Morality & Ethical theory

Part 1: Module 1 Learning Targets
This module defines morality and discusses how morality applies to business ethics. It then describes different moral philosophies that help explain how and why people make different moral decisions when faced with the same dilemma. Finally, the module provides insight into the relevance of case analysis for discussion of business ethics.

After studying this module, students should be able to:
Distinguish between morality and ethical theory, between morality and prudence and between morality and law.
Explain the three approaches to the study of morality.
Describe the moral theories of relativism and egoism.
Interpret the different types of utilitarian theory.
Evaluate the strengths and weaknesses of the egoism, relativism, utilitarianism and Kantian ethics.Apply Kantian ethics using different scenarios and explore the concept of rights theories.
Distinguish between virtue ethics, and feminist theories and the ethics of care.
Define altruism, case law, casuistical method, the categorical imperative, maxim, statutory law, and pluralism.Part 2: What is Philosophy?
Philosophy is one of those words we have all heard and many of us have used but when asked what it means most of us do not have a good answer. We have all heard statements such as “my philosophy is sex, drugs, and rock and roll” or other such claims. In a philosophy course, philosophy is something we do and not something we have. What are we doing when we do philosophy? We are asking questions in the search for truth. Literally translated philosophy means “love of wisdom.” Any time we do philosophy we are seeking wisdom (truth). The methods used are to ask questions and make arguments (or claims backed up by reasons). It is important to remember that philosophy is not rhetoric. Rhetoric is the art of persuasion. In rhetoric the goal is to persuade others that your view is correct (regardless of the truth). Rhetoric looks and sounds a lot like philosophy as both involve asking questions and offering arguments and counter-arguments in support of a view. One example of rhetoric in practice is lawyers at trial. The goal of the prosecutor is to make the best argument he can to persuade the jury that the defendant is guilty and the defense attorney asks questions and makes arguments to persuade the jury of the defendant’s innocence. This is rhetoric and not philosophy because neither lawyer is open to the arguments of the other side. They are not mutually seeking a “truth” of the matter. We do not hear the prosecution rest and the defense attorney stand up and say “that was a good argument; I think your right” or vice versa. Keeping an open mind is a requirement for doing philosophy. Rhetoric will not help us in our search for truth.

When we imagine a philosophy we should look at the founder of western philosophy, Socrates. Socrates did not write any books or work at a normal job as we do. Socrates spent his time wandering Athens in search of wisdom. The reason we know about Socrates is that people would follow him around to hear what he said (and a guy named Plato wrote much of it down). Socrates would go to the religious leaders, political leaders, business leaders and anyone else who was an “expert” in knowledge. He would then question how they knew what they claimed to know and to everyone’s surprise, the “experts” often contradicted themselves or had no answer to the few simple questions posed to them. Socrates of course claimed to know nothing himself and thus never offered his own view. Instead, he would ask questions of others until they either had no answer or contradicted themselves. This did not make him rather popular with those he questioned (who usually happened to be those in power). It also made him very unpopular with parents because many of the youth would listen to Socrates question those in authority and then go home and question their parents (and parents really hate it when kids question them and they lack a good answer). As a result, Socrates was charged with “corrupting the youth” and executed.

One lesson that can be learned from Socrates is just how frustrating philosophy can be. We are not accustomed to being questioned or to asking questions of the type we do in philosophy. The types of questions philosophers ask vary, but many are the sorts of questions you just don’t ask in polite company: How do you know God exists? Why is it wrong to murder? How do you really know what you see is real? Although these are not the questions we will be focusing on in this course, we may still find the questions of business ethics to be deeply troubling to us.

Ethics – An Introduction:

The branch of philosophy that we will be concerned with is ethics. But just what is ethics and for that matter, what is morality? We have heard and used these terms at some point in our lives, yet what do they really mean?  On a technical level “ethics” is the study of morality and “morality” attempts to answer two sorts of questions.

What is the right thing to do?

What is the right sort of person to be?

Our textbook offers a distinction between morality and ethics, but for our purposes we can use the terms ethics and morality interchangeably. When we talk of ethics and morality we are talking about what is right and what is wrong in regards to either an action or a character trait. Though we speak of things as either right or wrong, there are actually three different answers we can give to moral decisions. For example, suppose Alf is driving down the road when he sees Betty injured and bleeding on the side of the road. Alf considers three possible actions.

First, he could ignore Betty and drive past.

Second, he could stop, call 911 on his cell phone and wait for help.

Third, he could stop, use his shirt to lessen Betty’s bleeding, put her in his car and drive her to the hospital (as that would be quicker than waiting for an ambulance, but it would mean getting blood stains in his car).

We might analyze Alf’s options morally as follows: First, to drive by leaving Betty to bleed to death when he could at least call for an ambulance is immoral. Second, to stop and call for an ambulance is satisfactory (it may not be the best action Alf could take but it certainly passes as the moral minimum). Third, to stop and put himself out to help Betty at the cost of his shirt, time, and damage to his leather interior might be “supererogatory” (above and beyond the call of duty). We might display the range of actions Alf might take as follows:

As we can see, we can categorize actions and character traits as being in one of  three categories. Part of the controversy in morality is where to draw the boundaries between immorality, the moral minimum, and supererogatory actions. For example, there are those who think that meeting the minimum conditions of morality requires an awful lot. Such persons might depict Alf’s dilemma as follows:

On this sort of interpretation, the moral minimum requires much more of Alf. Although it might place “calling for an ambulance” in the immoral category along with “leaving Betty to die,” this only means that neither option is a moral solution. It might still be that calling for help is “better” than leaving Betty to die, but neither is a morally acceptable on this view. To have a supererogatory act also requires much more on this view (paying her bills in addition to putting himself out) than on the previous view. We could also adopt a moral view that requires less of the moral minimum such that even calling for an ambulance is a supererogatory action. A good part of moral discussion revolves around figuring out what the moral minimum requires as once we know what the moral minimum is then we can easily ascertain what is immoral and what is supererogatory.

Attempts to clarify the boundaries between immorality, the moral minimum, and supererogation are known as moral theories. A moral theory will attempt to explain how we know what is moral and immoral. Moral theories are often made up of moral principles (sometimes several, sometimes just one). As we examine moral theories we should take notice of the principles behind the theories, as we may reject a particular theory but adopt one of its component principles. In this module our task will be answering the question: How can we determine right from wrong?
To begin our discussion on moral theory, it is helpful to know the answers to five questions:
What is it that moral theory can do for us?
What is the relationship between law and morality?
How does morality differ from prudence?
How do we approach moral theory?
What is the cause of a moral disagreement?
We will address each of these five questions in the next section.
Part 3: Morality & Ethics
The last section ended with a list of five questions that required our attention. Let us now turn our focus to answering those questions.

