BUSINESS ETHICS

On page 70-73, outline the case Moral Decision Making: A Practical Approach – read this section and describe, in numbered paragraphs. the steps and major considerations covered. This will give you a reference or practical framework to use.

82088_index_ptg01_465-486.indd 481 9/3/15 9:08 AM

 

 

William H. Shaw San Jose State University

BUS INESS ETH ICS

9T H E DI T ION

82088_FM_ptg01_i-x.indd 1 9/4/15 11:02 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

82088_index_ptg01_465-486.indd 481 9/3/15 9:08 AM

This is an electronic version of the print textbook. Due to electronic rights restrictions,

some third party content may be suppressed. Editorial review has deemed that any suppressed

content does not materially affect the overall learning experience. The publisher reserves the right

to remove content from this title at any time if subsequent rights restrictions require it. For

valuable information on pricing, previous editions, changes to current editions, and alternate

formats, please visit www.cengage.com/highered to search by ISBN#, author, title, or keyword for

materials in your areas of interest.

portant otice e ia content reference ithin the pro ct escription or the pro ct te t a not e availa le in the e oo version

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

© 2017, 2014, 2011, Cengage Learning

ALL RIGHTS RESERVED. No part of this work covered by the copyright herein may be reproduced, transmitted, stored, or used in any form or by any means graphic, electronic, or mechanical, including but not limited to photocopying, recording, scanning, digitizing, taping, web distribution, information networks, or information storage and retrieval systems, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the publisher.

Library of Congress Control Number: 2015948749

Student Edition:

ISBN: 978-1-305-58208-8

Loose-leaf Edition:

ISBN: 978-1-305-87538-8

Cengage Learning 20 Channel Center Street Boston, MA 02210 USA

Cengage Learning is a leading provider of customized learning solutions with employees residing in nearly 40 different countries and sales in more than 125 countries around the world. Find your local representative at www.cengage.com.

Cengage Learning products are represented in Canada by Nelson Education, Ltd.

To learn more about Cengage Learning Solutions, visit www.cengage.com.

Purchase any of our products at your local college store or at our preferred online store www.cengagebrain.com.

Business Ethics, Ninth Edition William H. Shaw

Product Director: Paul Banks

Product Manager: Debra Matteson

Content Developer: Jessica Wang-Strykowski

Product Assistant: Michelle Forbes

Marketing Manager: Sean Ketchem

IP Analyst: Alexandra Ricciardi

IP Project Manager: Betsy Hathaway

Manufacturing Planner: Sandee Milewski

Art and Design Direction, Production Management, and Composition: Lumina Datamatics, Inc.

Cover and Interior Image: Fuse/Getty Images

Printed in the United States of America Print Number: 01 Print Year: 2015

For product information and technology assistance, contact us at Cengage Learning Customer & Sales Support, 1-800-354-9706

For permission to use material from this text or product, submit all requests online at www.cengage.com/permissions.

Further permissions questions can be emailed to permissionrequest@cengage.com.

82088_FM_ptg01_i-x.indd 2 9/4/15 5:46 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

WCN: 02-200-203

 

 

iii

PREFACE viii

PA RT ON E | MOR A L PH I LOSOPH Y A N D BUSI N E S S 1

CHA PTER 1 THE N ATURE OF MOR AL IT Y 1 Ethics 3 Moral versus Nonmoral Standards 5 Religion and Morality 11 Ethical Relativism 13 Having Moral Principles 15 Morality and Personal Values 19 Individual Integrity and Responsibility 20 Moral Reasoning 24 Study Corner 31 Case 1.1: Made in the U.S.A.—Dumped in Brazil, Africa, Iraq . . . 32 Case 1.2: Loose Money 35 Case 1.3: Just Drop off the Key, Lee 36 Case 1.4: The A7D Affair 39

CHA PTER 2 NORMAT IV E THEOR IES OF E TH ICS 4 3 Consequentialist and Nonconsequentialist Theories 45 Egoism 46 Utilitarianism 49 Kant’s Ethics 56 Other Nonconsequentialist Perspectives 62 Utilitarianism Once More 68 Moral Decision Making: A Practical Approach 70 Study Corner 73 Case 2.1: Hacking into Harvard 74 Case 2.2: The Ford Pinto 77 Case 2.3: Blood for Sale 80

CONTENTS

82088_FM_ptg01_i-x.indd 3 9/4/15 11:02 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

iv CONTENTS

CHA PTER 3 JUST ICE AND ECONOMIC D ISTR IBUT ION 83 The Nature of Justice 86 The Utilitarian View 89 The Libertarian Approach 93 Rawls’s Theory of Justice 100 Study Corner 109 Case 3.1: Eminent Domain 110 Case 3.2: Battling over Bottled Water 112 Case 3.3: Poverty in America 114

PA RT T WO | A M E R IC A N BUSI N E S S A N D ITS BA SIS 117

CHA PTER 4 THE N ATURE OF CA P ITAL ISM 117 Capitalism 119 Key Features of Capitalism 122 Two Arguments for Capitalism 124 Criticisms of Capitalism 128 Today’s Economic Challenges 136 Study Corner 142 Case 4.1: Catastrophe in Bangladesh 143 Case 4.2: Licensing and Laissez Faire 145 Case 4.3: One Nation under Walmart 148 Case 4.4: A New Work Ethic? 151 Case 4.5: Casino Gambling on Wall Street 152 Case 4.6: Paying College Athletes 154

CHA PTER 5 CORPOR AT IONS 156 The Limited-Liability Company 158 Corporate Moral Agency 160 Rival Views of Corporate Responsibility 164 Debating Corporate Responsibility 171 Institutionalizing Ethics within Corporations 176 Study Corner 183 Case 5.1: Yahoo in China 184 Case 5.2: Drug Dilemmas 186 Case 5.3: Free Speech or False Advertising? 189 Case 5.4: Corporations and Religious Faith 191 Case 5.5: Charity to Scouts? 193 Case 5.6: Corporate Taxation 195

82088_FM_ptg01_i-x.indd 4 9/4/15 11:02 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CONTENTS v

PA RT T H R E E | BUSI N E S S A N D SOCI ET Y 197

CHA PTER 6 CONSUMERS 197 Product Safety 199 Other Areas of Business Responsibility 211 Deception and Unfairness in Advertising 220 The Debate over Advertising 230 Study Corner 234 Case 6.1: Breast Implants 235 Case 6.2: Hot Coffee at McDonald’s 237 Case 6.3: Sniffing Glue Could Snuff Profits 239 Case 6.4: Closing the Deal 240 Case 6.5: The Rise and Fall of Four Loko 243

CHA PTER 7 THE EN V IRONMENT 24 5 Business and Ecology 249 The Ethics of Environmental Protection 252 Achieving Our Environmental Goals 258 Delving Deeper into Environmental Ethics 263 Study Corner 271 Case 7.1: Hazardous Homes in Herculaneum 272 Case 7.2: Poverty and Pollution 275 Case 7.3: The Fordasaurus 277 Case 7.4: The Fight over the Redwoods 279 Case 7.5: Palm Oil and Its Problems 282

PA RT FOU R | T H E ORG A N I Z AT ION A N D T H E PEOPL E I N IT 284

CHA PTER 8 THE WORK PL ACE (1) : BAS IC ISSUES 28 4 Civil Liberties in the Workplace 285 Hiring 291 Promotions 297 Discipline and Discharge 299 Wages 303 Labor Unions 307 Study Corner 316 Case 8.1: AIDS in the Workplace 317 Case 8.2: Web Porn at Work 319

82088_FM_ptg01_i-x.indd 5 9/4/15 11:02 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

vi CONTENTS

Case 8.3: Speaking Out about Malt 320 Case 8.4: Have Gun, Will Travel . . . to Work 321 Case 8.5: Union Discrimination 324

CHA PTER 9 THE WORK PL ACE ( 2 ) : TODAY’S CHALLENGES 326 Organizational Influence in Private Lives 327 Testing and Monitoring 332 Working Conditions 338 Redesigning Work 347 Study Corner 351 Case 9.1: Unprofessional Conduct? 352 Case 9.2: Testing for Honesty 353 Case 9.3: She Snoops to Conquer 356 Case 9.4: Protecting the Unborn at Work 357 Case 9.5: Swedish Daddies 360

CHA PTER 10 MOR AL CHOICES FAC ING EMPL OY EES 363 Obligations to the Firm 364 Abuse of Official Position 368 Bribes and Kickbacks 374 Gifts and Entertainment 378 Conflicting Obligations 380 Whistle-Blowing 383 Self-Interest and Moral Obligation 387 Study Corner 391 Case 10.1: Changing Jobs and Changing Loyalties 392 Case 10.2: Conflicting Perspectives on Conflicts of Interest 393 Case 10.3: Inside Traders or Astute Observers? 395 Case 10.4: The Housing Allowance 397 Case 10.5: Ethically Dubious Conduct 398

CHA PTER 11 JOB D ISCR IMINAT ION 4 01 The Meaning of Job Discrimination 403 Evidence of Discrimination 405 Affirmative Action: The Legal Context 410 Affirmative Action: The Moral Issues 415 Comparable Worth 418 Sexual Harassment 420

82088_FM_ptg01_i-x.indd 6 9/4/15 11:02 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CONTENTS vii

Study Corner 424 Case 11.1: Minority Set-Asides 425 Case 11.2: Hoop Dreams 427 Case 11.3: Raising the Ante 429 Case 11.4: Consenting to Sexual Harassment 430 Case 11.5: Facial Discrimination 433

SUGGESTIONS FOR FURTHER READING 435

NOTES 439

INDEX 465

82088_FM_ptg01_i-x.indd 7 9/4/15 11:02 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

viii

PREFACE It is difficult to imagine an area of study that has greater importance to society or greater relevance to students than business ethics. As this text enters its ninth edition, business ethics has become a well- established academic subject. Most colleges and universities offer courses in it, and scholarly interest continues to grow.

Yet some people still scoff at the idea of business ethics, jesting that the very concept is an oxymoron. To be sure, recent years have seen the newspapers filled with lurid stories of corporate misconduct and felo- nious behavior by individual businesspeople, and many suspect that what the media report represents only the proverbial tip of the iceberg. However, these scandals should prompt a reflective person not to make fun of business ethics but rather to think more deeply about the nature and purpose of business in our society and about the ethical choices individuals must inevitably make in their business and professional lives.

Business ethics has an interdisciplinary character. Questions of economic policy and business practice intertwine with issues in politics, sociology, and organizational theory. Although business ethics remains anchored in philosophy, even here abstract questions in normative ethics and political philosophy mingle with analysis of practical problems and concrete moral dilemmas. Furthermore, business ethics is not just an academic study but also an invitation to reflect on our own values and on our own responses to the hard moral choices that the world of business can pose.

GOAL S, ORG ANI Z AT ION, AND TOPICS Business Ethics has four goals: to expose students to the important moral issues that arise in various business contexts; to provide students with an understanding of the moral, social, and economic environ- ments within which those problems occur; to introduce students to the ethical and other concepts that are relevant for resolving those problems; and to assist students in developing the necessary reasoning and analytical skills for doing so. Although the book’s primary emphasis is on business, its scope extends to related moral issues in other organizational and professional contexts.

The book has four parts. Part One, “Moral Philosophy and Business,” discusses the nature of morality and presents the main theories of normative ethics and the leading approaches to questions of economic justice. Part Two, “American Business and Its Basis,” examines the institutional foundations of business, focusing on capitalism as an economic system and the nature and role of corporations in our society. Part Three, “Business and Society,” concerns moral problems involving business, consumers, and the natural environment. Part Four, “The Organization and the People in It,” identifies a variety of ethical issues and moral challenges that arise out of the interplay of employers and employees within an organization, includ- ing the problem of discrimination.

82088_FM_ptg01_i-x.indd 8 9/4/15 11:02 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

PREFACE ix

Case studies enhance the main text. These cases vary in kind and in length, but they are all designed to enable instructors and students to pursue further some of the issues discussed in the text and to analyze them in more specific contexts. The case studies should provide a lively springboard for classroom discus- sions and the application of ethical concepts.

Business Ethics covers a wide range of topics relevant to today’s world. Three of these are worth drawing particular attention to.

Business and Globalization The moral challenges facing business in today’s globalized world economy are well represented in the book and seamlessly integrated into the chapters. For example, Chapter 1 discusses ethical relativism, Chapter 4 outsourcing and globalization, and Chapter 8 overseas bribery and the Foreign Corrupt Practices Act; and there are international examples or comparisons throughout the book. Moreover, almost all the basic issues discussed in the book (such as corporate responsibility, the nature of moral reasoning, and the value of the natural world—to name just three) are as crucial to making moral decisions in an international business context as they are to making them at home. In addition, cases 1.1, 2.3, 4.1, 5.1, 5.2, 6.3, 7.2, 7.5, 9.5, and 10.4 deal explicitly with moral issues arising in today’s global economic system.

The Environment Because of its ongoing relevance and heightened importance in today’s world, an entire chapter, Chapter 7, with five case studies is devoted to this topic. In particular, the chapter highlights recent environmental disasters, the environmental dilemmas and challenges we face, and their social and business costs, as well as the changing attitude of business toward the environment and ecology.

Health and Health Care Far from being a narrow academic pursuit, the study of business ethics is relevant to a wide range of important social issues—for example, to health and health care, which is currently the subject of much discussion and debate in the United States. Aspects of this topic are addressed in the text and developed in the following cases: 2.3: Blood for Sale, 4.2: Licensing and Laissez Faire, 5.2: Drug Dilemmas, 6.1: Breast Implants, 8.1: AIDS in the Workplace, and 9.4: Protecting the Unborn at Work.

CHANGES IN TH IS ED IT ION YOUR TEXTBOOK

Instructors who have used the previous edition will find the organization, general content, and overall design of the book familiar. However, the text has been revised throughout, as examples and information have been updated, and the clarity of its discussions and the accuracy of its treatment of both philosophical and empirical issues have been improved. At all times the goal has been to provide a textbook that students will find clear, understandable, and engaging.

Fifty-two case studies—more than ever before—now supplement the main text. Five of them are brand new; a number of the others have been revised or updated. Of the cases that are new to this edi- tion, Case 1.2, “Loose Money,” deals with whether to return cash that has been dropped to its owner;

82088_FM_ptg01_i-x.indd 9 9/4/15 11:02 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

x PREFACE

Case 4.1, “Catastrophe in Bangladesh,” concerns responsibility for a factory collapse that killed over a thou- sand workers making clothing for Western firms; Case 4.6, “Paying College Athletes,” examines the move to give athletes a greater share of the revenues from college sports; Case 5.4, “Corporations and Religious Faith,” deals with the claim that corporations have a right to do business in a way that reflects the religious beliefs of their owners; and Case 5.6, “Corporate Taxation,” discusses tax avoidance by large corporations.

MINDTAP

MindTap® Ethics for Shaw’s Business Ethics is a digital learning solution that helps instructors engage and transform today’s students into critical thinkers. Through paths of dynamic assignments and applica- tions that can personalized by instructors (including ethics simulations, quizzing and BBC videos), real-time course analytics and an accessible reader, MindTap helps turn cookie cutter into cutting edge, apathy into engagement, and memorizers into higher-level thinkers.

WAYS OF US ING THE BOOK A course in business ethics can be taught in a variety of ways. Instructors have different approaches to the subject, different intellectual and pedagogical goals, and different classroom styles. They emphasize different themes and start at different places. Some of them may prefer to treat the foundational questions of ethical theory thoroughly before moving on to particular moral problems; others reverse this priority. Still other instructors frame their courses around the question of economic justice, the analysis of capitalism, or the debate over corporate social responsibility. Some instructors stress individual moral decision making, others social and economic policy.

Business Ethics permits teachers great flexibility in how they organize their courses. A wide range of theoretical and applied issues are discussed; and the individual chapters, the major sections within them, and the case studies are to a surprising extent self-contained. Instructors can thus teach the book in what- ever order they choose, and they can easily skip or touch lightly on some topics in order to concentrate on others without loss of coherence.

ACKNOWLEDGMENTS I wish to acknowledge my great debt to the many people whose ideas and writing have influenced me over the years. Philosophy is widely recognized to involve a process of ongoing dialogue. This is nowhere more evident than in the writing to textbooks, whose authors can rarely claim that the ideas being synthesized, organized, and presented are theirs alone. Without my colleagues, without my students, and without a larger philosophical community concerned with business and ethics, this book would not have been possible.

I particularly want to acknowledge my debt to Vincent Barry. Readers familiar with our textbook and reader Moral Issues in Business1 will realize the extent to which I have drawn on material from that work. Business Ethics is, in effect, a revised and updated version of the textbook portion of that collaborative work, and I am very grateful to Vince for permitting me to use our joint work here.

1William H. Shaw and Vincent Barry, Moral Issues in Business, 13th ed. (Boston, Mass.: Cengage Learning, 2016).

82088_FM_ptg01_i-x.indd 10 9/4/15 11:02 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

INTRODUCTION

1

end. Even with the company’s financial demise fast approach- ing, Kenneth Lay was still recommending the company’s stock to its employees—at the same time that he and other execu- tives were cashing in their shares and bailing out.

Enron’s crash cost the retirement accounts of its employ- ees more than a billion dollars as the company’s stock fell from the stratosphere to only a few pennies a share. Outside

investors lost even more. The reason Enron’s collapse caught investors by surprise—the company’s market value was $28 billion just two months before its bankruptcy—was that Enron had always made its financial records and accounts as opaque as possible. It did this by creating a Byzantine financial structure of off-balance-sheet special- purpose entities—reportedly as many as 9,000—that were supposed to be separate and independent from the main company. Enron’s board of direc-

tors condoned these and other dubious accounting practices and voted twice to permit executives to pursue personal interests that ran contrary to those of the company. When Enron was obliged to redo its financial statements for one three-year period, its profits dropped $600 million and its debts increased $630 million.

SOMETIMES THE RICH AND MIGHTY FALL. Take Kenneth Lay, for example. Convicted by a jury of conspiracy and multiple counts of fraud, he had been chairman and CEO of Enron until that once mighty company took a nose dive and crashed. Founded in the 1980s, Enron soon became a domi- nant player in the field of energy trading, growing rapidly to become America’s seventh biggest company. Wall Street loves growth, and Enron was its darling, ad- mired as dynamic, innovative, and—of course—profitable. Enron stock ex- ploded in value, increasing 40 percent in a single year. The next year it shot up 58 percent and the year after that an unbelievable 89 percent. The fact that nobody could quite understand exactly how the company made its money didn’t seem to matter.

Fortune magazine voted Enron Amer- ica’s “Most Innovative Company” for six consecutive years, and Enron proudly took to calling itself not just “the world’s leading energy com- pany” but also “the world’s leading company.” But when Enron was later forced to declare bankruptcy—at the time the largest Chapter 11 filing in U.S. history—the world learned that its leg- endary financial prowess was illusory and the company’s suc- cess built on the sands of hype. And the hype continued to the

CHAPTER 1

THE NATURE OF MORAL ITY

THE REASON ENRON’S

collapse caught investors by surprise . . . was

that Enron had always made its financial

records and accounts as opaque as possible.

PART ONE | MORAL PHILOSOPHY AND BUSINESS

82088_ch01_ptg01_001-042.indd 1 03/09/15 4:20 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

2 PART ONE MORAL PHILOSOPHY AND BUSINESS

who are compensated according to their ability to bring in and support investment banking deals. Enron was known in the industry as the “deal machine” because it generated so much investment banking business—limited partnerships, loans, and derivatives. That may explain why, only days before Enron filed bankruptcy, just two of the sixteen Wall Street analysts who cov- ered the company recommended that cli- ents sell the stock. The large banks that Enron did business with played a corrupt role, too, by helping manufacture its fraudu- lent financial statements. (Subsequent law- suits have forced them to cough up some

of their profits: Citibank, for example, had to pay Enron’s victimized shareholders $2 billion.) But the rot didn’t stop there. Enron and Andersen enjoyed extensive political connec- tions, which had helped over the years to ensure the passage of a series of deregulatory measures favorable to the energy company. Of the 248 members of Congress sitting on the eleven House and Senate committees charged with investigat- ing Enron’s collapse, 212 had received money from Enron or its accounting firm.1

Stories of business corruption and of greed and wrongdoing in high places have always fascinated the popular press, and media interest in business ethics has never been higher. But one should not be misled by the headlines and news reports. Not all moral issues in business involve giant corporations and their well-heeled executives, and few cases of business ethics are widely publicized. The vast majority of them involve the mundane, uncelebrated moral challenges that working men and women meet daily.

Although the financial shenanigans at Enron were compli- cated, once their basic outline is sketched, the wrongdoing is pretty easy to see: deception, dishonesty, fraud, disregarding one’s professional responsibilities, and unfairly injuring others for one’s own gain. But many of the moral issues that arise in busi- ness are complex and difficult to answer. For example:

How far must manufacturers go to ensure product safety? Must they reveal everything about a product, including any possible defects or shortcomings? At what point does acceptable exaggeration become lying

Still, Enron’s financial auditors should have spotted these and other problems. After all, the shell game Enron was playing is an old one, and months before the company ran aground, Enron Vice President Sherron Watkins had warned Lay that the com- pany could soon “implode in a wave of accounting scandals.” Yet both Arthur Andersen, Enron’s longtime outside auditing firm, and Vinson & Elkins, the company’s law firm, had routinely put together and signed off on various dubious financial deals, and in doing so made large profits for themselves. Arthur Andersen, in particular, was supposed to make sure that the company’s public records reflected financial reality, but Andersen was more wor- ried about its auditing and consulting fees than about its fiduciary responsibilities. Even worse, when the scandal began to break, a partner at Andersen organized the shredding of incriminating Enron documents before investigators could lay their hands on them. As a result, the eighty-nine-year-old accounting firm was convicted of obstructing justice. The Supreme Court later over- turned that verdict on a technicality, but by then Arthur Andersen had already been driven out of business. (The year before Enron went under, by the way, the Securities and Exchange Commission fined Andersen $7 million for approving misleading accounts at Waste Management, and it also had to pay $110 million to settle a lawsuit for auditing work it did for Sunbeam before it, too, filed for bankruptcy. And when massive accounting fraud was later uncovered at WorldCom, it came out that the company’s auditor was—you guessed it—Arthur Andersen.)

Enron’s fall also revealed the conflicts of interest that threaten the credibility of Wall Street’s analysts—analysts

The collapse of Enron’s stock price in late 2001

0 Oct. 16 Oct. 22 Oct. 24 Nov. 28

5

10

15

20

25

30

35

40 $38.44

$20.65

$16.41

$0.61

82088_ch01_ptg01_001-042.indd 2 03/09/15 4:20 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER ONE THE NATURE OF MORALITY 3

about a product or a service? When does aggressive marketing become consumer manipulation? Is adver- tising useful and important or deceptive, misleading, and socially detrimental? When are prices unfair or exploitative?

Are corporations obliged to help combat social prob- lems? What are the environmental responsibilities of business, and is it living up to them? Are pollution per- mits a good idea? Is factory farming morally justifiable?

May employers screen potential employees on the basis of lifestyle, physical appearance, or personality tests? What rights do employees have on the job? Under what conditions may they be disciplined or fired? What, if anything, must business do to improve work conditions? When are wages fair? Do unions promote the interests of workers or infringe their rights? When, if ever, is an employee morally required to blow the whistle?

May employees ever use their positions inside an orga- nization to advance their own interests? Is insider trad- ing or the use of privileged information immoral? How much loyalty do workers owe their companies? What say should a business have over the off-the-job activi- ties of its employees? Do drug tests violate their right to privacy?

What constitutes job discrimination, and how far must business go to ensure equality of opportunity? Is affir- mative action a matter of justice, or a poor idea? How

should organizations respond to the problem of sexual harassment?

LEARNING OBJECTIVES

These questions typify business issues with moral significance. The answers we give to them are determined, in large part, by our moral standards—that is, by the moral principles and values we accept. What moral standards are, where they come from, and how they can be assessed are some of the concerns of this opening chapter. In particular, you will encounter the fol- lowing topics:

1. The nature, scope, and purpose of business ethics

2. The distinguishing features of morality and how it differs from etiquette, law, and professional codes of conduct

3. The relationship between morality and religion

4. The doctrine of ethical relativism and its difficulties

5. What it means to have moral principles; the nature of conscience; and the relationship between morality and self-interest

6. The place of values and ideals in a person’s life

7. The social and psychological factors that sometimes jeopardize an individual’s integrity

8. The characteristics of sound moral reasoning

E THICS Ethics (or moral philosophy) is a broad field of inquiry that addresses a fundamental query that all of us, at least from time to time, inevitably think about—namely, How should I live my life? That question, of course, leads to others, such as: What sort of person should I strive to be? What values are important? What standards or principles should I live by? Exploring these issues immerses one in the study of right and wrong. Among other things, moral philosophers and others who think seriously about ethics want to understand the nature of morality, the meaning of its basic concepts, the charac- teristics of good moral reasoning, how moral judgments can be justified, and, of course, the principles or properties that distinguish right actions from wrong actions. Thus, ethics deals with individual character and with the moral rules that govern and limit our conduct. It investigates questions of right and wrong, fairness and unfairness, good and

SUMMARY Ethics deals with

individual character and the moral rules

that govern and limit our conduct.

