Chapter 15: Business Ethics
and Public Policy
Do public policy
approaches resolve the problem of social responsibility based upon moral and
ethical questions, i.e. if business adhered to the standards of performance
expressed in the law and existing public policy, could it be judged as being
socially responsive to the changing expectations of society???
of Business Ethics
view is that ethical behavior conforms to the marketplace. Economizing on
resources, meeting the competition, and successful economic performance.
2. Does the
drive for efficiency that leads to unsafe workplaces, environmental pollution,
inferior consumer products, etc. change business' social and ethical roles?
3. Should this
task be left to government regulation?
ethics is a subset of ethics in general. It is concerned with actions and
practices that are directed to improving the welfare of people.
2. It is
concerned with human conduct that is done knowingly and, to a large extent,
3. How does one
identify the ethical dimensions of a decision? A decision that significantly
affects human welfare where questions of justice and rights are serious and
relevant moral considerations.
- Holds that the moral worth of an action
or practice is determined solely by the consequences of the action or
- It promotes human welfare by minimizing
harms and/or maximizing benefits (cost/benefit analysis).
- Rule utilitarianism (as opposed to acts
utilitarianism) involves less time costs but is more inflexible when
applied to decisions.
- Utilitarianism does not consider the
distribution of utility. The market system measures utility by the price
people are willing to pay.
- Critics point out the difficulty in
quantifying utility and measuring subjective costs versus benefits. How do
you measure happiness or penalize adverse behavior?
Formalism (deontological approach)
- Actions are not justifies by their
consequences but by the intrinsic value (right or wrong) of actions or
- We must do things regardless of the
consequences or circumstances (Ex. repay our debts because its the right
thing to do.)
- The action must be consistently
universal; moral for everyone.
- It must respect rational beings as ends
in themselves; does not use others to advance themselves.
- It respects people's capacity to choose
freely for themselves; it is self-imposed and self-recognized. (Golden
(fairness or what is deserved)
- Distributive justice divides fairly
society's benefits and burdens.
- Compensatory justice makes amends to
people for their loss when wronged by others.
- Retributive justice penalizes those who
- Egalitarian theories emphasizes equal
access to primary goods and services. Radicals disregard need, ability,
theories emphasize rights to liberty. Government action is permissible on to
the extent that it protects these fundamental rights or entitlements.
Entitlement rights depend upon how they came about. Criticized as ignoring the
fact that freedom of one person imposes constraints upon other persons. It also
is criticized as generating unjust treatment of the disadvantaged born into
- Emerge when enough people feel an
injustice exists and are able to organize for a basic change. (women's
rights, civil rights, etc.)
- Basic human rights might override
property rights. (affirmative action)
- Moral rights form the basis for
entitlements that may or may not be formulated by the legal system.
Entitlements empower or permit persons to do something.
- Moral rights are closely correlated with
duties, activities, or interest
- Rights and justice are correlated but
have led to disagreements concerning negative rights (the duty not to
interfere with the rights of others) and positive rights (equal access and
opportunities to goods and services.)
- The market system is more geared toward
libertarian theories based upon negative rights while government
intervention emphasizes positive rights.
- When conflicts arise a balance or
compromise is reached toward the political center of society's ideology
that balances the right of liberty with the right of equality.
- Corporate managers must make decisions
within this political and economic context.
- Only one of these four ethical theories
might not give adequate insight in the complexities of a decision.
- Each of the alternative theories leads
to a decision rule that has its limitations.
- Managers must find intrinsic rewards
that are beyond economic rewards.
- May be good business by leading to
better and more devoted workers and a better reputation among consumers or
among the investment community.