Professional Ethics

1. BHMS4508
Professional Ethics and
Social Responsibilities
Lec-03
Evaluating Business Ethics
Normative Ethical Theories
1

2. 2
1. Introduction
• Routine ethical decision-making
• Business ethical decision making
- Values are in conflict
- Prior knowledge of what is ‘right’ and ‘wrong’
- Within scope of rational person
- Involves multiple people or institutes (stakeholders)
- Complex decision-making process
- Need systematic, rational and widely understandable argument, which
can be defended, justified and explained to relevant stakeholders
Complex

3. Ethical theories are the rules and principles that
determine right and wrong for any given situation.
• Normative ethical theories are those that
propose to prescribe the morally correct way of
acting.
• Descriptive ethical theories which seek to
describe how ethics decisions are actually made
in business.

4. 4
2. The role of ethical theory
Two extreme positions: (De George 1999)
• Ethical absolutism claims there are eternal, universally
applicable moral principles
– Right and wrong are objective qualities, can be rationally determined
– Typically, traditional ethical theories
• Ethical relativism claims morality is context-dependent and
subjective
– No universal right and wrongs that can be rationally determined
– Typically, contemporary ethical theories
Ethical pluralism

5. 5
3. International origins and differences
North American and European origins and differences
Individual versus institutional morality
• US tend to individualistic perspective
• Europe towards wider economic and governing institutions
Questioning versus accepting capitalism
• US tend to accept the capitalist framework
• Europe tend to question the ethical justification of capitalism
Justifying versus applying moral norms
• US tend to focus on application of morality
• Europe focus on justification and ethical legitimation of norms
• In contrast, Asian perspectives tend to be based on religion
(e.g., Islam, Buddhism)

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4. Western modernist ethical theories
4.1 Traditional ethical theories
• Generally, offer a certain rule or principle which one can
apply to any given situation
• Two groups
Motivation/
Principles Action Outcomes
Consequentialist Ethics
Non-consequentialist Ethics

7. 4.2 Major normative theories
Non-
consequentialist
Non-
consequentialist
Consequentialist
Consequentialist
Type
Man is a being that
is distinguished by
dignity
Man is a rational
moral actor
Man is controlled by
avoidance of pain
and gain of pleasure
(“hedonist”)
Man as an actor with
limited knowledge
and objectives
Concept of
human
beings
Respect for human
beings
Categorical
imperative
Act/rule
utilitarianism
Maximization of
desires/self interest
Rules
Rights
Duties
Collective welfare
Individual desires or
interests
Focus
John Locke
John Rawls
Immanuel Kant
Jeremy Bentham
John Stuart Mill
Adam Smith
Contributors
Egoism Utilitarianism Ethics of duties Rights & justice

8. 4.3 Consequentialist theories
Egoism
Utilitarianism
Consequentialist
theories

9. 1)
Theory of egoism:
an action is morally right if the decision-maker freely decides an action to
pursue either their (short-term) desires or their (long-term) interests.
– Pursuit of individual interest morally acceptable, relies on free
competition and good information, creates benefit for all
– ‘Enlightened egoism’
– However, markets do not function perfectly
• Anti-globalization movement
• Sustainability debate
Egoism
Example:

10. 2)
Theory of utilitarianism:
an action is morally right if it results in the greatest amount of good for the
greatest number of people affected by the action
– Also called the ‘greatest happiness principle’
– Based on cost-benefit analysis
Utilitarianism
A cost-benefit analysis is a systematic process that businesses
use to analyze which decisions to make and which to forgo.
Greatest Happiness Principle, holds that actions are right in
proportion as they tend to promote happiness, wrong as they tend
to produce unhappiness.

11. Problems with Utilitarianism
• Subjectivity
– This has led to refinement of theory
• Problems of quantification
• Distribution of utility
Act utilitarianism
– Looks to single actions and bases the moral judgement on the amount of
pleasure and the amount of pain this single action causes.
Rule utilitarianism
– looks at classes of action and ask whether the underlying principles of an
action produce more pleasure than pain for society in the long run.

12. 4.4 Non-Consequentialist theories
Ethics of duty
Ethics of rights
and justice
Non-
Consequentialist
theories

13. 1)
• German philosopher Immanuel Kant
• Morality and decisions about right and wrong do not dependent on a
particular situation but alone on the consequences of one’s action.
• No need of God or Church
• Human are independent rational actors
Ethics of duty

14. ‘Categorical Imperative’ (Kant)
• Consistency
– An action can only be regarded as right if the rule guiding that behaviour
should be followed consistently by everyone in all cases, without contradiction.
• Human Dignity
– Act so that you treat humanity, whether in your own person or in that of
another, always as an end and never as a means only.
• Universality
– The rules guiding our actions should also be ‘universally lawgiving.’

15. 2)
i) Human rights
Basic, inalienable entitlements that are inherent to all human beings,
without exception.
– Based on consensus about nature of human dignity.
– Increasingly important: enshrined in principles of UN Global Compact and
the “Ruggie Principles”.
Ethics of rights
and justice
The Ruggie Principles framed in:
 the state duty to protect against human rights abuses,
 the corporate responsibility to respect human rights,
 the need to help victims achieve remedy.
UN Global Compact includes human rights
obligations:
 Businesses should support and respect the protection
of internationally proclaimed human rights;
 Business should make sure that they are not complicit
in human rights abuses.

