IP: Business Ethics
Organising Principles for an Ethical
Framework
What is Ethics? Some classic
answers
• Ethics is the way things are done around here.
Aristotle
• Ethics is treating other people as you would be
treated.
Confucius, St Paul, Kant
• Ethics is doing whatever brings the best results.
Bentham, Mill, Singer
• Ethics is becoming the right kind of person acquiring the virtues.
Aristotle, MacIntyre
Objections
• Ethics is subjective/relative.
• If it’s legal, it’s ethical - at least for
corporations.
• Ethics is about following rules. If you know
the rules, that’s all you need to know.
• I don’t give a damn about ethics.
Is Ethics subjective and relative?
Everyone disagrees about ethics. Who is to
say what is right?
Ethics is relative to your culture, so it is
offensive to impose your values on to
someone else.
Clearly we do differ, but do we not also
share values?
A thought experiment
Think of someone who is an ethical example
to you and of the core ethical values they
embody.
 One word only (no hyphens)
 Serious (not punctual or polite)
 Non-religious (not pious or prayerful)
 Non-legal (not law-abiding)
Our guess about your answers
Honesty
Integrity
Fairness
Compassion
Although history has long forgotten them,
Lambini & Sons are generally credited with the
Sistine Chapel floor.
Law and ethics: a model
Law is the floor, ethics the ceiling.
Ethics is a higher standard, but without law is
unlikely to be effective.
Ethics and law are complementary: they
cannot substitute for each other.
Isn’t ethics just about following
rules?
Rules are essential because they allow for
predictability, the definition of roles and
responsibilities, and the definition of boundaries.
But

Human conduct cannot be reduced to rules:
rules are derived from conduct.

Rules date.

Rules cannot cover all contingencies.

Rules must be tempered by judgment: there
can be many ways to get things wrong and
more than one way to get them right.
Rules and standards
Rules are one way of proclaiming standards.
Standards are important for consistency, but
they are a minimum.
Businesses and managers must have
standards, but only as a minimum: they
should aim higher, like an archer.
Ethical defeat
Almost no one accepts that there is nothing
ethical to be said for them, even if they have
committed horrible offences.
Tale of a New York drug dealer.
Stephen Cohen has called this resistance to
ethical defeat.
Ethics are trumps
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•
•
•
•
•
Consider these reasons for accepting a bribe.
You would just be doing your job - only more
quickly.
You wouldn’t be hurting anyone - you would be
helping someone.
You and your family would be better off.
If you didn’t do it someone else would.
You deserve better pay anyway.
It’s unethical.
Ethics presents the most serious
kinds of reason
That is why we are reluctant to ‘impose’ our
views on others and vice-versa. People
become heated about ethical issues because
they are serious.
We can’t impose our views, but we can
argue hard and seriously for them. Why
wouldn’t we if they are truly important?
An ethical opinion:
Is not just self-interested
Has regard for others
Could apply to anybody - is reversible
Takes account of context
Overrides other considerations
Has to be ‘lived with’.
What is involved in ethical
justification?
Being accountable in terms of
–
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–
–
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the law
professional codes
employer’s values statements
common morality
informed ethical judgment (conscience)
Trust
• Basic to humanity - we need to trust and be
trusted. Trust builds trust.
• Basic to relationships - friendships of pleasure,
utility and affinity.
• Allows confidence and predictability.
• Reduces stress.
• Lowers transaction costs and increases
productivity.
• Encourages risk-taking; discourages risk-aversion.
Underwriting trust:
the Ring of Gyges
Gyges was a shepherd in Lydia who
discovered a magic ring which made him
invisible.
With this ring, he was able to seduce the
queen, murder the king and take his
kingdom.
Who would not do forbidden things if one
could get away with them? (Plato, Republic)
What the bagel man found out
 Payment rates were higher when he was the
known provider.
 An open basket is a temptation. A money box is
safer.
 People who steal bagels don’t steal the money
boxes - don’t perceive taking bagels as theft?
 Law firms and telecoms have notable failings and executives
seem to be the worst offenders!
 Firms with high morale seem to be more honest.
 Smaller firms are more trustworthy - the shame
factor?
Bagel behaviour
 An office with low paying staff rarely becomes
an honest payer, and vice versa. Hence Paul
F. believes that honest people remain honest,
and cheaters will cheat regardless of the
circumstance.
 Against Glaucon (Plato’s brother) who tells
the tale of Gyges, Paul F. knows that people
are honest 89% of the time. The bagels prove
it.
A simple framework
•
•
•
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Do no evil.
Prevent evil.
Remove evil.
Do good.
William Frankena
What is ethics?
The liberal might answer:
“Ethics is the responsible use of freedom.”
Surely this is correct. Is not misconduct the
irresponsible use of freedom, say, to
damage others and look after ourselves?
But this definition is too limited: it does not
commit us to anything in particular. What
goods matter to us ethically?
Can we name these goods?
John Finnis has nominated the following:
Life - health, security
Friendship - friends, community
Freedom - personal, political, economic
Knowledge - many forms
Aesthetics - art, nature
Play - spontaneous, organised
Belief systems - like religion
Trust
Ethics and impartiality
The house next door is on fire.
Your children are in the house. You rush
into the fire to rescue them. Other children
are in the house too.
Does ethics require you to rescue the
children impartially, i.e. without special
regard for saving your own children?
Do we not properly favour those
whom we recognise?
Peter Singer argued that favouring kin was a
survival device of evolutionary biology that
fairness and justice should now supercede.
But what of loyalty, love, affection and
intimate knowledge of the good in those we
know?
These values relate less to ‘favouring’ than
to the ethics of care.
What principles should steer
ethical judgment?
Four accounts:
1. Acts are intrinsically right or wrong. Ethical requirements
are expressed in duties – deontology (Kant)
2. Right and wrong means producing a surplus of good over
evil consequences - consequentialism, e.g. ‘utilitarianism’
(Mill)
3. The ethics of care.
4. Virtue and character. Human endowments can be improved
by the acquisition of virtues that can be learned.
Intentions are basic to
responsibility
Think of Bratman’s examples.
If we intend to kill, it doesn’t matter if we
actively kill or passively let die.
Intention changes the nature of acts.
Intention introduces responsibility
Results are integral to ethics
Ethics is about consequences even if it is not
only about consequences.
If there were no significance to consequences,
ethics would matter little. It is because
ethics guides conduct that it matters.
It is also because of this that ethics links with
economics.
Management Ethics
Management excellence requires human virtues.
All social virtues built on friendship, but
professional virtues include:
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High practice standards
Trustworthiness and honesty
Integrity
Compassion
LAURA NASH’S MODEL OF
ETHICAL DECISION MAKING
1. Have you defined the problem accurately?
2. How would you define the problem if you stood
on the other side of the fence?
3. How did this situation occur in the first place?
4. To whom and to what do you give your loyalty
as a person and as a member of the organisation?
5. What is your intention in making this decision?
6. How does this intention compare with the probable results?
7. Whom could your decision or action injure?
8. Can you discuss the problem with the affected parties before
you make your decision?
9. Are you confident that your position will be as valid over a
long period of time as it seems now?
10. Could you disclose without qualm your decision or action to
your boss, your CEO, your family, society as a whole?
11. What is the symbolic potential of your action if understood? If
misunderstood?
12. Under what conditions would you allow exceptions to your
stand?
Laura Nash, “Ethics without the sermon”, Harvard Business Review, 59, 1981, 79-90.