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Christian A. Conrad
Business Ethics -
A Philosophical
and Behavioral
Approach
Second Edition
Business Ethics - A Philosophical and
Behavioral Approach
Christian A. Conrad
Business Ethics - A
Philosophical and
Behavioral Approach
Second Edition
Christian A. Conrad
University of Applied Science
Hochschule für Technik und Wirtschaft des Saarlandes
Saarbrücken, Germany
Translated by
Danica Webb
Hotchkiss, CO, USA
Dessert plate from the Nantgarw China Works, ca. 1817-1822, impressed NANT-GARW
C.W., bearing the escutcheon, crest, torse and motto of Wyndham. The motto “Au Bon Droit”
translates as “With Good Right”. Henry Windham Wyndham-Quin (1782-1850) became
Viscount Mount Earl of Adare in Co. Limerick, in February 1816 and the Earl of Dunraven
in 1822. Family seats, Dunraven Castle, Glamorgan, and Uffords Manor, Norfolk. Reproduced
with permission from Gwyn Jones, Director of the John Andrews Charitable Trust Collection,
Oriel Plas Glyn-y-Weddw, Llanbedrog, Abersoch, Gwynedd.
© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland
AG 2018, 2022
This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether
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transmission or information storage and retrieval, electronic adaptation, computer software, or by similar
or dissimilar methodology now known or hereafter developed.
The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication
does not imply, even in the absence of a specific statement, that such names are exempt from the relevant
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The publisher, the authors and the editors are safe to assume that the advice and information in this book
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Preface to First Edition
This book is the result of more than twelve years of professional experience in a
large German bank, where I often worked with the management of international
companies as a business consultant. The time period of this experience included the
boom and crash at the beginning of the new millennium and the financial crisis.
These practical impressions led to the conviction that there is a problem with ethics
in the economy and that the lack of ethics is not only harmful to people but also
leads to serious productivity losses. As a result, I have held seminars on business
ethics in the bachelor’s and master’s degree at the University of Applied Science
HTW in Saarbrücken. This teaching experience was incorporated into this book as
well as an extensive literature study.
I would like to thank Ms. Danica Webb (USA) for the translation of the major
part of this book.
v
Preface to Second Edition
The second edition has been completely revised and expanded to include new find-
ings from the behavioral sciences (psychology, social psychology, sociology, and
behavioral economics). In particular, the research on emotions, motivation, and
group behavior has given rise to many new impulses in business ethics. In addition,
new case studies and new chapters were included, like Politics and Morality,
Theories of Justice, Global Ethics, and Institutions as Solutions to Specific Game
Situations (game theory).
Again, I would like to thank again Ms. Danica Webb (USA) for the translation of
the major part of this book.
vii
Introduction
The question of whether or not there is a need for ethics in business is still a scien-
tific discussion. However, in the context of the 2000 Enron crisis, the first doubts
arose as to whether a business enterprise without morality could work. Since the
financial crisis that began in 2007, the economy and business administrations are
increasingly confronted with the demand for more social responsibility. A common
feature of the crises was the immoral enrichment efforts of managers at the expense
of their companies and the system, and thus society. The market economy system
places the individual at the forefront of economic value creation and grants him a
great freedom of development. The pursuit of self-interest is intended to ensure the
greatest possible motivation for the individual, and thus a maximum result for the
general public seems to work less and less.
The central question to be answered in this textbook is the extent to which moral
values play a role as productive forces for the economy. Our underlying method is a
scientific approach. In this case, no normative approach is deliberately pursued, and
a morality is not demanded a priori by the economy. This morality would have to be
subjectively and culturally relativized and could therefore claim no universality.
Moral values in themselves, such as the dignity of man, should not be regarded as a
requirement profile without logical reasoning, although they have a high target pri-
ority. Normative, moral, and perhaps even emotional-related goals, such as justice,
should be mentioned, but should not be used for argumentation when they are not
productivity enhancing. The aim is the optimal development of the productive
forces in companies and national economy, that is, the simple increase in welfare
through output maximization while taking into account the welfare of all parties
involved. A system of ethics founded purely on logic will be devised, one which
stimulates the productive forces of the market economy. The aim is to reveal the
ethics implied by the market economy, ethics that can also claim international valid-
ity for the globalized economy. We hope to justify and promote ethics objectively
and thus convincingly.