It investigates questions of right

and wrong, duty and obligation, and moral

responsibility.

82088_ch01_ptg01_001-042.indd 3 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

4 PART ONE MORAL PHILOSOPHY AND BUSINESS

bad, duty and obligation, and justice and injustice, as well as moral responsibility and the values that should guide our actions.

You sometimes hear it said that there’s a difference between a person’s ethics and his or her morals. This can be confusing because what some people mean by saying that something is a matter of ethics (as opposed to morals) is often what other people mean by saying that it is a matter of morals (and not ethics). In fact, however, most people (and most philosophers) see no real distinction between a person’s “morals” and a person’s “ethics.” And almost everyone uses “ethical” and “moral” interchangeably to describe people we consider good and actions we consider right, and “unethical” and “immoral” to designate bad people and wrong actions. This book follows that common usage.

BUSINESS AND ORGANIZATIONAL ETHICS The primary focus of this book is ethics as it applies to business. Business ethics is the study of what constitutes right and wrong, or good and bad, human conduct in a business context. For example, would it be right for a store manager to break a promise to a cus- tomer and sell some hard-to-find merchandise to someone else, whose need for it is greater? What, if anything, should a moral employee do when his or her superiors refuse to look into apparent wrongdoing in a branch office? If you innocently came across secret informa- tion about a competitor, would it be permissible for you to use it for your own advantage?

Recent business scandals have renewed the interest of business leaders, academics, and society at large in ethics. For example, the Association to Advance Collegiate Schools of Business, which comprises all the top business schools, has introduced new rules on including ethics in their curricula, and in recent years thousands of MBA students have signed the “MBA Oath,” a voluntary pledge to “not advance my personal interests at the expense of my enterprise or society,” to “refrain from corruption, unfair competition, or business practices harmful to society,” and to “protect the human rights and dignity of all people affected by my enterprise.”2 But an appreciation of the importance of ethics for a healthy society and a concern, in particular, for what constitutes ethical conduct in business go back to ancient times. The Roman philosopher Cicero (106–43 bce), for instance, discussed the example, much debated at the time, of an honest merchant from Alexandria who brings a large stock of wheat to Rhodes where there is a food shortage. On his way there, he learns that other traders are setting sail for Rhodes with substantial cargos of grain. Should he tell the people of Rhodes that more wheat is on the way, or say nothing and sell at the best price he can? Some ancient ethicists argued that although the merchant must declare defects in his wares as required by law, as a vendor he is free— provided he tells no untruths—to sell his goods as profitably as he can. Others, including Cicero, argued to the contrary that all the facts must be revealed and that buyers must be as fully informed as sellers.3

“Business” and “businessperson” are broad terms. A “business” could be a food truck or a multinational corporation that operates in several countries. “Businessperson” could refer to a street vendor or a company president responsible for thousands of workers and millions of shareholder dollars. Accordingly, the word business will be used here sim- ply to mean any organization whose objective is to provide goods or services for profit. Businesspeople are those who participate in planning, organizing, or directing the work of business.

82088_ch01_ptg01_001-042.indd 4 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER ONE THE NATURE OF MORALITY 5

But this book takes a broader view as well because it is concerned with moral issues that arise wherever employers and employees come together. Thus, it addresses organi- zational ethics as well as business ethics. An organization is a group of people working together to achieve a common purpose. The purpose may be to offer a product or a service primarily for profit, as in business. But the purpose also could be health care, as in medical organizations; public safety and order, as in law enforcement organizations; education, as in academic organizations; and so on. The cases and illustrations presented in this book deal with moral issues and dilemmas in both business and nonbusiness orga- nizational settings.

People occasionally poke fun at the idea of business ethics, declaring that the term is a contradiction or that business has no ethics. Such people take themselves to be worldly and realistic. They think they have a down-to-earth idea of how things really work. In fact, despite its pretense of sophistication, their attitude shows little grasp of the nature of ethics and only a superficial understanding of the real world of business. Reading this book should help you comprehend how inaccurate and mistaken their view is.

MOR AL V ERSUS NONMOR AL STANDA RDS Moral questions differ from other kinds of questions. Whether the old computer in your office can copy a pirated DVD is a factual question. By contrast, whether you should copy the DVD is a moral question. When we answer a moral question or make a moral judg- ment, we appeal to moral standards. These standards differ from other kinds of standards.

Wearing shorts and a tank top to a formal dinner party is boorish behavior. Writing an essay that is filled with double negatives or lacks subject–verb agreement violates the basic conventions of proper language usage. Photographing someone at night without the flash turned on is a poor photographic technique. In each case a standard is violated— fashion, grammatical, technical—but the violation does not pose a serious threat to human well-being.

Moral standards are different because they concern behavior that is of serious consequence to human welfare, that can profoundly injure or benefit people.4 The con- ventional moral norms against lying, stealing, and killing deal with actions that can hurt people. And the moral principle that human beings should be treated with dignity and respect uplifts the human personality. Whether products are healthful or harmful, work conditions safe or dangerous, personnel procedures biased or fair, privacy respected or invaded––these are also matters that seriously affect human well-being. The standards that govern our conduct in these areas are moral standards.

A second characteristic follows from the first. Moral standards take priority over other standards, including self-interest. Something that morality condemns—for instance, the burglary of your neighbor’s home—cannot be justified on the nonmoral grounds that it would be a thrill to do it or that it would pay off handsomely. We take moral stan- dards to be more important than other considerations in guiding our actions.

A third characteristic of moral standards is that their soundness depends on the ade- quacy of the reasons that support or justify them. For the most part, fashion standards are set by clothing designers, merchandisers, and consumers; grammatical standards by

SUMMARY Business ethics is the study of

what constitutes right and wrong

(or good and bad) human conduct in

a business context. Closely related moral

questions arise in other organizational

contexts.

Moral standards concern behavior that seriously affects human well-being.

Moral standards take priority over other standards.

The soundness of moral standards depends on the adequacy of the reasons that support them.

82088_ch01_ptg01_001-042.indd 5 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

6 PART ONE MORAL PHILOSOPHY AND BUSINESS

grammarians and students of language; technical standards by practitioners and experts in the field. Legislators make laws, boards of directors make organizational policy, and licensing boards establish standards for professionals. In those cases, some authoritative body is the ultimate validating source of the standards and thus can change the standards if it wishes. Moral standards are not made by such bodies. Their validity depends not on official fiat but rather on the quality of the arguments or the reasoning that supports them. Exactly what constitutes adequate grounds or justification for a moral standard is a debated question, which, as we shall see in Chapter 2, underlies disagreement among philosophers over which specific moral principles are best.

Although these three characteristics set moral standards apart from other standards, it is useful to discuss more specifically how morality differs from three things with which it is sometimes confused: etiquette, law, and professional codes of ethics.

MORALITY AND ETIQUETTE Etiquette refers to the norms of correct conduct in polite society or, more generally, to any special code of social behavior or courtesy. In our society, for example, it is consid- ered bad etiquette to chew with your mouth open or to pick your nose when talking to someone; it is considered good etiquette to say “please” when requesting and “thank you” when receiving, and to hold a door open for someone entering immediately behind you. Good business etiquette typically calls for writing follow-up letters after meetings, returning phone calls, and dressing appropriately. It is commonplace to judge people’s manners as “good” or “bad” and the conduct that reflects them as “right” or “wrong.” “Good,” “bad,” “right,” and “wrong” here simply mean socially appropriate or socially inappropriate. In these contexts, such words express judgments about manners, not about ethics.

The rules of etiquette are prescriptions for socially acceptable behavior. If you violate them, you’re likely to be considered ill-mannered, impolite, or even uncivilized, but not necessarily immoral. If you want to fit in, get along with others, and be thought well of by them, you should observe the common rules of politeness or etiquette. However, what’s considered correct or polite conduct—for example, when greeting an elderly person, when using your knife and fork, or when determining how close to stand to someone you’re conversing with—can change over time and vary from society to society.

Although rules of etiquette are generally nonmoral in character, violations of those rules can have moral implications. For example, the male boss who refers to female sub- ordinates as “honey” or “doll” shows bad manners. If such epithets diminish the worth of female employees or perpetuate sexism, then they also raise moral issues concerning equal treatment and denial of dignity to human beings. More generally, rude or impolite con- duct can be offensive, and it may sometimes fail to show the respect for other persons that morality requires of us. For this reason, it is important to exercise care, in business situations and elsewhere, when dealing with unfamiliar customs or people from a different culture.

Scrupulous observance of rules of etiquette, however, does not make a person moral. In fact, it can sometimes camouflage ethical issues. In some parts of the United States sixty years ago, it was considered bad manners for blacks and whites to eat together. However, those who obeyed this convention were not acting in a morally desirable way. In the 1960s, black and white members of the civil rights movement sought to dramatize the injustice that lay behind this rule by sitting together in luncheonettes and

SUMMARY We appeal to moral

standards when we answer a moral question or make a moral judgment.

Three characteristics of moral standards distinguish them

from other kinds of standards.

82088_ch01_ptg01_001-042.indd 6 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER ONE THE NATURE OF MORALITY 7

restaurants. Although judged at the time to lack good manners, they thought that this was a small price to pay for exposing the unequal treatment and human degradation underlying this rule of etiquette.

MORALITY AND LAW Before distinguishing between morality and law, let’s examine the term law. Basically, there are four kinds of law: statutes, regulations, common law, and constitutional law.

Statutes are laws enacted by legislative bodies. For example, the law that defines and prohibits reckless driving on the highway is a statute. Congress and state legislatures enact statutes. (Laws enacted by local governing bodies such as city councils are usually termed ordinances.) Statutes make up a large part of the law and are what many of us mean when we speak of “laws.”

Limited in their time and knowledge, legislatures often set up boards or agencies whose functions include issuing detailed regulations covering certain kinds of conduct— administrative regulations. For example, state legislatures establish licensing boards to formulate regulations for the licensing of physicians and nurses. As long as these regula- tions do not exceed the board’s statutory powers and do not conflict with other kinds of law, they are legally binding.

Common law refers to the body of judge-made law that first developed in the English-speaking world centuries ago when there were few statutes. Courts frequently wrote opinions explaining the bases of their decisions in specific cases, including the legal principles those decisions rested on. Each of these opinions became a precedent for later decisions in similar cases. The massive body of precedents and legal principles that accumulated over the years is collectively referred to as “common law.” Like administra- tive regulations, common law is valid if it harmonizes with statutory law and with still another kind: constitutional law.

Constitutional law refers to court rulings on the requirements of the Constitution and the constitutionality of legislation. The U.S. Constitution empowers the courts to decide whether laws are compatible with the Constitution. State courts may also rule on the constitutionality of state laws under state constitutions. Although the courts cannot make laws, they have far-reaching powers to rule on the constitutionality of laws and to declare them invalid if they conflict with the Constitution. In the United States, the Supreme Court has the greatest judiciary power and rules on an array of cases, some of which bear directly on the study of business ethics.

People sometimes confuse legality and morality, but they are different things. On one hand, breaking the law is not always or necessarily immoral. On the other hand, the legality of an action does not guarantee that it is morally right. Let’s consider these points further.

1. An action can be illegal but morally right. For example, helping a Jewish family to hide from the Nazis was against German law in 1939, but it would have been a morally admirable thing to have done. Of course, the Nazi regime was vicious and evil. By contrast, in a democratic society with a basically just legal order, the fact that something is illegal provides a moral consideration against doing it. For example, one moral reason for not burning trash in your backyard is that it vio- lates an ordinance that your community has voted in favor of. Some philosophers believe that sometimes the illegality of an action can make it morally wrong, even

Legality should not be confused with morality. Breaking the law isn’t always or necessarily immoral, and the legality of an action doesn’t guarantee its morality.

82088_ch01_ptg01_001-042.indd 7 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

8 PART ONE MORAL PHILOSOPHY AND BUSINESS

if the action would otherwise have been morally acceptable. But even if they are right about that, the fact that something is illegal does not trump all other moral considerations. Nonconformity to law is not always immoral, even in a democratic society. There can be circumstances where, all things considered, violating the law is morally permissible, perhaps even morally required.

Probably no one in the modern era has expressed this point more eloquently than Dr. Martin Luther King, Jr. Confined in the Birmingham, Alabama, city jail on charges of parading without a permit, King penned his now famous “Letter from Birmingham Jail” to eight of his fellow clergymen who had published a statement attacking King’s unauthorized protest of racial segregation as unwise and untimely. King wrote:

All segregation statutes are unjust because segregation distorts the soul and damages the personality. It gives the segregator a false sense of superiority and the segregated a false sense of inferiority. Segregation, to use the terminology of the Jewish philoso- pher Martin Buber, substitutes an “I-it” relationship for an “I-thou” relationship and ends up relegating persons to the status of things. Hence segregation is not only politically, economically, and sociologically unsound, it is morally wrong and sinful. . . . Thus it is that I can urge men to obey the 1954 decision of the Supreme Court,* for it is morally right; and I can urge them to disobey segregation ordi nances, for they are morally wrong.5

2. An action that is legal can be morally wrong. For example, brokers are not legally required to act in their customers’ best interests, even when they are advising them on their retirement money.6 Yet it would be wrong of them to push their clients into investments that are bad for them in order to reap a commission. Likewise, it may have been perfectly legal for the chairman of a profitable company to lay off 125 workers and use three-quarters of the money saved to boost his pay and that of the company’s other top managers,7 but the morality of his doing so is open to debate.

Or, to take another example, suppose that you’re driving to work one day and see an accident victim sitting on the side of the road, clearly in shock and needing medical assistance. Because you know first aid and are in no great hurry to get to your destination, you could easily stop and assist the person. Legally speaking, though, you are not obligated to stop and render aid. Under common law, the prudent thing would be to drive on, because by stopping you could thus incur legal liability if you fail to exercise reasonable care and thereby injure the person. Many states have enacted so-called Good Samaritan laws to provide immunity from damages to those rendering aid (except for gross negligence or serious misconduct). But in most states, the law does not oblige people to give such aid or even to call an ambulance. Moral theorists would agree, however, that if you sped away without helping or even calling for help, your action might be perfectly legal but would be morally suspect. Regardless of the law, such conduct would almost certainly be wrong.

What then may we say about the relationship between law and morality? To a signif- icant extent, law codifies a society’s customs, ideals, norms, and moral values. Changes in

*In Brown v. Board of Education of Topeka (1954), the Supreme Court struck down the half-century-old “separate but equal doctrine,” which permitted racially segregated schools as long as comparable quality was maintained.

SUMMARY Morality must be

distinguished from etiquette (rules for

well-mannered behavior), from law

(statutes, regulations, common law,

and constitutional law), and from

professional codes of ethics (the special

rules governing the members of a

profession).

82088_ch01_ptg01_001-042.indd 8 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER ONE THE NATURE OF MORALITY 9

law tend to reflect changes in what a society takes to be right and wrong, but sometimes changes in the law can alter people’s ideas about the rightness or wrongness of conduct. However, even if a society’s laws are sensible and morally sound, it is a mistake to see them as sufficient to establish the moral standards that should guide us. The law cannot cover all possible human conduct, and in many situations it is too blunt an instrument to provide adequate moral guidance. The law generally prohibits egregious affronts to a society’s moral standards and in that sense is the “floor” of moral conduct, but breaches of moral conduct can slip through cracks in that floor.

PROFESSIONAL CODES Somewhere between etiquette and law lie professional codes of ethics. These are the rules that are supposed to govern the conduct of members of a given profession. Adhering to these rules is a required part of membership in that profession. Violation of a professional code may result in the disapproval of one’s professional peers and, in serious cases, loss of one’s license to practice that profession. Sometimes these codes are unwrit- ten and are part of the common understanding of members of a particular profession— for example, that professors should not date their students. In other instances, these codes or portions of them may be written down by an authoritative body so they may be better taught and more efficiently enforced.

These written rules are sometimes so vague and general as to be of little value, and often they amount to little more than self-promotion by the professional organization. The same is frequently true when industries or corporations publish statements of their ethical standards. In other cases—for example, with attorneys—professional codes can be very specific and detailed. It is difficult to generalize about the content of professional codes of ethics, however, because they frequently involve a mix of purely moral rules (for

You come upon this scene—the car is smoking, and it is clear that an accident just took place. In most states, you are not legally obligated to stop and offer help to the victims.

© M

ika du

n/ Sh

ut te

rs to

ck .co

m

82088_ch01_ptg01_001-042.indd 9 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

10 PART ONE MORAL PHILOSOPHY AND BUSINESS

example, client confidentiality), of professional etiquette (for example, the billing of ser- vices to other professionals), and of restrictions intended to benefit the group’s economic interests (for example, limitations on price competition).

Given their nature, professional codes of ethics are neither a complete nor a com- pletely reliable guide to one’s moral obligations. Not all the rules of a professional code are purely moral in character, and even when they are, the fact that a rule is officially enshrined as part of the code of a profession does not guarantee that it is a sound moral principle. As a professional, you must take seriously the injunctions of your profession, but you still have the responsibility to critically assess those rules for yourself.

Regarding those parts of the code that concern etiquette or financial matters, bear in mind that by joining a profession you are probably agreeing, explicitly or implicitly, to abide by those standards. Assuming that those rules don’t require morally impermissible conduct, then consenting to them gives you some moral obligation to follow them. In addition, for many, living up to the standards of one’s chosen profession is an important source of personal satisfaction. Still, you must be alert to situations in which professional standards or customary professional practice conflicts with ordinary ethical require- ments. Adherence to a professional code does not exempt your conduct from scrutiny from the broader perspective of morality.

WHERE DO MORAL STANDARDS COME FROM? So far you have seen how moral standards are different from various nonmoral standards, but you probably wonder about the source of those moral standards. Most, if not all, people have certain moral principles or a moral code that they explicitly or implicitly accept. Because the moral principles of different people in the same society overlap, at least in part, we can also talk about the moral code of a society, meaning the moral standards shared by its members. How do we come to have certain moral principles and not others? Obviously, many things influence what moral principles we accept: our early upbringing, the behavior of those around us, the explicit and implicit standards of our culture, our own experiences, and our critical reflections on those experiences.

For philosophers, though, the central question is not how we came to have the particular principles we have. The philosophical issue is whether those principles can be justified. Do we simply take for granted the values of those around us? Or, like Martin Luther King, Jr., are we able to think independently about moral matters? By analogy, we pick up our nonmoral beliefs from all sorts of sources: books, conversations with friends, movies, various experiences we’ve had. What is important, however, is not how we acquired the beliefs we have, but whether or to what extent those beliefs—for example, that women are more emotional than men or that telekinesis is possible—can withstand critical scrutiny. Likewise, ethical theories attempt to justify moral standards and ethical beliefs. The next chapter examines some of the major theories of normative ethics. It looks at what some of the major thinkers in human history have argued are the best-justified standards of right and wrong.

But first we need to consider the relationship between morality and religion on the one hand and between morality and society on the other. Some people main- tain that morality just boils down to religion. Others have argued for the doctrine of ethical relativism, which says that right and wrong are only a function of what a particular society takes to be right and wrong. Both those views are mistaken.

You should take seriously the code that

governs your profession, but you still have a

responsibility to assess its rules for yourself.

For philosophers, the important issue is

not where our moral principles came from, but whether they can

be justified.

82088_ch01_ptg01_001-042.indd 10 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER ONE THE NATURE OF MORALITY 11

REL IG ION AND MOR AL IT Y Any religion provides its believers with a worldview, part of which involves certain moral instructions, values, and commitments. The Jewish and Christian traditions, to name just two, offer a view of humans as unique products of a divine intervention that has endowed them with consciousness and an ability to love. Both these traditions posit creatures who stand midway between nature and spirit. On one hand, we are finite and bound to earth, not only capable of wrongdoing but also born morally flawed (original sin). On the other, we can transcend nature and realize infinite possibilities.

Primarily because of the influence of Western religion, many Americans and others view themselves as beings with a supernatural destiny, as possessing a life after death, as being immortal. One’s purpose in life is found in serving and loving God. For the Christian, the way to serve and love God is by emulating the life of Jesus of Nazareth. In the life of Jesus, Christians find an expression of the highest virtue—love. They love when they perform selfless acts, develop a keen social conscience, and realize that human beings are creatures of God and therefore intrinsically worthwhile. For the Jew, one serves and loves God chiefly through expressions of justice and righteousness. Jews also develop a sense of honor derived from a commitment to truth, humility, fidelity, and kindness. This commitment hones their sense of responsibility to family and community.

Religion, then, involves not only a formal system of worship but also prescriptions for social relationships. One example is the mandate “Do unto others as you would have them do unto you.” Termed the “Golden Rule,” this injunction represents one of humankind’s highest moral ideals and can be found in essence in all the great religions of the world:

Good people proceed while considering that what is best for others is best for themselves. (Hitopadesa, Hinduism)

Thou shalt love thy neighbor as thyself. (Leviticus 19:18, Judaism)

Therefore all things whatsoever ye would that men should do to you, do ye even so to them. (Matthew 7:12, Christianity)

Hurt not others with that which pains yourself. (Udanavarga 5:18, Buddhism)

What you do not want done to yourself, do not do to others. (Analects 15:23, Confucianism)

No one of you is a believer until he loves for his brother what he loves for himself. (Traditions, Islam)

Although inspiring, such religious ideals are very general and can be difficult to translate into precise policy injunctions. Religious bodies, nevertheless, occasionally articulate positions on more specific political, educational, economic, and medical issues, which help mold public opinion on matters as diverse as abortion, the environment, national defense, and the ethics of scientific research. Roman Catholicism, in particular, has a rich history of formally applying its core values to the moral aspects of industrial

82088_ch01_ptg01_001-042.indd 11 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

12 PART ONE MORAL PHILOSOPHY AND BUSINESS

relations and economic life. Pope Francis’s 2013 apostolic exhortation, “The Gospel of Joy,” stands in that tradition. There and elsewhere, the Pope has rejected an “economy of exclusion” and criticized blind faith in a free market that perpetuates inequality—a mes- sage that some politicians in Washington are starting to listen to.8

MORALITY NEEDN’T REST ON RELIGION Many people believe that morality must be based on religion, either in the sense that without religion people would have no incentive to be moral or in the sense that only religion can provide moral guidance. Others contend that morality is based on the com- mands of God. None of these claims is convincing.

First, although a desire to avoid hell and to go to heaven may prompt some of us to act morally, this is not the only reason or even the most common reason that people behave morally. Often we act morally out of habit or just because that is the kind of per- son we are. It would simply not occur to most of us to swipe an elderly lady’s purse, and if the idea did occur to us, we wouldn’t do it because such an act simply doesn’t fit with our personal standards or with our concept of ourselves. We are often motivated to do what is morally right out of concern for others or just because it is right. In addition, the approval of our peers, the need to appease our conscience, and the desire to avoid earthly punishment may all motivate us to act morally. Furthermore, atheists generally live lives as moral and upright as those of believers.

Second, the moral instructions of the world’s great religions are general and impre- cise: They do not relieve us of the necessity of engaging in moral reasoning ourselves. For example, the Bible says, “Thou shall not kill.” Yet Christians disagree among themselves over the morality of fighting in wars, of capital punishment, of killing in self-defense, of slaughtering animals, of abortion and euthanasia, and of allowing foreigners to die from famine because we have not provided them with as much food as we might have. The Bible does not provide unambiguous solutions to these moral problems, so even believers must engage in moral philosophy if they are to have intelligent answers. On the other hand, there are lots of reasons for believing that, say, a cold-blooded murder motivated by greed is immoral. You don’t have to believe in a religion to figure that out.

Third, although some theologians have advocated the divine command theory— that if something is wrong (like killing an innocent person for fun), then the only reason it is wrong is that God commands us not to do it—many theologians and certainly most philosophers would reject this view. They would contend that if God commands human beings not to do something, such as commit rape, it is because God sees that rape is wrong, but it is not God’s forbidding rape that makes it wrong. The fact that rape is wrong is independent of God’s decrees.

Most believers think not only that God gives us moral instructions or rules but also that God has moral reasons for giving them to us. According to the divine command theory, this would make no sense. In this view, there is no reason that something is right or wrong, other than the fact that it is God’s will. All believers, of course, believe that God is good and that God commands us to do what is right and forbids us to do what is wrong. But this doesn’t mean, say critics of the divine command theory, that it is God’s saying so that makes a thing wrong, any more than it is your mother’s telling you not to steal that makes it wrong to steal.

The idea that morality must be based

on religion can be interpreted in three

different ways, none of which is very plausible.

82088_ch01_ptg01_001-042.indd 12 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER ONE THE NATURE OF MORALITY 13

All this is simply to argue that morality is not necessarily based on religion in any of these three senses. That religion influences the moral standards and values of most of us is beyond doubt. But given that religions differ in their moral beliefs and that even members of the same faith often disagree on moral matters, you cannot justify a moral judgment simply by appealing to religion—for that will only persuade those who already agree with your particular interpretation of your particular religion. Besides, most religions hold that human reason is capable of understanding what is right and wrong, so it is human reason to which you will have to appeal in order to support your ethical principles and judgments.

