Ethical Theory – Part II

1. Ethical Theory – Part II Dr Andrea WernerMGT 3110 Business and Society 19 October 2009 1

2. Lecture overview • Ethical theories as frameworks to evaluate ethical issues in business • Consequences/Utilitarianism • Ethics of duty/Deontology/Kantianism • Ethics of Rights and Justice • Virtue Ethics • Confucian Ethics • Discourse Ethics • Postmodern Ethics • How are we to use ethical theories in ethical decision-making in business? • The idea of moral imagination

3. Virtue ethics • Being virtuous means having the right desires and motivations (Beauchamp et al. 2009:35) • concept of the ‘mean’ (Fisher and Lovell 2009:104) • Cardinal virtues (Plato): wisdom, justice, temperance (self-control), courage • Descends from classical Hellenistic tradition represented by Plato and Aristotle • Focuses on character of decision-maker: morally correct actions are those undertaken by actors with virtuous characters • “What would a virtuous person do in this situation?”

4. Virtue ethics Linked to the idea of human happiness or flourishing, the good life (“eudemonia”): a virtuous life is one that allows individuals to achieve true happiness – both for themselves and for their communities Moral virtues are acquired in a particular community of practice ‘Modern’ virtues may include: honesty, courage, faithfulness, trustworthiness, integrity, fairness, generosity, patience, compassion … What virtues do you value in your culture? What virtues do you value in a business person in your culture? Are your answers to the questions above identical – why/why not?

5. Virtue Ethics and Business • the virtuous organisation (Collier 1995, Solomon 2004) • economic success is just one part of the good business life, other aspects are important, too: a good product/service, employees fulfilling their human potential, harmonious relationships with all stakeholders • business organisations as moral communities: developing virtuous managers and employees • virtue approach reflected in mission statements • e.g. Merck (pharmaceutical company) http://www.merck.com/about/mission.html

6. Critique of Virtue ethics • Which way of life exemplifies flourishing or true happiness? • Different communities have different ideals: accumulation of wealth vs valuing of excellence, social relationships etc. • Virtue ethics may not help us if we face serious ethical dilemmas

7. Confucian Ethics – an Eastern virtue ethic • Confucius (551-479 BCE) • a humanist, collectivist ethic • “The nature of a person’s self is defined and constituted by the bundles of his or her social relationships in the world” (Ip 2009) • de: virtue, character formation through personal cultivation of virtues (Junzi: moral person) • Harmony seen as the primary goal of personal and social life

8. Confucian Ethics 5 cardinal virtues of humanity (lived out and learned in social relationships) • ren: capacity of compassion or benevolence for fellow human beings, human-heartedness • zhong shu: the Confucian formulation of the Golden Rule (neg version) • positive act of moral engagement in others’ moral welfare and development • yi: a sense of moral rightness • li: conventional propriety; etiquettes, norms and protocols in both personal and institutional lives • e.g. xiao: filial piety • zhi hui: wisdom • xin ren: trustworthiness

9. Confucian Ethics in Business and its limitations • business an activity embedded in social matrix – effect of one’s action on social matrix should always be considered • value placed on trustworthiness • favour of long-term business relationships • guanxi: importance of good relationships/connections • employer-employee relationship (and other business relationships) may resemble familial relationship (Koehn 1999, Ip 2009) • But also: danger of authoritarianism, sacrifice of individual interests and rights in the name of ‘harmony’, nepotism, corruption, how are people treated who do not belong to one’s group/society?

10. Discourse Ethics “…deals with the proper process of rational debate that are necessary to arrive at a resolution of ethical questions.” (Fisher and Lovell 2009:125) ethical reflection starts from real life experiences norms and solutions are generated through social interaction and open dialogue among all the different parties that are affected by the issue ultimate goal of ethical issues in business should be the peaceful settlement of conflicts(Steinmann and Löhr, 1994)

11. Discourse Ethics Ideal speech situation – criteria include: • every participant has an equal chance to argue and to question - suspension of power differences • all participants can express their own authentic attitudes, desires and needs • non-persuasion • non-coercion; the only force allowed is that of the better argument (Habermas 1990:89, Crane & Matten 2007:114, Fisher & Lovell 2009:pp. 126) Practical Application: Stakeholder Dialogue • e.g. Proctor & Gamble: series of dialogues with a number of societal stakeholders around safety and environmental impact of products

12. Limitations of Discourse Ethics practical time-limits requires high-level cognitive abilities on the part of the participants assumption that people behave rationally in discourses power differences are not easily suspended relies on the willingness of participants to follow the ‘non-coercive force of the best argumentation’ some stakeholders have no voice (e.g. future generations)

13. Postmodern Ethics / Levinas • “Postmodern Ethics … locates morality beyond the sphere of rationality in an emotional ‘moral impulse’ towards others.” (Crane & Matten 2007:115) Emmanuel Levinas (1906-1995) • morality is grounded in the encounter with the ‘other’ - ethics of proximity • encounter with the ‘other’ create infinite/unlimited responsibility for him/her • “I am not only for the Other but also for all the absent others who look at me in the eyes of the Other.” (Soares 2008)

14. Postmodern Ethics and Business Gustafson (2000:21 cited in Crane & Matten 2007:pp. 115) • individuals should not divorce their professional lives from their personal lives • persons with certain moral qualities regarded as examples for moral practice • different situations might require different moral responses • ethical reasoning is a constant learning process • ethical learning enhanced through ‘real life’ encounters (development of moral impulse) • ‘Blood Sweat and TShirts’ – a BBC documentary http://www.bbc.co.uk/thread/blood-sweat-tshirts/

15. Postmodern Ethics and Business Soares (2008) • The corporation has responsibility for each party which has a relationship to it • It is through responsibility that the corporation is able to discover its true aim and meaning Critique: • A very demanding approach to ethics • Is unlimited responsibility to the ‘other’ realistic in a business context?

16. How do we use ethical theory? • “All theoretical approaches throw light on one and the same problem and thus work in a complementary rather than a mutually excluding fashion.” (Crane & Matten 2007:119) • Utilitarianism: social consequences • Ethics of Duty: duties to others • Ethics of Rights: entitlement of others based on idea of human dignity • Discourse Ethics: process of resolving conflicts • Virtue Ethics / Confucianism: moral character • Confucianism / Postmodern Ethics: relationships with others • Postmodern Ethics: moral impulse and emotions see Crane & Matten 2007:121

17. And finally … moral imagination • concept introduced to business ethics by Patricia Werhane (1999) • is concerned with whether one has a “sense of the variety of possibilities and moral consequences of their decisions, the ability to imagine a wide range of possible issues, consequences and solutions” • allows us to see beyond the ‘rules of the game’ and standard responses • enables creative moral managerial decision-making Examples • bank lending with aim of social and economic renewal of neighbourhood • environmental innovation • flexible work-schemes for employees faced with redundancy

18. ANY QUESTIONS?