The term “business ethics” encompasses, according to the international standard,
both the ethics of companies in the business sector (meso level, corporate ethics,
and organizational ethics) as well as managerial ethics in companies (micro level,
personal ethics) and even ethics within the national economic framework (systemic
level, economic ethics). The goal is to create a textbook for business ethics from the
ix
x Introduction
many ethical approaches and partly also from different conceptual uses. The aim is
to show how ethics improves productivity in the economy. For practical application,
specific ethics tools are provided.
In order to work out how people behave ethically and unethically and how this
affects the economy, this book refers to newer research results from behavioral eco-
nomics, but also from other disciplines such as psychology, sociology, and social
psychology, thus leading to new conclusions for business ethics. The knowledge
relevant to the students is first derived scientifically then the results are presented as
summarized. The chapters have a behavioral and ethical summary. After the ethical
assessment approaches have been explained, the students are given an ethical
assessment of economic behavior using case studies. Roleplaying and games are
also used to explain the behavior of people in relation to ethics.
The book begins with the foundations of business ethics by defining terms and
delineating objectives. The importance of business ethics for business, the economy,
and the society is also discussed here. Then the ethical evaluation approaches are
presented, which are intended to enable the reader to evaluate economic behavior
ethically. Man in business is the next chapter. Here we will deal with man and his
behavior. What motivates him? To what extent is it ethically oriented? Is there a
sense of justice? Next, we will discuss the rules of the market. Does the market
economy promote ethical behavior or is there a conflict of goals between ethics and
market economy? Do companies have a social responsibility? We note that answers
to these questions are very much dependent on the legal framework of economic
activity. In an economic anarchy, ethical behavior cannot be expected either by the
companies or by the individual actors, which is why we turn to ethics as an ordi-
nance. Here, the state as an actor has an important role to play. In international busi-
ness, no government controls the companies. We will analyze the circumstances for
business ethics at the global level. Politicians organize government and shape insti-
tutions. They are responsible for the rules that should make ethical behavior worth-
while. Next, we will investigate the question of whether politics makes economic
decisions in an ethically and socially maximizing way. How do politicians behave,
what are their incentives, and how ethical can they be? After analyzing the impor-
tance of ethics for productivity in the enterprise and in the economy, we present
so-called ethics tools as the instruments with which the management can promote
ethical behavior in their employees. The book concludes with an outlook and rec-
ommendations on business ethics as a discipline as part of economic education.
Contents
xi
xii Contents
Index�������������������������������������������������������������������������������������������������������������������� 457
About the Author
xv
Basic of Ethics
1
Learning Goals
Students should be able to describe the basics of business ethics in their own words.
Business ethics investigates the connections between ethics and economy, or to put
it more simply, moral behavior in the economy and in particular the importance of
moral behavior for the economy. Under the term “economy” we understand the
system that produces goods and services to fullfil the needs of a society. Do econ-
omy and ethics go together at all? Is it possible to measure economic contexts with
criteria such as good and evil? At first glance this seems unrealistic. Economy is
something abstract, subject to its own laws. How can one differentiate between
good and evil? Many people have tried to answer the last question, without having
been able to develop a universally applicable definition of good and evil. The dif-
ferentiation and designation of good and evil is greatly dependent on one’s point of
view, but one can speak to general tendencies. We almost always use good and evil
in relation to the effect on a third party. An action is good if it is advantageous for
others, and bad if it is harmful. It is impossible to reach a differentiation without
addressing the relationship to an advantage or benefit. Societal norms and values are
created in a process of trial and error, or cultural evolution. They express the behav-
ior a society desires because it is advantageous for the society and its members.
Behavior considered by the society to be positive is rewarded with social approval.