E TH ICAL REL AT IV ISM Some people do not believe that morality boils down to religion but rather that it is merely a function of what a particular society happens to believe. This view is called ethical relativism, the theory that what is right is determined by what a culture or soci- ety says is right. What is right in one place may be wrong in another, because the only criterion for distinguishing right from wrong—and so the only ethical standard for judg- ing an action—is the moral system of the society in which the act occurs.

Abortion, for example, is condemned as immoral in Catholic Ireland but is prac- ticed as a morally neutral form of birth control in Japan. According to the ethical relativ- ist, then, abortion is wrong in Ireland but morally permissible in Japan. The relativist is not saying merely that the Irish believe abortion is abominable and the Japanese do not; that is acknowledged by everyone. Rather, the ethical relativist contends that abortion is immoral in Ireland because the Irish believe it to be immoral and that it is morally permissible in Japan because the Japanese believe it to be so. Thus, for the ethical relativ- ist there is no absolute ethical standard independent of cultural context, no criterion of right and wrong by which to judge other than that of particular societies. In short, what morality requires is relative to society.

Those who endorse ethical relativism point to the apparent diversity of human values and the multiformity of moral codes to support their case. From our own cul- tural perspective, some seemingly immoral moralities have been adopted. Polygamy, pedophilia, stealing, slavery, infanticide, and cannibalism have all been tolerated or even encouraged by the moral system of one society or another. In light of this fact, the ethi- cal relativist believes that there can be no non-ethnocentric standard by which to judge actions.

Some thinkers believe that the moral differences between societies are smaller and less significant than they appear. They contend that variations in moral standards reflect differing factual beliefs and differing circumstances rather than fundamental differences in values. But suppose they are wrong about this matter. The relativist’s conclusion still does not follow. A difference of opinion among societies about right and wrong no more proves that none of the conflicting beliefs is true or superior to the others than the diversity of viewpoints expressed in a college seminar establishes that there is no truth. In short, disagreement in ethical matters does not imply that all opinions are equally correct.

SUMMARY Morality is not

necessarily based on religion. Although

we draw our moral beliefs from many sources, for philosophers the issue is whether

those beliefs can be justified.

Ethical disagreement does not imply that all opinions are equally correct.

82088_ch01_ptg01_001-042.indd 13 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

14 PART ONE MORAL PHILOSOPHY AND BUSINESS

Moreover, ethical relativism has some unsatisfactory implications. First, it under- mines any moral criticism of the practices of other societies as long as their actions con- form to their own standards. We cannot say that slavery in a slave society like that of the American South 175 years ago was immoral and unjust as long as that society held it to be morally permissible.

Second, and closely related, is the fact that for the relativist there is no such thing as ethical progress. Although moralities may change, they cannot get better or worse. Thus, we cannot say that moral standards today are more enlightened than were moral stan- dards in the Middle Ages.

Third, from the relativist’s point of view, it makes no sense for people to criticize principles or practices accepted by their own society. People can be censured for not living up to their society’s moral code, but that is all. The moral code itself cannot be criticized because whatever a society takes to be right really is right for it. Reformers who identify injustices in their society and campaign against them are only encouraging peo- ple to be immoral—that is, to depart from the moral standards of their society—unless or until the majority of the society agrees with the reformers. The minority can never be right in moral matters; to be right it must become the majority.

The ethical relativist is correct to emphasize that in viewing other cultures we should keep an open mind and not simply dismiss alien social practices on the basis of our own cultural prejudices. But the relativist’s theory of morality doesn’t hold up. The more carefully we examine it, the less plausible it becomes. There is no good reason for saying that the majority view on moral issues is automatically right, and the belief that it is auto- matically right has unacceptable consequences.

RELATIVISM AND THE “GAME” OF BUSINESS In his essay “Is Business Bluffing Ethical?” Albert Carr argues that business, as practiced by individuals as well as by corporations, has the impersonal character of a game—a game that demands both special strategy and an understanding of its special ethical standards.9 Business has its own norms and rules that differ from those of the rest of society. Thus, according to Carr, a number of things that we normally think of as wrong are really permissible in a business context. His examples include conscious misstatement and con- cealment of pertinent facts in negotiation, lying about one’s age on a résumé, deceptive packaging, automobile companies’ neglect of car safety, and utility companies’ manipula- tion of regulators and overcharging of electricity users. He draws an analogy with poker:

Poker’s own brand of ethics is different from the ethical ideals of civilized human relationships. The game calls for distrust of the other fellow. It ignores the claim of friendship. Cunning deception and concealment of one’s strength and intentions, not kindness and openheartedness, are vital in poker. No one thinks any the worse of poker on that account. And no one should think any the worse of the game of busi- ness because its standards of right and wrong differ from the prevailing traditions of morality in our society.10

What Carr is defending here is a kind of ethical relativism: Business has its own moral standards, and business actions should be evaluated only by those standards.

One can argue whether Carr has accurately identified the implicit rules of the business world (for example, is misrepresentation on one’s résumé really a permissible

SUMMARY Ethical relativism is the theory that

right and wrong are determined by what one’s society says is right and wrong.

There are many problems with this

theory. Also dubious is the notion that

business has its own morality, divorced

from ordinary ideas of right and wrong.

82088_ch01_ptg01_001-042.indd 14 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER ONE THE NATURE OF MORALITY 15

move in the business game?), but let’s put that issue aside. The basic question is whether business is a separate world to which ordinary moral standards don’t apply. Carr’s thesis assumes that any special activity following its own rules is exempt from external moral evaluation, but as a general proposition this is unacceptable. The Mafia, for example, has an elaborate code of conduct, accepted by the members of the rival “families.” For them, gunning down a competitor or terrorizing a local shopkeeper may be a strategic move in a competitive environment. Yet we rightly refuse to say that gangsters cannot be criticized for following their own standards. Normal business activity is a world away from gangsterism, but the point still holds. Any specialized activity or practice will have its own distinctive rules and procedures, but the morality of those rules and procedures can still be evaluated.

Moreover, Carr’s poker analogy is itself weak. For one thing, business activity can affect others—such as consumers—who have not consciously and freely chosen to play the “game.” Business is indeed an activity involving distinctive rules and customary ways of doing things, but it is not really a game. It is the economic basis of our society, and we all have an interest in the goals of business (in productivity and consumer satisfaction, for instance) and in the rules business follows. Why should these be exempt from public evaluation and assessment? Later chapters return to the question of what these goals and rules should be. But to take one simple point, note that a business/economic system that permits, encourages, or tolerates deception will be less efficient (that is, work less well) than one in which the participants have fuller knowledge of the goods and services being exchanged.

In sum, by divorcing business from morality, Carr misrepresents both. He incor- rectly treats the standards and rules of everyday business activity as if they had nothing to do with the standards and rules of ordinary morality, and he treats morality as something that we give lip service to on Sundays but that otherwise has no influence on our lives.

HAV ING MOR AL PR INCIPLES At some time in their lives most people pause to reflect on their own moral principles and on the practical implications of those principles, and they sometimes think about what principles people should have or which moral standards can be best justified. (Moral phi- losophers themselves have defended different moral standards; Chapter 2 discusses these various theories.) When a person accepts a moral principle, when that principle is part of his or her personal moral code, then naturally the person believes the principle is important and well justified. But there is more to moral principles than that, as the phi- losopher Richard Brandt emphasized. When a principle is part of a person’s moral code, that person is strongly motivated to act as the principle requires and to avoid acting in ways that conflict with the principle. The person will tend to feel guilty when his or her own conduct violates that principle and to disapprove of others whose behavior conflicts with it. Likewise, the person will tend to hold in esteem those whose conduct shows an abundance of the motivation required by the principle.11

Other philosophers have, in different ways, reinforced Brandt’s point. To accept a moral principle is not a purely intellectual act like accepting a scientific hypothesis or a

By divorcing business from morality, Carr misrepresents both.

Accepting a moral principle is not a purely intellectual act like accepting a scientific hypothesis or a mathematical theorem.

82088_ch01_ptg01_001-042.indd 15 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

16 PART ONE MORAL PHILOSOPHY AND BUSINESS

mathematical theorem. Rather, it also involves a desire to follow that principle for its own sake, the likelihood of feeling guilty about not doing so, and a tendency to evaluate the conduct of others according to the principle in question. We would find it very strange, for example, if Sally claimed to be morally opposed to cruelty to animals yet abused her own pets and felt no inclination to protest when some ruffians down the street set a cat on fire.

CONSCIENCE People can, and unfortunately sometimes do, go against their moral principles, but we would doubt that they sincerely held the principle in question if violating it did not bother their conscience. We have all felt the pangs of conscience, but what exactly is conscience and how reliable a guide is it? Our conscience, of course, is not literally a little voice inside us. To oversimplify a complex piece of developmental psychology, our con- science evolved as we internalized the moral instructions of the parents or other authority figures who raised us as children.

When you were very young, you were probably told to tell the truth and to return something you filched to its proper owner. If you were caught lying or being dishonest, you were probably punished—scolded, spanked, sent to bed without dinner, or denied a privilege. In contrast, truth telling and kindness to your siblings were probably rewarded—with approval, praise, maybe even hugs or candy. Seeking reward and avoid- ing punishment motivate small children to do what is expected of them. Gradually, children come to internalize those parental commands. Thus, they feel vaguely that their parents know what they are doing even when the parents are not around. When children do something forbidden, they experience the same feelings as when scolded by their parents—the first stirrings of guilt. By the same token, even in the absence of explicit parental reward, children feel a sense of self-approval about having done what they were supposed to have done.

As we grow older, of course, our motivations are not so simple and our self-under- standing is greater. We are able to reflect on and understand the moral lessons we were taught, as well as to refine and modify those principles. As adults we are morally inde- pendent agents. Yet however much our conscience has evolved and however much our adult moral code differs from the moral perspective of our childhood, those pangs of guilt we occasionally feel still stem from that early internalization of parental demands.

THE LIMITS OF CONSCIENCE How reliable a guide is conscience? People often say, “Follow your conscience” or “You should never go against your conscience.” Such advice is not very helpful, however. Indeed, it can sometimes be bad advice. First, when we are genuinely perplexed about what we ought to do, we are trying to figure out what our conscience ought to be saying to us. When it is not possible to do both, should we keep our promise to a colleague or come to the aid of an old friend? To be told that we should follow our conscience is no help at all.

Second, it may not always be good for us to follow our conscience. It all depends on what our conscience says. On the one hand, sometimes people’s consciences do not bother them when they should—perhaps because they didn’t think through the impli- cations of what they were doing or perhaps because they failed to internalize strongly enough the appropriate moral principles. On the other hand, a person’s conscience might disturb the person about something that is perfectly all right.

Telling someone to “follow your

conscience” is not very helpful, and sometimes

it can be bad advice.

82088_ch01_ptg01_001-042.indd 16 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER ONE THE NATURE OF MORALITY 17

Consider an episode in Chapter 16 of Mark Twain’s The Adventures of Huckleberry Finn. Huck has taken off down the Mississippi on a raft with his friend, the runaway slave Jim, but as they get nearer to the place where Jim will become legally free, Huck starts feeling guilty about helping him run away:

It hadn’t ever come home to me before, what this thing was that I was doing. But now it did; and it stayed with me, and scorched me more and more. I tried to make out to myself that I warn’t to blame, because I didn’t run Jim off from his rightful owner; but it warn’t no use, conscience up and says, every time: “But you knowed he was running for his freedom, and you could a paddled ashore and told somebody.” That was so—I couldn’t get around that, no way. That was where it pinched. Conscience says to me: “What had poor Miss Watson done to you, that you could see her nigger go off right under your eyes and never say one single word? What did that poor old woman do to you, that you could treat her so mean? . . .” I got to feeling so mean and miserable I most wished I was dead.

Here Huck is feeling guilty about doing what we would all agree is the morally right thing to do. But Huck is only a boy, and his pangs of conscience reflect the principles that he has picked up uncritically from the slave-owning society around him. Unable to think independently about matters of right and wrong, Huck in the end decides to disre- gard his conscience. He follows his instincts and sticks by his friend Jim.

The point here is not that you should ignore your conscience but that the voice of conscience is itself something that can be critically examined. A pang of conscience is like a warning. When you feel one, you should definitely stop and reflect on the rightness of what you are doing. But you cannot justify your actions simply by saying you were following your conscience. Terrible deeds have occasionally been committed in the name of conscience.

MORAL PRINCIPLES AND SELF-INTEREST Sometimes doing what you believe would be morally right and doing what would best satisfy your own interests may be two different things. Imagine that you are in your car hurrying along a quiet road, trying hard to get to an important football game in time to see the kickoff. You pass an acquaintance who is having car trouble. He doesn’t recognize you. As a dedicated fan, you would much prefer to keep on going than to stop and help him, thus missing at least part of the game. Although you might rationalize that some- one else will eventually come along and help him out if you don’t, deep down you know that you really ought to stop. Self-interest, however, seems to say, “Keep going.”

Consider another example. You have applied for a new job, and if you land it, it will be an enormous break for you. It is exactly the kind of position you want and have been trying to get for some time. It pays well and will settle you into a desirable career for the rest of your life. The competition has come down to you and one other person, and you believe correctly that she has a slight edge on you. Now imagine that you could spread a nasty rumor about her that would guarantee that she wouldn’t get the job, and that you could do this in a way that wouldn’t come back to you. Presumably, circulating this lie would violate your moral code, but doing so would clearly benefit you.

Some people argue that moral action and self-interest can never really conflict. Although some philosophers have gone to great lengths to try to prove this, they are almost certainly mistaken. They maintain that if you do the wrong thing, then you will be caught, your conscience will bother you, or in some way “what goes around comes

SUMMARY Accepting a moral principle involves a motivation to conform one’s conduct to that

principle. Violating the principle will

bother one’s conscience, but

conscience is not a perfectly reliable guide to right and

wrong.

82088_ch01_ptg01_001-042.indd 17 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

18 PART ONE MORAL PHILOSOPHY AND BUSINESS

around,” so that your misdeed will come back to haunt you. This is often correct. But unfortunate as it may be, sometimes—viewed just in terms of personal self-interest—it may pay off for you to do what you know to be wrong. People sometimes get away with their wrongdoings, and if their conscience bothers them at all, it may not bother them very much. To believe otherwise not only is wishful thinking but also shows a lack of understanding of morality.

Morality serves to restrain our purely self-interested desires so we can all live together. The moral standards of a society provide the basic guidelines for cooperative social existence and allow conflicts to be resolved by an appeal to shared principles of jus- tification. If our interests never came into conflict—that is, if it were never advantageous for one person to deceive or cheat another—then there would be little need for morality. We would already be in heaven. Both a system of law that punishes people for hurting others and a system of morality that encourages people to refrain from pursuing their self-interest at great expense to others help make social existence possible.

Usually, following our moral principles is in our best interest. This idea is par- ticularly worth noting in the business context. Recently, a number of business theorists have argued persuasively not only that moral behavior is consistent with profitability but also that the most morally responsible companies are among the most profitable.12 Apparently, respecting the rights of employees, treating suppliers fairly, and being straightforward with customers pay off.

But notice one thing. If you do the right thing only because you think you will profit from it, you are not really motivated by moral concerns. Having a moral principle involves having a desire to follow the principle for its own sake—simply because it is the right thing to do. If you do the right thing only because you believe it will pay off, you might just as easily not do it if it looks as if it is not going to pay off.

In addition, there is no guarantee that moral behavior will always benefit a person in strictly selfish terms. As argued earlier, there will be exceptions. From the moral point of view, you ought to stop and help your acquaintance, and you shouldn’t lie about com- petitors. From the selfish point of view, you should do exactly the opposite. Should you follow your self-interest or your moral principles? There’s no final answer to this ques- tion. From the moral point of view, you should, of course, follow your moral principles. But from the selfish point of view, you should look out solely for “number one.”

Which option you choose will depend on the strength of your self-interested or self- regarding desires in comparison with the strength of your other-regarding desires (that is, your moral motivations and your concern for others). In other words, your choice will depend on your character, on the kind of person you are, which depends in part on how you were raised. A person who is basically selfish will pass by the acquaintance in distress and will spread the rumor, whereas someone who has a stronger concern for others, or a stronger desire to do what is right just because it is right, will not.

Although it may be impossible to prove to selfish people that they should not do the thing that best advances their self-interest (because if they are selfish, then that is all they care about), there are considerations that suggest it is not in a one’s overall self- interest to be a selfish person. People who are exclusively concerned with their own interests tend to have less happy and less satisfying lives than those whose desires extend beyond themselves. This is usually called the paradox of hedonism, but it might equally well be dubbed the “paradox of selfishness.” Individuals who care only about their own

Morality restrains our self-interested desires. A society’s

moral standards allow conflicts to be

resolved by an appeal to shared principles of

justification.

When morality and self-interest conflict,

what you choose to do will depend on the kind

of person you are.

82088_ch01_ptg01_001-042.indd 18 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER ONE THE NATURE OF MORALITY 19

happiness will generally be less happy than those who care about others. Moreover, peo- ple often find greater satisfaction in a life lived according to moral principle, and in being the kind of person that entails, than in a life devoted solely to self-gratification. Thus, or so many philosophers have argued, people have self-interested reasons not to be so self- interested. How do selfish people make themselves less so? Not overnight, obviously, but by involving themselves in the concerns and cares of others, they can in time come to care sincerely about those persons.

MOR AL IT Y AND PERSONAL VAL UES It is helpful to distinguish between morality in a narrow sense and morality in a broad sense. In a narrow sense, morality is the moral code of an individual or a society (inso- far as the moral codes of the individuals making up that society overlap). Although the principles that constitute our code may not be explicitly formulated, as laws are, they do guide us in our conduct. They function as internal monitors of our own behavior and as a basis for assessing the actions of others. Morality in the narrow sense concerns the principles that do or should regulate people’s conduct and relations with others. These principles can be debated, however. (Take, for example, John Stuart Mill’s contention that society ought not to interfere with people’s liberty when their actions affect only themselves.) And a large part of moral philosophy involves assessing rival moral princi- ples. This discussion is part of the ongoing development in our moral culture. What is at stake are the basic standards that ought to govern our behavior—that is, the fundamental framework or ground rules that make coexistence possible. If there were not already fairly widespread agreement about these principles, our social order would not be sustainable.

In addition we can talk about our morality in the broad sense, meaning not just the principles of conduct that we embrace but also the values, ideals, and aspirations that shape our lives. Many different ways of living our lives would meet our basic moral obli- gations. The type of life each of us seeks to live reflects our individual values—whether following a profession, devoting ourselves to community service, raising a family, seek- ing solitude, pursuing scientific truth, striving for athletic excellence, amassing political power, cultivating glamorous people as friends, or some combination of these and many other possible ways of living. The life that each of us forges and the way we understand that life are part of our morality in the broad sense of the term.

It is important to bear this in mind throughout your study of business ethics. Although this book’s main concern is with the principles that ought to govern conduct in certain business-type situations—for example, whether a hiring officer may take an applicant’s race into account, whether insider trading is wrong, or whether corporate bribery is permissible in countries where people turn a blind eye to it—your choices in the business world will also reflect your other values and ideals or, in other words, the kind of person you are striving to be. What sort of ideal do you have of yourself as a busi- nessperson? How much weight do you put on profitability, for instance, as against the quality of your product or the socially beneficial character of your service?

The decisions you make in your career and much of the way you shape your work- ing life will depend not only on your moral code but also on the understanding you have

SUMMARY Part of the point

of morality is to make social

existence possible by restraining self- interested behavior. Sometimes doing

what is morally right can conflict

with one’s personal interests. In general,

though, following your moral principles will enable you to live a more satisfying life.

82088_ch01_ptg01_001-042.indd 19 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

20 PART ONE MORAL PHILOSOPHY AND BUSINESS

of yourself in certain roles and relationships. Your morality—in the sense of your ideals, values, and aspirations—involves, among other things, your understanding of human nature, tradition, and society; of one’s proper relationship to the natural environment; and of an individual’s place in the cosmos. Professionals in various fields, for example, will invariably be guided not just by rules but also by their understanding of what being a professional involves, and a businessperson’s conception of the ideal or model relation- ship to have with clients will greatly influence his or her day-to-day conduct.

There is more to living a morally good life, of course, than being a good business- person or being good at your job, as Aristotle (384–322 bce) argued long ago. He under- scored the necessity of our trying to achieve virtue or excellence, not just in some particular field of endeavor, but also as human beings. Aristotle thought that things have functions. The function of a piano, for instance, is to make certain sounds, and a piano that performs this function well is a good or excellent piano. Likewise, we have an idea of what it is for a person to be an excellent athlete, an excellent manager, or an excellent professor—it is to do well the types of things that athletes, managers, or professors are supposed to do.

But Aristotle also thought that, just as there is an ideal of excellence for any par- ticular craft or occupation, similarly there must be an excellence that we can achieve simply as human beings. He believed that we can live our lives as a whole in such a way that they can be judged not just as excellent in this respect or in that occupation but as excellent, period. Aristotle thought that only when we develop our truly human capaci- ties sufficiently to achieve this human excellence will we have lives blessed with happi- ness. Philosophers since Aristotle’s time have been skeptical of his apparent belief that this human excellence would come in just one form, but many would underscore the importance of developing our various potential capacities and striving to achieve a kind of excellence in our lives. How we understand this excellence is a function of our values, ideals, and worldview—our morality in a broad sense.

Aristotle also emphasized the importance of character and of being a person whose life displays the various virtues that human beings are capable of achieving. A virtue is a trait or settled disposition; for example, a courageous, generous, or kind person is one who habitually acts in ways that are courageous, generous, or kind. A generous person does not debate whether to act generously; for her or him acting generously is second nature. How we act, however, shapes the character we come to have; that is, we become a generous person by acting in generous ways whereas we come to be selfish or stingy by acting in stingy or selfish ways. For Aristotle, it was therefore important to model our- selves on those who are virtuous and to try to act as they act. As we shall see in the next section, though, different social environments can make it easier or harder to develop virtuous habits and to be the kind of person we want to be.

IND I V IDUAL INTEGR IT Y A ND RESPONSIB IL I T Y Previous sections discussed what it is for a person to have a moral code, as well as the sometimes conflicting pulls of moral conscience and self-interest. In addition, we have seen that people have values and ideals above and beyond their moral principles, narrowly understood, that also influence the lives they lead. And we have seen the importance of

SUMMARY Morality in the

sense of the rules or principles that

regulate one’s conduct toward others can be

distinguished from morality in the

broader sense of the values, ideals,

and aspirations that shape a person’s life.

82088_ch01_ptg01_001-042.indd 20 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER ONE THE NATURE OF MORALITY 21

reflecting critically on both moral principles and our ideals and values as we seek to live morally good and worthwhile lives. None of us, however, lives in a vacuum, and social pressures of various sorts always affect us. Sometimes these pressures make it difficult to stick with our principles and to be the kind of person we wish to be. Corporations are a particularly relevant example of an environment that can potentially damage individual integrity and responsibility.

ORGANIZATIONAL NORMS One of the major characteristics of an organization—indeed, of any group—is the shared acceptance of organizational norms and rules by its members. Acceptance can take different forms; it can be conscious or unconscious, overt or implicit, but it is almost always present, because an organization can survive only if it holds its members together. Group cohesiveness requires that individual members “commit” themselves—that is, relinquish some of their personal freedom in order to further organizational goals. One’s degree of commitment—the extent to which one accepts group norms and subordinates self to organizational goals—is a measure of one’s loyalty to the “team.”

The corporation’s overarching goal is profit. To achieve this goal, top management sets specific targets for sales, market share, return on equity, and so forth. For the most part, the norms or rules that govern corporate existence are derived from these goals. But clearly there’s nothing in either the norms or the goals that necessarily encourages moral behavior; indeed, they may discourage it.

According to a recent survey by the American Management Association, pressure to meet unrealistic business objectives and deadlines is the leading cause of unethical business conduct.13 And mounting evidence suggests that most managers experience role conflicts between what is expected of them as efficient, profit-minded members of an organization, and what is expected of them as ethical persons. In a series of in-depth interviews with recent graduates of the Harvard MBA program, researchers Joseph L. Badaracco, Jr., and Allen P. Webb found that these young managers frequently received explicit instructions or felt strong organizational pressure to do things they believed to be sleazy, unethical, or even illegal.14 Another survey found that a majority of managers at all levels experience “pressure from the top” to meet corporate goals and comply with corporate norms. Of the managers interviewed, 50 percent of top managers, 65 percent of middle managers, and 84 percent of lower managers agreed that they felt pressure to “compromise personal standards to achieve company goals.”15

The young managers interviewed by Badaracco and Webb identified four powerful organizational “commandments” as responsible for the pressure they felt to compromise their integrity:

First, performance is what really counts, so make your numbers. Second, be loyal and show us that you’re a team player. Third, don’t break the law. Fourth, don’t overinvest in ethical behavior.16

Although most corporate goals and norms are not objectionable when viewed by themselves, they frequently put the people who must implement them into a moral pres- sure cooker. In addition, people can overlook the ethical implications of their decisions just because they are busy working on organizational goals and not looking at things from a broader perspective. In these ways, the need to meet corporate objectives, to be a

Pressure to meet corporate objectives, to be a team player, and to conform to organizational norms can sometimes lead people to act unethically.

