BUSINESS ETHICS AND

SUSTAINABILITY

Shachi
Yadav
 LEARNING OUTCOMES

Page 2

1.Cultural relativism and Cultural imperialism

2.Traditional ethical theories

3.Contemporary ethical theories

4.Ethical decision making

Shachi
Yadav
 Importance of Cultural Relativism Versus
Cultural Imperialism in Ethical Decision
making.

Shachi
Yadav
 Cultural Relativism

… Holds that appropriate behavior in a

country or culture is determined by its laws
and customs. That is, what is moral is
defined by the customs within individual
countries.

Shachi
Yadav
 Cultural Imperialism

… Means that in operating internationally a

firm maintains the standards of its home
country and judges others by those
standards.

Shachi
Yadav
 Relevance of Cultural Relativism

• Helps avoid cultural stereotypes and sweeping

generalizations
• Facilitates adaptation by taking a dynamic
rather than a static view of cultures
• Helps to identify universal values like human
dignity, respect for basic rights, and good
citizenship , which determine the absolute
moral threshold for all business activities in all
cultures .
• Enables understanding the context when
Shachi
deciding what is right and wrong. 22-6
Yadav © 2006 Prentice Hall, Inc.
 THE ORIGINS OF ETHICAL THOUGHT
Page 7
The origins of ethical thought may be
linked to Judeo-Christian tradition. On the
other hand, non-western socities as well
have developed their own ethical principals
on a similar basis.
For some people ethical principals are
rooted in religious beliefs. But this is not
true for others. A very ethical person may
be non-religious. Or vice-versa: a religious
person may not always behave ethical.
Shachi
Yadav
 A BRIEF HISTORY of ETHICAL THOUGHT
The origins of western moral thought are based on ancient
Greek philosophers as well as on ancient religious thinking
and writing.

The written sources of Judaistic moral tradition are based on

Torah and Old Testament. Greek ethical thought originated
with the famous philosophers; Socrates and Aristotle
(Nichomachean Ethics).

Shachi
Yadav
 Aristotelian Ethics consists of ten books
(scrolls) which were taught by him at the
Lykeion and were dedicated to his son
Nichomacus.

The Nicomachean Ethics is widely

considered one of the most important
historical philosophical works, and had an
important impact upon the European Middle
Ages, becoming one of the core works of
medieval philosophy. It therefore indirectly
became critical in the development of all
modern philosophy as well as European law
and theology.

Shachi
Yadav
 Socratic question: How men should best live?

Pre-socratic philosophy was purely theoretical! Socrates

(through Platon) and later on Aristotle turned
philosophy into a tool in the quest for good-man.

Many philosophers (Locke, Kant, Mill) have turned their

attention to ethics and morals and have tried to provide
insight into these concepts.

These philosophers acknowledged that moral principals

are universal and claimed that they could be applicable
to secular settings (French Revolution).

Shachi
Yadav
 ETHICAL THEORIES
Ethical problem solving is not as cut and dried as problem
solving in most engineering classes. In engineering classes
usually there are only one theory that can be utilized in the
process of problem solving. On the other hand ethical
problem solving is based upon several theories.

This fact does not reflect the fuzziness of the situation but
rather the complexity and diversity of ethics. Having
multiple theories does enrich the process allowing problems
to be looked at from different angles.

Basic ethical problem solving technique utilizes different

theories and approaches to analyze the problem and then try
to determine the best solution.
Shachi
Yadav
 ETHICAL THEORIES
There seem to be as many different ethical systems as
there are ethicists.
The notion of ethics is far more tenuous. In trying to
determine what is to be taken as ethical behavior, an
engineer gets a different answer depending upon the
chosen system.
After this selection [of principles and methods], a
specific range of right action appears . . . Different sets
of principles and methods yield different ranges that
often overlap only partially.
The moral agent uses ethical heuristics to cause the
best change in a poorly understood situation within the
available resources.
Shachi
Yadav
 Philosophical Systems

Western Perspective
Islamic View
Confucian Thought
Indian Systems

Shachi
Yadav
 Teleological and Deontological Ethics
Systems

Shachi 20-14
Yadav © 2006 Prentice Hall, Inc.
 WESTERN PERSPECTIVE

• TELEOLOGICAL THEORIES
• DEONTOLOGICAL- NORMATIVE THEORIES
• CONTEMPORARY VIEWPOINTS

Shachi
Yadav
 Differences
• Teleological, systems define the rightness of an
action in terms of end result that is the good its
consequences yield.- End Over Means