On the other hand, negative behavior damaging to a society is punished through
social exclusion or through the justice system as societal institutions. We say people
are good if they bring benefit to other people and evil if they are harmful. The cat-
egorical imperative from the famous philosopher Immanuel Kant will be discussed
later in detail as an example that expresses the same idea; act in such a way that your
behavior could be the basis for a universal law. One could also follow the golden
rule; do unto others, as you would have them do unto you. This we would consider
moral behavior.
We can transfer this idea to the economy. Economics is a relatively abstract con-
cept due to its complexity, yet the institutions and organizations were created by
humans, for humans. An ethics of economics is thus legitimate if it asks whether the
people acting economically and/or the institutions and organizations are good
because they are good for the community. An ethics of economics can thus be
reduced to the question of what economic actions, or the economy as a whole or in
part, offers the society. Ethics in economics thus places people above the economy,
and assumes that the economy should serve the people.
Moral or ethical is therefore to be defined in the following book as a human
behavior that does not harm other people (living beings) objectively, and that their
welfare is not diminished (definition).
It is conceivable that the agent did not intend this effect, that is, his mind was not
moral. We also do not exclude that the action was objectively beneficial for the other
person, but he does not care. For example, it would certainly be wrong to say that to
give someone €100 is not moral only because he is a millionaire. Active action is not
a prerequisite for unethical behavior. Inaction can be considered unethical, for
example, if one does not help someone in an emergency situation.
Because we need an objective assessment criterion, our definition of moral dif-
fers from the common use of “moral” as the subjective viewpoint of society. Our
definition of moral therefore also differs as an adjective from the corresponding
noun “morality”.
The word “morality” comes from the Latin: the custom (Lat: mos, mores custom,
customs). According to this, morality depends on the time, that is to say, it is subject
to fluid societal trends, as well as dependent on the particular culture, that is, from
country to country. The applicable law covers only a part of these standards.
Norms are social behavioral guidelines (definition).
For instance: Do not smoke if others are eating. Respect the property of others, etc.
The elementary norms are incorporated into the laws of a society. Empirical
studies show that apart from the damage caused by an action, the social norms,
or the ethical consensus, are decisive for whether a person behaves ethically or
unethically.1
For sociology, norms are the unwritten rules that make the conflict-free coexis-
tence of many people in a society possible. Unclear or missing norms lead to
anomie-producing situations, meaning a lack of social integration. Too much or too
1
See Singhapakdi, A./Vitell, S. J./Kraft, K. L. (1996); Frey, B. F. (2000) and Butterfield, K. D./
Treviño, L. K./Weaver, G. R. (2000).
1.1 Basic Terms 3
restrictive of norms cause special stress situations and contradictory norms create
norm conflicts. If a society has many different groups or sub-societies (pluralistic
society), it will also have many different and conflicting norms, as each sub-society
has its own norms. If a person moves in different sub-groups he must inevitably
violate the behavior norms of the sub-groups. This applies not only to immigration
but also between generations. A youth must behave according to the rules of his age
group in order to be recognized there, but he is also dependent on the acceptance of
his parents. And there are other norms of behavior. In contrast to norms, conven-
tions are voluntary agreements between people, for instance the terms for objects in
a language, or shaking hands with greetings.
What is ethics? The Roman Cicero (born January 3, 106 BC in Arpinum, †
December 7, 43 BC at Formiae) translated the Greek term êthikê (ethics) with phi-
losophia moralis. Thus ethics is the philosophy of morality.2 Ethics (from the ancient
Greek “ta ethika”, translated as the moral doctrine) is then the science of morality,
whereby the goal of this science as part of philosophy (the friend of wisdom) is to
regulate the world and in particular the behavior of man. To investigate what
includes not only the being of man, but how he should be in the world. For us, ethics
answers the question of how we should behave properly. It is also called practical
philosophy. So, ultimately, it is no more and no less than the meaning of life and the
meaning of our existence as human beings. We want to understand ethics as the sci-
ence of the analysis and assessment of human behavior with effects on third parties
or all living beings.
