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    Business Ethics

    Basic Principles: Ethics and

    Business

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    Kohlbergs Three Levels ofMoral Development

    First Level: Preconventional !tages !tage "ne: punishment and obedience

    orientation !tage T#o: instrumental and relative

    orientation !econd Level: $onventional !tages

    !tage Three: interpersonal concordanceorientation

    !tage Four: la# and order orientation Third Level: Postconventional !tages

    !tage Five: social contract orientation !tage !i%: universal principles orientation

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    Kohlbergs Three Levels ofMoral Development

    &elps in understanding ho# our moral capacities develop 'ot ever(one passes through all the stages Moral reasoning at later stage is better that at earlier

    stages) !ee things from #ider and fuller perspective

    Better #a(s of *ustif(ing their decisions Basis of *usti+cation is impartial and reasonable and thattherefore can appeal to an( reasonable person

    $riticism Later stage perspectives are not al#a(s morall( better then

    the earlier stages Face to ade,uatel( trace out the pattern of development of

    #omen Females tend to see themselves as part of a #ave ofrelationships #ith famil( and friends- #hen females encountermoral issues. the( are concerned #ith sustaining theserelationships. avoiding hurt to others in these relationships.and caring for their #ellbeing) For #omen moralit( isprimaril( a matter of /caring0 and /being responsible0)

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    The &ein1 Dilemma

    /&ein1s #ife is d(ing from a serious disease) Thereis a drug that might save her. a drug that has beendeveloped b( a pharmacist living in the same to#nas &ein1) But #hilst the drug is e%pensive. the

    pharmacist is charging ten times #hat it cost him toma2e) &ein1 goes to ever(one he 2no#s to tr( andborro# the mone( for the drug. but can onl( raisehalf the amount he needs) &ein1 goes to the

    pharmacist and e%plains his situation. as2ing thepharmacist to reduce the price) The pharmacistrefuses) &ein1 gets desperate and brea2s into thepharmac( to steal the drug)0

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    Kohlbergs Moral 3udgement 4ntervie#s

    5se of semistructured intervie# techni,ue

    !hould &ein1 have stolen the drug6

    Why should 7 shouldnt &ein1 have stolen

    the drug6

    !hould &ein1 be punished for #hat he did6

    Why should 7 shouldnt &ein1 be

    punished6 Focus on *usti+cations given rather than

    course of action ta2en)

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    8ns#ers to 9&ein1: PreconventionalLevel

    !tage : Punishment and "bedience "rientation

    For: 4f (ou let (our #ife die. (ou #ill get intotrouble) 8gainst: 4f (ou steal the drug. (ou #ill go

    to *ail)

    4gnores &ein1s intentions and focuses onconse,uences

    !tage ;: 4nstrumental &edonism

    For: 4f (ou did get caught. (ou could al#a(s pa(the pharmacist bac2) 8gainst: The pharmacist

    *ust #ants to ma2e a pro+t li2e an(one else)

    Focuses on individual instrumental needs 7 goals

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    8ns#ers to 9&ein1: $onventional Level

    !tage : !ociet( Maintaining "rientation

    For: The pharmacist is leading the #rong 2ind oflife and it is &ein1s dut( to steal the drug)8gainst: 4ts natural for &ein1 to #ant to steal thedrug. but it is still al#a(s #rong to steal)

    !ociet(s norms become paramount

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    8ns#ers to &ein1: PostconventionalLevel

    !tage ?: $ontract 7 4ndividual @ights 7Democrac( For: 4t might be against the la#. but an(one in

    &ein1s position #ould steal the drug) 8gainst:

    !tealing the drug might help. but the ends dont*ustif( the means)

    3udgements no longer 9blac2 and #hite)

    !tage A: 5niversal Ethical Principle "rientation

    For: Bet#een obe(ing a la# and saving a life. savinga life is the higher principle) 8gainst: 4f &ein1 stealsthe drug. there might not be enough to go aroundfor ever(one else)

    4ndividual conscience. sanctit( of life)

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    Moral @easoning

    The reasoning process b( #hich humanbehaviors. institutions. or policies are

    *udged to be in accordance #ith or inviolation of moral standards)

    Moral reasoning al#a(s involves: 8n understanding of #hat reasonable moral

    standards re,uire. prohibit. value. or condemn-and

    Evidence or information that sho#s that aparticular person. polic(. institution orbehavior has the 2ind of features that thesemoral standard re,uires. prohibit. value. orcondemn )

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    Moral @easoning

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    Moral @easoning

    Moral reasoning involves: The moral standards b( #hich #e evaluate things Factual 4nformation about #hat is being evaluated 8 moral *udgment about #hat is being evaluated)

    4n man( cases one or more of the three components involved are note%pressed)

    Failure to ma2e ones moral standard e%plicit leaves one vulnerable to allthe problems created b( basing critical decision on une%aminedassumptions)

    The assumptions ma( be inconsistent. ma( have no rational basis. andma( lead the decision ma2er into un#ittingl( ma2e decisions #ithundesirable conse,uences)

    To uncover the implicit moral standard one has to retrace the personsmoral reasoning bac2 to its bases)

    Chat factual information does the person accepts as evidence for this moral*udgment. and Chat moral standards are needed to relate this factual information logicall( to the

    moral *udgment)

    Developed moral standards incorporate ,uali+cations. e%ceptions. andrestrictions that limit there scope) The( ma( also be combined in various#a(s #ith other important standards)

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    Four !teps Leading to EthicalBehavior

    !tep "ne: @ecogni1ing a situation is anethical situation) @e,uires framing it as one that re,uires ethical

    reasoning

    !ituation is li2el( to be seen as ethical #hen: involves serious harm that is concentrated. li2el(.