• Deontological ethics systems hold that moral

right takes precedence over the good and can
be evaluated by considerations independent of,
or in addition to consequences. Means over End

• Contemporary theories reflect on individual

freedom , innate goodness of human beings and
application orientation
Shachi
Yadav
 CONTEMPORARY VIEWPOINTS

• Objectivism- Ayn Rand

• Intuitionism-Henry More, GE Moore,
Samuel Clark
• Humanism-Kubasek, Brenan , Huang
• Applied Ethics

Shachi
Yadav
 Teleological and Deontological Ethics
Systems

Shachi 20-18
Yadav © 2006 Prentice Hall, Inc.
 Teleological theories
Page 19
Teleological based on the Greek word for
‘goal’.
The moral judgment in consequentialist
theories(another name for teleological
theories) is based on the intended
outcomes, the aims, or the goals of a
certain action.
Two main consequentialist theories:-
• Egoism
Shachi
Yadav
• Utilitarianism
 WHAT
SHOULD
I DO?

Shachi
Yadav
 EGOISM
You should act in your own best interest.

Shachi
Yadav
 If NO objective truth exists:
• Relativism: Do what your society says is
right
• Subjectivism: Do what you think is right
• Emotivism: Do what you feel is right
• Nihilism: Do whatever. Or not. Doesn’t
matter.

Shachi
Yadav
 DIVINE COMMAND
• Do what your religion says is right

Shachi
Yadav
 ETHICAL EGOISM
• An ethical theory which claims that we all
SHOULD act in our own interest

• NORMATIVE, makes a claim about how

humans SHOULD act

Shachi
Yadav
 Arguments for Ethical Egoism
• Psychological egoism is true; we all are
selfish, therefore we all should act
selfishly
• Since everyone else will be selfish you
should be too or you will lose out
• Everyone will be better off if we each
look after our own interests

Shachi
Yadav
 Arguments against Ethical Egoism
• Psychological egoism is untrue

• If PE is true, it is superfluous (unnecessary) to

tell us to act selfishly if we all do anyway

• Cannot get “Ought” from “Is” (if something IS a

certain way, does not prove it SHOULD be that
way)

• We seem inhuman if we truly do not care about

others; we ought not hurt them even in self
Shachi
interest
Yadav
 Famous Egoist: Thomas Hobbes
• Published “Leviathan” in
1651
• Without strong central
government, Hobbes says
we will be in a “war of
all against all”
• Life in time of war is
“solitary, poor, nasty,
brutish and short”

Shachi
Yadav
 Famous Egoist: Adam Smith
• Published “Wealth of
Nations” in 1776
• Intellectual foundation of
capitalism
• Claims everyone will be
better off if we each act
in our own interest
• “Invisible hand” of free
market keeps balance

Shachi
Yadav
 Utilitarianism : Basic Tenets

• Utilitarianism is committed to the maximization

of good and minimization of harm and evil.
Means to achieve this is :
– Cost and benefit analysis
– Risk assessment
– Efficiency is key
– Intensity of effect is important
– Focus on consequences rather than
intentions
Shachi
Yadav
 What is “Good”?

Involves the fulfillment of at least one of these:

– Pleasure : hedonistic view

– Happiness : realization of goals: personal vs individual
?
– Ideals : maximize ideal values – majority vs minority
– Preferences : satisfaction of hybrid of values & goals

Shachi
Yadav
 Problems with Utilitarianism

• Not always possible to calculate utility

• Quantification of happiness, love,
pleasure
• No common definition of what is ‘good’
• Focus on “greater good” over “smaller
good”

Shachi
Yadav
 Utilitarianism is most appropriate for policy
decisions, as long as a strong notion of
fundamental human rights guarantees that it
will not violate rights of small minorities

Shachi
Yadav
 CASE
• You have a small business with thirty
employees. Five of them are of strong
adherents of a religion that a minority
practices in India. They have put a
petition that to be given holidays on days
prescribed by their religion , and this
because , others have holidays on theirs .
• Should you concede?