Ethics can be described as descriptive, normative, but also as a method of teach-
ing. The latter form searches for the way “to enter the laws of pure practical reason
into the human mind, to influence the maxims. The objective-practical reason can
also make subjectively practical.”3
Material ethics, which is concretely evaluated, examines which behavior is moral
and can be differentiated from formal ethics, which provides methods for how moral
behavior can be generated or determined. An example of formal ethics would be the
rule that a just, and thus moral division of a single cake would be for the first person
to cut the cake into two pieces and then the second one to select their piece.4
The term ethos is used when the individual chooses a part of morality as a basis
for action, thus internalizes it (definition).5 Virtues (definition), on the other hand,
are practiced and internalized dispositions of inner attitudes, to do good, to behave
ethically (definition). The Cardinal Virtues of Socrates and Plato were bravery, pru-
dence, wisdom and justice. Virtues correspond to characteristics and are related to
the persons. Aristotle (384–322 BC) concluded here by formulating “virtue is the
way to happiness (eudaimonia)”. Christian ethics supplemented these virtues by
three more: faith, love, and hope.6
2
See Ritter, Joachim /Gründer, Karlfried/Gabriel, Gottfried (1984), p. 149.
3
Kant, Immanuel (1788), p. 269.
4
See Göbel, Elisabeth (2010), pp. 45.
5
See Schmidt, Heinrich (1982), p. 172 and Göbel, Elisabeth (2010), p. 10.
6
See Götzelmann, Arnd (2010), pp. 17 and Schmidt, Walter (1986), p. 40.
4 1 Basic of Ethics
The heavenly virtues (and the contrary vices) of the Occidental Middle Ages
were widespread by the musical work of Hildegard of Bingen in the Christian West
of the Middle Ages: humility (arrogance), benevolence (avarice, greed), abstinence
(lewdness), moderation (gluttony), goodwill (envy), diligence (laziness), patience
(anger).7
Faithfulness, efficiency, consistency, thriftiness, reliability, cleanliness, punctu-
ality, diligence, conscientiousness, patience, order and self-discipline are called sec-
ondary virtues. They have the nickname “secondary” because they are not directly
moral, but are useful to society and are necessary for the implementation of moral
actions. A good intention, such as caring for the elderly, cannot have a moral effect
if discipline is lacking, and the care must be clean, punctual and orderly so that the
old do not suffer any harm. In general, it is also possible to paraphrase the secondary
virtues with a certain degree of certainty and reliability, which enables the good and
expected implementation of a moral action. Secondary virtues are therefore also
referred to as work ethos.8
Another approach emphasizes the human limits of ethical behavior. Bounded
ethicality is based on the term “bounded rationality”. The concept of bounded ratio-
nality was developed by Nobel Prize laureate Herbert Simon, implying limited
information processing capacities as opposed to complete rationality. A decision is
rationally limited if, taking account of information access and processing effort, the
decision that maximizes utility is chosen.9 Human beings can only reach a satisfac-
tory decision, rather than the optimal one. The same is true for ethical behavior.
People cannot make an ethically optimal decision because they are limited by infor-
mation, time, social and environmental limits and pressure as Tenbrunsel and
Bazerman pointed out. Human beings are more focused on reaching a satisfactory
ethical decision, the most ethical, rather than the optimal one.10 Kern and Chugh
showed for instance that time and financial pressures can encourage unethical
behavior. For example, test subjects in a financial loss situation and under time pres-
sure decided more unethically than test subjects who were not subjected to this
influence.11 It is obvious that human capabilities are limited, but it is crucial that
there is the will to do good, as we will see later in the ethics of conviction (Sect. 2.1.1).
Duties, goods and values are the basis of ethical action. Values are the highest
guiding principles of human behavior. They can apply to groups or individuals.
These conscious or unconscious orientation standards are the goal of all goods.
Values are the fundamental conceptions of the desirable.
Values are positive occupied guidance (goals) for behavioral orientation (defini-
tion). A good example are the three values of the French Revolution: égalité,
7
See Davidson, Audrey Ekdahl (1992) and Stalker, James (1998).
8
See Leisinger, Klaus M. (1997), p. 144 and http://www.familie.de/eltern/sekundaertugenden-
foerdern-moral-538569.html
9
See Simon, Herbert A. (1959), pp. 262.
10
See Bazerman, M.H./Tenbrunsel, A.E. (2011).