What is it that moral theory can do for us?
One common confusion is that once we answer the question “what is right from wrong” we will actually change behavior. This is not what moral theory can do for us as morality cannot make anyone do anything.
But then what is the point of spending time and money discussing morality if when we reach an answer it doesn’t actually do anything to change behavior? Is moral theory just “academic” (Heaven forbid!). Fortunately it is not just academic. Moral theory may not change behavior but it does serve to provide at least one useful function. Ask yourself what would it mean for us to be able to convincingly claim that something someone did was wrong? The answer here is that demonstrating that a behavior is wrong is what justifies us in disapproving, discouraging, or even punishing the person doing it. Conversely, if we convincingly claim that something is morally right or acceptable, we have provided a justification for encouraging, rewarding, or not punishing people for doing it. This then is the power of moral theory. The ability to justify individual and societal reactions to what people do depends upon whether the actions were morally right or wrong. In this sense morality is very practical as it serves to justify the system of rewards and punishments which enables society to function as it does. In short, moral theory is needed to justify standards of business ethics.
Speaking of societal responses and punishment, this brings us to our next question: What is the relationship between law and morality?
What is the relationship between law and morality?
One common confusion introductory students often have concerning ethics is the relation between law and morality. It is a common mistake for us to think that we can identify something as right or wrong based upon whether or not it is legal or illegal. In other words, there seems to be a natural tendency to equate what is legal with what is morally right or morally acceptable and to equate what is illegal with what is morally wrong.
For example, Jones is starving and steals a loaf of bread from a store. Upon hearing this Smith claims that Jones was morally wrong to steal. If we were to ask Smith why Jones was morally wrong to steal the bread he might say something like: “We know it is morally wrong to steal because it is illegal to steal.”
We might represent this view that the law determines morality as follows:
Hence since what the law says yields morality, then because stealing is illegal, stealing is also wrong. In business this view often places moral decisions in the hands of lawyers (a scary thought indeed, when you think about it). More than one business has claimed “what we did was legal, so how could it be immoral?” There are numerous counterexamples to this view of equating what the law says about an action with what morality says about the same action. For example, if one were to hold that we can determine what is morally right or wrong by appealing to what is legal or illegal then one would be committed to the proposition that slavery was morally right because the law said it was legal. Though I cite just one example here, for further examples consider how some of the laws from history as well as current laws square with your intuitions of what is morally right and wrong.
Does this mean that law has nothing to tell us about morality?  Not exactly; what this tells us is that what the law states is not sufficient to tell us what is morally right or wrong.  Laws themselves can be morally right or wrong.  However, the law does tend to serve as an indication of what is commonly held to be morally right or wrong. Law in effect accomplishes two different functions.
The law solves problems of coordination.
For instance, the law tells us to drive on the right side of the road.  Notice, this sort of law has nothing to do with morality as it is no more moral for the law to tell us to drive on the right side of the road as it would be if the law said to drive on the left side of the road (as in England).  A great deal of laws serve this first function.  They do not reflect any moral views whatsoever but simply provide guidelines to solve non-moral problems like which side of the road to drive on.
The law reflects the very core of our moral views.
For example, laws against murder and theft derive from a deeply and widely held moral belief that it is wrong to murder.  In this way the law acts as a way for us to formalize our moral views and give them “teeth” such that violators are identified and punished. This is not to suggest that all moral views become laws, but rather that those moral views that are widely accepted tend to be reflected in the laws.
In a democracy like the United States, we can identify many laws that derive from moral beliefs. For example, in many areas it is illegal to buy liquor before 1 p.m. on Sundays.  Clearly, laws such as this do not solve coordination problems as there is a supply of liquor, a demand for liquor, and stores willing to sell liquor on Sunday morning if the law allowed.  Laws such as the prohibition of liquor sales on Sunday morning were the result of a widely held moral view that it is wrong to buy or consume liquor on a day when one should pay respect to religious worship. This is not to say that the law currently reflects a widely held moral view (many people do not think it is wrong to buy liquor on Sunday morning), but this was the origin of the law. As a practical matter, laws that derive from widely held moral views historically will change after the moral view changes.
We might represent this view of the law’s function as follows:
This is not intended to be a description of what the law “ought” to say, but rather this is a description of the two functions that the law (at least in the U.S.) does in fact serve.  This relationship says that some laws are solutions to coordination problems and that other laws are derived from widely held moral views and therefore, the fact that something is the law is still subject to the question “is this law moral or immoral?” One further point concerning this relationship between law and morality is the limited nature of the relationship. Though many of society’s widely held moral views do become law, this is not to say that every widely held moral view ought to become law. In other words, we might all agree that behavior X is immoral, but still hold that X is not the sort of behavior that should be illegal. We might conclude this for any number of reasons, including the practical difficulty or cost of enforcing a law against X. For instance, we may conclude that adultery is immoral, but that it is impractical to try to enforce a law against it.
Thus we can conclude the following concerning the relationship between law and morality:
What the law allows or prohibits is not conclusive of what  is morally right or wrong. Each law is still subject to the question of whether it is a moral law or an immoral law.
Widely held moral views are often reflected in laws that enforce those moral views. Hence, if something is deemed moral or immoral it gives some reason for us to change laws to reflect what we should or shouldn’t be allowed to do.
Determining something is immoral does not necessarily mean that it ought to be illegal. Though law does reflect widely held moral views, law making must take into account the practical costs and difficulties of enforcement in determining if something should be illegal.
How does morality differ from prudence?
Another confusion we must remember to avoid is that morality and prudence are not necessarily the same thing. Prudence asks what is in the best interest of the business? Morality goes beyond this to ask what is the right thing to do?  Often, the answers to these two questions may be identical. For instance, shortchanging customers is not only morally wrong, but it is also bad for business in the long run. In other cases these prudence and morality clearly diverge. For instance, when Elo Touch Systems relocated its plant it did a good deal to help its employees find new jobs. Though there is prudence in good public relations, this company went beyond just what was in their prudential interest to consider the right way to treat it’s former employees. This confusion between morality and prudence can work two ways. First, some think that morality is nothing more than prudence (we just saw how they can be different). Second, some think that morality has nothing to do with prudence. This suggestion that prudence plays no part in morality is also mistaken. One axiom in moral philosophy is “ought implies can” which says we can only expect you to act in ways which you can act. In business ethics we can interpret this as an inclusion of prudential reasoning as part of a moral decision. We cannot expect business to forgo all prudence in the name of right, but we can expect business to act in accordance with more than just their own prudential interests. Still, what role prudence plays in moral reasoning is not yet clear. We will encounter some moral theories which will provide various accounts of the role prudence (or self interest) should play in ethical decisions.
How do we approach moral theory?
When we talk about morality/ethics, we can do so in one of three ways. In this course we will use each of these approaches, but it is useful to understand the difference to avoid confusion. The three approaches to morality are:
Descriptive – To talk about morality as a depiction of dominant attitudes is a descriptive approach to morality.
This approach is often used by historians, social scientists, anthropologist, and sociologists. On a descriptive approach, there is no evaluation of moral views or determination of the truth of any views. This approach does a fine job explaining what most people think is right or wrong (which is prudent thing to know for those in business) or portrays current practices, but does not provide the grounds we need to determine what is right and wrong.
Conceptual – To define the concepts involved in moral decisions is a conceptual approach.
This approach seeks to define what we mean by deception, justice, responsibility and other concepts that are thrown about, but rarely explained. One aspect of what we will do in this course is to offer an account of what these concepts mean and how they work together.
Prescriptive (normative) – To evaluate what makes something right or wrong and make prescriptive claims on the morality of actions.
In this course what makes an action right or wrong is an essential question as only with this information can we evaluate the ethics of business. As we can see each approach to morality has its place in this course. It will be useful to keep in mind these three differences as sometimes we will discuss current business ethics (descriptive), other times we will talk about what ethical language means (conceptual), and we will spend a great deal of time evaluating the morality of business decisions (prescriptive).
What is the cause of a moral disagreement?