82088_ch01_ptg01_001-042.indd 21 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

22 PART ONE MORAL PHILOSOPHY AND BUSINESS

team player, and to conform to organizational norms can sometimes lead otherwise hon- orable individuals to engage in unethical conduct.

CONFORMITY It is no secret that organizations exert pressure on their members to conform to norms and goals. What may not be so widely known is how easily individuals can be induced to behave as those around them do. A dramatic example is provided in the early conformity studies by social psychologist Solomon Asch.17

In a classic experiment, Asch asked groups of seven to nine college students to say which of three lines on a card matched the length of a single line on another card:

1 2 3

Only one of the subjects in each group was “naive,” or unaware of the nature of the experiment. The others were shills or stooges of the experimenter, who had instructed them to make incorrect judgments in about two-thirds of the cases and in this way to pressure the naive subjects to alter their correct judgments.

The results were revealing. When the subjects were not exposed to pressure, they invariably judged correctly, but when the stooges all gave a false answer, the subjects changed their responses to conform with the unanimous majority judgments. When one shill differed from the majority and gave the correct answer, naive subjects maintained their position three-fourths of the time. However, when the honest shill switched to the majority view in later trials, the errors made by naive subjects rose to about the same level as that of subjects who stood alone against a unanimous majority.

Why did they yield? Some respondents said they didn’t want to seem different, even though they continued to believe their judgments were correct. Others said that although their perceptions seemed correct, the majority couldn’t be wrong. Still other subjects didn’t even seem aware that they had caved in to group pressure. Even those who held their ground tended to be profoundly disturbed by being out of step with the majority and confessed to being sorely tempted to alter their judgments. Indeed, a subsequent study found that students who stood firm in their judgments suffered more anxiety than those who switched. One student with the strength of his correct convic- tions was literally dripping with perspiration by the end of the experiment.

In these experiments, which cumulatively included several hundred students, the subjects were not exposed to the authority symbols that people inside an organization face—bosses, boards of directors, professional peers—nor were they up against established policy and entrenched norms. Correct responses would not have had the serious career consequences that bucking the system can sometimes have for members of an organiza- tion: being transferred, dismissed, frozen in a position, or made an organizational pariah. And, of course, the students did not bring to these experiments the financial and personal investments that individuals bring to their jobs. Men and women within an organization are under greater pressure to conform than were the students in Asch’s studies.

© 2

01 7

Ce ng

ag e

Le ar

ni ng

82088_ch01_ptg01_001-042.indd 22 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER ONE THE NATURE OF MORALITY 23

Groupthink Almost all groups require some conformity from their members, but in extreme cases the demand for conformity can lead to what social psychologists call “groupthink.” Groupthink happens when pressure for unanimity within a highly cohesive group over- whelms its members’ desire or ability to appraise the situation realistically and consider alternative courses of action. The desire for the comfort and confidence that comes from mutual agreement and approval leads members of the group to close their eyes to nega- tive information, to ignore warnings that the group may be mistaken, and to discount outside ideas that might contradict the thinking or the decisions of the group.

When under the sway of groupthink, group members may have the illusion that the group is invulnerable or that because the group is good or right, whatever it does is permissible. Individuals in the group tend to self-censor thoughts that go against the group’s ideas and rationalize away conflicting evidence, and the group as a whole may implicitly or explicitly pressure potential dissenters to conform. Groupthink thus leads to irrational, sometimes disastrous decisions, and it has enormous potential for doing moral damage.

DIFFUSION OF RESPONSIBILITY Pressure to conform to the group and to adhere to its norms and beliefs can lead to the surrender of individual moral autonomy. This tendency is enhanced by the fact that group actions frequently involve the participation of many people. As a result, respon- sibility for what an organization does can become fragmented or diffused throughout the group, with no single individual seeing himself or herself as responsible for what happens. Indeed, it may be difficult to say exactly who should be held accountable. This diffusion of responsibility inside an organization leads individuals to have a diluted or diminished sense of their own personal moral responsibilities. They tend to see them- selves simply as small players in a process or as cogs in a machine over which they have no control and for which they are unaccountable. They rationalize to themselves contribut- ing to actions, policies, or events that they would refuse to perform or to authorize if they thought the decision were entirely up to them. “It’s not my fault,” they think. “This would happen anyway, with or without me.” Diffusion of responsibility encourages the moral myopia of thinking “I’m just doing my job,” instead of taking a 20/20 look at the bigger picture.

This sense of diminished individual moral responsibility for an outcome that many people bring about or allow to happen is something that social psychologists began studying more closely as a result of the sad case of Kitty Genovese, a young woman who was stabbed to death in the 1960s. Although the murder was not in itself so unusual, it made headlines and editorial pages across the nation because thirty-eight of her neighbors witnessed her brutal slaying. In answer to her pitiful screams of terror at 3 a.m., they came to their windows and remained there for the thirty or more minutes it took her assailant to brutalize her. (He evidently left for a while and then returned to finish her off.) Of the thirty-eight, not one attempted to intervene in any way; no one even phoned the police.18

Why didn’t Kitty Genovese’s neighbors help her? Most social psychologists believe that an individual’s sense of personal responsibility is inversely proportional to the

SUMMARY Several aspects of corporate structure

and function work to undermine individual moral responsibility.

Organizational norms, pressure

to conform (sometimes leading

to groupthink), and diffusion of

responsibility inside large organizations can all make the

exercise of individual integrity difficult.

Diffusion of responsibility inside an organization can weaken people’s sense of moral responsibility.

82088_ch01_ptg01_001-042.indd 23 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

24 PART ONE MORAL PHILOSOPHY AND BUSINESS

number of people witnessing or involved in the episode. The more people who are observing an event, the less likely is any one of them to feel obliged to do something. In emergencies, we seem naturally to let the behavior of those around us dictate our response—a phenomenon often called bystander apathy. But the point is more general. In any large group or organization, diffusion of responsibility for its actions can lead individuals to feel anonymous and not accountable for what happens. Submerged in the group, the individual may not even question the morality of his or her actions.19

Pressure to conform to organizational norms and a diminished sense of personal respon- sibility for group behavior undermine individual integrity and moral autonomy. Business corporations are not necessarily worse than many other groups in this respect, but certainly the pressure in business to help the company make a profit or achieve its other goals, to do what is expected of you, and generally to be a loyal and cooperative team player can foster, or at least do nothing to inhibit, these group propensities. Beyond that, many corpora- tions fail to institutionalize ethics. They don’t articulate or communicate ethical standards to their members; they don’t actively enforce them; and they retain structures and policies that thwart individual integrity. For example, when a Beech-Nut employee expressed con- cerns about the fact that the concentrate the company was producing for its “100% pure” apple juice contained nothing more than sugar, water, and chemicals, his annual perfor- mance review described his judgment as “colored by naïveté and impractical ideals.”20

Employees frequently have to fight hard to maintain their moral integrity in a show- down with organizational priorities. Consider, for example, those Wall Street analysts pressured by their firms to recommend to clients stocks or bonds the analysts knew to be “junk” or “dogs.”21 More dramatically, on a June day in 2011, a US Airways captain with thirty years of experience stopped her flight from departing because she was wor- ried that a backup power system was defective. The company pressured her to fly any- way, and when she refused to do so, security officials escorted her out of the airport and threatened to arrest her crew if they didn’t cooperate. When other pilots backed her up and refused to fly the plane, US Airways finally had technicians service the plane. They confirmed that the component was faulty, and fixed it.22

Often, however, the problem facing people in business and other organization con- texts is not that of doing what they believed to be right but rather of deciding what the right thing to do is. They can sometimes face difficult and puzzling moral questions, questions that need to be answered. How does one go about doing that? Is there some reliable procedure or method for answering moral questions? In science, the scientific method tells us what steps to take if we seek to answer a scientific question, but there is no comparable moral method for engaging ethical questions. There is, however, general agreement about what constitutes good moral reasoning.

MOR AL RE ASONING It is useful to view moral reasoning at first in the context of argument. An argument is a group of statements, one of which (called the conclusion) is claimed to follow from the others (called the premises). Here’s an example of an argument:

Business corporations are no worse than other

groups, but many of them do little to protect individual integrity and

moral autonomy.

82088_ch01_ptg01_001-042.indd 24 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER ONE THE NATURE OF MORALITY 25

ARGUMENT 1

If a person is a mother, the person is a female.

Fran is a mother.

Therefore, Fran is a female.

The first two statements (the premises) of this argument happen to entail the third (the conclusion), which means that if I accept the first two as true, then I must accept the third as also true. Not to accept the conclusion while accepting the premises would result in a contradiction—holding two beliefs that cannot both be true at the same time. In other words, if I believe that all mothers are females and that Fran is a mother (the premises), then I cannot deny that Fran is a female (the conclusion) without contradict- ing myself. An argument like this one, whose premises logically entail its conclusion, is a valid argument.

An invalid argument is one whose premises do not entail its conclusion. In an invalid argument, I can accept the premises as true and reject the conclusion without any contradiction. Thus:

ARGUMENT 2

If a person is a mother, the person is a female.

Fran is a female.

Therefore, Fran is a mother.

The conclusion of this argument does not necessarily follow from the true premises. I can believe that every mother is a female and that Fran is a female but deny that Fran is a mother without contradicting myself.

One way to show this is by means of a counterexample, an example that is consis- tent with the premises but is inconsistent with the conclusion. Let’s suppose Fran is a two-year-old, a premise that is perfectly consistent with the two stated premises. If she is, she can’t possibly be a mother. Or let’s suppose Fran is an adult female who happens to be childless, another premise that is perfectly consistent with the stated premises but obvi- ously at odds with the conclusion. If an argument is valid (such as Argument 1), then no counterexamples are possible.

A valid argument can have untrue premises, as in the following:

ARGUMENT 3

If a person is a female, she must be a mother.

Fran is a female.

Therefore, Fran must be a mother.

Like Argument 1, this argument is valid. If I accept its premises as true, I must accept its conclusion as true; otherwise I will contradict myself. However, although Argument 3 is valid, it is unsound because one of its premises is false—namely, “If a person is a female, she must be a mother.” Realizing the patent absurdity of one of its premises, no sen- sible person would accept this argument’s conclusion. But notice why the argument is unsound—not because the type of reasoning it involves is invalid but because one of the

82088_ch01_ptg01_001-042.indd 25 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

26 PART ONE MORAL PHILOSOPHY AND BUSINESS

premises is false. Sound arguments, such as Argument 1, have true premises and valid reasoning. Unsound arguments have at least one false premise, as in Argument 3, or invalid reasoning, as in Argument 2, or both.

Now let’s consider some moral arguments, which can be defined simply as argu- ments whose conclusions are moral judgments. Here are some examples that deal with affirmative action for women and minorities in the workplace:

ARGUMENT 4

If an action violates the law, it is morally wrong.

Affirmative action on behalf of women and minorities in personnel matters violates the law.

Therefore, affirmative action on behalf of women and minorities in personnel matters is morally wrong.

ARGUMENT 5

If an action violates the will of the majority, it is morally wrong.

Affirmative action on behalf of women and minorities in personnel matters violates the will of the majority.

Therefore, affirmative action on behalf of women and minorities in personnel matters is morally wrong.

ARGUMENT 6

If an action redresses past injuries that have disadvantaged a group, it is morally permissible.

Affirmative action on behalf of women and minorities in personnel matters redresses injuries that have disadvantaged these groups.

Therefore, affirmative action on behalf of women and minorities in personnel matters is morally permissible.

ARGUMENT 7

If an action is the only practical way to remedy a social problem, then it is morally permissible.

Affirmative action on behalf of women and minorities in personnel matters is the only practical way to remedy the social problem of unequal employment opportunity.

Therefore, affirmative action on behalf of women and minorities in personnel matters is morally permissible.

The first premise in each of these arguments is a moral standard, the second an alleged fact, and the conclusion a moral judgment. Moral reasoning or argument typi- cally moves from a moral standard, through one or more factual judgments about some person, action, or policy related to that standard, to a moral judgment about that person, action, or policy. Good moral reasoning will frequently be more complicated than these examples. Often it will involve an appeal to more than one standard as well as to various appropriate factual claims, and its argumentative structure may be more elaborate. Still, these examples illustrate its most basic form.

82088_ch01_ptg01_001-042.indd 26 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER ONE THE NATURE OF MORALITY 27

DEFENSIBLE MORAL JUDGMENTS If a moral judgment or conclusion is defensible, then it must be supportable by a defen- sible moral standard, together with relevant facts. A moral standard supports a moral judgment if the standard, taken together with the relevant facts, logically entails the moral judgment and if the moral standard itself is an acceptable standard. If someone argues that affirmative action for minorities and women is right (or wrong) but cannot produce a supporting principle when asked, then the person’s position is considerably weakened. And if the person does not see any need to support the judgment by appealing to a moral standard, then he or she simply does not understand how moral concepts are used or is using moral words like “right” or “wrong” differently from the way they are commonly used.

Keeping this in mind—that moral judgments must be supportable by moral stan- dards and facts—will aid your understanding of moral discourse, which can be highly complex and sophisticated. It will also sharpen your own critical faculties and improve your moral reasoning and ability to formulate relevant moral arguments.

PATTERNS OF DEFENSE AND CHALLENGE In assessing arguments, one must be careful to clarify the meanings of their key terms and phrases. Often premises can be understood in more than one way, and this ambiguity may lead people to accept (or reject) arguments that they shouldn’t. For example, “affirmative action” seems to mean different things to different people (see Chapter 11 on job discrimination). Before we can profitably assess Arguments 4 through 7, we have to agree on how we understand “affirmative action.” Similarly, Argument 5 relies on the idea of “violating the will of the majority,” but this notion has to be clarified before we can evaluate either the moral principle that it is wrong to violate the will of the majority or the factual claim that affirmative action does violate the majority’s will.

Assuming that the arguments are logically valid in their form (as Arguments 4 through 7 are) and that their terms have been clarified and possible ambiguities elimi- nated, then we must turn our attention to assessing the premises of the arguments. Should we accept or reject their premises? Remember that if an argument is valid and you accept the premises, you must accept the conclusion.

Let’s look at some further aspects of this assessment process:

1. Evaluating the factual claims. If the parties to an ethical discussion are willing to accept the moral standard (or standards) in question, then they can concentrate on the factual claims. Thus, for example, in Argument 4 they will focus on whether affirmative action on behalf of women and minorities is in fact illegal. In Argument 7 they will need to determine whether affirmative action is really the only practical way to remedy the social problem of unequal employment opportunity. Analogous questions can be asked about the factual claims of Arguments 5 and 6. Answering them in the affirmative would require considerable supporting data.

2. Challenging the moral standard. Moral disagreements do not always turn on factual issues. The moral standard on which a given moral argument relies may be controversial. One party might challenge the standard, contending that it is

Moral judgments should be supported by moral standards and relevant facts.

SUMMARY Moral reasoning and argument typically

appeal both to moral standards and to

relevant facts. Moral judgments should be entailed by the

relevant moral standards and the

facts, and they should not contradict

our other beliefs. Both standards

and facts must be assessed when

moral arguments are being evaluated.

82088_ch01_ptg01_001-042.indd 27 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

28 PART ONE MORAL PHILOSOPHY AND BUSINESS

implausible or that we should not accept it. The critic might do this in several different ways—for example, by showing that there are exceptions to the standard, that the standard leads to unacceptable consequences, or that it is inconsistent with the arguer’s other moral beliefs.

In the following dialogue, for example, Lynn is attacking Sam’s advocacy of the standard “If an action redresses past injuries that have disadvantaged a group, it is morally permissible”:

Lynn: What would you think of affirmative action for Jews in the workplace?

Sam: I’d be against it.

Lynn: What about Catholics?

Sam: No.

Lynn: People of Irish extraction?

Sam: They should be treated the same as anybody else.

Lynn: But each of these groups and more I could mention were victimized in the past by unfair discrimination and probably in some cases continue to be.

Sam: So?

Lynn: So the standard you’re defending leads to a judgment you reject: namely, that Jews, Catholics, and Irish should be compensated by affirmative action for having been disadvantaged. How do you account for this inconsistency?

At this point, Sam, or any rational person in a similar position, has three alternatives: abandon or modify the standard, alter his moral judgment, or show how women and minorities fit the original principle even though the other groups do not.

3. Defending the moral standard. When the standard is criticized, then its advo- cate must defend it. Often this requires invoking an even more general principle. A defender of Argument 6, for example, might uphold the redress principle by appealing to some more general conception of social justice. Or defenders might try to show how the standard in question entails other moral judgments that both the critic and the defender accept, thereby enhancing the plausibility of the standard.

In the following exchange, Tina is defending the standard of Argument 5: “If an action violates the will of the majority, it is morally wrong”:

Tina: Okay, do you think the government should impose a national religion on all Americans?

Jake: Of course not.

Tina: What about requiring people to register their handguns?

Jake: I’m all for it.

Tina: And using kids in pornography?

Jake: There rightly are laws against it.

Tina: But the principle you’re objecting to—that an action violating the will of the majority is wrong—supports your moral stance on all these issues.

82088_ch01_ptg01_001-042.indd 28 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER ONE THE NATURE OF MORALITY 29

Of course, Tina’s argument is by no means a conclusive defense for her moral stan- dard. Other moral standards could just as easily entail the judgments she cites, as Jake is quick to point out:

Jake: Now wait a minute. I oppose a state religion on constitutional grounds, not because it vio- lates majority will. As for gun control, I’m for it because I think it will reduce violent crimes. And using kids in pornography is wrong because it exploits and endangers children.

Although Tina’s strategy for defending the standard about majority rule proved inconclusive, it does illustrate a common and often persuasive way of arguing for a moral principle.

4. Revising and modifying the argument. Arguments 4 through 7 are only illustra- tions, and all the moral principles they mention are very simple—too simple to accept without qualification. (The principle that it is immoral to break the law in all circumstances, for example, is implausible. Nazi Germany furnishes an obvious counterexample to it.) But once the standard has been effectively challenged, the de- fender of the argument, rather than abandoning the argument altogether, might try to reformulate it. For instance, the defender might replace the original, contested premise with a better and more plausible one that still supports the conclusion. For example, Premise 1 of Argument 4 might be replaced by: “If an action violates a law that is democratically decided and that is not morally unjust, then the action is immoral.” Or the defender might revise the conclusion of his or her argument, perhaps by restricting its scope. A more modest, less sweeping conclusion will often be easier to defend.

In this way, the discussion continues, the arguments on both sides of an issue improve, and we make progress in the analysis and resolution of ethical issues. In general, in philosophy we study logic and criticize arguments not to be able to score quick debating points but rather to be able to think more clearly and deeply about moral and other problems. Our goal as moral philosophers is not to “win” argu- ments but to arrive at the truth—or, put less grandly, to find the most reasonable answers to various ethical questions.

REQUIREMENTS FOR MORAL JUDGMENTS Moral discussion and the analysis of ethical issues can take different, often complicated, paths. Nevertheless, the preceding discussion implies that moral judgments should be (1)  logical, (2) based on facts, and (3) based on sound or defensible moral principles. A moral judgment that is weak on any of these grounds is open to criticism.

Moral Judgments Should Be Logical To say that moral judgments should be logical implies several things. First, as indicated in the discussion of moral reasoning, our moral judgments should follow logically from their premises. The connection between (1) the standard, (2) the conduct or policy, and (3) the moral judgment should be such that 1 and 2 logically entail 3. Our goal is to be able to support our moral judgments with reasons and evidence, rather than basing them solely on emotion, sentiment, or social or personal preference.

SUMMARY Philosophical

discussion generally involves the revision and modification of arguments; in this way progress is

made in the analysis and resolution of moral and other

issues.

Our moral judgments should follow logically from their premises.

82088_ch01_ptg01_001-042.indd 29 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

30 PART ONE MORAL PHILOSOPHY AND BUSINESS

Second, our moral judgments should be logically compatible with our other moral and nonmoral beliefs. We must avoid inconsistency. Almost all philosophers agree that if we make a moral judgment—for example, that it was wrong of Smith to alter the figures she gave to the outside auditors—then we must be willing to make the same judgment in any similar set of circumstances—that is, if our friend Brown, our spouse, or our father had altered the figures. In particular, we cannot make an exception for ourselves, judging some- thing permissible for us to do while condemning others for doing the very same thing.

Moral Judgments Should Be Based on Facts Adequate moral judgments cannot be made in a vacuum. We must gather as much relevant information as possible before making them. For example, an intelligent assess- ment of the morality of insider trading would require an understanding of, among other things, the different circumstances in which it can occur and the effects it has on the market and on other traders. The information supporting a moral judgment, the facts, should be relevant—that is, the information should actually relate to the judgment; it  should be complete or inclusive of all significant data; and it should, of course, be accurate or true.

Moral Judgments Should Be Based on Acceptable Moral Principles We know that moral judgments are based on moral standards. At the highest level of moral reasoning, these standards embody and express very general moral principles. Reliable moral judgments must be based on sound moral principles—principles that are unambiguous and can withstand close scrutiny and rational criticism. What, precisely, makes a moral principle sound or acceptable is one of the most difficult questions that the study of ethics raises and is beyond the scope of this book. But one criterion is worth mentioning, namely, consistency with our considered moral beliefs.

These beliefs contrast with our gut responses, with beliefs based on ignorance or prejudice, and with beliefs we just happen to hold without having thought them through. As philosophy professor Tom Regan explains, our considered beliefs are those moral beliefs “we hold after we have made a conscientious effort . . . to think about our beliefs coolly, rationally, impartially, with conceptual clarity, and with as much relevant information as we can reasonably acquire.”23 We have grounds to doubt a moral principle when it clashes with such beliefs. Conversely, conformity with our considered moral beliefs is good reason for regarding it as provisionally established.

This does not imply that conformity with our considered beliefs is the sole or even basic test of a moral principle, any more than conformity with well-established beliefs is the exclusive or even fundamental test of a scientific hypothesis. (Copernicus’s heliocen- tric hypothesis, for example, did not conform with what passed in the medieval world as a well-considered belief, the Ptolemaic view that the earth was the center of the universe.) But conformity with our considered beliefs seemingly must play some part in evaluating the many alternative moral principles that are explored in the next chapter.

Our moral judgments should be logically

compatible with our other beliefs.

SUMMARY Moral judgments should be logical

and based on facts and acceptable moral principles. Conformity with our considered moral beliefs is an important

consideration in evaluating moral

principles.

82088_ch01_ptg01_001-042.indd 30 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER ONE THE NATURE OF MORALITY 31

S T U D Y C O R N E R KEY TERMS AND CONCEPTS

administrative regulations

argument

business

business ethics

businesspeople

bystander apathy

common law

conclusion

conscience

considered moral beliefs

constitutional law

counterexample

diffusion of responsibility

divine command theory

ethical relativism

ethics

etiquette

groupthink

invalid argument

moral arguments

moral standards

morality in the broad sense

morality in the narrow sense

organizational norms

paradox of hedonism

premises

professional codes of ethics

self-interest

sound arguments

statutes

unsound arguments

valid argument

POINTS TO REVIEW

what happened at Enron (pp. 1–2)

three characteristics of moral standards (p. 5)

four types of law (p. 7)

what King’s violation of the law shows (p. 8)

the point of the example of not stopping to help an accident victim (pp. 8–9)

shortcomings of professional codes as an ethical guide (p. 10)

where we get our moral standards (p. 10)

three ways in which morality might be thought to be based on religion (p. 12)

three unsatisfactory implications of ethical relativism (p. 14)

what’s wrong with Carr’s idea that business is a game with its own moral rules (pp. 14–15)

what’s involved in a person’s accepting a moral principle (pp. 15–16)

why telling someone “Follow your conscience” isn’t very helpful advice (p. 16)

the point of the Huckleberry Finn example (p. 17)

what determines what a person will do when morality and self-interest collide (p. 18)

morality in the broad sense vs. morality in the narrow sense (p. 19)

Aristotle and the ideal of achieving excellence (p. 20)

what the experiments by Solomon Asch showed (p. 22)

dangers of groupthink (p. 23)

diffusion of responsibility and the Kitty Genovese example (pp. 23–24)

the difference between valid and invalid, sound and unsound, arguments (pp. 25–26)

moral judgments as resting on moral standards and facts (p. 27)

what it means to say moral judgments should be logical (pp. 29–30)

role of “considered moral beliefs” in the evaluation of moral principles (p. 30)

MindTap MindTap is a fully online, highly personalized learning experience built upon Cengage Learning content. MindTap combines student learning tools—readings, multimedia, activities, and assessments—into a singular Learning Path that guides students through their course.