11
See Kern, M.C., Chugh, D. (2009) and Khan, Ashraf (2018).
1.1 Basic Terms 5
fraternité and liberté. Values that are relevant to the company or the economy are,
for example, reliability, honesty, etc.
Values can apply to groups or individuals. These conscious or unconscious ori-
entation standards are the goal of all goods. A successful life is the supreme value
of Aristotle. (Born 384 BC in Stageira, † 322 BC in Chalkis).
12
See Störig, Hans Joachim (1997), pp. 152; Hersch, Jeanne (1981), p. 274; Schuschanaschwili, G
G. (1987), pp. 855 and http://www.paradisi.de/Freizeit_und_Erholung/Kultur/Philosophie/
Artikel/22607_Seite_9.php (15.04.2015).
13
See Korff, Wilhelm (1999), p. 312 and Göbel, Elisabeth (2010), p. 155.
6 1 Basic of Ethics
Business ethics (definition) is the science of morality and ethos in the economy
(definition). The aim of this science, as part of philosophy, is to understand the rules
of the world, and in particular the behavior of human beings, which includes not
only the being of man, but also his normative expectations. In the case of business
ethics as a science, the aim is to analyze the causes and effects of ethical and unethi-
cal economic behavior and to develop approaches to improve productivity with the
help of ethics in order to provide recommendations for action for companies and
policies.
Business ethics is the ethics of the economy and thus encompasses all kinds of
human behavior at different levels of the economy. A part of this is the so-called
corporate ethics or business ethics, which deals with the ethics of enterprises (meso-
level), whereas manager ethics is concerned with the ethics of the enterprise, and
thus is attributable to the microcosm. The micro level is concerned with the indi-
vidual level, that is, the ethics of the economic operators. The macro level is con-
cerned with the ethical framework of the entire economy (economic ethics). For
example, the decision on the economic order (pure market economy, social market
economy, socialism or communism) or the laws would have to be taken on the sys-
tem level.14
Ethics in the company affects both the behavior of executives and employees
among themselves as well as against third parties, other stakeholders. For example,
customers are not allowed to be lied to about product properties and contract terms,
balances are not falsified, nor bad company news kept secret against the lenders and
shareholders. Dependencies (e.g., from vendors) should not be exploited.15 From
this point of view, the problem of ethics is a natural part of a market economy based
on the free action of individuals.
Why do we need business ethics at all? Is it not enough to let the market forces
work? Why should an economic subject be ethical, and why is ethics important to
society? Although the answer to this central question is still being elaborated in
detail, it should already be answered in principle:
This results in two conflicts of interest for the individual: the individual pursues his
own interests and conflicts with the interests of society. In extreme cases, he can
even maximize his utility at the expense of society (individual versus society). This
conflict of interests also often arises against the company as an employer (individual
versus company).
14
See Kreikebaum, H. (1996), p. 14 and Dietzfelbinger, D. (2008), p. 30.
15
See Göbel, Elisabeth (2010), p. 202.
1.3 Objective of Business Ethics 7
The moral preoccupation with which the economy is confronted is ancient. Aristotle
(384–322 BC) distinguished between natural acquisition or acquisition and enrich-
ment (chrematism), which he condemns, because it is not given, but is based on the
weakness of man. The pursuit of money becomes a self-interest, which removes
man from his natural destiny, namely the elementary need-satisfaction for a good
life. Aristotle puts virtue over the economy because man can only achieve his hap-
piness through the exercise of his virtues. The perfect virtue for Aristotle is justice,
which serves as a measure of the economy. He does not see any need for justice, as
is the case with socialism, because unequal should not be made or treated as equal.
According to Aristotle, there must also be a balancing justice, which compensates
for unlawful distributive results, for example from fraud.17
Business ethics thus puts people above the economy and assumes that the econ-
omy is to be used by man. However, there are also other opinions, according to
which the economic success justifies the means. Economy is then faced with moral-
ity. Economic success is a sign of God’s benevolence according to Calvinism.
