10/13/2014 BUSINESS ETHICS first, second and third session Gianfranco Rusconi September 18-19 and October 2nd 2014 AMORALITY OF BUSINESS? • 1) STEREOTYPE • 2) AUTONOMY OR FREE ZONE OF ETHICS=AMORALITY? • 3) SMITH, FRIEDMAN, MAXIMIZATION AND MORALITY 1
10/13/2014 AN ALMOST COMMON GROUND ALSO PEOPLE THINKING THAT MAXIMIZING PROFITS IS THE • ONLY (ALSO SOCIAL) DUTY FOR BUSINESS, MORE OR LESS IMPLICITLY, RECOGNIZE AT LEAST THAT: 1) IT EXISTS A SORT OF MORAL FRAME (PLUS OR MINUS FLEXIBLE ACCORDING TO THE VARIOUS PERSONAL ETHICS VIEWS) TO COMPLY WITH; 2) THE LAW HAS TO BE RESPECTED; 3) THE RICHNESS PRODUCING PROCESS (EMPLOYMENT, KNOWLEDGE AND WEALTH DIFFUSION) IS MORALLY APPRECIABLE. NATURE OF BUSINESS ETHICS • BUSINESS ETHICS STUDIES AND APPLICATIONS WERE BORNE BECAUSE OF BEING SCHOLARS AND PRACTITIONERS AWARE THAT TO MAKE EXPLICIT ETHICS IN BUSINESS (AND ECONOMICS) IS NOT SO IMMEDIATE AND SIMPLE, ASKING FOR INTERDISCIPLINARY SKILLS. 2
10/13/2014 DIFFUSION OF BUSINESS ETHICS • BUSINESS ETHICS DIFFUSED AFTER ALSO IN EUROPE, THOUGH WITH SOME DIFFERENT CHARACTERISTICS FROM USA- CANADA, • ALSO WHEN IN THE MORE RECENT TIMES, DIFFERENT WORLD’S AREAS ARE GETTING BETTER HOMOGENOUS THANKS TO CONTINUOUS EXCHANGE OF PAPERS, CONFERENCES AND EXPERIENCES. BUSINESS ETHICS AND SUBSECTORS • IT COULD BE USEFUL TO DEFINE SUBSECTORS, THAT, THOUGH ALWAYS INTERCONNECTED IN BUSINESS ETHICS STUDIES, COULD PRESENT MORE SPECIFIC STUDIES, FOR EXAMPLES DISTINGUISHING ETHICS OF MANAGEMENT AND BUSINESS ADMINISTRATION FROM ETHICS OF ECONOMICS; • TO DO A FURTHER DIVISION, INTRODUCING (ALWAYS SAVING BASIC KNOWLEDGE AND GENERAL INTERCONNECTIONS WITHIN BUSINESS ETHICS) MORE SPECIFIC STUDIES: ETHICS OF MARKETING OR ETHICS OF FINANCE, LABOUR AND ACCOUNTING. 3
10/13/2014 NEED OF BUSINESS ETHICS • HISTORY • SCANDALS • BAD ETHICS AND AGENCY COSTS • FALSE ACCOUNTING, SUBPRIME, PROBLEM OF DERUVATIVES, HUMAN RIGHTS…..DAMAGES BUSINESS ETHICS AND SCANDALS • LOCKHEED AND ALIA ’70s, FOREIGN CORRUPTING PRACTICES ACT (1977), BIG PRESSURE TO BUSINESS ETHICS DEVELOPMENT • BEFORE IN USA AFTER IN EUROPE: “BIRTH” OF SOCIETY OF BUSINESS ETHICS (NORDAMERICAN, SBE) AND EUROPEAN BUSINESS ETHICS NETWORK ( EBEN), other (EABIS,…international…) 4
10/13/2014 BUSINESS ETHICS AND SCANDALS 2 • AND BUSINESS ETHICS IS ALWAYS MORE AND MORE CLAIMED, BUT …. • ENRON, PARMALAT (2000): UNEXPECTED BANKRUPCIES WITH FALSE ACCOUNTING • BIG FINANCIAL CRISES (2007-8): THE (MORE OR LESS) COLLAPSE OF FINANCIAL SYSTEM IN MANY COUNTRIES: USA, IRELAND, UK. SPAIN NOVELTY OF BUSINESS ETHICS • TO MAKE ETHICS EXPLICIT IS NOT SO EASY AND IMMEDIATE: DILEMMAS, DIFFERENCES OF PRINCIPLES, ECC. • PAGE 3 OF MATERIALS 1 5
10/13/2014 IS FIRM A MORAL PERSON? • TWO EXTREMES: • FRENCH: autonomous Moral «Person» , not a «sum» of Moral Persons • LADD: Formal organization «as all sort of bureaucracies, private and public», big companies included IS A FIRM A MORAL PERSON?2 • MORE INTERMEDIATE • GOODPASTER AND MATTHEW: • Firms have some characteristics of human person, but they have not a conscience. We can speak to a company like a person by analogy, also when we can not think to a company- person according to French • 6