Shachi
Yadav
 • A utilitarian response will be denying the
request simply because it does not serve
the interest of the larger group

Shachi
Yadav
 The Biochemist’s Dilemma
X is an unemployed biochemist, who is an expert on
biochemical weapons. On ethical grounds, he has
never engaged in developing such weapons. Now he
finds out that there is an vacancy in government lab
that is used to be developing biochemical weapons.
Though X will not even apply for the job, he learns
that his friend Y also a biochemist , is likely to get the
job. Y has no qualms about developing deadly
weapons and would do so quickly. If X were to apply
for and get the job ,he could deliberately slow down
the development of the weapons and end up saving
lives. If he takes the job , he would be violating his
ethical commitment never to develop weapons.
What should X do?

Shachi
Yadav
 From a utilitarian point of view , X should
take up the job. But that forces him to go
against his deep held commitment.

Shachi
Yadav
 Jim and the natives
Jim is trekking in a foreign country, loses
his way and ends up deep in a forest. He
meets Pedro, an anti- government
militant, who is about to kill 20 natives
found guilty of treason. Pedro offers Jim
a choice; if Jim kills one of the natives .
Pedro will release the other 19 natives. If
Jim refuses the offer, Pedro will kill all
the 20 natives. What should Jim do?

Shachi
Yadav
 Bernard Williams calls it ‘ negative
responsibility’ . How can utilitarianism
make people negatively responsible for
the action of someone else?

Shachi
Yadav
 Nozick’s Experience Machine
The philosopher Robert Nozick (1938-2002) devised a
thought experiment to counter the idea that pleasure is
the only good:
“ suppose there were an experience machine that would
give you any experience that you desired.
Neuropsychologists could stimulate your brain so that
you can think and feel that you are writing something
good or reading or playing. All the time you are floating
in a tank , with electrodes attached to your brain.
Should you plug this machine for life, pre-programming
your life experiences?
what else can matter to us, other than how our lives
feel from inside?
Shachi
Yadav
 Nozick suggests that most people would
not choose to plug in the machine. There
are many things that matter to us than
just the way that we feel. We want to do
things , and not just experience doing
them. We want more that just the
happiness that the machine would be able
to supply. We crave the fabric of reality,
including the hardships and the struggles
that make happiness distinct.
Shachi
Yadav
 Deontological ethics

• Deontological ethics systems hold that moral

right takes precedence over the good and can
be evaluated by considerations independent of,
or in addition to consequences. Means over End

Shachi
Yadav
 Immanuel Kant

• 1785, published
Fundamental
Principles of the
Metaphysics of
Morals

Shachi
Yadav
 Duty and Rights Ethics:

Ethics of duties begin with assigning of the duty to act in a certain

way while, right based theories start by assigning a right to one
party and advocating a corresponding duty on another party to
protect that right. Here, good consequences for society as a whole
are not the only moral consideration.

The major proponent of duty ethics is Immanual Kant (1724-1804).

He held that moral duties are fundamental. Duties like: be honest,
do not cause suffering to people, be fair to others, etc.

When one’s duties are recognized, the ethically correct moral

actions are obvious.

Shachi
Yadav
 Deontology : Kant’s Metaphysics of Morals
• Moral theories tell us that lying & homicide are wrong &
helping those in need is a good thing – virtues and vices

• The theories explain WHY these things are right or

wrong. And give REASONS for believing in them.

• They illuminate “grey areas,” clarify difficult problems,

and resolve conflicts.

• Kant was convinced that humans do not need God, to

identify these principles of human behavior. In his views,
if God has created rational human beings they should be
able to decide whatever is morally right or wrong in a
given situation.

Shachi
Yadav
 “Supreme Principle” of Morality

• An action has “moral worth” if it conforms to the

requirements of duty and is done for the sake of duty.

• A person is morally good if he/she can be counted on to

do duty, motivated by a respect for moral law

• Eg Shopkeeper keeping honest prices as a duty and a

sense of morality and not for attracting customers.