Economic success is thus more than just morally legitimate, it indicates God’s cho-
sen. There can hardly be any greater incentive for active pursuit. Hard work and
asceticism are therefore the basis of a successful Calvinistic entrepreneurial
personality.18
16
The Moral Hazard theory comes originally from the Principal Agent Theory. Here, the incentives
for the agent to enrich themselves with rational utility maximization at the expense of the principal.
See Schnebel, Eberhard/Bienert, Margo A. (2004), p. 205.
17
See Aristoteles (1960), p. 196 und p. 358; See Aristoteles (1991), pp. 22 or 1257b und 1258b and
Schefold, Bertram (1989), p. 19–55.
18
Already Max Weber saw in the Protestant and Calvinist influence a cause for the positive eco-
nomic development in Switzerland, the Netherlands, England and parts of Germany. See Weber,
Max (1905); Ulrich, Peter (1993), pp. 1168 and Noll, Bernd (2002), p. 166.
8 1 Basic of Ethics
19
See Aristoteles (1991), pp. 22 or 1258a, b, 1059b and Aristoteles (1960), pp. 5 or 1094a, b, 1095a.
20
See Aristoteles (1991), p. 27 or 1258b.
21
See Aristoteles (1991), p. 26 or 1258b.
22
See Aristoteles (1991), pp. 22 or 1257b and 1258b.
23
See Aristoteles (1991), p. 23 or 1256b and Aristoteles (1960), pp. 8 or 1095b.
24
See Stigler, George J./Becker, Gary p. (1977); Ulrich, Peter (2001), pp. 2 and Wöhe, Günther
(2008), p. 17.
1.3 Objective of Business Ethics 9
“... there still remains, as in all other cases, a law, namely, to promote his happiness,
not out of affection, but out of duty, and so his behavior first of all has the real
moral value.”25
It follows from Kant’s considerations that, in those cases where the welfare of
others or the common good (or company) is opposed to one’s own, the welfare of
others is at least accepted as equivalent. Under no circumstances should the pursuit
of one’s own happiness, or one’s own benefit maximization be carried out at the
expense of the others, or that of general wellbeing. And when in doubt, morality,
that is the wellbeing of others, must be placed above one’s own. For this purpose,
one’s attitude is important in order to be moral and be of benefit to others.
Kant does not demand self-sacrifice, since man is explicitly to pursue his own
happiness.26 Rather, he is striving to find his own happiness in the pursuit of the hap-
piness of others. In the consistency of happiness and morality Kant sees the “highest
good” as the ultimate goal. At the same time, he sees it as a human duty to shape the
world in such a way that people can also be happy in this.27
Business ethics therefore has the important purpose of countering the common
good of the economic individual benefit maximization. This is one task of business
ethics. Another is to demonstrate the productivity advantages that result from ethi-
cal behavior for the company and society. This indirectly promotes ethical behavior.
Business ethics is thus legitimate when it asks whether the economically active
people, or the institutions and organizations, are good because they are good for the
human community. Thus, business ethics can be reduced to the question of what
economic activity or the economy as a whole or in parts brings to man, society and
business. Business ethics thus puts people above the economy and assumes that the
economy is to be used by man.
There are also different concepts in European business ethics. One can differenti-
ate into corrective, functionalist and integrative approaches. In the corrective
approach, the unethical effects of the economy are to be corrected by business ethics
(Principal Agents Horst Steinmann, Albert Löhr and Peter Koslowski). In this con-
cept economics has to be subordinated to ethics and is improved normatively.
Functional business ethics considers ethics a means of increasing the productivity of
the economy. Ethics thus becomes a means to an economic end (Karl Homann). The
same goals are pursued as the economy. Integrative business ethics by Peter Ulrich,
on the other hand, strives to reveal the ethical effects of the economy and to orient
the economy more to the life demands of the people.
25
See Kant, Immanuel (1785), p. 25 or BA13.
26
See Kant, Immanuel (1785), p. 25 or BA13 and Kant, Immanuel (1797a), p. 518 or A18.
27
See Kant, Immanuel (1788), pp. 216 or A166, 223,225, 234. “The moral law requires the highest
possible good in a world to make me the ultimate object of all behavior. This, however, I can not
hope to effect, but by the agreement of my will with the holy and benevolent maker of the world,…”
Kant, Immanuel (1788), p. 261 or A233.