When we disagree about what morality requires of us, what is the cause of that disagreement? There are in fact three causes of moral disagreement. Sometimes knowing the cause of the disagreement will aid us in resolving that disagreement. The three causes of moral disagreement are:
Values – If one person values X and the other does not, this is a cause of moral disagreement. Or both persons might value X and Y but differ as to which one takes precedence in a conflict.
For example, Gandhi and Hitler are disagreeing over “should we increase military spending or spend more on the poor.” Gandhi says “we should help the poor” and Hitler says “spend more on the military.” We might explain this disagreement in terms of differing values. Hitler and Gandhi disagree because they each possess different values (or has different rankings for the same values). Gandhi values the poor and as a pacifist does not value the military. Hitler places no value on the poor but values the military (to conquer others of course). Disagreements over values are the most difficult to resolve.
Understanding of the Facts – If two persons have a different understanding of the facts, this can be a cause for disagreement.
For example, Jones and Smith are disagreeing over whether “the war on drugs is worth fighting.”  Jones says the war on drugs is worth fighting. Smith says the war on drugs is not worth fighting. However, both Jones and Smith admit that drugs are bad and that we should try to discourage drug use. In other words, both have the same values in play. Their disagreement may be a simple matter of understanding the facts. For instance, Jones has heard that the war on drugs has cut drug use among minors by 50%, hence he supports the war on drugs.  Smith, has heard that drug production has increased by 50%, hence he views the war on drugs as a failure. Notice, it is their understanding of the facts that is the source of the disagreement and not their values (as in the case of Hitler and Gandhi). In this case we may resolve their disagreement by further explaining the facts to them.
Definitions – If two persons have a different understanding of what something means then this may be a cause of moral disagreement.
For example,  Jones and Smith disagree about whether we should continue the the war on drugs because each has a different definition of  “the war on drugs.”  Smith defines the war on drugs as preventing drug use among citizens. Jones defines the war on drugs as preventing the production of drugs and their entry into the U.S. Hence, even if they agree upon the facts (assume that the facts are that drug use is down but drug production and imports are up), they would still disagree because they have a misunderstanding on the definition of “the war on drugs.” These sorts of disagreements can be resolved through definitional clarity which is done in part by a conceptual approach to morality.
Disagreements of understanding and definition can be resolved by more information and definitional clarity. However, disagreements of values are the prime source for moral disagreement that we will examine. No amount of facts or definitional clarity will resolve disagreements caused by a conflict of values. What is needed for these types of disagreements, is an argument about what we should value and what values take precedence.
Now that we have a basic grasp of what moral/ethical theory is about we can ask: What would be an adequate (prescriptive) ethical theory to determine what is moral and immoral? In our next section we will examine several moral theories that put forth some value or set of values that purportedly help resolve these sorts of disagreements.Part 4: Ethical Theory
In the next few sections of this module we will examine several moral theories. Each theory will offer a different account of what constitutes right and wrong. These theories are arranged into two categories. First, we will discuss some very common, but very problematic moral theories in an attempt to avoid their pitfalls and to gain an understanding of what a good moral theory will require.  Second, we will examine some modern moral theories which avoid the mistakes of the earlier theories but contain some problems of their own. By the end of this module you should have a solid grasp on the various theories and principles of morality and perhaps find an approach that appeals to you. We begin with some deeply flawed ethical theories.
Dogmatism: (What the textbook refers to as the Rule of Conscience)
A person’s moral claim is dogmatic if they insist that others follow their view simply because it is their view (or someone else’s view). For example, “You shouldn’t smoke because I said so” would be a dogmatic claim. When you think of dogmatism you may be inclined to recall things your parents used to say. Often, they would claim that you should or shouldn’t do something and when you asked “why” the responded with something like “because I said so” (and maybe they added in “or else!”). It is important to note that the form of dogmatism that is important to us is moral dogmatism, which is used between rational adults. Children and adults who cannot reason are generally placed in special categories where dogmatism may be justified.
When one adult makes dogmatic claims upon how other adults should or shouldn’t act or live this is moral dogmatism.  Looking at our history we see moral dogmatism is quite common. For instance, during the colonial period, western powers went into Africa, Asia, and the Americas and dogmatically forced indigenous populations to obey the colonial power’s law, religion, and morality because it was the right thing to do (because they said so). Some specific examples of this sort of moral dogmatism are:The Western concept of sexual morality had determined that the only morally correct method of having sex was the “missionary position.” This idea was imposed on other cultures as the only proper way of  having sex.
The Western concept of marriage as being between one man and one woman was forced on other cultures (many of whom allowed marriage between multiple persons). Sex, of course, was only right if it occurred between people married in this way (and performed in the missionary position).
South American cultures (and others including indigenous tribes in Canada) whose religions believed in multiple gods were told that theirs was an incorrect view and many of their children were forcibly taken from their parents and trained in Christian academies because it was the only correct religion. They also learned English in these academies as it was the right language for everyone.Dogmatists often honestly believe that they know right from wrong, and that their version of right and wrong applies to everyone. Dogmatists have little explanation, reasons or argument to offer (other than a claim to tradition “This is how it’s done” or to appeal to authority “God said so”) as to why we should follow their moral claims. Dogmatists only claim that they are right and we ought obey them (and occasionally add a menacing “or else” to their statement).
There are (at least) three essential flaws with dogmatism that force us to reject it.Dogmatism does not provide us with sufficient reason for complying with its claims.  Any good moral claim should be supported by an argument that we ourselves can evaluate. Failing to offer sufficient reason is to treat people as unable to think for themselves. In other words dogmatists treat rational adults as if they were children.Dogmatism encourages people to resort to force, threats, or violence to resolve moral disputes. If one dogmatist says X and the other says Y, they have no way to resolve their differences without one person (or group) forcing the other to comply. We can see this effect of dogmatism in world history. If morality is to do anything it is to avoid having to resort to ‘might makes right’ as dogmatism does.
Dogmatism violates the law of non-contradiction. A thing cannot both be true and false. Dogmatism allows that Jones’ view that abortion is wrong and Smith’s view that abortion is right are both true (until one forces the other to change their view). This violates the law of non-contradiction.For these reasons (and perhaps others not mentioned here) we must reject dogmatic answers when evaluating moral problems. However, these reasons can serve as a guide for evaluating other moral theories. In other words, by rejecting dogmatism on these grounds, we are saying that a good ethical theory must provide us reasons to support its conclusion, must not resort to force to determine the right thing to do and must not violate the law of non-contradiction. There is one cost in rejecting dogmatism. By rejecting dogmatism as a moral theory consistency  now demands that you not be a dogmatist in future. In other words, dogmatic arguments are not adequate responses to the moral questions we discuss in this module.Jed – The neighborhood dogmatist…Cultural Relativism:
Cultural Relativism is the claim that there is no universal (or objective) moral truth. In other words, nothing is right or wrong for everyone. Moral truth is relative to a particular society. Cultural relativists may say something like “what’s right for your country isn’t right for ours, we don’t tell you how to live your lives so you can’t tell us how to live ours.” Notice how this is a complete reversal from dogmatism in that the relativist holds that no culture can determine right or wrong for anyone other than themselves.  Moral arguments between societies would be equivalent to an argument about which ice cream is best. There is no “best” ice cream for everyone; there is only an individual’s personal taste or preference for ice cream. The relativist thinks, for example, that an argument about abortion is also just a statement of personal taste. Just as it would be absurd for someone who prefers chocolate to argue with someone who prefers vanilla that chocolate is the best ice cream, the relativist claims it is absurd for a country like Sweden which approves of abortion to argue with Ireland which disapproves of abortion that abortion is right for them. Abortion, like ice cream, is just a matter of personal taste, there is no absolute right or wrong. In other words, there IS a right and wrong that apply to all Americans, but this may not be what is right and wrong for the Chinese. Each culture is allowed to determine its own right and wrong with the limitation that it cannot impose that view on other cultures. We see cultural relativism in business ranging from variations in environmental protections, worker safety, worker rights and wages, and even the acceptance of bribery. Certainly there is a practical interest in a business altering it’s ethic in accordance with local custom. Don’t we want to let each culture set its own rules? The motto for relativistic business ethics then would be “when in Rome do as the Romans do.” Relativism is also quite appealing to college students (having been recently emancipated from parental dogmatism). However, there are flaws with this approach.