82088_ch01_ptg01_001-042.indd 31 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

32 PART ONE MORAL PHILOSOPHY AND BUSINESS

Soon, however, ads began appearing in the classified pages of Women’s Wear Daily. “Tris-Tris-Tris . . . We will buy any fabric containing Tris,” read one. Another said, “Tris—we will purchase any large quantities of garments containing Tris.” The ads had been placed by exporters, who began buying up the pajamas, usually at 10 to 30 percent of the normal wholesale price. Their intent was clear: to dump* the carcinogenic pajamas on overseas markets.24

Tris is not the only example of dumping. There were the 450,000 baby pacifiers, of the type known to have caused choking deaths, that were exported for sale overseas, and the 400 Iraqis who died and the 5,000 who were hospitalized after eating wheat and barley treated with a U.S.-banned organic mercury fungicide. Winstrol, a synthetic male hormone that had been found to stunt the growth of American children, was made available in Brazil as an appetite stimulant for children. DowElanco sold its weed killer Galant in Costa Rica, although the Environmental Protection Agency (EPA) forbade its sale

C A SE 1.1

Made in the U.S.A.— Dumped in Brazil, Africa, Iraq . . .

WHEN IT COMES TO THE SAFETY OF YOUNG children, fire is a parent’s nightmare. Just the thought of their young ones trapped in their cribs or beds by a raging nocturnal blaze is enough to make most mothers and fathers take every precaution to ensure their children’s safety. Little wonder that when fire-retardant children’s pajamas first hit the market, they proved an overnight success. Within a few short years more than 200 million pairs were sold, and the sales of millions more were all but guaranteed. For their manufacturers, the future could not have been brighter. Then, like a bolt from the blue, came word that the pajamas were killers. The U.S. Consumer Product Safety Commission (CPSC) moved quickly to ban their sale and recall millions of pairs. Reason: The pajamas con- tained the flame-retardant chemical Tris (2,3- dibromoprophyl), which had been found to cause kidney cancer in children.

Because of its toxicity, the sleepwear couldn’t even be thrown away, let alone sold. Indeed, the CPSC left no doubt about how the pajamas were to be disposed of—buried or burned or used as industrial wiping cloths. Whereas just months earlier the man- ufacturers of the Tris-impregnated pajamas couldn’t fill orders fast enough, suddenly they were worrying about how to get rid of the millions of pairs now sitting in warehouses.

* Dumping is a term apparently coined by Mother Jones magazine to refer to the practice of exporting to other countries products that have been banned or declared hazardous in the United States.

FOR FURTHER REFLECTION

1. To what extent do our moral ideas reflect the society around us, and to what extent are we free to think for ourselves about moral matters?

2. Describe a situation in which you felt pressured to act against your moral principles or where you felt torn between conflicting moral values, rules, or principles. What did you do?

3. How do you explain the fact that in the business world basically good people sometimes act immorally?

82088_ch01_ptg01_001-042.indd 32 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER ONE THE NATURE OF MORALITY 33

to U.S. farmers because Galant may cause cancer. After the U.S. Food and Drug Administration (FDA) banned the painkiller dipyrone because it can cause a fatal blood disorder, Winthrop Products continued to sell dipyrone in Mexico City.

Manufacturers that dump products abroad clearly are motivated by profit, or at least by the hope of avoiding financial losses resulting from having to withdraw a product from the U.S. market. For government and health agencies that cooperate in the exporting of dangerous products, some- times the motives are more complex.

For example, when researchers documented the dangers of the Dalkon Shield intrauterine device—among the adverse reactions were pelvic inflammation, blood poisoning, tubal pregnancies, and uterine perforations—its manufacturer, A. H. Robins Co., began losing its domestic market. As a result, the company worked out a deal with the Office of Population within

the U.S. Agency for International Development (AID), whereby AID bought thousands of the devices at a reduced price for use in population-control programs in forty-two countries.

The agencies involved say their motives are humani tarian. Because the death rate in childbirth is relatively high in third-world countries, almost any birth-control device is safer than preg- nancy. Analogous arguments are used to defend the export of pesticides and other products judged too dangerous for use in the United States: Foreign countries should be free to decide for themselves whether the benefits of those products are worth their risks. In line with this, some third-world government officials insist that denying their countries access to these products is tantamount to violating their countries’ national sovereignty.

This reasoning has found a sympathetic ear in Washington, for it turns up in the “notification” system that regulates the export of banned or dangerous products overseas. Based on the

E-waste is routinely exported to third-world countries, where there is little regulatory oversight of its processing despite potential health and environmental dangers.

Fr ie

dr ich

S ta

rk /A

la m

y

82088_ch01_ptg01_001-042.indd 33 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

34 PART ONE MORAL PHILOSOPHY AND BUSINESS

and many other pesticides, including 2,4,5-T (which contains the deadly poison dioxin, the active ingredient in Agent Orange, the notorious defoliant used in Vietnam) because they are dangerous to human beings. No law, however, prohibits the sale of DDT and these other U.S.-banned pesticides overseas, where thanks to corporate dumping they are routinely used in agriculture. In one three-month period, for example, U.S. chemical companies exported 3.9 million pounds of banned and withdrawn pesticides. The FDA now estimates, through spot checks, that 10 percent of our imported food is contami- nated with residues of banned pesticides. And the FDA’s most commonly used testing procedure does not even check for 70 percent of the pesticides known to cause cancer.25

Update

In 2013 researchers purchased 42 different types of foam furni- ture for children, including the popular Mickey Mouse couch, and found that all but four of them contained the toxic flame retar- dants that were banned years ago from children’s pajamas— flame retardants that contain chemicals linked, not just to cancer, but also to diminished IQs and other problems. Although the chemical industry defends flame retardants as necessary to safeguard children, it turns out that they do not actually prevent fires. If you set a cushion on fire, it will burn right up.26

DISCUSSION QUESTIONS

1. Complete the following statements by filling in the blanks with either “moral” or “nonmoral” (e.g., factual, scientific, legal):

a. Whether or not dumping should be permitted is a question.

b. “Are dangerous products of any use in the third world?” is a question.

c. “Is it proper for the U.S. government to sponsor the export of dangerous products overseas?” is a

question.

d. Whether or not the notification system works as its supporters claim it works is a question.

e. “Is it legal to dump this product overseas?” is a question.

principles of national sovereignty, self-determination, and free trade, the notification system requires that foreign governments be notified whenever a product is banned, deregulated, sus- pended, or canceled by a U.S. regulatory agency. The State Department, which implements the system, has a policy statement on the subject that reads in part: “No  country should establish itself as the arbiter of others’ health and safety stan- dards. Individual governments are generally in the best position to establish standards of public health and safety.”

Critics of the system claim that notifying foreign health officials is virtually useless. For one thing, governments in poor countries can rarely establish health standards or even control imports into their countries. Indeed, most of the third- world countries where banned or dangerous products are dumped lack regulatory agencies, adequate testing facilities, and well-staffed customs departments.

Then there’s the problem of getting the word out about hazardous products. In theory, when a government agency such as the EPA or the FDA finds a product hazardous, it is supposed to inform the State Department, which is to notify health officials in other nations. But agencies often fail to inform the State Department of the product they have banned or found harmful, and when it is notified, its communiqués typically go no further than U.S. embassies abroad. When foreign officials are notified by U.S. embassies, they sometimes find the communiqués vague or ambiguous or too technical to understand.

But even if communication procedures were improved or the export of dangerous products forbidden, there are ways that companies can circumvent these threats to their profits— for example, by simply changing the name of the product or by exporting the individual ingredients of a product to a plant in a foreign country. Once there, the ingredients can be reassem- bled and the product dumped. The United States does prohibit its pharmaceutical companies from exporting drugs banned in this country, but sidestepping the law is not difficult. “Unless the package bursts open on the dock,” one drug company executive observes, “you have no chance of being caught.”

Unfortunately for us, in the case of pesticides, the effects of overseas dumping are now coming home. In the United States, the EPA bans all crop uses of DDT and dieldrin, which kill fish, cause tumors in animals, and build up in the fatty tissue of humans. It also bans heptachlor, chlordane, leptophos, endrin,

82088_ch01_ptg01_001-042.indd 34 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER ONE THE NATURE OF MORALITY 35

2. Explain what dumping is, giving some examples. Does dumping raise any moral issues? What are they? What would an ethical relativist say about dumping?

3. Speculate on why dumpers dump. Do you think they believe that what they are doing is morally permis- sible? How would you look at the situation if you were one of the manufacturers of Tris-impregnated pajamas?

4. If no law is broken, is there anything wrong with dumping? If so, when is it wrong and why? Do any moral considerations support dumping products overseas when this violates U.S. law?

5. What moral difference, if any, does it make who is dumping, why they are doing it, where they are doing it, or what the product is?

6. Critically assess the present notification system. Is it the right approach, or is it fundamentally flawed?

7. Putting aside the question of legality, what moral arguments can be given for and against dumping? What is your position on dumping, and what principles and values do you base it on? Should we have laws prohibiting more types of dumping?

C A SE 1.2

Loose Money

MONEY FALLING FROM AN ARMORED TRUCK? That may sound pretty far-fetched, but it can and has hap- pened. Take a recent six-month period. In August 2014, an armored truck left the Revel Casino Hotel in Atlantic City with a bag of money sitting on its roof. Video recordings show that it remained there unnoticed when the truck stopped at another casino. Sometime after that, however, the bag fell off, and the $21,000 it contained was never recovered. Two months later—on Halloween, to be precise—a bag of money worth an undisclosed sum spilled out of the rear door of an armored car after the door’s lock malfunctioned. Numerous drivers on their morning commute along I-270 in Frederick County, Maryland, pulled over and hopped out of their cars to grab as much cash as they could. Then on

Christmas Eve of the same year, nearly $2 million tumbled out of the back of an armored vehicle in a crowded business district of Hong Kong, creating havoc as pedestrians and motorists alike scrambled for the money. And, finally, back in New York a month later, the back door of an armored vehicle popped open on the Long Island Expressway—exactly why is uncertain—and a bag containing $178,000 fell out. When it hit the ground, it sent $20 and $100 bills flying through the air, which caused drivers to screech to a halt to chase the fluttering cash. When it was all over, only $40 was recovered.

After each of these accidents, local police appealed to people to return the scattered money to its rightful owners, saying that those who kept it might be guilty of theft. Whether anyone heeded their pleas has not been declosed.

82088_ch01_ptg01_001-042.indd 35 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

36 PART ONE MORAL PHILOSOPHY AND BUSINESS36 PART ONE MORAL PHILOSOPHY AND BUSINESS

under what circumstances would you return property or money that you found to its rightful owner?

4. Do these cases pit morality against self-interest? Which of the following is true of you: “I am willing to do the right thing: (a) always, (b) only if the sacrifice is not too great, (c) only if doing so doesn’t inconvenience me or cost me anything, or (d) only if doing so benefits me in some way”?

5. What factors explain why some people rush to take money that has fallen from a truck while others do not? In your view, to what extent is people’s behavior in such situations influenced by what they see other people doing?

6. Does the principle “Finders Keepers” apply to cases like these?

DISCUSSION QUESTIONS

1. If you encountered a situation like those described, what would you do—turn the money into the authori- ties, grab what you can and keep it, or just ignore the whole thing? What factors would influence your deci- sion? Is the decision a moral decision or some other kind of decision?

2. Is it dishonest to keep money that falls from an armored vehicle? Is it theft? In your opinion, what would be the right thing to do? Explain the values or moral principles that support your answer.

3. Some people think that if you take the money, you are hurting no one. Is that true? Would it make a difference if the money had fallen out of someone’s purse or briefcase rather than out of an armored car? When and

C A SE 1.3

Just Drop off the Key, Lee

HINDSIGHT, THEY SAY, IS 20/20. So, in retrospect, it is not so surprising that the boom in real estate prices of just a few years ago was followed by a painful collapse. Encouraged by low interest rates and a willingness of banks to lend money to almost anybody, many people had jumped into the housing market, sometimes buying expensive homes with mortgages they could barely afford, based on the belief, celebrated in televisions shows like “Flip This House,” that housing prices would continue to go up and up and up. But the law of gravity applies to housing prices, too, it seems. Inevitably, the housing market cooled down, and housing

prices stopped rising; then they slowly reversed direction and began steadily declining. As a result, many people found themselves making mortgage payments on homes worth far less than what they had originally paid for them. Moreover, many of them had been talked into taking mortgages they didn’t really understand, for example, mortgages with adjust- able rates or with special “balloon” payments due after a few years, or that were too expensive for them to afford in the first place. The financial crisis of 2008 and the recession that followed only made things worse. Faced with monthly payments they could no longer sustain, these borrowers lost

82088_ch01_ptg01_001-042.indd 36 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER ONE THE NATURE OF MORALITY 37

The standard mortgage-loan document that a bor- rower signs says, “I promise to pay” the borrowed amount. A promise is a promise, many people believe; they think you should keep making your mortgage payments even if doing so is inconvenient. In fact, 81 percent of Americans agree that it is immoral not to pay your mortgage when you can. George Brenkert, professor of business ethics at Georgetown University, is one of them. He maintains that if you were not deceived by the lender about the nature of the loan, then you have a duty to keep paying. If everybody walked away from such commitments, he reasons, the result would be disastrous. As Paola Sapienza, a finance professor at Northwestern University, points out, each strategic default emboldens others to take the same step, which he describes as a “cascade effect” with potentially damaging conse- quences for the whole economy. Economist David Rosenburg adds that these borrowers were not victims. They “signed contracts, and as adults should be held accountable.”

Others disagree. Brent White, a law professor at the University of Arizona, says that homeowners should base the decision whether to keep paying or walk away entirely on their own interests “unclouded by unnecessary guilt or shame.” They should take their lead from the lenders, who, he says, “ruthlessly seek to maximize profits or minimize loss irrespective of concerns of morality or social responsibility.” People who think like Professor White also argue that the banks fueled the housing boom in the first place by loaning money, based on unrealistic appraisals of home values, to people who were unlikely to be able to keep up their pay- ments in order to resell those loans to other investors. Others suspect a double standard. Homeowners are criticized for defaulting but businesses often declare bankruptcy even when they have money in the bank and could keep paying their bills. In fact, doing so is often thought to be a smart move because it trims their debt load and allows them to break their union contracts.

Benjamin Koellmann, for his part, remains conflicted. “People like me are beginning to feel like suckers. Why not let it go in default and rent a better place for less? . . . There is no financial sense in staying.” Still, he struggles with the ethical side of the question: “I took a loan on an asset that I didn’t see as overvalued,” he says. “As much as I would like my bank to pay

their homes through foreclosure. Widespread foreclosures, in turn, drove housing prices even lower, leaving more and more homeowners—by 2010 an estimated 5.4 million of them— “under water,” that is, with mortgage balances at least 20 percent higher than the value of their homes.

Consider thirty-year-old software engineer, Derek Figg. He paid $340,000 for a home in the Phoenix suburbs. Two years later, its value had dropped to less than $230,000, but he still owed the bank $318,000. As a result, Figg decided to stop paying his mortgage, defaulted on his loan, and walked away from his home. Or consider Benjamin Koellmann. He paid $215,000 for an apartment in Miami Beach, which three years later was worth only $90,000. Although still paying his mortgage, he is thinking about following Figg’s example.

What distinguishes Figg and Koellmann from many other homeowners whose homes are under water or who are in mortgage trouble is that both have good jobs and could afford to keep making their monthly payments—if they chose to. Moreover, they are smart guys and knew what they were doing, or thought they did, when they bought their homes. However, figuring that it would take years for their proper- ties to regain their original value and that renting would be cheaper, they are among a growing number of homeowners who have either walked away from their mortgages or are considering it, not out of necessity, but because doing so is in their financial interest. Experts call this “strategic default.” Or, in the words of an old Paul Simon song, “Just drop off the key, Lee, and get yourself free.”

As any financial advisor will tell you, there are lots of good reasons not to default on a mortgage. A foreclosure ruins a consumer’s credit record for seven years, and with a low credit score, one must pay a higher interest rate on auto and other loans. Moreover, some states allow lenders to seize bank deposits and other assets of people who default on mortgages. Benjamin Koellmann also worries that skipping out on his mortgage might hurt him with a future employer or diminish his chance of being admitted to graduate school. Still, there’s no denying that for some borrowers simply mail- ing in the keys and walking away can make sense. But that leaves one question unanswered: Do they have a moral responsibility to meet their financial commitments?

82088_ch01_ptg01_001-042.indd 37 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

38 PART ONE MORAL PHILOSOPHY AND BUSINESS38 PART ONE MORAL PHILOSOPHY AND BUSINESS

this simply a business decision based on self-interest alone, as Professor White thinks?

3. “It is morally permissible for homeowners whose homes are under water to default on their mortgages even if they could continue to pay them.” What arguments do you see in favor of this proposition? What arguments do you see against it?

4. When it comes to paying your debts, does it matter whether you borrow money from a bank or from an individual person? Explain why or why not.

5. Suppose your moral principles imply that you should keep on paying your mortgage, but financial self- interest counsels you to walk away. How are you to decide what to do?

6. Repaying a loan is a legal obligation. Is it also a moral obligation? Explain why or why not.

7. Are the banks responsible for the housing boom that enticed people to buy homes at inflated prices? If so, does this affect whether you have an obligation to repay your loan? What about Professor White’s contention that the banks themselves care only about maximizing profit?

for that mistake, why should it?” John Gourson, chief execu- tive of the Mortgage Bankers Association, concurs with this. In addition, he says, defaulting on your mortgage and letting your home go into foreclosure hurts the whole neighborhood by lowering property values. He adds: “What about the mes- sage they still send to their family and their kids and their friends?”

For his part, Derek Figg admits that defaulting was the “toughest decision I ever made.” Still, he faced a “claustro- phobic situation,” he says, because if ever he lost or quit his job, he would have been unable to sell his house and move somewhere else. Moreover, he says, lenders “manipulated” the housing market during the boom by accepting dubious appraisals. “When I weighed everything,” he says, “I was able to sleep at night.”27

DISCUSSION QUESTIONS

1. What would you do if you were in Figg’s or Koellmann’s situation? What factors would you consider?

2. Do people have a moral obligation to repay money that they borrow, as Professor Brenkert thinks, or is

Date

Percentages 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Below 1% X

From 1% to 2% X X X

From 2% to 3% X

From 3% to 4% X X X

From 4% to 5% X X

U.S. foreclosure rates in recent years, in percentages

82088_ch01_ptg01_001-042.indd 38 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER ONE THE NATURE OF MORALITY 39

KERMIT VANDIVIER COULD NOT HAVE predicted the impact on his life of purchase order P-237138, issued by LTV Aerospace Corporation.28 The order was for 202 brake assemblies for a new Air Force light attack plane, the A7D, and news of the LTV contract was cause for uncork- ing the champagne at the B. F. Goodrich plant in Troy, Ohio, where Vandivier worked. Although the LTV order was a small one, it signaled that Goodrich was back in LTV’s good graces after living under a cloud of disrepute. Ten years earlier, Goodrich had built a brake for LTV that, to put it kindly, hadn’t met expectations. As a result, LTV had written off Goodrich as a reliable source of brakes.

LTV’s unexpected change of heart after ten years was easily explained. Goodrich made LTV an offer it couldn’t refuse—a ridiculously low bid for making the four-disk brakes. Had Goodrich taken leave of its financial senses? Hardly. Because aircraft brakes are custom-made for a par- ticular aircraft, only the brakes’ manufacturer has replace- ment parts. Thus, even if it took a loss on the job, Goodrich figured it could more than make up for it in the sale of replacement parts. Of course, if Goodrich bungled the job, there wouldn’t be a third chance.

John Warren, a seven-year veteran and one of Goodrich’s most capable engineers, was made project engineer and lost no time in working up a preliminary design for the brake. Perhaps because the design was faultless or perhaps because Warren was given to temper tantrums when criticized, co-workers accepted the engineer’s plan without question. So there was no reason to suspect that young Searle Lawson, one year out of college and six months with Goodrich, would come to think Warren’s design was fundamentally flawed.

C A SE 1.4

The A7D Affair

Lawson was assigned by Warren to create the final pro- duction design. He had to determine the best materials for brake linings and identify any needed adjustments in the brake design. This process called for extensive testing to meet military specifications. If the brakes passed the gruel- ing tests, they would then be flight-tested by the Air Force. Lawson lost no time in getting down to work. What he par- ticularly wanted to learn was whether the brake could with- stand the extreme internal temperatures, in excess of 1,000 degrees F, when the aircraft landed.

When the brake linings disintegrated in the first test, Lawson thought the problem might be defective parts or an unsuitable lining. But after two more consecutive failures, he decided the problem lay in the design: The four-disk design was simply too small to stop the aircraft without generating so much heat that the brake linings melted. In Lawson’s view, a larger, five-disk brake was needed.

Lawson knew well the implications of his conclusion. The four-disk brake assemblies that were arriving at the plant would have to be junked, and more tests would have to be conducted. The accompanying delays would preclude on-time delivery of the production brakes to LTV.

Lawson reported his findings and recommendations to John Warren. Going to a five-disk design was impossible, Warren told him. Officials at Goodrich, he said, were already boasting to LTV about how well the tests were going. Besides, Warren was confident that the problem lay not in the four- disk design but in the brake linings themselves.

Unconvinced, Lawson went to Robert Sink, who super- vised engineers on projects. Sink was in a tight spot. If he agreed with Lawson, he would be indicting his own

82088_ch01_ptg01_001-042.indd 39 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

40 PART ONE MORAL PHILOSOPHY AND BUSINESS

Now this. . . . Hell, I’ve got two sons I’ve got to put through school and I just . . .” When his voice trailed off, it was clear that he would in fact knuckle under. He and Vandivier would prepare the qualifying data; then someone “upstairs” would actually write the report. Their part, Gretzinger rationalized, wasn’t really so bad. “After all,” he said, “we’re just drawing some curves, and what happens to them after they leave here—well, we’re not responsible for that.” Vandivier knew Gretzinger didn’t believe what he was saying about not being responsible. Both of them knew that they were about to become principal characters in a plot to defraud.

Unwilling to play his part, Vandivier decided that he, too, would confer with Line. Line was sympathetic; he said he understood what Vandivier was going through. But in the end he said he would not refer the matter to chief engineer H. C. “Bud” Sunderman, as Vandivier had suggested. Why not? Vandivier wanted to know.

“Because it’s none of my business, and it’s none of yours,” Line told him. “I learned a long time ago not to worry about things over which I had no control. I have no control over this.”

Vandivier pressed the point. What about the test pilots who might get injured because of the faulty brakes? Didn’t their uncertain fate prick Line’s conscience?

“Look,” said Line, growing impatient with Vandivier’s moral needling, “I just told you I have no control over this thing. Why should my conscience bother me?” Then he added, “You’re just getting all upset over this thing for noth- ing. I just do as I’m told, and I’d advise you to do the same.”

Vandivier made his decision that night. He knew, of course, he was on the horns of a dilemma. If he wrote the report, he would save his job at the expense of his con- science. If he refused, he would honor his moral code and, he was convinced, lose his job—an ugly prospect for anyone, let alone a forty-two-year-old man with a wife and several children. The next day, Vandivier phoned Lawson and told him he was ready to begin on the qualification report.

Lawson shot over to Vandivier’s office with all the speed of one who knows that, swallowed fast, a bitter pill doesn’t taste so bad. Before they started on the report, though, Vandivier, still uneasy with his decision, asked Lawson if he fully understood what they were about to do.

professional judgment: He was the man who had assigned Warren to the job. What’s more, he had accepted Warren’s design without reservation and had assured LTV more than once that there was little left to do but ship them the brakes. To recant now would mean explaining the reversal not only to LTV but also to the Goodrich hierarchy. In the end, Sink, who was not an engineer, deferred to the seasoned judgment of Warren and instructed Lawson to continue the tests.

His own professional judgment overridden, Lawson could do little but carry on. He built a production model of the brake with new linings and subjected it to the rigorous qualification tests. Thirteen more tests were conducted, and thirteen more failures resulted. It was at this point that data analyst and technical writer Kermit Vandivier entered the picture.

Vandivier was looking over the data of the latest A7D test when he noticed an irregularity: The instrument recording some of the stops had been deliberately miscalibrated to indicate that less pressure was required to stop the aircraft than actually was the case. Vandivier immediately showed the test logs to test lab supervisor Ralph Gretzinger. He learned from the technician who miscalibrated the instru- ment that Lawson had requested the miscalibration. Lawson later said he was simply following the orders of Sink and the manager of the design engineering section, who were intent on qualifying the brakes at whatever cost. For his part, Gretzinger vowed he would never permit deliberately falsi- fied data or reports to leave his lab.

A month later, the brake was again tested, and again it failed. Nevertheless, Lawson asked Vandivier to start prepar- ing the various graph and chart displays for qualification. Vandivier refused and told Gretzinger what he’d been asked to do. Gretzinger was livid. He again vowed that his lab would not be part of a conspiracy to defraud. Then, bent on getting to the bottom of the matter, Gretzinger rushed off to see Russell Line, manager of the Goodrich Technical Services Section.

