1 intro to ethics
- 1. Business Ethics, Governance and Social Responsibility Lecture One An Introduction to ethics Pt. 1
- 3. “A noble man compares and estimates himself by an idea which is higher than himself; and a mean man, by one lower than himself. One produces aspiration; the other ambition, which is the way in which a vulgar man aspires”. Marcus Aurelius - Meditations
- 4. Once upon a time... • Aristotle was a Greek philosopher • Tutored Alexander (the Great – Macedonian King) and Ptolemy (encouraging the former to invade the east!) • Aristotle argued that ethics was a practical (rather than theoretical) subject – i.e. it was about doing good, not identifying good • Aristotle argued that the function of a person was the fulfilment of the soul (including well-being)
- 5. Where does ethics come from? • Aristotle first used the term ethics to name aspects of morality and judgement offered by Socrates and Plato • Aristotle stated that the consideration of ethics must begin with "the that" or "the fact that“ – i.e. context!
- 6. Character = Ethos = Ethics? • Aristotle identified that the means of persuasion is divided into three aspects – Ethos – Character (authority) – Pathos - Emotion – Logos – Logic • Ethos is often cited as the ‘ethical’ appeal of the individual • Ethos was a descriptor for the credibility or authority of the individual making the argument
- 7. Ethics is.... ……a system of moral principles “…accepted principles of right or wrong that govern the conduct of a person, members of a profession or the actions of an organisation.” Hill, 2007
- 8. Areas of ethical study • Meta-Ethics – The nature or morality and judgement (abstract) – Where do our principles come from? • Normative Ethics – The contextual nature of right and wrong – What is right and what is wrong? • Applied Ethics – The application of moral judgements upon a specific issue – Is a specific action morally justified?
- 9. Issues of Ethical Responsibility • Employment – Work conditions being considered inferior – Which standards to apply? • Human Rights – Right of association, speech, assembly, political choice • Environmental Considerations – Reduced cost of adhering to lesser legal standards • Corruption – Facilitating payments to coerce • Moral Judgement – Exploiting lack of education standards
- 10. What is Ethical Responsibility? • What is right and wrong? • Governing the conduct of business and individuals • Context vs. Social norms • Strongly affected by culture and customs • Social responsibility
- 12. Where do norms come from? • Moral Catalogues • Dogmatic termination of substantiation:„holy books“ e.g. Bible • Sustainable development • Human Rights Codes of conduct, e.g. US Model Business Principles Is universalism possible? • Dialogue ethics • Procedural norms (universal) • Shared norms through dialogue • Combination – Existing norms/catalogues as basis for dialogue
- 13. But what does this mean? • Ethics is a intangible construct • Based on personal or societal beliefs of right or wrong • Dynamic (as society itself is dynamic)
- 14. “It is a ridiculous thing for a man not to fly from his own badness, which is indeed possible, but to fly from other men's badness, which is impossible”. Marcus Aurelius - Meditations
- 15. Integrity? • What is integrity? • Can we define integrity? • Can we classify integrity? • Can we identify it in ourselves? • Can we identify it in others?
- 16. • professional behaviour is often described as behaving appropriately, doing the right thing, acting with integrity or acting in a way that maintains or improves the trust that others have in you (RICS) – laws, rules and technical standards are very much concerned with what you have to do to comply or meet those requirements; ethics or professional behaviour are about asking what is the right thing to do (RICS)
- 17. Ethics begins where the law ends! • The law represents a (potentially) ethical minimum • Ethical responsibility often exceeds minimum legal mandates/expectations • But which law?
- 18. • The problem is that sticking to the law is not always that simple, because; (1)Differences in national laws and lack of international law! Which law to abide by, the home- or the host- country’s? (2) Acting according to the law does not always prevent MNEs from getting into trouble? E.g. the South Africa/apartheid example earlier; -- so is there still a reason for firms to act “ethically”? So one very pragmatic reason is that firms run into conflicts if they don’t start to act ethically – that’s not a very ethical reason, but it’s a good argument for the necessity of corporate ethics
- 19. Legitimate Illegitimate Legal (MNEs as “good corporate citizens“) Illegal I II III IV Ethics and the Law
- 20. Shaping ethics • Regional approaches • Institutional shifts • Corporate scandals • Globalisation and regulation • (source, crane & matten 2004)
- 22. Why bother.....? “The social responsibility of business is to increase its profit.” (Milton Friedmann 1970)
- 23. • Friedmann suggests that : • Everybody who suggests that firms should not only pursue profits is a socialist • Managers of MNEs are usually employees of the owners/shareholders, so their responsibility is towards no-one else than the owners/shareholders • Ethics might still have a place, but only if it pays off, e.g. body shop. • Ethics has no place where being ethical reduces profits, I.e. share- holder value ALSO Cause related marketing • Good corporate citizenship does not come cheap – and the cost is borne by society at large • Concept of ethics, fighter jet producing company – the only thing the company should do is produce jet that have the highest destruction power and thus make profits to serve its owner and employees; if the state doesn’t like it, it has to have regulation to prevent it.