10/13/2014 ETHICS AND FIRM SYSTEM THEORY • See page 7 of materials RELATIVISM AND OBIECTIVISM • INDIVIDUAL EXTREME RELATIVISM • CULTURAL (MODERATE) RELATIVISM • OBJECTIVISM • See materials 7
10/13/2014 ONLY SOME SHORT REFERENCES • 1) Business Ethics and religion • 2) Business Ethics and law • See materials THREE BASIC IDEAS OF ETHICS TO APPLY TO BUSINESS ETHICS • UTILITARIANISM (CONSEQUENTIALISM): • DEONTOLOGY • VIRTUE ETHICS 8
10/13/2014 INTRODUCTION TI BUSINESS ETHICS • To help discussion PAPER TO READ TO PREPARE FOURTH AND FIFTH LESSONS • Andre Gustafson: Utilitarianism • and Business Ethics • Norman Bowie: A Kantian Approach to Business Ethics • Robert Solomon: Corporate Roles, Personal Virtue: An Aristotelean Approach to Business Ethics 9
10/13/2014 UTILITARIANISM • SOMETHING IS GOOD IF IT IS USEFUL (BENTHAM IN XIX CENTURY), PROBLEMS: FOR WHOM? FOR ALL? FOR THE SINGLE? FOR THE MAJORITY? • AND PRINCIPLES, HUMAN RIGHTS, ECC. • VARIOUS FORMS OF UTILITARIANISM (ACT OR RULE UTILITARIANISM) • CONNECTION WITH CONSEQUENTIALISM: SOMETHING IS GOOD IF IT HAS USEFUL CONSEQUENCES; CONNECTION WITH PRAGMATISTIC PHILOSOPHY DEONTOLOGY • ETHICS IN ALL (AND ALSO IN BUSINESS) IS RESPECTING SOME GENERAL PRINCIPLES. • FOR EXAMPLE: KANT • ALSO BIG AND DIFFUSED RELIGIONS HAVE SOME PRINCIPLES AS KEY ELEMENTS 10
10/13/2014 VIRTUE ETHICS • TO BE ETHICAL IN BUSINESS IS NOT ONLY RESPECTING SOME RULES AND PRINCIPLES, BUT BECOME ALWAYS MORE AND MORE VIRTUOUS AND EXCELLENT BY PRACTICING VIRTUE (INFLUENCE OF ARISTOTLE, ETICA NICOMACHEA) Papers to analyse comment • In addition prepare the papers of: • We comment and in next two lessons: • A kantian approach to business ethics (Bowie); Corporate Roles, Personal Virtues….(Solomon) ; Gustafson about utilitarianism. To grasp essential not to study on memory….NOW I GIVE YOU SOME INSIDES. • A) central points of this paper B) in your opinion what are possible consequences for ethics or for business of the applications of these papers? • The last lesson will be an inside about stakeholder theory 11
10/13/2014 INTRODUCTION TO BUSINESS ETHICS by Donaldson and Wehrane • ALL THESE PAPERS ARE AIMED AT BETTER EXAMINE AND GRASP CONCEPTS, ISSUES AND DILEMMAS • First impressions of students after reading this paper:……… • My observations: • What is the nature of an ethical action? • The BASF investment in South Carolina: pollution vs. employment in a poor area, economic and ethical dilemma for BASF INTRODUCTION TO BUSINESS ETHICS by Donaldson and Wehrane 2 • 3 options • To build with minimal pollution control? • To build with maximal pollution control? • Do not build • Consequences:Consequentialism: Ethical Egoism and Utilitarianism • Duties: Deontology (Kantianis and Contractarianism) 12
10/13/2014 INTRODUCTION TO ETHICAL REASONING • EXAM AND DISCUSSION directly on the paper in the classroom 13
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