10 1 Basic of Ethics
Comprehension Questions
Literature
Aristoteles. (1960). Nikomachische Ethik, Werke Band (2. Aufl.). Darmstadt. www.linke-buecher.
de/texte/…/Aristoteles%2D%2DNikomachische%20Ethik.pdf. Accessed 19 Apr 2015.
Aristoteles. (1991). Politik I, Werke (Bd. 9/I). Darmstadt: Wissenschaftliche Buchgesellschaft.
Bazerman, M. H., & Tenbrunsel, A. E. (2011). Blind spots: Why we fail to do what’s right and what
to do about it. Princeton University Press.
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(Eds.), Kalamazoo: Western Michigan University.
Dietzfelbinger. (2008). Praxisleitfaden Unternehmensethik (1st ed.). Wiesbaden: Gabler Verlag.
Frey, B. F. (2000). The impact of moral intensity on decision making in a business context. Journal
of Business Ethics, 26, 181–195.
Göbel, E. (2010). Unternehmensethik. Stuttgart: UTB.
Götzelmann, A. (2010). Wirtschaftsethik Workshop kompakt. Norderstedt: Books on Demand.
Hersch, J. (1981). Das philosophische Staunen – Einblicke in die Geschichte des Denken.
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Wilhelm Weischedel. Frankfurt a. M: suhrkamp. 1974, first edition 1785 Internet-edition (B).
http://www.korpora.org/kant/aa04.html. Accessed 17 Apr 2015.
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Literature 11
Learning Goals
Students should be able to apply the classical and modern ethics concepts to eco-
nomic action.
How should one behave morally in the economy?
1. A will help him and recommend him. B is lazy and also steals from the bank.
2. A will help him and recommend him. B will be a grateful and loyal employee.
The bank is grateful to A.
3. A says no, because he does not know B and only stands up for something he
believes in. B goes to the competition and becomes one of their best employees.
4. A says no, because A does not know B and is only willing to recommend what
he is sure is a good person. A meets B in a year in the pub again. Because of his
financial problems and the resulting bad mood, his wife left him.
5. A says no because A does not want to help B. What has A to do with B, B should
help himself. A meets B in a year in the pub again. Because of his financial prob-
lems and the resulting bad mood, his wife left him.
How should one behave morally in this situation? What is right? The above example
shows that one can see the same situation differently and can behave differently
morally.
One can focus on the mind; the motivation or intention. Accordingly, it would have
been sufficient to mention the prospective employee to the personnel department in
order to help him. Not mentioning him to the personnel department would have
been moral if it was intended to protect the bank. According to Immanuel Kant, the
“good will” and not “the ability to achieve a purpose” is decisive for an ethical
evaluation:
There is nothing in the world, or at all, to think outside of it, which, without limitation, can
be considered a good intention...1
Good will is not determined by what it affects or effects, not by virtue of its suitability for
the attainment of any superior purpose, but only by the will, in itself, good ...2
I also set aside the actions which are really duty-bound, but which are not directly affecting
men, but which they nevertheless exercise, because they are driven by a different inclina-
tion. For it is easy to distinguish whether the duty-related action has been done for duty or
self-seeking.3
For today’s society too, ethics of conviction is central. “Good will counts” and even
courts of law distinguish between premeditation and negligence. Ethics of convic-
tion also corresponds to conscience. If we have a clear conscience, we think we have
done everything right, especially since we often cannot ignore the consequences of
our actions. Thus, in cases 1 and 2, a good will exists, but the effects of the action
are negative and thus unintended.
1
See Kant, Immanuel (1797a), (C), p. 393.
2
See Kant, Immanuel (1797a), (C), p. 394.
3
See Kant, Immanuel (1785), (B), p. 397.
4
Kant, Immanuel (1785), (B), p. 397.
2.1 Classical Ethics 15
But what about the consequences? Is it enough to want good? No, unfortunately
not. Otherwise, every fanatic, every terrorist would be a morally acting man, even
though he harms many people. It would depend only on the subjective assessment
by the actor, his, in his opinion, positive attitude. Well meant is not well done.