Why is cultural relativism an inadequate moral theory? One objection to cultural relativism is to look at the consequences of accepting it. If we accept cultural relativism we would be forced to accept the dominant practices of other cultures regardless of what they are. We would have no grounds for declaring any practices beyond our own culture as immoral. Yet, ponder the history of various cultures and governments around the world and ask yourself: “Does the fact that they do things differently mean that there is no right way?” For instance, is the fact that a country uses slave labor grounds to declare that there is nothing universally wrong with using slave labor? Clearly, we have reason to hold that relativism is deficient in that it denies the existence of any universal ethic. This problem is compounded by the fact that if there is no universal ethic we have no way of resolving cultural disputes peaceably.  For instance, if the U.S. does not allow companies to pollute the Great Lakes, but Canada allows so much lake pollution that the health of many is adversely affected, how can this difference be resolved peaceably if each country is doing what is “right for them?” One nations business practices can affect others such that some sort of universal standard is necessary.

In a sense, relativism gives rise to chaos where every society does what it determines it should (and often these actions conflict with neighboring societies). Consider the following cartoons:It is worth noting that despite the relativist’s attempt to avoid being dogmatic, they run into a very similar problem. Neither the dogmatist nor the relativist has a method by which reason can resolve differences. Just as dogmatists resolve disputes by force, relativists also have no means of resolving conflicts (as shown above) without resorting to force or surrendering to the whims of others.

To review, what is wrong with relativism?

It does not allow us to make moral judgments on other cultures regardless of what they are doing.

When disputes arise there is no way to reasonably resolve differences because neither side can claim to be right, they can only claim to be right for their culture.

In rejecting both dogmatism and relativism we are placed in a situation of saying both that morality is objective, and that we cannot arbitrarily impose our moral values upon others just because they are our views. In other words, we can determine that another culture is violating objective moral standards, but we must do so through argument and reason. Conversely, we must be aware that not every difference of method is morally significant. For instance, both Europeans and Americans value safe foods and drugs, yet each applies a different standard for safety. The American standard for safety is that if there is no solid evidence that a food or drug is harmful, then it is deemed safe. The European standard for safety is that if there is no solid evidence that a food or drug is harmless, then it is deemed unsafe. Each standard gives a different result in terms of what is safe (we have far more genetically/chemically modified foods allowed than Europe for this reason) yet both standards reflect the same ethic–food and drugs should be safe. In the end, some variation of behaviors may not be morally significant, but there are many behavioral differences that are morally significant. One of the finer tasks of business ethics is to determine which differences are morally important and which are simply a different path to the same end.

What then is the answer to the question of: How do we determine right from wrong? We are far from a complete solution, but we have seen at least one more component to it. Relativism can teach us two things of importance. First, that morality must be objective (if it is wrong for you it is wrong for me). Second, relativism brings to light the practical nature of our moral discussions. Our motive for determining the moral minimum is based upon the need to justify our system of rewards and punishments. As a result it is central for us to determine morally significant questions such as, if it is right or wrong to lie, steal, or harm others. Though relativism is flawed, it does challenge us to prioritize moral questions into those that a society has a great practical need to answer and those that are less important. After examining Dogmatism and Relativism, our focus becomes to find a theory that can explain the moral minimum in an objective and non-dogmatic fashion.Ethical Egoism:

In many ways ethical egoism is the assertion that morality requires nothing more than prudence (something we have already touched upon). A person who places his own interests first is acting in accordance with egoism. The opposite of egoism is altruism (acting for the benefit of others before yourself). Ethical egoism is the claim that a person ought to act for their own benefit. Thus egoism determines the rightness of an action not by the motive or method, but by the consequences. According to egoism an action is right if and only if it achieves the greatest benefit for the actor. Any action that does not result in benefiting the actor is wrong. This means that an action motivated by self interest but that results in making things worse for the actor is wrong, despite the intent. Egoism is often mentioned as the ethic for business as isn’t the point of a business to act for it’s own benefit? One of the more eloquent defenses of egoism is the claim that everyone acting egoistically will in fact achieve the greater good. One instance of this argument is found by examining the capitalist argument originating from Adam Smith’s “invisible hand” theory, which says that when everyone acts for their own interest they end up making things better for all. This “act for yourself thereby benefiting all” idea is the cornerstone of capitalism. There is also a certain descriptive quality to egoism that seems attractive to us. Consider why people do things and much of the time we point to some self-interested motivation (he did that just to get in the news or she is visiting her sick grandma just to get inheritance). However, there does seem to be a few problems with egoism of which I will state two.Egoism can lead to outcomes that conflict with our intuitions. It seems to justify the sneaky criminal in committing harmful crimes against the rest of us so long as he can avoid being caught. (Can you say Enron?).There seems to be an internal contradiction contained in ethical egoism. If I am an ethical egoist I should do what is best for me. However, what is best for me is that the rest of you are not egoists. This creates an odd result in which the true egoist must discourage egoism in others. If this is not a contradiction it certainly does not appear to be a theory that yields objective standards.
In rejecting egoism we are not rejecting the idea that our interests count. Rejecting egoism only forces us to admit that we cannot place our interests above the interests of others simply on the grounds that they are our interests. We may be able to argue on other grounds why our interests ought to come before another’s, but egoism assumes that everyone ought to always act in their own interest regardless of the situation.

Now that we have explored some of the more problematic (but not uncommon) theories of morality, we can move on to the major moral theories that take part in the modern debate. These theories are not perfect, but each of them avoids the problems that Dogmatism, Relativism and the like encounter. Specifically, we will examine the following moral theories: Bentham’s Utilitarianism, Kant’s Deontology, and  Aristotle’s Virtue Ethics.
Part 5: Utilitarianism
Jeremy Bentham is credited with founding  the “Utilitarian” theory. He thought natural rights were “nonsense on stilts” and that religious ethics was prejudice in disguise. Oddly enough, Bentham ended up leaving all his money to University College in London (he was on its board). By accepting his money, Bentham’s will stipulated that the college was to keep his body embalmed.  Furthermore, when the board meets (as per the conditions of his will) his embalmed body is wheeled in to the board room (though he never votes). The rest of the time his body is kept in a glass case in the library (but the head is wax).  As you can see Bentham was a colorful character, and his theory is equally controversial.
Bentham’s basic idea was that mankind’s nature was ruled by two forces, pleasure and pain. Each decision we make boils down to our perception of how pleasure and pain will be affected as a result of our choice. Bentham’s basic presumption is that we are naturally drawn to pleasure and repulsed by pain. This leads us to the principle of utility.
The Principle of Utility:
“That principle which approves or disapproves of every action whatsoever; according to the tendency which it appears to have to augment or diminish the happiness of the party whose interest is in question: or what is the same thing in other words, to promote or oppose that happiness.”

In other words, the principle of utility says that what makes an action right or wrong is whether or not it leads to happiness (pleasure) or pain.  An action is right if it leads to happiness for those involved. An action is wrong if it leads to pain for those involved.

A point worth mentioning is that Bentham claims the word “right” can have no meaning apart from utility. In other words, in order for us to speak of a thing as being “right” we must be referring to some  gain or benefit that thing provides. The idea of something being “right” in and of itself is nonsensical for Bentham. Do you concur with Bentham here?

