentials Individuals
Available
PREPARING FOR NEGOTIATIONS
• Determine
incentives for
deception
• Determine
character of other
side
• Determine your
attitudes toward
issues and others
BUILDING TRUST
• Face to Face Contact
• Create opportunities
to display trust
• Demonstrate your
trustworthiness
• Place negotiations in
long term context
• Bring in trusted
intermediaries
• Self Protection