An hour later, Gretzinger returned to his desk looking like a beaten man. He knew he had only two choices: defy his superiors or do their bidding.

“You know,” he said to Vandivier, “I’ve been an engineer for a long time, and I’ve always believed that ethics and integ- rity were every bit as important as theorems and formulas, and never once has anything happened to change my beliefs.

82088_ch01_ptg01_001-042.indd 40 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER ONE THE NATURE OF MORALITY 41

“Yeah,” Lawson said acidly, “we’re going to screw LTV. And speaking of screwing,” he continued, “I know now how a whore feels, because that’s exactly what I’ve become, an engineering whore. I’ve sold myself. It’s all I can do to look at myself in the mirror when I shave. I make me sick.”

For someone like Vandivier, who had written dozens of them, the qualification report was a snap. It took about a month, during which time the brake failed still another final qualification test, and the two men talked almost exclu- sively about the enormity of what they were doing. In the Nuremberg trials they found a historical analogy to their own complicity and culpability in the A7D affair. More than once, Lawson opined that the brakes were downright dangerous, that anything could happen during the flight tests. His opinion proved prophetic.

When the report was finished, copies were sent to the Air Force and LTV. Within a week test flights were begun at Edwards Air Force Base in California. Goodrich dispatched Lawson to Edwards as its representative, but he wasn’t there long. Several “unusual incidents” brought the flight tests literally to a screeching halt. Lawson returned to the Troy plant, full of talk about several near crashes caused by brake trouble during landings. That was enough to send Vandivier to his attorney, to whom he told the whole sorry tale.

Although the attorney didn’t think Vandivier was guilty of fraud, he was convinced that the analyst/writer was guilty of participating in a conspiracy to defraud. Vandivier’s only hope, the attorney counseled, was to make a clean breast of the matter to the FBI. Vandivier did. At this point both he and Lawson decided to resign from Goodrich. In his letter of resignation, addressed to Russell Line, Vandivier cited the A7D report and stated: “As you are aware, this report contains numerous deliberate and willful misrepresentations which . . . expose both myself and others to criminal charges of conspiracy to defraud.”

Vandivier was soon summoned to the office of Bud Sunderman, who berated him mercilessly. Among other things, Sunderman accused Vandivier of making irrespon- sible charges and of arch disloyalty. It would be best, said Sunderman, if Vandivier cleared out immediately. Within min- utes, Vandivier had cleaned out his desk and left the plant.

Two days later Goodrich announced it was recalling the qualification report and replacing the old brake with a new five-disk brake at no cost to LTV.

Aftermath A year later, a congressional committee reviewed the A7D affair. Vandivier and Lawson testified as government witnesses, together with Air Force officers and a General Accounting Office team. All testified that the brake was dangerous.

Robert Sink, representing the Troy plant, depicted Vandivier as a mere high school graduate with no technical training, who preferred to follow his own lights rather than organizational guidance. R. G. Jeter, vice president and general counsel of Goodrich, dismissed as ludicrous even the possibility that some thirty engineers at the Troy plant would stand idly by and see reports changed and falsified.

The congressional committee adjourned after four hours with no real conclusion. The following day the Department of Defense, citing the A7D episode, made major changes in its inspection, testing, and reporting procedures.

The A7D eventually went into service with the Goodrich-made five-disk brake.

Searle Lawson went to work as an engineer for LTV assigned to the A7D project.

Russell Line was promoted to production superintendent.

Robert Sink moved up into Line’s old job.

Kermit Vandivier became a newspaper reporter for the Daily News in Troy, Ohio.

DISCUSSION QUESTIONS

1. Identify the main characters in this case, and explain what happened.

2. To what extent did Lawson, Vandivier, and Gretzinger consider the relevant moral issues before deciding to participate in the fraud? What was their reason- ing? What would you have done if you were in their situation?

3. How did Sink and Line look at the matter? How would you evaluate their conduct?

82088_ch01_ptg01_001-042.indd 41 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

42 PART ONE MORAL PHILOSOPHY AND BUSINESS

Do any of these factors excuse the conduct of particular  individuals in this case? If so, who and why?

7. Should Goodrich be held morally responsible as a company for the A7D affair, or just the individuals involved?

8. What might Goodrich have done, and what steps should it take in the future, to ensure more moral behavior?

4. Do you think Vandivier was wrong to work up the qualification report? Explain the moral principle or principles that underlie your judgment.

5. Was Vandivier right to “blow the whistle”? Was he morally required to so? Again, explain the moral principles on which your judgment is based.

6. Describe the different pressures to conform in this case and discuss the relevance of the concepts of groupthink and diffusion of responsibility.

82088_ch01_ptg01_001-042.indd 42 03/09/15 4:21 PM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

INTRODUCTION

43

suspicious. However, the law doesn’t require hedge funds to operate as transparently as it does mutual funds, and Madoff was notoriously secretive about his investment strategy. The Securities and Exchange Commission, which is charged with policing the financial marketplace, never noticed anything amiss, and most business observers and investment advi- sors simply thought that Madoff had the Midas touch. And

so it seemed he did—until, that is, the financial crisis of 2008 when the melt- down on Wall Street led more and more of his investors to seek to redeem fund shares for cash. With new investors now few and far between, Madoff sim- ply had no money to pay those investors who wanted to cash in some or all of their chips. Unable to keep the game up, he confessed to his sons that his fund was “one big lie.” They promptly

turned him in to the authorities. Madoff’s victims included insurance companies, pension

and investment funds, banks in Europe and Asia, and a num- ber of prominent individuals, such as Hall of Fame baseball pitcher Sandy Koufax, filmmaker Steven Spielberg, and actors Kevin Bacon and John Malkovich. Many of these people were bilked for millions and millions of dollars, in some cases losing nearly all their savings. Likewise, some

HEAD OF A PREMIER HEDGE FUND AND FORMER president of the NASDAQ stock exchange, Bernard Madoff was a respected financier with a sterling reputation. So, when he stated in a speech that “in today’s regulatory environment, it’s virtually impossible [for fund managers] to violate the rules,” his listeners were unlikely to have doubted the truth of what he was saying. They were even less likely to have fore- seen how eerily prophetic his words would turn out to be when the FBI arrested him a year later for perpetrat- ing what may have been the greatest scam of all time.

Madoff’s celebrated hedge fund, it turns out, was a total fraud—in essence, a gigan tic Ponzi scheme. In a Ponzi scheme, a con artist takes in money from investors but keeps it for himself rather than investing it as promised. On paper, the profits of the investors continue to grow. If they want to redeem some of their fund shares for cash, the fraudster uses money from new investors to pay them. This keeps investors happy and content but clueless about what really happened to their money.

The fact that Madoff’s phony hedge fund reported consistently strong returns in both good and bad markets, with never a down quarter, made a few financial analysts

CHAPTER 2

NORMAT IVE THEOR I ES OF ETH ICS

MADOFF’S

celebrated hedge fund, it turns out, was a total

fraud—in essence, a gigantic Ponzi scheme.

82088_ch02_ptg01_043-082.indd 43 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

44 PART ONE MORAL PHILOSOPHY AND BUSINESS

from Madoff before his scheme crashed? Or are the Madoff investors morally required to pool their gains and try to equal- ize their losses?

You don’t need to study moral philosophy to see that Madoff acted immorally. Only a complete scoundrel steals from charities, pension funds, and friends and acquaintances who have entrusted him with their life savings. In contrast, it is not easy to know what an investor should do, who got back from Madoff more than other investors did—perhaps even more than his or her initial investment. Even if the person wants to do the right thing, what exactly does morality require,

of the charities that had invested with Madoff were com- pletely ruined. Having lost their assets, they were forced to shut down. A few investors, however, who had withdrawn money from their accounts on and off over the years, ended up in an ethical quandary. The money that they thought was in their Madoff accounts was, of course, gone, but over the years they had actually taken more money out of the fund, sometimes substantially more money, than they had initially put into it. But what they thought at the time to be legitimate profit was, they now realized, almost certainly money that Madoff had stolen from other clients. Should they keep quiet? Should they return the money to other investors, most of whom had ended up deep in the hole? Or should they insist that the money they received was legitimately theirs and push (along with all the other inves- tors) to somehow get restitution of the balances that just a few weeks before they had assumed still remained in their Madoff accounts?

Under legal pressure, Boston philanthropist Carl Shapiro, an early investor with Madoff, agreed to hand over to other victims the $625 million he had received over the years from Madoff. Trustees representing Madoff’s victims also sued Fred Wilpon and Saul Katz, the successful inves- tors who own the New York Mets, on the grounds that they should have known that the $300 million they had earned from their Madoff accounts were “fictitious prof- its.” The suit was settled in 2012 for about half that sum. As a general matter, though, the legal responsibilities of those Madoff investors who came out ahead are unclear; a number of legal battles are being waged, and some in Congress want to protect the profits of innocent Madoff inves- tors. In addition, of course, it’s unclear where any individual investor’s money actually went. But it’s not just factual or legal complexities that make the question difficult. There are competing moral considerations. If you yourself were scammed, it might seem that you have no moral obligation to help those whose losses were greater—after all, you were a victim, too. On the other hand, although Madoff was osten- sibly paying you money that you were entitled to, you were, in fact, receiving embezzled funds. Do those later investors have a right to get their money back from you? Would you act wrongly in hanging on to what you were lucky enough to get

In the 1920s, con artist Charles Ponzi told gullible investors that he could double their money in 90 days by buying postage reply coupons in other countries and redeeming them at the U.S. Post Office. In fact, he kept their money and paid early investors with money coming in from later investors.

Pi ct

or ia

l P ar

ad e/

Ar ch

ive P

ho to

s/ Ge

tty Im

ag es

82088_ch02_ptg01_043-082.indd 44 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER ONE NORMATIVE THEORIES OF ETHICS 45 CHAPTER TWO NORMATIVE THEORIES OF ETHICS 45

and how are we to determine what that is? On what basis are we to judge what is right or wrong?

Chapter 1 explained that defensible moral judgments must be underwritten by sound moral principles. That is because when we judge something wrong, we are not judging simply that it is wrong but also that it is wrong for some reason or by virtue of some general characteristic.1 Moral principles thus provide the basis for making moral judgments. The use of these principles, however, is not a mechanical process by which one cranks in data and out pops an automatic moral judgment. Rather, the principles provide a conceptual frame- work that guides us in making moral decisions. Careful thought and open-minded reflection are always necessary to work from one’s moral principles to a considered moral judgment.

But what are the appropriate principles to rely on when making moral judgments? The truth is that there is no consen- sus among people who have studied ethics and reflected on these matters. Different theories exist as to the proper standard of right and wrong. As the British philosopher Bernard Williams put it, we are heirs to a rich and complex ethical tradition, in which a variety of different moral principles and ethical consid- erations intertwine and sometimes compete.2

LEARNING OBJECTIVES

This chapter discusses the different normative perspectives and rival ethical principles that are our heritage. After distinguish- ing between what are called “consequentialist” and “noncon- sequentialist” normative theories, it looks in detail at several ethical approaches, discussing their pros and cons and their relevance to moral decision making in an organizational context:

1. Egoism, both as an ethical theory and as a psychological theory

2. Utilitarianism, the theory that the morally right action is the one that achieves the most happiness for everyone concerned

3. Kant’s ethics, with his categorical imperative and his emphasis on moral motivation and respect for persons

4. Other nonconsequentialist normative themes: duties, moral rights, and prima facie principles

The chapter concludes by suggesting a practical way of approach- ing moral decision making, which reflects the major concerns of the different normative theories that have been discussed.

CONSEQUENT IAL IST AND NONCONSEQUENT IAL IST THEOR IES In ethics, normative theories propose some principle or principles for distinguishing right actions from wrong actions. These theories can, for convenience, be divided into two kinds: consequentialist and nonconsequentialist.

According to consequentialist theories, the moral rightness of an action is deter- mined solely by its results. If its consequences are good, then the act is right; if they are bad, the act is wrong. Consequentialists (moral theorists who adopt this approach) determine what is right by weighing the ratio of good to bad that an action will produce. The right act is the one that produces (or will probably produce) at least as great a ratio of good to evil as any other course of action open to the agent.

One question that arises here is: Consequences for whom? Should one consider the con- sequences only for oneself? Or the consequences for everyone affected? The two most impor- tant consequentialist theories, egoism and utilitarianism, are distinguished by their different answers to this question. Egoism advocates individual self-interest as its guiding principle. Utilitarianism holds that one must take into account everyone affected by the action. But both theories agree that rightness and wrongness are solely a function of an action’s results.

SUMMARY Consequentialist

moral theories see the moral rightness

or wrongness of actions as a function of their results. If the consequences are good, the action is

right; if they are bad, the action is wrong. Nonconsequentialist theories see other

factors as also relevant to the

determination of right and wrong.

82088_ch02_ptg01_043-082.indd 45 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

46 PART ONE MORAL PHILOSOPHY AND BUSINESS

By contrast, nonconsequentialist (or deontological ) theories contend that right and wrong are determined by more than the likely consequences of an action. Non- consequentialists do not necessarily deny that consequences are morally significant, but they believe that other factors are also relevant to the moral assessment of an action. For example, a nonconsequentialist would hold that for Kevin to break his promise to Cindy is wrong not simply because it has bad results (Cindy’s hurt feel- ings, Kevin’s damaged reputation, and so on) but because of the inherent character of the act itself. Even if more good than bad were to come from Kevin’s breaking the promise, a nonconsequentialist might still view it as wrong. What matters is the nature of the act in question, not just its results. This idea will become clearer later in the chapter as we examine some specific nonconsequentialist principles and theories.

EGO ISM A few years after Firestone first introduced its “500” steel-belted radial tires, it was dis- covered that their tread was prone to separate at high speeds, with a House subcommit- tee later concluding that the tires had led to thirty-four highway deaths. In response to the controversy, Firestone announced that it was discontinuing the “500.” Newspapers at the time interpreted this to mean that Firestone would immediately remove the tires from the market. In fact, Firestone intended only a “rolling phaseout” and continued to manufacture the tire. When a Firestone spokesperson was later asked why the com- pany had not corrected the media’s misinterpretation of its intent, the spokesperson said that Firestone’s policy was to ask for corrections only when it was beneficial to the company to do so—in other words, only when it was in the company’s self-interest.

The view that equates morality with self-interest is referred to as egoism. According to it, an act is morally right if and only if it best promotes the agent’s own interests. (Here an “agent” can be a single person or, as in the Firestone example, an organization.) Egoism makes personal advantage (both in the short term and the long run) the standard for measuring an action’s rightness. If an action will produce more good for the agent than any alternative action would, then that action is the morally right one to perform.

Moral philosophers distinguish between two kinds of egoism: personal and imper- sonal. Personal egoists claim they should pursue their own best interests, but they do not say what others should do. Impersonal egoists claim that everyone should let self-interest guide his or her conduct.

MISCONCEPTIONS ABOUT EGOISM Several misconceptions haunt both versions of egoism. One is that egoists do only what they like, that they believe in “eat, drink, and be merry.” Not so. Undergoing unpleasant, even painful experience meshes with egoism, provided such temporary sacrifice is neces- sary for the advancement of one’s long-term interests.

Another misconception is that all egoists endorse hedonism, the view that pleasure (or happiness) is the only thing that is good in itself, that it is the ultimate good, the one thing in life worth pursuing for its own sake. Although some egoists are hedonistic— as was the ancient Greek philosopher Epicurus (341–270 bce)—other egoists have a

82088_ch02_ptg01_043-082.indd 46 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER TWO NORMATIVE THEORIES OF ETHICS 47

broader view of what constitutes self-interest. Some of them identify a person’s good with knowledge or power; others with what some modern psychologists call “self- actualization.” Egoists may, in fact, hold any theory of what is good.

A final but very important misconception is that egoists cannot act honestly, be gracious and helpful, or otherwise promote other people’s interests. Egoism, however, requires us to do whatever will best further our own interests, and doing this sometimes requires us to advance the interests of others. In particular, egoism tells us to benefit oth- ers when we expect that our doing so will be reciprocated or when the act will bring us pleasure or in some way promote our own good. For example, egoism might discourage a shopkeeper from trying to cheat customers because it is likely to hurt business in the long run. Or egoism might recommend to the chair of the board that she hire as a vice presi- dent her nephew, who is not the best candidate for the job but of whom she is very fond. Hiring the nephew might bring her more satisfaction than any other course of action, even if the nephew doesn’t perform his job as well as someone else might.

PSYCHOLOGICAL EGOISM So egoism does not preach that we should never assist others but rather that we have no basic moral duty to do so. The only moral obligation we have is to ourselves. Although you and I are not required to act in the interests of others, we should if that is the best way to promote our own self-interest. In short: Always look out for “number one.”

Proponents of the ethical theory of egoism generally attempt to derive their basic moral principle from the alleged fact that human beings are by nature selfish creatures. According to this doctrine, termed psychological egoism, people are, as a matter of fact, so constructed that they must behave selfishly. Psychological egoism asserts that all actions are selfishly motivated and that truly unselfish actions are therefore impos- sible. Even apparently self-sacrificial acts such as giving up one’s own life to save the lives of one’s children or blowing the whistle on organizational misdeeds at great personal expense are, according to psychological egoism, done to satisfy the person’s own self- interested desires. For example, the parent may seek to perpetuate the family line or to avoid guilt, and the employee may be after fame or revenge.

PROBLEMS WITH EGOISM Although egoism as an ethical doctrine has always had its adherents, the theory is open to very strong objections. It is safe to say that few, if any, philosophers today would advocate it as either a personal or an organizational morality. Consider these objections:

1. Psychological egoism is not a sound theory. Self-interest motivates all of us to some extent, and we all know of situations in which someone pretended to be act- ing altruistically or morally but was really motivated only by self-interest. The the- ory of psychological egoism contends, however, that self-interest is the only thing that ever motivates anyone.

This contention seems vulnerable to various counterexamples. Take the actual case of a man who, while driving a company truck, spotted smoke coming from inside a parked car and a child trying to escape from the vehicle. The man quickly made a U-turn, drove up to the burning vehicle, and found a little girl trapped in the back seat, restrained by a seat belt. Flames raged in the front seat as heavy smoke

According to egoism, we should assist others when doing so best promotes our own interests.

There are strong objections to egoism as an ethical doctrine.

82088_ch02_ptg01_043-082.indd 47 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

48 PART ONE MORAL PHILOSOPHY AND BUSINESS

billowed from the car. Disregarding his own safety, the man entered the car and removed the child, who would otherwise have died from the flames and poisonous fumes. When the police and rescue workers arrived, he quietly slipped away.

Or take a more mundane example. It’s Saturday, and you feel like having a beer with a couple of pals and watching the ball game. On the other hand, you believe that you ought to take your two children to the zoo, as you earlier suggested to them you might. Going to the zoo would bring them a lot of pleasure—and besides, you haven’t done much with them recently. Of course, you love your children, and it will bring you some pleasure to go to the zoo with them, but—let’s face it—they’ve been rather whiny lately and you’d prefer to watch the ball game. Nonetheless, you feel an obligation and so you go to the zoo.

These appear to be cases in which people are acting for reasons that are not self-interested. Of course, the reasons that lead you to take your children to the zoo—a sense of obligation, a desire to promote their happiness—are your reasons, but that by itself does not make them self-interested reasons. Still less does it show that you are selfish. Anything that you do is a result of your desires, but that fact doesn’t establish what the believer in psychological egoism claims—namely, that the only desires you have, or the only desires that ultimately move you, are self- interested desires.

Proponents of the theory of psychological egoism will claim that deep down both the heroic man who saved the little girl and the unheroic parent who took the children to the zoo were really motivated by self-interest in some way or another. Maybe the hero was hoping to win praise or the parent to avoid criticism or outshine his or her spouse. Or maybe some other self-interested consideration motivated them. Adherents of psychological egoism can always claim that some yet-to-be- identified subconscious egoistic motivation is the main impulse behind any action.

At this point, though, psychological egoism sounds a little far-fetched, and we may suspect its advocates of trying to make their theory true by definition. Whatever example we come up with, they will simply claim that, contrary to appearances, somehow or other the person is really motivated only by self-interest. One may well wonder how scientific this theory is, or how much content it has, when the hero and the coward, the parent who goes to the zoo and the parent who stays home, are equally selfish in their motivations.

A defender of egoism as an ethical doctrine could concede that people are not fully egoistic by nature and yet continue to insist that morally people ought to pursue only their own interests. Yet without the doctrine of psychological egoism, the ethical thesis of egoism becomes less attractive. Other types of ethical principles are possible. We all care about ourselves, but how much sense does it make to see self-interest as the basis of right and wrong? Do we really want to say that someone acting altruistically is behaving immorally?

2. Ethical egoism is not really a moral principle at all. Many critics of egoism as an ethical standard contend that it misunderstands the nature and point of moral- ity. As Chapter 1 explained, morality serves to restrain our purely self-interested desires so we can all live together. If our interests never came into conflict—that is, if it were never advantageous for one person to deceive or cheat another—then we would have no need for morality. The moral standards of a society provide the basic

82088_ch02_ptg01_043-082.indd 48 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER TWO NORMATIVE THEORIES OF ETHICS 49

guidelines for cooperative social existence and allow us to resolve conflicts by appeal to shared principles of justification.

It is difficult to see how ethical egoism could perform this function. In a society of egoists, people might publicly agree to follow certain rules so their lives would run more smoothly. But it would be a very unstable world, because people would not hesitate to break the rules if they thought they could get away with it. Nor can egoism provide a means for settling conflicts and disputes, because it simply tells each party to do whatever is necessary to promote effectively his or her interests.

Many moral theorists maintain that moral principles apply equally to the con- duct of all persons and that their application requires us to be objective and impar- tial. Moral agents are seen as those who, despite their own involvement in an issue, can be reasonably disinterested and objective—those who try to see all sides of an issue without being committed to the interests of a particular individual or group, including themselves. If we accept this attitude of detachment and impartiality as at least part of what it means to take a moral point of view, then we must look for it in any proposed moral principle.

Those who make egoism their moral standard are anything but objective, for they seek to guide themselves by their own best interests, regardless of the issue or circumstances. They do not even attempt to be impartial, except insofar as impar- tiality furthers their own interests. And, according to their theory, any third party offering advice should simply represent his or her own interest.

3. Ethical egoism condones blatant wrongs. The most common objection to egoism as an ethical doctrine is that it sometimes condones actions that are blatantly immoral. Deception, theft, or even murder can be morally right according to the standard of egoism, if it advances the agent’s self-interest (and the agent can get away with it).

In response, the defender of egoism might argue that this objection begs the question by assuming that such acts are immoral and then repudiating egoism on this basis when, in fact, their morality is the very issue that moral principles such as egoism are meant to resolve. Still, egoism fails to do justice to some of our basic ideas about right and wrong. A moral principle that permits murder, if it successfully advances one’s self-interest, clashes with our firmest moral convictions. If anything is wrong, that is wrong.

UT IL ITA R IA NISM Utilitarianism is the moral doctrine that we should always act to produce the great- est possible balance of good over bad for everyone affected by our actions. By “good,” utilitarians understand happiness or pleasure. Thus, the greatest happiness of all con- stitutes the standard that determines whether an action is right or wrong. Although the basic theme of utilitarianism is present in the writings of many earlier thinkers, Jeremy  Bentham (1748–1832) and John Stuart Mill (1806–1873) were the first to develop the theory explicitly and in detail. Both Bentham and Mill were philosophers

SUMMARY Egoism is the

consequentialist theory that an action

is right if and only if it promotes the individual’s best

interests. Proponents of this theory base their view on the alleged fact that

human beings are, by nature, selfish (the doctrine of psychological

egoism). Critics of egoism argue that (1) psychological

egoism is implausible,

(2) egoism is not really a moral principle, and

(3) egoism condones blatant wrongs.

Utilitarianism tells us to bring about the most happiness for everyone affected by our actions.

Jeremy Bentham and John Stuart Mill were important early utilitarians.

82088_ch02_ptg01_043-082.indd 49 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

50 PART ONE MORAL PHILOSOPHY AND BUSINESS

with a strong interest in legal and social reform. They used the utilitarian standard to evaluate and criticize the social and political institutions of their day—for example, the prison system and the disenfranchisement of women. As a result, utilitarianism has long been associated with social improvement.

Bentham viewed a community as no more than the individual persons that it com- prises. The interests of the community are simply the sum of the interests of its members. An action promotes the interests of an individual when it adds to the individual’s plea- sure or diminishes the person’s pain. Correspondingly, an action augments the happiness of a community only insofar as it increases the total amount of individual happiness. This is what Bentham had in mind when he argued for the utilitarian principle that actions are right if they promote the greatest human welfare, wrong if they do not.