Shachi
Yadav
 KANT’S CATEGORICAL IMPERATIVE
(Three Formulations of the Categorical Imperative)

CI (1) CI (2) CI (3)

Does it
treat could the
Maxim Could it People maxim be
become as an ends willed by PASSES
universal And not you and
Law? simply agreed to by
As a everyone to
be the moral
means?
laws for the
community

No No No
Fails the Categorical Imperative
Shachi
IT IS NOT MORALLY RIGHT!
Yadav
 Kant’s Categorical Imperative
Form One
I. I am never to act otherwise than so that
I could also will that my maxim should
become a universal law

(Modern version: Do only that which you

would will to be a universal law)

Shachi
Yadav
 Kant’s Categorical Imperative
Form Two
II. So act as to treat humanity, whether in
thine own person or in that of any other,
in every case as an end withal, never as a
means only

(Modern version: Treat all people, yourself

included, as an end, never as merely a
means)

Shachi
Yadav
 Kant’s Categorical Imperative
Form Three
III. Act only so that the will through its
maxims could regard itself at the same
time as universally lawgiving.

(Modern version: This has been referred to

as to as the‘ New York Times test’-
namely, if you would be uncomfortable if
your actions were reported in the press,
you can be fairly sure that they are of
Shachi
Yadav
doubtful moral status)
Problems with ethics of duty
• Undervaluing outcomes- there is little consideration
to the outcomes of one’s actions. Although you can
consider consequences providing you would agree
that everyone should when faced with similar
situation. It gives you no real way of assessing
outcomes.
• Complexity- This principle based way requires a
certain amount of abstraction and hence a level of
intellectual scrutiny.
• Optimism- Kant’s view of man as a rational actor
seems more of an ideal than a reality.
Shachi
Yadav
 CASE
• You are the CEO of a small manufacturing
company in Pondicherry( 15 employees). It has
come to your notice that that a rival company
has gained illegal access to one of your
engineering secrets and intends to use it for
commercial gain. The use will have an adverse
effect on your commercial viability. Your legal
advisors tells you that recourse to litigation will
be laborious , expensive and not stop the rival
from going ahead with use. senior management
advises you to hire a private investigator
engaged to find out information that can be
used as a leverage ( blackmail)to restore the
Shachi
Yadav equity in power .
 • Can hiring a detective be made a
universal law? ( C1)

• When we engage in espionage we use

people as means against the other . (
C2)

• Will every one agree to this kind of law (

using detectives) to gain power equity ? (
Shachi
Yadav
C3)
 Ethics of rights and justice
Ethics &
CSR Ethics of Right-John Locke (1632-1714)

Natural Rights are some basic , important ,

unalienable entitlements that should be respected
and protected in every single action.
Natural rights are based on certain consensus of all
human beings about the nature of human dignity.
These theories lack complicated theoretical deduction
but have been really powerful and influenced
constitutions of many modern states.
Today, basic rights may include a right to life, liberty,
justice, education, free trial, freedom of association
etc..
Shachi
Yadav
 Ethics of rights and justice
Ethics &
Justice can be defined as the simultaneously fair
CSR
treatment of individuals in a given situation with
the result that everybody gets what they deserve.

Fairness:
Fair procedures(procedural justice)-everyone is
free to acquire rewards of his own.
Fair outcomes(distributive justice)- some
underline principle need or merit

Shachi
Yadav
 Theory of justice( John Rowls,1971)
Tests:
Ethics &
CSR
• Basic freedom is realized to the same degree
for everyone affected by the decision.(
General Human Rights)
• Inequalities are unavoidable in free and
competitive society they would be just only
when
1. One who benefits least is still better of than
he would be without.
2. Everyone would have a fair chance to do so
Shachi
Yadav
– condition of fair equality of opportunity.
 John Rawls’ : Distributive Justice
Starting point: “The Original Position”

– self-interested men and women

– maximizing personal welfare
– seeking agreement and cooperation
– People are free and rational
– Correct inequality if they exist

Shachi
Yadav
 Social and economic justice
• Egalitarianism- justice is same as equality
and deviations are unjust.
Marxist thinking suggests that a just society
would be one where working class would
collectively own the means of production
and would be immediate beneficiaries of
the economic outcomes.
• Non-egalitarianism-distribution of wealth
in a society is just as long as it has been
brought about by just transfers and just
original acquisitions.
Shachi
Yadav
 REFERENCES

Page 58

• Sinha, M., 2012. Business ethics and Corporate Social

Responsibility, MBAFT-6301 Management. Faculty of Management
Studies, unpublished.

Shachi
Yadav
 TA ETIHIKA…….

Shachi
Yadav