It is important to remember that although he refers to individual pleasure and pain as our motivation for acting, Bentham is trying to alter how society shapes rules. Bentham’s goal was that governments legislate laws in accordance with the principle of utility (that laws bring about the greatest happiness over pain for everyone affected by them). This is important since it avoids utilitarianism collapsing into self interest. Bentham wants his principle to be universalized. He wants us to agree that we all want happiness and we all want to avoid pain. Once we agree with that, Bentham wants us all to judge actions based on how they affect everyone’s happiness and everyone’s pain, not just our own.Act-Utilitarianism: (Instructor’s short version)
To determine right from wrong obey these principles:
What makes an action right or wrong are the consequences of the action.
The only consequence that matters is happiness.
No person’s happiness counts more than anyone else’s.
In other words, utilitarians claim that whatever action brings about the most happiness for everyone involved is the right one. Utilitarian arguments are quite common, though they may not call themselves utilitarian. Often utilitarians will defend their views with phrases like: We must do X for the greater good Or We must do what brings about the greatest happiness for the greatest number Or The end justifies the means.
Act-utilitarianism only demands that we do what brings about the greatest happiness for all affected, beyond this no action is intrinsically right or wrong. This means utilitarians can offer exceptions where other theories can’t. An act-utilitarian will admit that as a rule of thumb, lying is not conducive in achieving the greatest happiness for all involved, but in some cases lying is the correct solution. A business example of where an act-utilitarian would support lying is the case of the American bank in Italy. In Italy the custom was that companies grossly understate their earnings and then Italian tax representatives would use that statement as a starting point to negotiate tax liability. The U.S. manager of the bank thought that to submit a grossly understated earnings statement was tantamount to lying. Since lying was wrong (and the U.S. IRS would agree), the manager determined that the only ethical choice was to submit the real earnings (against the advice of local lawyers). An act-utilitarian would reach a different conclusion such that lying would be acceptable, given the circumstances, as only lying will lead to the correct payment of taxes due after the negotiation process. The result of this case tends to support the act-utilitarian’s concern in that by submitting real earnings the Italian authorities forced the bank to pay substantially more (on the assumption that the initial statement must have been understated as is the custom).
Act-Utilitarianism in Business
Looking beyond utilitarianism in the general sense, there are several applications to be found in the business world that are worth mentioning. Act-utilitarian reasoning is very common in business and government decision-making. What differs is that in a business or agency we are looking at promoting the general happiness on a much narrower scale. Most businesses make decisions that only affect a small number of employees, customers and communities for which act-utilitarianism then requires that the business ought to maximize the good for those groups. The idea that the goal of a business is to maximize value and minimize disvalue is often accepted without question. Certainly, maximizing efficiency, production, profit, customer satisfaction and minimizing costs is an essential part of doing business. Cost-benefit analysis and risk assessments are also instances of business activities that are heavily influenced by act-utilitarian reasoning. Even decisions about layoffs, ending advertising campaigns, and reducing discretionary spending are decisions based in large part on the long term greater good put forth by act-utilitarianism. Some specific examples of industries using utilitarian reasoning to determine the right course of action are:
1. Petroleum industries balancing environmental concerns vs. the benefits of increased production.
2.Nuclear power industries balancing the benefits of plants versus the risk of catastrophic failures (Three Mile Island or Chernobyl).
One mistake we must avoid making is to reduce act-utilitarianism in business to the ethic “give people whatever they want.” In other words, act-utilitarianism does not entail that business ought to do whatever makes customers happy. For instance, satisfying consumer demand for crack is not defended by saying “hey this is what the people want to make them happy” or “let the free market work as the free market satisfies happiness.”  Act-utilitarians may conclude, as Adam Smith does, that markets generally lead to the greater happiness, but will quickly add that some regulation in the market will lead to an even greater happiness. So too, a business must make decisions taking into account the long term consequences to everyone affected by a decision rather than serving their short term interests, i.e. the Enron executive who points to all those happy investors in the 90’s as a defense of his actions which destroyed the company.
The Lifeboat:
One extreme example that demonstrates how act-utilitarianism works is the case of the lifeboat. Imagine you are in the middle of the ocean and suddenly the call comes to abandon ship. Unfortunately the ship sinks fast and only one lifeboat is launched with 11 people (including you) on board. The water is freezing and anyone who gets wet will die of hypothermia soon after. There is no rescue ship in sight, but a distress call was sent. The lifeboat has been taking on water and despite the best efforts of those on board, you cannot bail the water out as fast as it is coming in the lifeboat. Within five minutes the lifeboat will sink unless something is done.  While bailing out the lifeboat you notice a sign on the bottom that reads “maximum capacity ten 200 lb. persons.” It becomes clear that the boat is overloaded with 11 people on board but what is the right thing to do?
If no right answer is offered, panic will ensue and people will start throwing each other overboard leading to many deaths. Yet, if nothing is done everyone will surely die. Someone asks if anyone will jump, but no one accepts that offer. Someone else suggests “drawing straws” but half of the people decline to draw. One person asks everyone if they have family and careers. Yourself and nine others all have good jobs and families (including children). Then, the last person to answer says he has no family and is unemployed. Furthermore you notice that he is at least 400 pounds! What should you do?   An act-utilitarian pipes up and makes the following argument.
Look, what is important here is that we make the best of this bad situation. We want to achieve the greatest good possible or in this case choose the lesser of the evils presented us. Even if we assume that we are all equal (though some might suggest otherwise) the standard should be to save as many people as possible. Thus, since the boat can support ten persons but not eleven, someone must be forced out of the boat (since nobody offered to jump). Factoring in all of the unhappy family and coworkers that will miss us it seems that pushing the 400 pound bum will lead to the least unhappiness overall. In addition, since he is 400 pounds (and everyone else is 200 pounds or less) we would have to push two people overboard to save the rest unless we push him. Since sacrificing one person to save ten is better (or less worse) than sacrificing two persons to save nine we ought to push the 400 pound bum from the lifeboat.
Notice how the act-utilitarian factors in all of the consequences not only for those in the boat but for those who would be affected by the death of those in the boat. In adding up the consequences for happiness the act-utilitarian advocates what amounts to the murder of the 400 pound bum in order to save the rest on board. Though this may strike us as an unacceptable solution, consider the alternatives. If nothing is done everyone dies (including the 400 pound bum). If we force people to draw straws the likely result will be that two persons would die rather than one. If we claim that no right solution exists then the rule defaults to “every man for himself” which will surely lead to many people being pushed overboard. We may be tempted to write this off as an extreme case, but this would be contrary to the facts as a great many cases involve decisions of life and death not unlike the lifeboat.
Objections to Act-Utilitarianism:
Two common objections to act-utilitarianism are: Does the end justify the means? Is happiness the only thing that matters in the end? The act-utilitarian has responses to each of these objections. First, does the end justify the means? Consider the following dialogue between a teacher and student:
T: Why are you in this class?
S: Because like it is required for a degree.
T: Why do you want a degree?
S: Umm, so  I can get a high paying job.
Notice how each question asks the student to justify an action and each answer points to some goal or end as a justification. The act-utilitarian points out that everything we do, we do because we think it will accomplish some end. Thus, when asked “does the end justify the means?” the act-utilitarian counters with: If the end doesn’t justify the means, what else does?
What about the question, “Is happiness as the only thing that ultimately matters?” Consider the continuance of the teacher-student line of questioning.
T: Why do you want a high paying job?
S: So I can get a big house, nice car, and have money for things that I want.
T: Why do you want a big house, a nice car, and money for things you want?
S: Well, umm, cause it makes me happy.