For Bentham, pleasure and pain are merely types of sensations. He offered a “hedonic calculus” of six criteria for evaluating pleasure and pain exclusively by their quantitative differences—in particular, by their intensity and duration. This calculus, he believed, makes possible an objective determination of the morality of anyone’s conduct, individual or collective, on any occasion.

Bentham rejected any distinctions based on the type of pleasure except insofar as they might indicate differences in quantity. Thus, if equal amounts of pleasure are involved, throwing darts is as good as writing poetry and baking a cake as good as com- posing a symphony; watching Shakespeare’s Hamlet has no more value than watching Jersey Shore. Although he himself was an intelligent, cultivated man, Bentham main- tained that there is nothing intrinsically better about refined and intellectual pleasures than about crude or prosaic ones. The only issue is which yields the greater amount of enjoyment.

John Stuart Mill thought Bentham’s concept of pleasure was too simple. He viewed human beings as having elevated faculties that allow them to pursue various higher kinds of pleasure. The pleasures of the intellect and imagination, in particular, have a higher value than those of mere physical sensation. Thus, for Mill the utility principle must take into consideration the relative quality of different pleasures and pains, not just their intensity and duration.

Although Bentham and Mill had different conceptions of pleasure, both men equated pleasure and happiness and considered pleasure the ultimate value. In this sense they are hedonists: Pleasure, in their view, is the one thing that is intrinsically good or worthwhile. Anything that is good is good only because it brings about plea- sure (or happiness), directly or indirectly. Take education, for example. The learning process itself might be pleasurable to us; reflecting on or working with what we have learned might bring us satisfaction at some later time; or by making possible a career and life that we could not have had otherwise, education might bring us happiness indirectly. In contrast, critics of Bentham and Mill contend that things other than happiness are also inherently good—for example, knowledge, friendship, and aesthetic satisfaction. The implication is that these things are valuable even if they do not lead to happiness.

Bentham and Mill cared about happiness because they implicitly identified it with well-being, that is, with what is good for people. In their view, our lives go well—we have well-being—just to the extent that our lives are pleasurable or happy. Some moral theorists have modified utilitarianism so that it aims at other consequences in addition to

Bentham and Mill had different conceptions of pleasure, but they both equated it with

happiness and believed that pleasure was the

ultimate value.

82088_ch02_ptg01_043-082.indd 50 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER TWO NORMATIVE THEORIES OF ETHICS 51

happiness. And some utilitarians, wary of trying to compare one person’s happiness with another’s, have interpreted their theory as requiring us not to maximize happiness but rather to maximize the satisfaction of people’s desires or preferences. The focus here will be utilitarianism in its standard form, in which the good to be aimed at is human happi- ness or well-being, but what will be said about standard or classical utilitarianism applies, with the appropriate modifications, to other versions as well.

Although this chapter will later consider another form of utilitarianism, known as “rule utilitarianism,” utilitarianism in its most basic version, often called act utilitarianism, states that we must ask ourselves what the consequences of a particular act in a particular situation will be for all those affected. If its consequences bring more net good than those of any alternative course of action, then this action is the right one and the one we should perform.

SIX POINTS ABOUT UTILITARIANISM Before evaluating utilitarianism, one should understand some points that might lead to confusion and misapplication. First, when deciding which action will produce the great- est happiness, we must consider unhappiness or pain as well as happiness. Suppose, for example, that an action produces eight units of happiness and four units of unhappiness. Its net worth is four units of happiness. Suppose also that an opposed action produces ten units of happiness and seven units of unhappiness; its net worth is three units. In this case, we should choose the first action over the second. In the event that both lead not to happiness but to unhappiness, and there is no third option, we should choose the one that brings fewer units of unhappiness.

Second, actions affect people to different degrees. Playing your radio loudly might enhance two persons’ pleasure a little, cause significant discomfort to two others, and leave a fifth person indifferent. The utilitarian theory is not that each person votes on the basis of his or her pleasure or pain, with the majority ruling, but rather that we add up the various pleasures and pains, however large or small, and go with the action that brings about the greatest net amount of happiness.

Third, because utilitarians evaluate actions according to their consequences and because actions produce different results in different circumstances, almost anything might, in principle, be morally right in some particular situation. For example, whereas breaking a promise generally produces unhappiness, there can be circumstances in which, on balance, more happiness would be produced by breaking a promise than by keeping it. In those cases, utilitarianism would require us to break the promise.

Fourth, utilitarians wish to maximize happiness not simply immediately but in the long run as well. All the indirect ramifications of an act have to be taken into account. Lying might seem a good way out of a tough situation, but if and when the people we deceive find out, not only will they be unhappy, but also our reputations and our relation- ships with them will be damaged. This is a serious risk that a utilitarian cannot ignore.

Fifth, utilitarians acknowledge that we often do not know with certainty what the future consequences of our actions will be. Accordingly, we must act so that the expected or likely happiness is as great as possible. If I take my friend’s money, unbeknownst to him, and buy lottery tickets with it, there is a chance that we will end up millionaires and that my action will have maximized happiness all around. But the odds are definitely against it; the most likely result is loss of money (and probably of a friendship, too).

Six important things to understand about utilitarianism.

SUMMARY Utilitarianism, another

consequentialist theory, maintains

that the morally right action is the one that

provides the most happiness for all

those affected. After assessing as best we can the likely results of each action, not

just in the short term but in the long run as well, we are to

choose the course of conduct that brings about the greatest

net happiness.

82088_ch02_ptg01_043-082.indd 51 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

52 PART ONE MORAL PHILOSOPHY AND BUSINESS

Therefore, no utilitarian could justify gambling with purloined funds on the grounds that it might maximize happiness.

Sometimes it is difficult to determine the likely results of alternative actions, and no modern utilitarian really believes that we can assign precise units of happiness and unhappiness to people. But as Mill reminds us, we actually do have quite a lot of experi- ence as to what typically makes people happy or unhappy. In any case, as utilitarians our duty is to strive to maximize total happiness, even when it is difficult to know which action will produce the most good.

Finally, when choosing among possible actions, utilitarianism does not require us to disregard our own pleasure. Nor should we give it added weight. Rather, our own pleasure and pain enter into the calculus equally with the pleasures and pains of others. Even if we are sincere in our utilitarianism, we must guard against the possibility of being biased in our calculations when our own interests are at stake. For this reason, and because it would be time-consuming to do a utilitarian calculation before every action, utilitarians encour- age us to rely on rules of thumb in ordinary moral circumstances. We can make it a rule of thumb, for example, to tell the truth and keep our promises, rather than to calculate pos- sible pleasures and pains in every routine case, because we know that in general telling the truth and keeping promises result in more happiness than do lying and breaking promises.

UTILITARIANISM IN AN ORGANIZATIONAL CONTEXT Several features about utilitarianism make it appealing as a standard for moral decisions in business and nonbusiness organizations.

First, utilitarianism provides a clear and straightforward basis for formulating and testing policies. By utilitarian standards, an organizational policy, decision, or action is good if it promotes the general welfare more than any other alternative. A policy is con- sidered wrong (or in need of modification) if it does not promote total utility as well as some alternative would. Utilitarians do not ask us to accept rules, policies, or principles blindly. Rather, they require us to test their worth against the standard of utility.

Second, utilitarianism provides an objective and attractive way of resolving con- flicts of self-interest. This feature of utilitarianism dramatically contrasts with egoism, which seems incapable of resolving such conflicts. By proposing a standard outside self-interest, utilitarianism greatly minimizes and may actually eliminate such disputes. Thus, individuals within organizations make moral decisions and evaluate their actions by appealing to a uniform standard: the general good.

Third, utilitarianism provides a flexible, result-oriented approach to moral decision making. By recognizing no actions of a general kind as inherently right or wrong, utilitari- anism encourages organizations to focus on the results of their actions and policies, and it allows them to tailor their decisions to suit the complexities of their situations. This facet of utilitarianism enables organizations to make realistic and workable moral decisions.

CRITICAL INQUIRIES OF UTILITARIANISM

1. Is utilitarianism really workable? Utilitarianism instructs us to maximize hap- piness, but in difficult cases we may be very uncertain about the likely results of the alternative courses of action open to us. Furthermore, comparing your level of happiness or unhappiness with that of someone else is at best tricky, at worst impossible—and when many people are involved, the matter may get hopelessly

Three features of utilitarianism make

it appealing in an organizational context.

82088_ch02_ptg01_043-082.indd 52 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER TWO NORMATIVE THEORIES OF ETHICS 53

complex. Even if we assume that it is possible to make comparisons and to identify the various possible results of each course of action that a person might take (and to determine the likelihood of each result), is it realistic to expect people to take the time to make those calculations and, if they do, to make them accurately? Some critics of act utilitarianism have contended that teaching people to follow the basic utilitarian principle would not, in fact, promote happiness because of the difficul- ties in applying utilitarianism accurately.

2. Are some actions wrong, even if they produce good? Like egoism, utilitarianism focuses on the results of an action, not on the character of the action itself. For util- itarians, no action is in itself objectionable. It is objectionable only when it results in less happiness than could otherwise have been brought about. Critics of utilitari- anism, by contrast, contend that some actions can be immoral and thus things we must not do, even if doing them would maximize happiness.

Suppose a dying woman has asked you to promise to send the $25,000 under her bed to her nephew in another part of the country. She dies without anyone else’s knowing of the money or of the promise that you made. Now suppose, too, that you know the nephew is a spendthrift and a drunkard and, were the money delivered to him, it would be wasted in a week of outrageous partying. On the other hand, a very fine orphanage in your town needs such a sum to improve and expand its recre- ational facilities, something that would provide happiness to many children for years to come. It seems clear that on utilitarian grounds you should give the money to the orphanage, because this action would result in greater net happiness.

Many people would balk at this conclusion, contending that it would be wrong to break your promise, even if doing so would bring about more good than keeping it. Having made a promise, you have an obligation to keep it, and a deathbed promise is particularly serious. Furthermore, the deceased woman had a right to do with her

Can we estimate the effects of our actions well enough for utilitarianism to work?Individuals whose happiness levels must be

measured and combined by the utilitarian.

H ap

pi ne

ss Q

uo tie

nt

14

13

12

11

0

21

22

23

24

= Individual a’s units of happiness

= Individual b’s units of happiness

= Individual c’s units of happiness

= Individual d’s units of happiness

82088_ch02_ptg01_043-082.indd 53 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

54 PART ONE MORAL PHILOSOPHY AND BUSINESS

money as she wished; it is not for you to decide how to spend it. Likewise, having been bequeathed the money, the nephew has a right to it regardless of how wisely or foolishly he might spend it. Defenders of utilitarianism, however, would insist that promoting happiness is all that really matters and warn you not to be blinded by moral prejudice.

Critics of utilitarianism respond that it is utilitarianism that is morally blind because it not only permits but sometimes even requires us to perform immoral actions. Philosopher Richard Brandt states the case against act utilitarianism this way:

Act-utilitarianism . . . implies that if you have employed a boy to mow your lawn and he has finished the job and asks for his pay, you should pay him what you prom- ised only if you cannot find a better use for your money. . . . It implies that if your father is ill and has no prospect of good in his life, and maintaining him is a drain on the energy and enjoyments of others, then, if you can end his life without provoking any public scandal or setting a bad example, it is your positive duty to take matters into your own hands and bring his life to a close.3

In the same vein, ethicist A. C. Ewing concludes that “[act] utilitarian principles, logically carried out, would result in far more cheating, lying and unfair action than any good man would tolerate.”4

Defenders of act utilitarianism would reply that these charges are exaggerated. Although it is theoretically possible, for example, that not paying the boy for his work might maximize happiness, this is extremely unlikely. Utilitarians contend that only in very unusual circumstances will pursuit of the good conflict with our ordi- nary ideas of right and wrong, and in those cases—like the deathbed promise—we should put aside those ordinary ideas. The anti-utilitarian replies that the theoretical possibility that utilitarianism may require immoral conduct shows it to be an unsat- isfactory moral theory.

3. Is utilitarianism unjust? Utilitarianism concerns itself with the sum total of hap- piness produced, not with how that happiness is distributed. If policy X brings two units of happiness to each of five people and policy Y brings nine units of happiness to one person, one unit each to two others, and none to the remaining two, then Y is to be preferred (eleven units of happiness versus ten), even though it distributes that happiness very unequally.

Worse still from the critic’s point of view, utilitarianism may even require that some people’s happiness be sacrificed in order to achieve the greatest overall amount of happiness. Sometimes the general utility may be served only at the expense of a single individual or group. For example, under the right of eminent domain (see Case 3.1), the government may appropriate private property for public use (after compensating the owner). Thus, the government may legally purchase your house from you to widen a highway—even if you don’t want to sell the house or want more money than the government is willing to pay. The public interest is served at your private expense. Is this just?

Or consider the Dan River experiment, part of the long-running controversy over the cause of brown lung disease. Claiming that the disease is caused by the inhalation of microscopic fibers in cotton dust, textile unions fought for years for tough regulations to protect their workers. The Occupational Safety and Health Administration (OSHA) responded by proposing cotton dust standards, which would require many firms to install expensive new equipment. A few months before

SUMMARY In an organizational

context, utilitarianism provides an

objective way to resolve conflicts of self-interest and

encourages a realistic and result-oriented approach to moral

decision making. But critics contend that (1) utilitarianism is

not really workable, (2) some actions are wrong even if they

produce good results, and (3) utilitarianism incorrectly overlooks

considerations of justice and the

distribution of happiness.

82088_ch02_ptg01_043-082.indd 54 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER TWO NORMATIVE THEORIES OF ETHICS 55

the deadline for installing the equipment, officials at Dan River Mills, a textile man- ufacturer in Danville, Virginia, asked the government to waive the requirements for a time so that the company could conduct an experiment to determine the precise cause of brown lung disease. Both the state of Virginia and the U.S. Department of Labor allowed the extension. In response, the textile workers union contended, “It is simply unconscionable to allow hundreds of cotton mill workers to continue to face a high risk of developing brown lung disease.”5

Suppose that the Dan River project did expose workers to what is considered a high risk of contracting lung disease. If so, then a small group of individuals—633 textile workers at ten locations in Danville, Virginia—were being compelled to carry the burden of isolating the cause of brown lung disease. Is that just?

Although their critics would say no, utilitarians would respond that it is, if the experiment maximizes the total good of society. Does it? In fact, the results of the experiment were inconclusive, but if the project had succeeded in identifying the exact cause of the disease, then thousands of textile workers across the country would have benefited. Researchers might also have discovered a more economical way to ensure worker safety than by installing expensive new equipment, which in turn would have profited both consumers and the textile industry. Certainly, utilitarians would consider the potentially negative impact on workers, but only as one factor among others. At the time of the decision, after the interests of all affected parties have been weighed, if extending the deadline is likely to yield the greatest net benefit or utility, then doing so is just—even though workers might be injured.

THE INTERPLAY BETWEEN SELF-INTEREST AND UTILITY Both self-interest and utility play important roles in organizational decisions, and the views of many businesspeople blend these two theories. To the extent that each business pursues its own interests and each businessperson tries to maximize personal success, business practice can be called egoistic. But business practice is also utilitarian in that pursuing one’s economic interests is thought to benefit society as a whole, and playing by the established rules of the competitive game is seen as advancing the social good. The classical capitalist economist Adam Smith (1723–1790) held such a view. He argued that leaving business and businesspeople free to pursue their self-interest will serve the good of society. Indeed, Smith believed that only through egoistic pursuits could the greatest economic benefit for the whole society be produced. The essence of Smith’s position can be seen in the follow- ing passage from the Wealth of Nations (1776), in which Smith underscores the interplay between self-interest and the social good and between egoism and utilitarianism:

Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command. It is his own advantage, indeed, and not that of the society, which he has in view. But the study of his own advantage, naturally, or rather necessarily, leads him to prefer that employment which is most advantageous to the society. . . .

As every individual, therefore, endeavours as much as he can  .  .  . to employ his capital . . . [so] that its produce may be of the greatest value, every individual necessarily labors to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how

Business practice is egoistic, but Adam Smith and others believe that it is also utilitarian because the pursuit of self-interest promotes the good of society.

82088_ch02_ptg01_043-082.indd 55 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

56 PART ONE MORAL PHILOSOPHY AND BUSINESS

much he is promoting it. . . . He intends only his own security; and by directing that industry in such a manner as its product may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.6

Many today would agree with Smith* that the pursuit of self-interest is central to our economic system because it provides the motivating force that turns the wheels of commerce and industry. Although acknowledging that business is part of a social system and that certain ground rules are needed and should be followed, they would argue that society is best served by the active pursuit of self-interest within the established rules of business practice. Thus what we might call business egoism—the view that it is morally acceptable (or even morally required) for individuals to pursue their economic interests when engaged in business—is defended on utilitarian grounds.

K ANT’S E TH ICS Most of us find the ideal of promoting human happiness and well-being an attrac- tive one and, as a result, admire greatly people like Mother Teresa (1910–1997), who devoted her life to working with the poor. Despite the attractiveness of this ideal, many moral philosophers are critical of utilitarianism—particularly because, like egoism, it reduces all morality to a concern with consequences. Although nonconsequential- ist normative theories vary significantly, adopting different approaches and stress- ing different themes, the writings of the preeminent German philosopher Immanuel Kant (1724–1804) provide an excellent example of a thoroughly nonconsequentialist approach to ethics. Perhaps few thinkers today would endorse Kant’s theory on every point, but his work has greatly influenced subsequent philosophers and has helped shape our general moral culture.

Kant sought moral principles that do not rest on contingencies and that define actions as inherently right or wrong apart from any particular circumstances. He believed that moral rules can, in principle, be known as a result of reason alone and are not based on observation (as are, for example, scientific judgments). In contrast to utilitarianism and other consequentialist doctrines, Kant’s ethical theory holds that we do not have to know anything about the likely results of, say, my telling a lie to my boss in order to know that it is immoral. “The basis of obligation,” Kant wrote, “must not be sought in human nature, [nor] in the circumstances of the world.” Rather it is a priori, by which he meant that moral reasoning is not based on factual knowledge and that reason by itself can reveal the basic principles of morality.

*Chapter 4 examines Smith’s position in more detail.

Kant believed that moral reasoning is not based on factual knowledge

and that the results of our actions do not

determine whether they are right or wrong.

82088_ch02_ptg01_043-082.indd 56 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER TWO NORMATIVE THEORIES OF ETHICS 57

GOOD WILL Chapter 1 mentioned Good Samaritan laws, which shield from lawsuits those rendering emergency aid. Such laws, in effect, give legal protection to the humanitarian impulse behind emergency interventions. They formally recognize that the interventionist’s heart was in the right place—that the person’s intention was irreproachable. And because the person acted from right intention, he or she should not be held liable for any inadvertent harm except in cases of extreme negligence. The widely observable human tendency to introduce a person’s intentions in assigning blame or praise is a good springboard for engaging Kant’s ethics.

Nothing, said Kant, is good in itself except good will. This does not mean that intel- ligence, courage, self-control, health, happiness, and other things are not good and desir- able. But Kant believed that their goodness depends on the will that makes use of them. Intelligence, for instance, is not good when exercised by an evil person.

By will Kant meant the uniquely human capacity to act from principle. Contained in the notion of good will is the concept of duty: Only when we act from a sense of duty does our action have moral worth. When we act only out of feeling, inclination, or self- interest, our actions—although they may be otherwise identical with ones that spring from the sense of duty—have no true moral worth.

Suppose that you’re the owner of a small convenience store. Late one night a cus- tomer pays for his five-dollar purchase with a twenty-dollar bill, which you mistake for a ten. Only after the customer leaves do you realize you short-changed him. You race out the front door and find him lingering by a vending machine. You give him the ten dollars with your apologies, and he thanks you warmly.

Can we say that you acted from good will? Not necessarily. You may have acted from a desire to promote future business or to cultivate a reputation for honesty. If so, you would have acted in accordance with, but not from, duty. Your apparently virtuous ges- ture just happened to coincide with what duty requires. According to Kant, if you do not will the action from a sense of your duty to be fair and honest, your action lacks moral worth. Actions have true moral worth only when they spring from a recognition of duty and a choice to discharge it.

What determines our duty? How do we know what morality requires of us? Kant answered these questions by formulating what he called the “categorical imperative.” This extraordinarily significant moral concept is the linchpin of Kant’s ethics.

THE CATEGORICAL IMPERATIVE We have seen that egoists and utilitarians allow factual circumstances or empirical data to determine moral judgments. In contrast, Kant believed that reason alone can establish the moral law. We need not rely on empirical evidence relating to consequences and to similar situations. Just as we know, seemingly through reason alone, such abstract truths as “Every change must have a cause,” so we can arrive at absolute moral truth through nonempirical reasoning and thereby discover our duty. For Kant, the moral law must hold in all circumstances, free from any internal contradiction. If we can formulate this law or rule, he thought, everyone would be obliged to follow it without exception.

Kant believed that there is just one command (imperative) that is categorical and thus necessarily binding on all rational agents, regardless of any other considerations.

SUMMARY Kant’s theory

is an important example of a purely nonconsequentialist approach to ethics. Kant held that only when we act from

duty does our action have moral worth.

Good will is the only thing that is good in

itself.

82088_ch02_ptg01_043-082.indd 57 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

58 PART ONE MORAL PHILOSOPHY AND BUSINESS

From this one categorical imperative (that is, from this universal command), we can derive all the specific commands of duty. Kant’s categorical imperative says that we should always act in such a way that we can will the maxim of our action to be a universal law. So Kant’s answer to the question “What determines whether an act is right?” is that an act is morally right if and only if we can will it as a universal law of conduct.

The obvious and crucial question that arises here is, “When are we justified in saying that the maxim of our action could become a universal law of conduct?”

By maxim, Kant meant the subjective principle of an action, the principle (or rule) that people in effect formulate in determining their conduct. For example, suppose building contractor Martin promises to install a sprinkler system in a project but is will- ing to break that promise to suit his purposes. His maxim can be expressed this way: “I’ll make promises that I’ll break whenever keeping them no longer suits my purposes.” This is the subjective principle—the maxim—that directs his action.

Kant insisted that the morality of any maxim depends on whether we can logically will it to be a universal law governing everyone’s conduct. Could Martin’s maxim be universally acted on? That depends on whether the maxim as law would involve a contra- diction. The maxim “I’ll make promises that I’ll break whenever keeping them no longer suits my purposes” could not be universally acted on because it involves a contradiction of will. On the one hand, Martin is willing that it be possible to make promises and have them honored. On the other, if everyone made promises without intending to keep them, then promises would not be honored in the first place, because it is in the nature of promises that they be believed. A law that allowed promise breaking would contradict the very nature of a promise. Similarly, a law that allowed lying would contradict the very nature of serious communication, for the activity of serious communication (as opposed to joking) requires that participants intend to speak the truth. I cannot, without contra- diction, will both serious conversation and lying. By contrast, there is no problem, Kant thinks, in willing promise keeping or truth telling to be universal laws.

Consider, as another example, Kant’s account of a man who, in despair after suffer- ing a series of major setbacks, contemplates suicide. While still rational, the man asks whether it would be contrary to his duty to take his own life. Could the maxim of his action become a universal law of nature? Kant thinks not:

His maxim is this: From self-love I make it my principle to shorten my life when its continued duration threatens more evil than it promises satisfaction. There only remains the question whether this principle of self-love can become a universal law of nature. One sees at once a contradiction in a system of nature whose law would de- stroy life by means of the very same feeling that acts so as to stimulate the furtherance of life. . . . Therefore, such a maxim cannot possibly hold as a universal law of nature and is, consequently, wholly inconsistent with the supreme principle of all duty.7

When Kant insists that a moral rule be consistently universalizable, he is saying that moral rules prescribe categorically, not hypothetically. A hypothetical prescription tells us what to do if we desire a particular outcome. Thus, “If I want people to like me, I should be nice to them” and “If you want to go to medical school, you must take biology” are hypothetical imperatives. They tell us what we must do on the assumption that we have some particular goal. If that is what we want, then this is what we must do; but if we don’t want to go to medical school, then the command to take biology does not apply to us. In contrast, Kant’s imperative is categorical: It commands unconditionally. It is

If you make a promise that you don’t intend to

keep, it is impossible to will the maxim

governing your action as a universal law.

82088_ch02_ptg01_043-082.indd 58 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER TWO NORMATIVE THEORIES OF ETHICS 59

necessarily binding on everyone, regardless of his or her specific goals or desires, regard- less of consequences. A categorical imperative takes the form of “Do this” or “Don’t do that”—no ifs, ands, or buts.

Universal Acceptability There is another way of looking at the categorical imperative. Each person, through his or her own acts of will, legislates the moral law. The moral rules that we obey are not imposed on us from the outside. They are self-imposed and self-recognized, fully inter- nalized principles. The sense of duty that we obey comes from within; it is an expression of our own higher selves.

Thus, moral beings give themselves the moral law and accept its demands on them- selves. But that is not to say we can prescribe anything we want, for we are constrained by reason and its requirements. Because reason is the same for all rational beings, we all give ourselves the same moral law. In other words, when you answer the question “What should I do?” you must consider what all rational beings should do. You can embrace something as a moral law only if all other rational beings can also embrace it. It must have universal acceptability.