16. Ethics of rights
and justice

17. ii) Justice
Fair treatment of individuals in a given situation with the result that
everybody gets what they deserve
– Fair procedures (procedural justice)
– Fair outcomes (distributive justice)

18. John Rawls’s ‘Theory of Justice’
• Each person is to have an equal right to the most extensive
total system of basic liberties compatible with a similar
system of liberty for all.
• Social and economic inequalities are to be arranged so that
they are both:
✓ to the greatest benefit of the least advantaged;
✓ attached to offices and positions open to all under
conditions of fair equality of opportunity.

19. 4.5 Limits of Western modernist theories
• Too abstract
• Too reductionist
• Too objective and elitist
• Too impersonal
• Too rational and codified
• Too imperialist

20. https://www.youtube.com/watch?v=IjZ-ke1kJrA
ETHICS ON SCREEN

21. • Egoist thinking is powerful in
business, but not always in its
genuine ‘ethical’ form (where
everyone gets to freely and fairly
participate in the market), or still less
in its more enlightened form (where
concern for others is seen as part of
the firm’s long-term self-interest).

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5. Alternative perspective on ethical theory
Four main ethical approaches bases on:
Character and
integrity
Relationship and
responsibility
Procedures of
norm generation
Empathy and
moral impulse

23. 5.1 Approach bases on character and integrity
Virtue ethics
Contends that morally correct actions are those undertaken by actors with
virtuous characters.
Therefore, the formation of a virtuous character is the first step towards
morally correct behavior.
Acquired traits
• Intellectual virtues: honesty, courage, friendship, kindness, loyalty,
modesty, patience…
• Moral virtues: the good life.

24. 5.2 Approach bases on relationship and responsibility
Feminist ethics
An approach that prioritizes empathy, harmonious and healthy social
relationships, care for one another, and avoidance of harm above abstract
principles.
Key elements
• Relationships
– Decisions taken in context of personal human interrelations
• Responsibility
– Active ‘taking’ of responsibility, rather than merely ‘having’ it
• Experience
– Learn and develop from experience

25. 5.3 Approach bases on procedures of norm generation
Discourse ethics
Aims to solve ethical conflicts by providing a process of norm generation
through rational reflection on the real-life experiences of all relevant participants
Key elements
• Ultimate goal of ethical issues in business should be the peaceful
settlement of conflicts
• Different parties in a conflict should sit together and engage in a discourse
about the settlement of the conflict, and ultimately provide a situation that
is acceptable to all
• ‘ideal discourse’ criteria
• In an ideal speech situation, participants would be able to evaluate each
other's assertions solely on the basis of reason and evidence in an
atmosphere completely free of any nonrational “coercive” influences,
including both physical and psychological coercion.

26. 5.4 Approach bases on empathy and moral impulse
Postmodern ethics
An approach that locates morality beyond the sphere of rationality in an
emotional ‘moral impulse’ towards others.
It encourages individual actors to question everyday practices and rules,
and to listen to and follow their emotions, inner convictions and ‘gut feelings’
about what they think is right and wrong in a particular incident of decision-
making.

27. Summary of ethical theories

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6. A pluralist business ethics evaluation
Pluralistic Perspective

29. Why Pluralism?
Crane and Matten (2010) argue that for the practical purpose of
making effective decisions in business:
• Not suggest one theory or one approach as the best or true
view of a moral dilemma
• Suggest that all these theoretical approaches throw light from
different angles on one and same problem
• Complementary rather than mutually exclusive
Advocate position of pluralism
• Middle ground between absolutism and relativism

30. Considerations in making ethical decisions:
summary of key insights from ethical theories
Consideration Typical question you might ask
yourself
Theory
One’s own
interests
Is this really in my, or my organization’s, best
long
-term interests? Would it
be
acceptable and expected for me to think only of the consequences to
myself in this
situation
?
Egoism
Social
consequences
If I consider all of the possible consequences of my actions, for everyone
that is
affected, will we be better or worse off overall? How likely are
these
consequences and how significant are
they?
Utilitarianism
Duties to others Who do I have obligations to in this situation? What would happen if
everybody
acted in the same way as me? Am I treating people only to get what I
want for
myself (or my organization) or am I thinking also of what they might want
too?
Ethics of
duty
Entitlements of
others
Whose rights do I need to consider here? Am I respecting fundamental
human
rights and people’s need for
dignity?
Ethics of
rights
Fairness Am I treating everyone fairly here? Have processes been set up to allow
everyone
an equal
ch
ance? Are there major disparities between the ‘winners’ and
‘losers’
that could be
avoided?
Theories of
justice
Moral
character
Am I acting with integrity here? What would a decent, honest person do
in the
same
situation?
Virtue ethics
Care for others a nd
relationships
How do (or would) the other affected parties feel in this situation? Can I
avoid
doing harm to others? Which solution is most likely to preserve
healthy and
harmonious relationships among those
involved?
Feminist
ethics
Process of resolving
conflicts
What norms can we work out together to provide a mutually acceptable
solution
to this problem? How can we achieve a peaceful settlement of this
conflict that
avoids ‘railroading’ by the most powerful
player?
Discourse
ethics
Moral impulse and
emotions
Am I just simply going along with the usual practice here, or slavishly
following
the organization’s code, without questioning whether it really feels right
to me?
How can I get closer to those likely to be affected by my decision? What do my
emotions or gut feelings tell me once I’m out of the office?
Postmodern
ethics

31. Thank You for your attention!
The Hong Kong Polytechnic University

32. Reference
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