Would you answer differently? The act-utilitarian thinks that when pressed to justify our actions we will follow a chain of ends until we reach happiness. But, suppose the teacher asks one more question: Why do you want to be happy? Can you answer this question? The act-utilitarian doesn’t think you can. The reason being that happiness is the only thing that really matters so that when asked why you want it there can be no answer since happiness is the end of the road; it is the only thing that matters.
There are at least two serious objections to act-utilitarianism that we should discuss.
First, there seems to be a fundamental incompatibility between act-utilitarianism and our common sense of “rights” or “justice.”
This is because the act-utilitarian does not bar any particular conduct. As we saw in the lifeboat case murder can be justified on act-utilitarian grounds. So too can we find other cases in which the needs of the majority would justify things that are clear violations of rights or justice. For instance, suppose we catch a known terrorist who we are certain knows about an impending terrorist attack that will kill many innocent persons. The terrorist asks for his attorney and refuses to answer any questions. Yet, we could torture the terrorist and likely force him to tell us what he knows, which might allow us to prevent the attack thereby saving many innocent lives. If we wait for his attorney, we will be unlikely to get the information we need or the information will be retrieved too late to prevent the attack. Our common idea of justice clearly tells us not to torture him and instead to call his attorney, yet the act-utilitarian seems forced to conclude that torture is morally justified in this case.
A second objection is based upon utilitarianism being incompatible with our sense of family. Consider the following case:
You are at the lake. You can’t swim so you try the paddle boat. On the paddle boat you have a large donut flotation device capable of holding several people. Suddenly 20 feet of to your right you see three children drowning. At the same time 20 feet off to your left there is another child drowning. Since you can’t swim and the boat will not get to either side fast enough and you have only the flotation device to throw to prevent drowning which direction do you throw it? It is clear based upon act-utilitarianism that you ought to throw it to the right where it could save three children as opposed to the left where it would say only one.  However, if the lone child on the left was your little brother (and assume you like him) would you then throw it to your brother? To do so would be placing your brother above three other peoples’ little brothers. The act-utilitarian must hold that saving your brother is wrong. The only correct solution for the act-utilitarian is to throw the flotation device to the three children even if it means your little brother goes un-aided.
Thus, act-utilitarianism goes against our common sense idea of family. Most of us do feel a greater obligation to aid those close to us even if the greater good would be to aid strangers. This idea is incompatible with utilitarianism.Objections to Act-utilitarianism in Business
Though the above objections apply against utilitarianism in general, they do not directly address the problems associated with using a utilitarian ethical theory in business. There are at least two objections against utilitarianism in business worth mentioning.
Act-utilitarianism justifies immoral activities such as “bean counting.” Just as the act-utilitarian sacrificed the fat man in the life boat for the greater good, act-utilitarianism justifies business decisions which involve the sacrifice of others for the greater good.
Several businesses have been found to use “bean counters” who among other things have analyzed the cost of settling product liability lawsuits versus the costs of manufacturing a safer product or having a recall of a product. For example, suppose your company bean counters conclude that your product X will seriously injure .01% of consumers which works out to be about 50 people. Further, if each injured party sues the company, the bean counters estimate you will pay 2 million each for a total cost of $100 million in damages. However, if you issue a product recall to prevent the .01% of incidents the bean counters estimate a cost of $500 million. Act-utilitarianism seems to justify the decision not to issue a recall on the grounds that the minimal gains in safety are outweighed by the costs (which may include higher prices wage cuts and layoffs to pay the $500 million) for the recall. Three sorts of cases that apply here are debates over how much arsenic we should have in drinking water, how much health risk is acceptable for employees working in national security industries (the Beryllium case), or the more famous cases of automobiles prone to gas tank explosions which were not recalled for the reasons mentioned above. Many would argue that “bean counting” involving the lives or health of people not included in the decision is wrong in itself.
Act-utilitarianism justifies comparisons of apples and oranges.
Any use of act-utilitarianism requires that we can factor in multiple consequences into a common formula to determine the greater good. This is objected to on the grounds that many things cannot be compared. For instance, how much money is a life worth? How much money is an extra day of health worth? What is the value of an endangered species? How do we compare the value of a national wildlife preserve to an increase in oil supplies from drilling? How can we measure happiness between persons preferences for these things?
Rule-Utilitarianism:
One attempt to defend utilitarianism against the charge that it is incompatible with rights and  justice and justifies is to advocate rule-utilitarianism. Essentially, rule-utilitarianism is identical to act-utilitarianism except that you do not make determinations on a case by case basis. Instead, rule-utilitarianism says that a person ought to act in accordance with the rule that, if generally followed, would produce the greatest overall good consequences for everyone considered. In other words, if upholding rights generally leads to the greatest happiness for everyone involved, then even in those cases where we might be tempted to override rights for the greater good, we should not do so. Rule-utilitarianism is able to remain compatible with rights and justice.  This also provides a defense of placing family above strangers too. If, as a general rule, the greatest happiness is achieved when everyone looks after their friends and family above strangers, then it is acceptable, even in a case like the paddle boat, to save your brother instead of the three strangers.
One example that illustrates the difference between the act and rule utilitarians is as follows: Suppose you are driving home and you are in a hurry to get home. On the way home there is a long stoplight that takes minutes to turn green. However, it is late at night and you have a clear view of crossing traffic such that there is no one coming from any direction. Do you run the stop light or do you wait even though no one is there and your family is awaiting your arrival? Both the act and rule utilitarians agree that having a rule against running stop lights will lead to the greatest happiness all things considered. Rule utilitarians would hold firm that even in a case like this we ought to uphold the rule. However, the act-utilitarians would run this stop light on the grounds that in this case the greater good is served by running the light rather than waiting for it.
An example of rule utilitarianism specific to business is found in the case of John Zaccaro. Zaccaro (the husband of Geraldine Ferraro, a 1984 candidate for Vice President) was the guardian of an elderly woman’s estate. He then borrowed $175,000 from the estate for business purposes and repaid the money at 12% interest (far more than what the estate could have earned in other investments). Though this action clearly benefited the elderly woman in this case, it was a clear violation of the rule prohibiting such “conflicts of interest.” This rule was set in place because barring guardians from transactions involving conflicts of interest generally promotes the greater good. Act-utilitarians would defend Zaccaro’s actions whereas rule-utilitarians would still uphold the general rule. Zaccaro himself adopted rule-utilitarianism in admitting that although he did no harm (he promoted the greater good) his actions were wrong because he violated a rule set in place to promote the greater good.
One problem that rule-utilitarianism runs into is over complexity of the rules. Since the rules will be absolute once they are set and since we want to set them in such a way as to be very clear on all the allowable exceptions to the rule, the rule will naturally become very unwieldy. Take a simple rule: Do not kill. Now, list out all of the exceptions to the rule. Right away we want to add (and have to specify in detail) an exception for self-defense. Then comes a host of other potential exceptions such as wartime actions in military service, prevention of extreme prolonged suffering, executions and so on. If we were to sit down and try to write out all the exceptions to a rule against killing  we end up with an overly complex, hard to employ or even remember rule. In addition, rule utilitarians run into problems where rules conflict. For instance, when rules preventing drug use among employees run into equally important rules of privacy something must give. Can we adopt one rule to resolve all conflicts between these rules? It is possible, but the complexity of rule-utilitarianism is clear.
Thought Question:
When Carl Kotchian was president of Lockheed he authorized $12 million in “grease payments” (what we would call bribes or extortion payments) made to Japanese officials to ensure the sale of Lockheed’s Tri-Star plane to Japan.  Kotchian understood that such payments violated U.S. rules of business, but offered two defenses of his decision:

1. The payments did not violate U.S. laws (at that time the laws were changed later).
2. The payments would provide Lockheed workers with jobs, stockholders with profits, enhance the economic conditions in the communities where the planes were created, and supported the relationship between the U.S. and Japan.

Were these payments ethical? If these payments occurred today they would be in violation of U.S. laws designed to promote the greater good by banning bribes and extortion payments. Imagine you were to uncover such payments occurring today, would you make them public or would you overlook this rule infraction due to the benefits described in #2 above?
One thing that both forms of utilitarianism have in common is an emphasis on the consequences of an action at the overlooking of the method and motive behind the action. For a utilitarian, acting with a good motive or employing a right method is wrong unless it leads to the right consequences. There is a major alternative school of ethics which takes an opposite approach. This school, known as deontology, has its beginnings in the philosophy of Immanuel Kant. Kantians will hold that consequences are not determinative of the morality of an action. Moral actions are actions done with the right motive and done in the right way. We will explore Kantian deontology in the next section
Deontological theories claim that right and wrong are not strictly a matter of consequence. Deontological theories appeal to the method and motive of the action instead of the consequences. The most famous deontological theory is that of Immanuel Kant. Kant is to moral philosophy what Michael Jordan is to basketball. You can agree or disagree with Kant, but you cannot have a serious discussion of moral philosophy without Kant. Kant will argue that right and wrong are absolute duties. We should do right only because it is right (do it for the right reason) and do so without regard to negative consequences.
Kant wants to base morality on something that does not rely upon our personal desires or self interest to motivate us to act morally. He wants to find out what it is that is good in and of itself, and not because it leads to something. This “good in and of itself” is what Kant calls the categorical imperative. The categorical imperative is absolute. It applies to everyone, everywhere, regardless of circumstances or desires. Kant claims that there is but one categorical imperative from which all morality can be derived:
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.
This requires that we show a respect for persons. Kant requires that we always treat people as something worthwhile in themselves and never just as a means to some goal we have. This requires us not to use people exclusively. For example, pretending to like someone just because they are wealthy and you hope to benefit would violate the categorical imperative. This does not mean that we can never use people for our ends as we do when we hire someone to do a job for us. It only means that we cannot manipulate them or use them without their knowledge and consent. For instance, I can use someone by hiring them to do work for me. However, it would be wrong to deceive them as to the employment contract or to manipulate them into doing more than what was agreed to.
Kantian respect for persons will provide a moral prohibition upon several methods of actions. For instance, the act of lying is a violation of respect for persons because lying to someone does not demonstrate respect for them, lying is an attempt to manipulate or deceive, and lying does not represent a good motive. For these reasons Kantian ethics prohibits lying. The same reasons apply to murder, theft, and other actions as well.
Two Instances of Kantian Ethics in Business:
1.      Plasma International sold blood to earthquake victims in Nicaragua.
Though the company provided much needed blood, their motives and method were questionable on Kantian grounds. Plasma International obtained blood by paying people in impoverished west African countries just 15 cents a pint and then sold it to Nicaragua at a substantial markup netting the company millions in profit. Kant would criticize the company on two grounds. First, that Plasma’s motive had nothing to do with helping people in need and everything to do with exploiting the needs of dying people to maximize profits. Second, Plasma did not treat the west African people with respect, but took advantage of their desperate poverty to obtain their blood at a rock bottom price.
2. In contrast to Plasma’s business practices, Kant would favor the practices put in place by Hewlett-Packard.

Where most companies lay off workers in tough economic times, HP has a policy of not laying off workers. Instead, HP uses partial-hour layoffs and other techniques to ensure the best welfare possible for its workforce. Such actions demonstrate a real respect for employees beyond simply tools to be used and discarded. As a side effect of  HP’s respect for persons policies the company benefits from a loyal and productive workforce and a reputation for respecting rather than exploiting the workforce.

One of the interesting features of Kantian ethics is that even if we are not employing an improper method (lying, stealing. etc.) our action may still be immoral. Imagine three people who care for an elderly parent. Fred cares for his parent because he is afraid of what people will think of him if he doesn’t. Sam cares for his parent because he feels it is his duty to do so despite the fact that Sam secretly hates having to do it. Bill cares for his parent because he is a kind person who enjoys the satisfaction that comes from helping others. In each case the sacrifices are equal and the benefits to the parent are equal, yet who is acting morally? Utilitarians would have a hard time distinguishing between Fred, Sam, and Bill. According to Kant, Fred is not acting morally because his motive is not good but is simply prudential to him. Sam deserves praise for acting morally because Sam is acting based upon duty alone. Bill, like Fred, can be said to be acting in accordance with morality (as he is doing what morality requires of him) but Bill deserves no praise for his actions because he is not motivated by duty alone. Bill’s motivation is based upon sympathy and compassion instead of his moral duty to his parent. Therefore, Kant holds that only by acting out of moral duty alone do we deserve credit for our actions.
Applying this to business Kant is saying that a business which acts in accordance with moral duty, but does so for prudential reasons does not deserve credit. For instance, when a business donates funds to charity for tax purposes or public relations it may act in accordance with what morality requires, but such an act deserves no moral credit as the motives were prudential not moral. Moral credit is only found when we are motivated by our moral duty alone.
The Problems:
Now that we have a basic grasp on Kant’s theory, let’s examine the weaknesses of the theory. One common objection to Kant has to do with “absolute duties” in that sometimes they may conflict. This type of objection usually involves trying to design an example in which your only options would violate one of your moral duties. For example, if I make a promise to meet a friend at noon, but while crossing a bridge to get there I see a car drive off the bridge and into the river. If I stop, I will be late (I don’t have a cell phone to call). If I do not stop and help, the people may die. Would we not also say that  I have a duty to aid? If so, I have two conflicting moral duties. What shall I do? Kant has not provided a mechanism for choosing between conflicting duties.

In addition to cases of conflicting duties there is also a much more serious objection to Kant that involves the absolute nature of Kantian morality. Consider the following case:
You live in Nazi occupied territory. The Gestapo (Nazi secret police) are tracking down Jews to send to the concentration camps. Knowing this, you have allowed several Jews to hide in your home to escape capture. One day a team of Gestapo agents shows up at your door and asks you if you have any Jews in your house. At this point you have three options:

Tell the truth,Refuse to answer,Lie
If you tell the truth, all the Jews will die (not to mention you and your family for hiding them). If you refuse to answer they will force the door and search the house finding the Jews and your family. If you lie they may believe you. If they believe your lie they won’t search (as searching houses isn’t exactly fun) and therefore you will have saved the lives of several innocent people. Given these options what seems like the right thing to do? If your inclination is to lie, you have violated the categorical imperative. Yet, don’t we want to say something to the effect of “lying is OK in this case” (since innocent lives are saved)?

If we are to accept Kant’s theory we are bound not to lie, even in this case. This is a primary weakness in Kant’s theory, that it does not allow for exceptions even for “the greater good.” Kant is not alone in this as many moral views are equally absolute (for instance, there are no exceptions listed in the Ten Commandments).
Yet, we can imagine many cases where (using the same reason that Kant appeals to) we find it acceptable to lie (the Nazi case), or steal (Robin Hood). This “weakness” is not fatal to Kantian theory (his theory accomplishes most of what we want in a moral theory), but there is sufficient reason to examine other views that may yield the exceptions Kant does not provide us.

Further, Kant’s focus on treating everyone impartially fails to take into account the special nature of relationships. Many of our daily moral decisions do not treat people equally in that we feel special consideration must be given to those close to us. Just as friends treat each other different from strangers, businesses with long term relationships also favor each other due to the special nature of the relationship. Often, manufacturers and suppliers develop long term relationships such that a manufacturer provides the supplier special consideration even when a cheaper supply is present out of respect for the past relationship. Kant’s focus on impartiality seems to run counter to this practice.
Thought Question:
One instance where a violation of a special relationship is claimed is the case of Unocal and Security Pacific Bank. Unocal had a 40 year relationship with the bank, which included granting access to sensitive company information over that 40 year period. Despite a promise from the bank not to loan money to anyone attempting a hostile takeover of Unocal, the bank broke that agreement and loaned $185 million to a group attempting a takeover.
Was the bank’s actions ethical?
Had the bank refused to provide a loan to the group on the grounds that a “special relationship” existed with Unocal, would the bank fail it’s ethical obligation to be impartial?
Finally, Kantian morality may fail to acknowledge virtues and character as a source of moral action. For instance, Bill receives no credit from Kant for caring for his parent on the grounds that Bill does so out of compassion instead of duty. Yet, don’t many of us place more admiration on Bill than Sam on the grounds that Sam doesn’t want to help but does so because he feels he should whereas Bill actually wants to help because Bill is a compassionate, caring person. Kant ignores Bill’s good character traits as a source of morally admirable conduct.
Though Kant’s theory has several flaws, there is a lot here to like. First, Kant provides an objective theory dependant upon our reason. His respect for persons principle is also commonly accepted. In addition, Kant offers an alternative to Utilitarianism. Kant may not give us the moral flexibility that the utilitarians can, but Kant forces us to ask: “Are these exceptions worth the cost?”