There are people who are particularly convinced they always know what is good.
This has the consequence that they also know better for others what is good for
them. They thereby patronize others and impinge on their freedom. They accuse
others of being immoral and yet it is often a point of view. Do they really know bet-
ter? What is the right behavior? As a rule, the information on the consequences and,
in particular, the impact and the assessment of the affected persons are missing. A
basic problem with ethics is that one cannot look through people, what they have
thought about their behavior, what their motivation was. Every judge has to deal
with this problem if he is to decide whether an action with a negative effect for third
parties was intentional. The intent distinguishes murder from manslaughter and thus
also clearly the penalty changes. In addition, even the actor can often not determine
the motives that have guided him, since he can also be influenced by the
subconscious.5
People are very different and sometimes not rational, or rather emotional and
irrational for many reasons, whether predisposition, indoctrination by religion or
ideologies. Georg Wilhelm Friedrich Hegel (August 27, 1770 in Stuttgart,
Wuerttemberg, 14 November 1831 in Berlin, Prussia) lends absurdity to ethics by
saying that ultimately any crime can be justified as long as it was committed only
with good intent or with good conscience.6
In principle, an ethics of conviction would suffice to produce good behavior for
mankind if all men were to have the same perceptions and objective reason, in order
to correctly assess the consequences of their actions. Kant doubts this, which is why
in his work Metaphysics of Morals he develops a duty ethics for general human
behavior (deontological ethics, from Greek to déon: the necessary, the duty). In
addition, he developed imperatives or rules as an aid to the practical reasoning about
human coexistence: a categorical imperative and a practical imperative as well as
the publicity rule. The conviction of the agent to do good has to be added to the duti-
ful action.
Act in the way that you use humanity, both in your person and in the person of each other,
at any time not just as means but also as a purpose.7
5
See Grünewald, B. (2010), pp. 99.
6
See Hegel, Georg Wilhelm Friedrich (1820), § 140.
7
Kant, Immanuel (1797a), (C), p. 429.
16 2 Ethical Valuation Approaches
Only act according to the maxim that you can make a universal law.9
This is to be the guiding principle for ethical action. This means that the actor should
ask himself whether his behavior satisfies a principle that he also wishes to find
generally applied in society. All human beings would behave in this way, and the
agent would be exposed to the same behavior from other people. The first case cor-
responds to the question often heard as a child: “What if everyone did that?” If you
would like to take a little stone as a souvenir from the Acropolis, this might be
socially acceptable as a single action, but not if all people behave like this. Then
there would soon be no more acropolis. So there can be no exception to the rule.
The second case corresponds to the popular saying: “What you do not want to
done to you, do not do to anyone else.” Here, the agent is supposed to put them-
selves into the situation of the person affected by their behavior. If action leads to
the person to be better, the action is not only socially problem-free, but also desirable.
Lying to other people for one’s own advantage would, for example, contradict
the categorical imperative, since one does not want to be lied to. If someone in the
workplace is rude to colleagues or even mobbing, he should ask himself whether he
wants to be treated like this.
All actions related to the right of other people, whose maxim is not compatible with public-
ity, is wrong.
8
See Schmidt, Walter (1986), p. 47.
9
See Kant, Immanuel (1797a), (C), p. 421.
2.1 Classical Ethics 17
That is, the behavioral rule is such that if the agent would fear the response of his
community should his actions become public, we assume that the rights of others
are unfairly, thus disproportionately, affected. One should ask oneself whether those
affected by an action would approve of it. For example, if a pharmaceutical com-
pany conceals the side effects of a drug, the publicity rule would be violated because
the patients would not understand the dangers to their health.
10
See Bührmann, Mario (2008), p. 126 and http://www.zeno.org/Kirchner-Michaelis-1907/A/
Pflichtenlehre (15.04.2015).
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But just the Fireside, that can make a home;
None of your spindling things of modern style,
Like pins stuck through to stay the card-built pile,
It rose broad-shouldered, kindly, debonair,
Its warm breath whitening in the October air,
While on its front a heart in outline showed
The place it filled in that serene abode.