    pro%imate. imminent. and potentiall( violates ourmoral standards

    "bstacles to recogni1ing a situation: Euphemistic labeling. *ustif(ing our actions.

    advantageous comparisons. displacement ofresponsibilit(. diusion of responsibilit(. distorting theharm. and dehumani1ation. and attribution of blame)

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    Four !teps Leading to EthicalBehavior

    !tep T#o: 3udging the ethical courseof action)

    @e,uires moral reasoning that applies

    our moral standards to the information#e have about a situation)

    @e,uires reali1ing that information about

    a situation ma( be distorted b( biasedtheories about the #orld. about others.and about oneself)

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    Four !teps Leading to EthicalBehavior

    !tep Three: Deciding to do the ethicalcourse of action) Deciding to do #hat is ethical can be

    inGuenced b(:The culture of an organi1ationHpeoples

    decisions to do #hat is ethical are greatl(inGuenced b( their surroundings)

    Moral seductionHorgani1ations can also

    generate a form of /moral seduction0 that cane%ert subtle pressures that can graduall( leadan ethical person into decisions to do #hat heor she 2no#s is #rong)

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    Four !teps Leading to EthicalBehavior

    !tep Four: $arr(ing out the ethicaldecision)

    Factors that inGuence #hether a personcarries out their ethical decision include:

    "nes strength or #ea2ness of #ill

    "nes belief about the locus of control ofones actions

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    8nal(1ing Moral @easoning

    Logical logic of arguments used to establish a moral*udgment be rigorousl( e%amined all the unspo2en moraland factual assumptions be made e%plicit and bothassumption and premises be displa(ed and sub*ected tocriticism)

    Factual evidence cited in support of a persons *udgementmust be accurate. relevant. and complete) Moral standard involved must be consistent

    $onsistent #ith each other and #ith the other standards andbeliefs the person holds)

    "ne must be #illing to accept the conse,uences of appl(ing

    ones moral standards consistentl( to all persons in similarcircumstances) T#o situations are /relevantl( similar0 #hen all those factors

    that have a bearing on the *udgement that an action is rightor #rong in one situation are also present in the othersituation)

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    Moral @esponsibilit( andBlame

    Determining #hether a person is morall(responsible for an in*ur( or for a #rong-

    3udgment about a persons moralresponsibilit( for #rongdoing is that the

    person should be blamed. punished. orforced to pa( restitution)

    Distinct from 9moral obligation or 9moraldut()

    People are not al#a(s responsible forin*uries the( inGict on others) $aused the in*ur( and did so 2no#ingl( and

    freel()

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    Moral @esponsibilit(

    Three $omponents of Moral @esponsibilit( Person caused or helped cause the in*ur(. or failed to

    prevent it #hen he or she could and should havecausalit()

    "missions- po#er to prevent the in*uries. and should have doneso)

    For some reason the person has an obligation to prevent suchin*ur( special relationship

    Person did so 2no#ing #hat he or she #as doing2no#ledge)

    Deliberatel( sta(s ignorant of a certain matter to escape liabilit( 'egligentl( fails to ta2e ade,uate steps to become informed

    about a matter that is of 2no#n importance) 4gnorance of relevant facts or of relevant moral standards)

    Person did so of his or her o#n free #ill: acts deliberatel(or purposefull( and his actions are not result of someuncontrollable mental impulse or e%ternal force) freedom

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    Factors that Mitigate Moral@esponsibilit(

    Minimal contribution 4n general. the less ones actual actions contribute to the

    outcome of an act. the less one is morall( responsible for thatoutcome)

    5ncertaint( 8 person ma( be fairl( convinced that doing something is

    #rong (et ma( still be doubtful about some important facts.or ma( have doubts about the moral standards involved. ordoubts about ho# seriousl( #rong the action is)

    DiIcult( 8 person ma( +nd it diIcult to avoid a certain course of

    action because he or she is sub*ected to threats or duress ofsome sort or because avoiding that course of action #ill

    impose heav( costs on the person) !eriousness

    !eriousness of the #rong need to be ta2en into consideration#hile deciding e%tent to #hich these mitigatingcircumstances can diminish a persons responsibilit( for ablame)

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    $orporate @esponsibilit(

    $orporate acts normall( are brought about b( several actions oromissions or man( dierent people all cooperating together so asthere lin2ed actions and omissions *ointl( produce the corporate act)

    Jie# those #ho 2no#ingl( and freel( did #hat #as necessar( toproduce the corporate act are each morall( responsible)

    Bringing about #rongful act #ith the help of others does not dier in

    a morall( signi+cant #a( from deliberatel( bringing about a #rongfulact #ith the help of inanimate instruments) Jie# ; Chen an organi1ed group such as a corporation acts

    together there corporate act ma( be described as the act of thegroup and conse,uentl( the group and not the individuals #ho ma2eup the group must be held responsible for the act)

    The la# t(picall( attribute the acts of managers to the corporation

    and not to the managers as individual) Emplo(ees of large corporations can not be said to have /2no#ingl(

    and freel( *oined their actions together0 Bureaucratic rules andstructures

    Depending on the seriousness of the act. the mitigating factorsdiminishes a persons moral responsibilit()

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    !ubordinates @esponsibilit(

    Chen a subordinate acts on the orders of alegitimate superior. the subordinate isabsolved of all the responsibilit( for that act:onl( the superior is morall( responsible for the

    #rongful act even though the subordinate #asthe agent #ho carried it out)

    There are limits to an emplo(ees obligation toobe( an order to do #hat is immoral) !uperior

    can put signi+cant economic pressure on anemplo(ee and such pressure can mitigate theemplo(ees responsibilit(. but the( do nottotall( eliminate it)

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