We can see a clear break between Kantian deontology and act-utilitarianism. This split drives across almost every point. Consider the following comparison of how the two theories differ in evaluating the morality of actions:
Evaluation
Kantian Deontology
Act-Utilitarianism
Does our motive matter:Yes | No
Does our method matter: Yes | No
Some acts are always wrong: Yes | No
Each act is judged case by case:Yes | No
The outcome of the act matters:Yes | No
We know in advance if act is OK:Yes| No
While both Utilitarians and Kantians have consistent and often compelling theories of morality, both also fall short of providing a complete answer. For many the ideal falls somewhere between the duties and respect for persons found in Kant and the practical exceptions found in Utilitarianism. Though we shall see attempts to move beyond these two theories, we will see elements of both theories maintained by other theorists. Two instances where theorists attempt to move beyond Kantian and Utilitarian theories are found in rights theories and virtue ethics. Each will adopt some familiar ideas but add something new.
Part 7: Rights Theories & Virtue Ethics
Beyond Utilitianism and Kantian deontology, there are two additional theories of morality that have direct relevance to business ethics. First, there are theories of morality that appeal to rights as a way of evaluating and resolving moral disagreements. Second, there are theories of morality that appeal to virtues as a way of evaluating character to determine how we can be moral persons.
Rights Theories:
A right is a claim upon others. There are two types of rights. Positive rights are claims upon what others must provide you. Negative rights are claims limiting what others may do to you. A right to welfare is a positive right as it is a claim for aid that others must provide. A right to free speech is negative as it is a claim restricting others from interfering with your speech. We are familiar with many rights in the political sense, but even these are often taken from moral or “human rights.” Rights theories often import the values of social utility and respect for persons and derive rights as a way of explaining morality. In business ethics, we see a growing trend of using rights as a way to evaluate business practices. Some instances of rights in business ethics are: The right of an employee to “blow the whistle,” the right not to be discriminated against in hiring, firing, or promotion decisions on the basis of race, gender, etc., or the right to a safe working environment. Each of these is an ethical claim grounded in rights (which may be supported by utilitarians or Kantians as well).

The drawbacks of a rights theories approach are two fold. First, what rights do we have and where do they come from? Although any rights theorist will spend a great deal of time answering this question, we will not. Instead, we will accept those rights that most of us are willing to accept without a detailed debate upon the subject. The second drawback is of more immediate concern. Second, what are the limits of rights and how do we resolve conflicts of rights? For example, most of us would accept both that an employee has a right to a safe working environment and that employee’s have a right to privacy. However, what happens when in the name of a safe working environment, a construction company requires random drug tests of all construction workers? Certainly we understand that a drug free construction site is safer for everyone, but there is concern that such testing is a violation of privacy. A similar conflict of rights is found in employers attempts to regulate employee behavior outside the workplace. Some employers require that employees not smoke, go skydiving, race automobiles, or climb mountains. Employers can often provide some reason for this (sometimes grounded in rights) but do not employees have rights to liberty and privacy off the job? We will examine these issues and others later in the course, but we can see how rights conflicts occur and why they must be resolved.

Aristotle’s Virtue Ethics:

Virtues are those qualities or character traits that are good. Virtues are not intrinsic, they are learned and developed through practice. As a result, Aristotle says virtues can be taught. Society can train people to be virtuous if they are brought up correctly. Virtue ethics focuses upon the character traits that people should strive for rather than a determination of what a right action is.

The opposite of a virtue is a vice. For Aristotle, virtues tend to be the “mean” or balance between the extremes of excess and deficiency. Aristotle believed that reason required a life of moderation. Too much, or not enough of something is often a vice, whereas the right amount is a virtue. Consider the following chart:

Aristotle applies this idea of moderation to other virtues as well. Being physically fit is a virtue, but too much or to little exercise is a vice. Courage is a virtue, too little courage and you’re a coward, too much and you’re foolhardy (see below).  We could also add food and drink, honesty (even too much is a vice), and pleasure.

Note: By perfecting a life of virtues, Aristotle holds that we are living a good life (which for Aristotle equates to a happy life). We might pause for a moment to reflect upon this question: Are virtuous people happier than people with many vices? If we answer yes, then Aristotle’s argument has succeeded to some degree.

In business ethics virtue theorists talk about what sorts of traits should a CEO or employee have. Virtue ethics allows us to make clear distinctions that other theories cannot. For instance, Alf and Betty are salespeople. Both strive to give a customer what they want. However, Alf does this because he enjoys his job and Betty does it just to get paid, secretly hating her job and customers in general. If both are successful salespersons with happy customers utilitarians hold they are both acting correctly. Virtue ethics allows us to hold that Alf is good employee whereas Betty has a defect in her character (applying this to the case discussed in Kant, virtue ethics would support Bill’s caring for his parents motivated by compassion). Certainly if you were a manager you would rather have more Alf’s than Betty’s and virtue ethics upholds this judgment.

Another instance of virtue ethics in business relates to the proper virtues that a CEO should posses. It used to be thought that toughness and competitiveness were the preferred virtues but this has changed in recent years. For instance, John Chambers, CEO of Cisco, displays generosity and compassion which has helped with his companies success. For example, workers receive generous salaries and bonuses, 40% of stock options go to regular staff, there is a no layoff policy, and Chambers and other executives work in small offices, do not fly first class, and routinely have breakfasts with regular employees.

Much of the appeal of virtue ethics for business is that if we have the right sort of traits in employees and executives then these people will more likely know what to do. Someone with the right motives who is moderately generous and compassionate is more likely to be a good employee than someone motivated by self-interest alone. Certainly, we could cite numerous examples where the vice of greed and self-interest have led to the ruin of more than on business (Enron etc.).

We can see how Aristotle’s view is important to business in the following  two video clips concerning Enron. As you watch the first clip, pay close attention to the character as well as perceived virtues and vices of Jeff Skilling one of the top guys at Enron. In the second clip, pay close attention to how the character and virtues Skilling promoted at Enron affected the entire character of the company down to the lower level employees. This is a clear case of how the character and virtues of corporate leaders can create a culture which permeates every level of the company. In this case it is for the worse, but Aristotle would quickly point out that the reverse could also have transpired.
At this point we have provided an introductory overview of several moral theories. Some of these theories are clearly inadequate grounds to base a public morality upon. Other theories, such as Kantian deontology, Aristotle’s virtue ethics, and Utilitarianism have a lot more going for them. Despite the flaws of these three theories, each seems to contain part of what is necessary for a public morality. From Aristotle we see the importance of promoting good character traits, from Kant we see the importance of duties (often expressed as rights in contemporary language), and from Utilitarianism we see the importance of the common good. Some combination of these theories, or some new theory containing these elements seems to be the next step in moral theory. This ends our introductory foray into moral theory. The rest of this course will focus upon applying elements of these moral theories to various cases that occur in business.
Analysis of Cases:
We will be encountering several cases in this course such that it will help to say a bit about how we evaluate cases. First, the cases we will examine are not intended to derive or prove any particular moral theory or principle. Each case is designed to pose a real dilemma for business in which no answer is ideal, but a tradeoff must be made. Second, no official answer will be adopted or pushed by the instructor. The purpose of this course is not to “teach you” how business should act, but is to challenge you to think about how business should act. In this sense, cases are designed to fine tune your ability to make good judgments rather than teach you what judgments are good. Third, students should not get the impression that anything goes or that no answer is better than any other. Answers can be evaluated on their consistency with other answers we accept, further, we can compare answers in terms of their consequences which often demonstrates one answer to be better, or less harmful, than another. Finally, through the process of reflective equilibrium (applying a provisional set of moral principles to cases, but then modifying the principles based upon an examination of cases and then applying them to further cases, etc.) students will begin to develop their own consistent theory of business ethics.