IP: Business Ethics

1. IP: Business Ethics Organising Principles for an Ethical Framework

2. What is Ethics? Some classic answers • Ethics is the way things are done around here. Aristotle • Ethics is treating other people as you would be treated. Confucius, St Paul, Kant • Ethics is doing whatever brings the best results. Bentham, Mill, Singer • Ethics is becoming the right kind of person - acquiring the virtues. Aristotle, MacIntyre

3. Objections • Ethics is subjective/relative. • If it’s legal, it’s ethical - at least for corporations. • Ethics is about following rules. If you know the rules, that’s all you need to know. • I don’t give a damn about ethics.

4. Is Ethics subjective and relative? Everyone disagrees about ethics. Who is to say what is right? Ethics is relative to your culture, so it is offensive to impose your values on to someone else. Clearly we do differ, but do we not also share values?

5. A thought experiment Think of someone who is an ethical example to you and of the core ethical values they embody. • One word only (no hyphens) • Serious (not punctual or polite) • Non-religious (not pious or prayerful) • Non-legal (not law-abiding)

6. Our guess about your answers Honesty Integrity Fairness Compassion

7. Although history has long forgotten them, Lambini & Sons are generally credited with the Sistine Chapel floor.

8. Law and ethics: a model Law is the floor, ethics the ceiling. Ethics is a higher standard, but without law is unlikely to be effective. Ethics and law are complementary: they cannot substitute for each other.

9. Isn’t ethics just about following rules? Rules are essential because they allow for predictability, the definition of roles and responsibilities, and the definition of boundaries. But • Human conduct cannot be reduced to rules: rules are derived from conduct. • Rules date. • Rules cannot cover all contingencies. • Rules must be tempered by judgment: there can be many ways to get things wrong and more than one way to get them right.

10. Rules and standards • Rules are one way of proclaiming standards. • Standards are important for consistency, but they are a minimum. • Businesses and managers must have standards, but only as a minimum: they should aim higher, like an archer.

11. Ethical defeat Almost no one accepts that there is nothing ethical to be said for them, even if they have committed horrible offences. Tale of a New York drug dealer. Stephen Cohen has called this resistance to ethical defeat.

12. Ethics are trumps Consider these reasons for accepting a bribe. • You would just be doing your job - only more quickly. • You wouldn’t be hurting anyone - you would be helping someone. • You and your family would be better off. • If you didn’t do it someone else would. • You deserve better pay anyway. • It’s unethical.

13. Ethics presents the most serious kinds of reason That is why we are reluctant to ‘impose’ our views on others and vice-versa. People become heated about ethical issues because they are serious. We can’t impose our views, but we can argue hard and seriously for them. Why wouldn’t we if they are truly important?

14. An ethical opinion: • Is not just self-interested • Has regard for others • Could apply to anybody - is reversible • Takes account of context • Overrides other considerations • Has to be ‘lived with’.

15. What is involved in ethical justification? Being accountable in terms of • the law • professional codes • employer’s values statements • common morality • informed ethical judgment (conscience)

16. Trust • Basic to humanity - we need to trust and be trusted. Trust builds trust. • Basic to relationships - friendships of pleasure, utility and affinity. • Allows confidence and predictability. • Reduces stress. • Lowers transaction costs and increases productivity. • Encourages risk-taking; discourages risk-aversion.

17. Underwriting trust: the Ring of Gyges • Gyges was a shepherd in Lydia who discovered a magic ring which made him invisible. • With this ring, he was able to seduce the queen, murder the king and take his kingdom. • Who would not do forbidden things if one could get away with them? (Plato, Republic)

18. What the bagel man found out • Payment rates were higher when he was the known provider. • An open basket is a temptation. A money box is safer. • People who steal bagels don’t steal the money boxes - don’t perceive taking bagels as theft? • Law firms and telecoms have notable failings and executives seem to be the worst offenders! • Firms with high morale seem to be more honest. • Smaller firms are more trustworthy - the shame factor?

19. Bagel behaviour • An office with low paying staff rarely becomes an honest payer, and vice versa. Hence Paul F. believes that honest people remain honest, and cheaters will cheat regardless of the circumstance. • Against Glaucon (Plato’s brother) who tells the tale of Gyges, Paul F. knows that people are honest 89% of the time. The bagels prove it.

20. A simple framework • Do no evil. • Prevent evil. • Remove evil. • Do good. William Frankena

21. What is ethics? The liberal might answer: “Ethics is the responsible use of freedom.” Surely this is correct. Is not misconduct the irresponsible use of freedom, say, to damage others and look after ourselves? But this definition is too limited: it does not commit us to anything in particular. What goods matter to us ethically?

22. Can we name these goods? John Finnis has nominated the following: Life - health, security Friendship - friends, community Freedom - personal, political, economic Knowledge - many forms Aesthetics - art, nature Play - spontaneous, organised Belief systems - like religion Trust

23. Ethics and impartiality The house next door is on fire. Your children are in the house. You rush into the fire to rescue them. Other children are in the house too. Does ethics require you to rescue the children impartially, i.e. without special regard for saving your own children?

24. Do we not properly favour those whom we recognise? Peter Singer argued that favouring kin was a survival device of evolutionary biology that fairness and justice should now supercede. But what of loyalty, love, affection and intimate knowledge of the good in those we know? These values relate less to ‘favouring’ than to the ethics of care.

25. What principles should steer ethical judgment? Four accounts: 1. Acts are intrinsically right or wrong. Ethicalrequirements are expressed in duties – deontology (Kant) 2. Right and wrong means producing a surplus of good over evil consequences - consequentialism, e.g. ‘utilitarianism’ (Mill) 3. The ethics of care. 4.Virtue and character.Human endowments can be improved by the acquisition of virtues that can be learned.

26. Intentions are basic to responsibility • Think of Bratman’s examples. • If we intend to kill, it doesn’t matter if we actively kill or passively let die. • Intention changes the nature of acts. • Intention introduces responsibility

27. Results are integral to ethics Ethics is about consequences even if it is not only about consequences. If there were no significance to consequences, ethics would matter little. It is because ethics guides conduct that it matters. It is also because of this that ethics links with economics.

28. Management Ethics Management excellence requires human virtues. All social virtues built on friendship, but professional virtues include: • High practice standards • Trustworthiness and honesty • Integrity • Compassion

29. LAURA NASH’S MODEL OF ETHICAL DECISION MAKING • Have you defined the problem accurately? • How would you define the problem if you stood on the other side of the fence? • How did this situation occur in the first place? • To whom and to what do you give your loyalty as a person and as a member of the organisation? • What is your intention in making this decision?

30. 6. How does this intention compare with the probable results?7. Whom could your decision or action injure?8. Can you discuss the problem with the affected parties before you make your decision?9. Are you confident that your position will be as valid over a long period of time as it seems now?10. Could you disclose without qualm your decision or action to your boss, your CEO, your family, society as a whole?11. What is the symbolic potential of your action if understood? If misunderstood?12. Under what conditions would you allow exceptions to your stand?Laura Nash, “Ethics without the sermon”, Harvard Business Review, 59, 1981, 79-90.