To see whether a rule or principle is a moral law, we can thus ask if what the rule commands would be acceptable to all rational beings. In considering lying, theft, or murder, for example, you must consider the act not only from your own viewpoint but also from the perspective of the person lied to, robbed, or murdered. Presumably, ratio- nal beings do not want to be lied to, robbed, or murdered. The test of the morality of a rule, then, is whether all rational beings looking at the matter objectively and impartially could accept the rule regardless of whether the action in question was performed by them or done to them. This is an important moral insight, and most philosophers see it as implicit in Kant’s discussion of the categorical imperative, even though Kant (whose writings are difficult to understand) did not make the point in this form.

The principle of universal acceptability has important applications. Suppose a man advocates a hiring policy that discriminates against women. For this rule to be universally acceptable, the man would have to be willing to accept it if he were a woman, something he would presumably be unwilling to do. Or suppose the manufacturer of a product decides to market it even though the manufacturer knows that the product is unsafe when used in a certain common way and that consumers are ignorant of this fact. Applying the universal-acceptability principle, the company’s decision makers would have to be willing to advocate marketing the product even if they were themselves in the position of uninformed consumers. Presumably they would be unwilling to do this. So the rule that would allow the product to be marketed would fail the test of universal acceptability.

Humanity as an End, Never as Merely a Means In addition to the principle of universal acceptability, Kant explicitly offered another, very famous way of formulating the core idea of his categorical imperative. According to this formulation, as rational creatures we should always treat other rational creatures as ends in themselves and never as only means to our own ends. This formulation underscores Kant’s belief that every human being has an inherent worth resulting from the sheer possession of rationality. We must always act in a way that respects this humanity in others and in ourselves. When brokers at the Dallas office of Prudential Securities encouraged unneces-

SUMMARY Kant’s categorical imperative states that an action is

morally right if and only if we can will the maxim (or principle) represented by our

action as a universal law. For example, a person making a promise with no

intention of keeping it cannot universalize the maxim governing his action because if everyone followed

this principle, promising would make no sense.

Kant believed that the categorical

imperative is binding on all rational

creatures, regardless of their specific

goals or desires and regardless of the consequences.

82088_ch02_ptg01_043-082.indd 59 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

60 PART ONE MORAL PHILOSOPHY AND BUSINESS

sary buying and selling of stocks by their clients in order to reap a commission (a practice called “churning”), they failed to do this. They were treating their clients simply as a means to their own ends and not respecting them as persons, as ends in themselves.8

As rational beings, humans would act inconsistently if they did not treat everyone else the way they themselves would want to be treated. Here we see shades of the Golden Rule. Indeed, Kant’s moral philosophy can be viewed as a profound reconsideration of this basic nonconsequentialist principle. Because rational beings recognize their own inner worth, they would never wish to be used as if they were entities possessing value only as means to an end.

Kant maintained, as explained first, that an action is morally right if and only if we can will it to be a universal law of conduct. We now have two ways of reformulating his categorical imperative that may be easier to grasp and apply:

First reformulation: An action is right if and only if its underlying principle is universally acceptable, that is, acceptable to all rational parties whether the action is done by them or to them.

Second reformulation: One must always act so as to treat other people as ends in themselves.

KANT IN AN ORGANIZATIONAL CONTEXT Like utilitarianism, Kant’s moral theory has application for organizations.

First, the categorical imperative gives us firm rules to follow in moral decision mak- ing, rules that do not depend on circumstances or results and that do not permit indi- vidual exceptions. No matter what the consequences may be or who does it, some actions are always wrong. Lying is an example: No matter how much good might come from misrepresenting a product, such deliberate misrepresentation is always wrong. Similarly, it would be wrong to expose uninformed workers to some occupational health risk on the grounds that it advances medical knowledge.

Second, Kant introduces an important humanistic dimension into business deci- sions. One of the principal objections to egoism and utilitarianism is that they permit us to treat humans as means to ends. Kant’s principles clearly forbid this. Many would say that respect for the inherent worth and dignity of human beings is much needed today in business, where encroaching technology and the pressure of globalization tend to dehumanize people under the guise of efficiency. Kant’s theory puts the emphasis of organizational decision making where it belongs: on individuals. Organizations, after all, involve human beings working in concert to provide goods and services for other human beings. The primacy Kant gives the individual reflects this essential aspect of business.

Third, Kant stresses the importance of motivation and of acting on principle. According to Kant, it is not enough just to do the right thing; an action has moral worth only if it is done from a sense of duty—that is, from a desire to do the right thing for its own sake. The importance of this point is too often forgotten. Sometimes when indi- viduals and organizations believe that an action promotes the interests of everyone, they are actually rationalizing—doing what is best for themselves and only imagining that somehow it will also benefit others. Worse still, they may defend their actions as mor- ally praiseworthy when, in fact, they are only behaving egoistically. They wouldn’t do the morally justifiable thing if they didn’t think it would pay off for them. By stressing

SUMMARY There are two

alternative formulations of the categorical

imperative. The first is that the action

must be acceptable to all rational parties whether it is done

by them or done to them. The second is that one must always treat other people as ends, never merely

as means.

Two alternative formulations of the

categorical imperative.

82088_ch02_ptg01_043-082.indd 60 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER TWO NORMATIVE THEORIES OF ETHICS 61

the importance of motivation, a Kantian approach serves as a corrective to this. Even an action that helps others has moral value for Kant only if the person doing it is morally motivated—that is, acting on principle or out of moral conviction.

CRITICAL INQUIRIES OF KANT’S ETHICS

1. What has moral worth? According to Kant, the convenience store owner who returns the ten dollars to the customer is doing the right thing. But if his action is motivated by self-interest (perhaps he wants to get a reputation for honesty), then it does not have moral worth. That seems plausible. But Kant also held that if the owner does the right thing out of instinct, habit, or sympathy for the other person, then the act still does not have moral worth. Only if it is done out of a sense of duty does the action have moral value. Many moral theorists have felt that Kant was too severe on this point. Do we really want to say that giving money to famine relief has no moral worth if one is emotionally moved to do so by pictures of starving chil- dren rather than by a sense of duty? We might, to the contrary, find a person with strong human sympathies no less worthy or admirable than the person who gives solely out of an abstract sense of duty.

2. Is the categorical imperative an adequate test of right? Kant said that a moral rule must function without exception. Critics wonder why the prohibition against actions such as lying, promise breaking, and suicide must be exceptionless. They say that Kant failed to distinguish between saying that a person should not except himself or herself from a rule and that the rule itself cannot specify exceptions.

Is the categorical imperative an adequate test of right? A moral rule must function without exception, according to Kant. How applicable is that tenet to torture?

Ch ris

ta D

eR id

de r/S

hu tte

rs to

ck .co

m

82088_ch02_ptg01_043-082.indd 61 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

62 PART ONE MORAL PHILOSOPHY AND BUSINESS

If stealing is wrong, it’s wrong for me as well as for you. “Stealing is wrong, except if I do it” is not universalizable, for then stealing would be right for all to do, which contradicts the assertion that stealing is wrong. But just because no one may make of oneself an exception to a rule, it does not follow that the rule itself cannot specify exceptions.

Suppose, for example, that we decide that stealing is sometimes right, perhaps in the case of a person who is starving. Thus, the rule becomes “Never steal except when starving.” This rule seems just as universalizable as “Never steal.” The phrase “except. . . .” can be viewed not as justifying a violation of the rule but as building a qualification into it. Critics in effect are asking why a qualified rule is not just as good as an unqualified one. If it is, then we no longer need to state rules in the simple, direct, unqualified manner that Kant did.

In fairness to Kant, it could be argued that his universalization formula can be interpreted flexibly enough to meet commonsense objections. For example, perhaps we could universalize the principle that individuals should steal rather than starve to death or that it is permissible to take one’s own life to extinguish unspeakable pain. Yet to qualify the rules against stealing, lying, and taking one’s life seems to invite a non-Kantian analysis to justify the exceptions. One could, it seems, universalize more than one moral rule in a given situation: “Do not lie unless a life is at stake” versus “Lying is wrong unless necessary to avoid the suffering of innocent people.” If so, then the categorical imperative would supply at best a necessary, but not a suffi- cient, test of right. But once we start choosing among various alternative rules, then we are adopting an approach to ethics that Kant would have rejected.

3. What does it mean to treat people as means? Kant’s mandate that individuals must always be considered as ends in themselves and never merely as means expresses our sense of the intrinsic value of the human spirit and has profound moral appeal. Yet it is not always clear when people are being treated as ends and when merely as means. For example, Kant believed that prostitution is immoral because, by selling their sexual services, prostitutes allow themselves to be treated as means. Prostitutes, however, are not the only ones to sell their services. Anyone who works for a wage does so. Does that mean that we are all being treated immorally, because our em- ployers are presumably hiring us as a means to advance their own ends? Presumably not, because we freely agreed to do the work. But then the prostitute might have freely chosen that line of work, too.

OTHER NONCONSEQUENT IAL IST PERSPECT IV ES For Kant, the categorical imperative provided the basic test of right and wrong, and he was resolutely nonconsequentialist in his application of it. You know now what he would say about the case of the deathbed promise: The maxim permitting you to break your promise cannot be universalized, and hence it would be immoral of you to give the money to the orphanage, despite its bringing about more happiness. But nonconsequen- tialists are not necessarily Kantians, and several different nonutilitarian moral concerns emerged in the discussion of the deathbed promise example.

SUMMARY Kant’s ethics gives us firm standards

that do not depend on results; it injects a humanistic element into moral decision

making and stresses the importance of acting on principle and from a sense of duty. Critics,

however, worry that (1) Kant’s view of moral worth is too

restrictive, (2) the categorical imperative is not a sufficient test of

right and wrong, and (3) distinguishing between treating

people as means and respecting them as ends in themselves may be difficult in

practice.

82088_ch02_ptg01_043-082.indd 62 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER TWO NORMATIVE THEORIES OF ETHICS 63

Critics of act utilitarianism believe that it is faulty for maintaining that we have one and only one moral duty. A utilitarian might follow various principles as rules of thumb, but they are only calculation substitutes. All that matters morally to utilitarians is the maximization of happiness. Yet this idea, many philosophers think, fails to do justice to the richness and complexity of our moral lives.

PRIMA FACIE OBLIGATIONS One influential philosopher who argued this way was the British scholar W. D. Ross (1877–1971).9 Ross rejected utilitarianism as too simple and as untrue to the way we ordinarily think about morality and about our moral obligations. We see ourselves, Ross and like-minded thinkers contend, as being under various moral duties that can- not be reduced to the single obligation to maximize happiness. Often these obligations grow out of special relationships into which we enter or out of determinate roles that we undertake. Our lives are intertwined with other people’s in particular ways, and we have, as a result, certain specific moral obligations.

For example, as a professor, Rodriguez is obligated to assist her students in the learning process and to evaluate their work in a fair and educationally productive way— obligations to the specific people in her classroom that she does not have to other people. As a spouse, Rodriguez must maintain a certain emotional and sexual fidelity to her partner. As a parent, she must provide for the individual human beings who are her children. As a friend to Smith, she may have a moral responsibility to help him out in a time of crisis. Having borrowed money from Chang, Rodriguez is morally obligated to pay it back. Thus, different relationships and different circumstances generate a variety of specific moral obligations.

In addition, we have moral duties that do not arise from our unique interactions and relationships with other people. For example, we ought to treat all people fairly, do what we can to remedy injustices, and make an effort to promote human welfare generally. The latter obligation is important, but for a nonconsequentialist like Ross, it is only one among various obligations that people have.

At any given time, we are likely to be under more than one obligation, and some- times these obligations can conflict—that is, we may have an obligation to do A and an obligation to do B, where it is not possible for us to do both A and B. For example, I promise to meet a friend on an urgent matter, and now, as I am hurrying there, I pass an injured person who is obviously in need of help. Stopping to aid the person will make it impossible for me to fulfill my promise. What should I do? For moral philosophers like Ross, there is no single answer for all cases. What I ought to do will depend on the circumstances and relative importance of the conflicting obligations. I have an obligation to keep my promise, and I have an obligation to assist someone in distress. What I must decide is which of these obligations is, in the given circumstance, the more important. I  must weigh the moral significance of the promise against the comparative moral urgency of assisting the injured person.

Ross and many contemporary philosophers believe that all (or at least most) of our moral obligations are prima facie ones. A prima facie obligation is an obligation that can be overridden by a more important obligation. For instance, we take the keeping of promises seriously, but almost everyone would agree that in some circumstances—for example, when a life is at stake—it would be not only morally permissible, but morally required, to break a

Ross believed that we have various moral duties that cannot be reduced to one single obligation to maximize happiness.

82088_ch02_ptg01_043-082.indd 63 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

64 PART ONE MORAL PHILOSOPHY AND BUSINESS

promise. Our obligation to keep a promise is a real one, and if there is no conflicting obliga- tion, then we must keep the promise. But that obligation is not absolute or categorical; it could in principle be outweighed by a more stringent moral obligation. The idea that our obligations are prima facie is foreign to Kant’s way of looking at things.

Consider an example that Kant himself discussed.10 Imagine that a murderer comes to your door, wanting to know where your friend is so that he can kill her. Your friend is in fact hiding in your bedroom closet. Most people would agree that your obligation to your friend overrides your general obligation to tell the truth and that the right thing to do would be to lie to the murderer to throw him off your friend’s trail. Although you have a genuine obligation to tell the truth, it is a prima facie obligation, one that other moral considerations can outweigh. Kant disagreed. He maintained that you must always tell the truth—that is, in all circumstances and without exception. For him, tell- ing the truth is an absolute or categorical obligation, not a prima facie one.

Ross thought that our various prima facie obligations could be divided into seven basic types: duties of fidelity (that is, to respect explicit and implicit promises), duties of repara- tion (for previous wrongful acts), duties of gratitude, duties of justice, duties of beneficence (that is, to make the condition of others better), duties of self-improvement, and duties not to injure others.11 Unlike utilitarianism, Ross’s ethical perspective is pluralistic in recognizing a variety of genuine obligations. But contrary to Kant, Ross does not see these obligations as absolute and exceptionless. On both points, Ross contended that his view of morality more closely fits with our actual moral experience and the way we view our moral obligations.

Ross also saw himself as siding with commonsense morality in maintaining that our prima facie obligations are obvious. He believed that the basic principles of duty are as self-evident as the simplest rules of arithmetic and that any person who has reached the age of reason can discern that it is wrong to lie, to break promises, and to injure people needlessly. However, what we should do, all things considered, when two or more prima facie obligations conflict is often difficult to judge. In deciding what to do in any con- crete situation, Ross thought, we are always “taking a moral risk.”12 Even after the fullest reflection, judgments about which of these self-evident rules should govern our conduct are only “more or less probable opinions which are not logically justified conclusions from the general principles that are recognised as self-evident.”13

ASSISTING OTHERS Nonconsequentialists believe that utilitarianism presents too simple a picture of our moral world. In addition, they worry that utilitarianism risks making us all slaves to the maxi- mization of total happiness. Stop and think about it: Isn’t there something that you could be doing—for instance, volunteering at the local hospital or orphanage, collecting money for third-world development, helping the homeless—that would do more for the general good than what you are doing now or are planning to do tonight or tomorrow? Sure, working with the homeless might not bring you quite as much pleasure as what you would otherwise be doing, but if it would nonetheless maximize total happiness, then you are morally required to do it. However, by following this reasoning, you could end up working around the clock, sacrificing yourself for the greater good. This notion seems mistaken.

Most nonutilitarian philosophers, like Ross, believe that we have some obligation to promote the general welfare, but they typically view this obligation as less stringent than, for example, the obligation not to injure people. They see us as having a much stronger

Ross’s pluralistic ethical perspective

differs from utilitarianism. Ross also rejected Kant’s

belief that our moral obligations are absolute and

exceptionless.

82088_ch02_ptg01_043-082.indd 64 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER TWO NORMATIVE THEORIES OF ETHICS 65

obligation to refrain from violating people’s rights than to promote their happiness or well- being. From this perspective, a manufacturing company’s obligation not to violate OSHA regulations and thereby endanger the safety of its employees is stronger than its obligation to open up day-care facilities for their children, even though the cost of the two is the same. The company, in other words, has a stronger duty to respect its legal and contractual employ- ment-related obligations than to promote its employees’ happiness in other ways. Likewise, for a company to violate people’s rights by despoiling the environment through the discharge of pollutants would be morally worse than for it to decide not to expand a job training pro- gram in the inner city, even if expanding the program would bring about more total good.

Different nonutilitarian philosophers may weigh these particular obligations differ- ently, depending on their particular moral theory. But they typically believe that we have a stronger duty not to violate people’s rights or in some other way injure them than we do to assist people or otherwise promote their well-being. A utilitarian, concerned solely with what will maximize happiness, is less inclined to draw such a distinction.

Many moral philosophers draw a related distinction between actions that are mor- ally required and charitable or supererogatory actions—that is, actions that would be good to do but not immoral not to do. Act utilitarianism does not make this distinc- tion. Although we admire Mother Teresa and Albert Schweitzer for devoting their lives to doing good works among the poor, we see them as acting above and beyond the call of duty; we do not expect so much from ordinary people. Yet people who are not moral heroes or who fall short of sainthood may nonetheless be living morally satisfactory lives.

Nonutilitarian theorists see the distinction between morally obligatory actions and supererogatory actions not so much as a realistic concession to human weakness but as a necessary demarcation if we are to avoid becoming enslaved to the maximization of the general welfare. The idea here is that each of us should have a sphere in which we are free to pursue our own plans and goals, to carve out a distinctive life plan. These plans and goals are limited by various moral obligations, in particular by other people’s rights, but the demands of morality are not all-encompassing.

MORAL RIGHTS What, then, are rights, and what rights do people have? Broadly defined, a right is an entitlement to act or have others act in a certain way. The connection between rights and duties is that, generally speaking, if you have a right to do something, then someone else has a correlative duty to act in a certain way. For example, if you claim a “right” to drive, you mean that you are entitled to drive or that others should—that is, have a duty to— permit you to drive. Your right to drive under certain conditions is derived from our legal system and is thus considered a legal right.

In addition to rights that are derived from some specific legal system, we also have moral rights. Some of these moral rights derive from special relationships, roles, or circum- stances in which we happen to be. For example, if Tom has an obligation to return Bob’s car to him on Saturday morning, then Bob has a right to have Tom return his car. If I have agreed to water your plants while you are on vacation, you have a right to expect me to look after them in your absence. As a student, you have a right to be graded fairly, and so on.

Even more important are rights that do not rest on special relationships, roles, or situations. For example, the rights to life, free speech, and unhampered religious affili- ation are widely accepted, not just as the entitlements of some specific political or legal

SUMMARY Nonconsequentialists needn’t be Kantians.

W. D. Ross, for instance, rejects both Kantianism and utilitarianism, arguing that we

are under a variety of distinct moral

obligations. These are prima facie,

meaning that any one of them may be outweighed in some

circumstances by other, more important moral considerations. Nonconsequentialists

believe that a duty to assist others and

to promote total happiness is only one of a number of duties

incumbent on us.

Nonutilitarian philosophers believe that we have a stronger obligation to respect people’s rights and avoid injuring them than we do to promote their happiness.

82088_ch02_ptg01_043-082.indd 65 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

66 PART ONE MORAL PHILOSOPHY AND BUSINESS

system but as fundamental moral rights. More controversial, but often championed as moral rights, are the rights to medical care, decent housing, education, and work. Moral rights that are not the result of particular roles, special relationships, or specific circum- stances are called human rights. They have several important characteristics.

First, human rights are universal. For instance, if the right to life is a human right, as most of us believe it is, then everyone, everywhere and at all times, has that right. By contrast, there is nothing universal about your right that I keep my promise to help you move or about my right to drive 65 miles per hour on certain roads.

Second, and closely related, human rights are equal rights. If the right to free speech is a human right, then everyone has this right equally. No one has a greater right to free speech than anyone else. In contrast, your daughter has a greater right than do the daughters of other people to your emotional and financial support.

Third, human rights are not transferable, nor can they be relinquished. If we have a fundamental human right, we cannot give, lend, or sell it to someone else. We cannot waive it, and no one can take it from us. That is what is meant in the Declaration of Independence when certain rights—namely, life, liberty, and the pursuit of happiness— are described as “unalienable.” By comparison, legal rights can be renounced or trans- ferred, as when one party sells another a house or a business.

Fourth, human rights are natural rights, not in the sense that they can be derived from a study of human nature, but in the sense that they do not depend on human institutions the way legal rights do. If people have human rights, they have these rights simply because they are human beings. They do not have them because they live under a certain legal system. Human rights rest on the assumption that people have certain basic moral entitlements merely because of their humanity. No authoritative body assigns them human rights. The law may attempt to protect human rights, to make them explicit and safe through codification, but the law is not their source.

Rights, and in particular human rights, can be divided into two broad categories: negative rights and positive rights. Negative rights reflect the vital interests that human beings have in being free from outside interference. The rights guaranteed in the Bill of Rights—freedom of speech, assembly, religion, and so on—fall within this category, as do the rights to freedom from injury and to privacy. Correlating with these are duties that we all have not to interfere with others’ pursuit of these interests and activities. Positive rights reflect the vital interests that human beings have in receiving certain benefits. They are rights to have others provide us with certain goods, services, or oppor- tunities. Today, positive rights often are taken to include the rights to education, medical care, equal job opportunity, comparable pay, and so on. Correlating with these are posi- tive duties for appropriate parties to assist individuals in their pursuit of these interests.

Thus a child’s right to education implies not only that no one should interfere with the child’s education but also that the necessary resources for that education ought to be provided. In the case of some positive rights—for example, the right to a decent standard of living, as proclaimed by the United Nations’ 1948 Human Rights Charter—who exactly has the duty to provide the goods and services required to fulfill those rights is unclear. Also, interpreting a right as negative or positive is sometimes controversial. For example, is my right to liberty simply the right not to be interfered with as I live my own life, or does it also imply a duty on the part of others to provide me with the means to make the exercise of that liberty meaningful?

Human rights have four important

characteristics.

Philosophers distinguish negative rights from

positive rights.

82088_ch02_ptg01_043-082.indd 66 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER TWO NORMATIVE THEORIES OF ETHICS 67

The significance of positing moral rights is that they provide grounds for making moral judgments that differ radically from utilitarianism’s grounds. Once moral rights are asserted, the locus of moral judgment becomes the individual, not society. For example, if workers have a moral right to be informed about potentially dangerous working condi- tions and to decide for themselves whether to undertake the work in question, then it would be wrong to violate this right—even if doing so would somehow promote the com- mon good. Again, if employees have a right to compensation equal to what others receive for doing comparable work, then they cannot be paid less on the grounds that doing so would be economically efficient or in some other way result in greater overall utility.

Utilitarianism, in effect, treats all such entitlements as subordinate to the general welfare. Thus, individuals are entitled to act in a certain way and entitled to have oth- ers allow or aid them to so act only insofar as acknowledging this right or entitlement achieves the greatest good. The assertion of moral rights, therefore, decisively sets non- consequentialists apart from utilitarians.

NONCONSEQUENTIALISM IN AN ORGANIZATIONAL CONTEXT We have already looked at Kant’s ethics in an organizational context, but, as we have seen, many nonconsequentialists (like Ross) are not Kantians, and their ideas also have impor- tant implications for moral decision making in business and nonbusiness organizations.

First, in its non-Kantian forms nonconsequentialism stresses that moral decision making involves the weighing of different moral factors and considerations. Unlike utilitarianism, nonconsequentialism does not reduce morality solely to the calculation of consequences; rather, it recognizes that an organization must usually take into account other equally impor- tant moral concerns. Theorists like Ross emphasize that, contrary to what Kant believed, there can often be rival and even conflicting moral demands on an organization. For example, obligations to employees, stockholders, and consumers may pull a corporation in different directions, and determining the organization’s proper moral course may not be easy.

Second, nonconsequentialism acknowledges that the organization has its own legiti- mate goals to pursue. There are limits to the demands of morality, and an organization that fulfills its moral obligations and respects the relevant rights of individuals is mor- ally free to advance whatever (morally permissible) ends it has—public service, profit, government administration, and so on. Contrary to utilitarianism, organizations and the people in them need not see themselves as under an overarching obligation to seek continually to enhance the general welfare.

Third, nonconsequentialism stresses the importance of moral rights. Moral rights, and in particular human rights, are a crucial factor in most moral deliberations, includ- ing those of organizations. Before it acts, any morally responsible business or nonbusi- ness organization must consider carefully how its actions will impinge on the rights of individuals—not just the rights of its members, such as stockholders and employees, but also the rights of others, such as consumers. Moral rights place distinct and firm constraints on what sorts of things an organization can do to fulfill its own ends.

CRITICAL INQUIRIES OF NONCONSEQUENTIALISM

1. How well justified are these nonconsequentialist principles and moral rights? Ross maintained that we have immediate intuitive knowledge of the basic prima facie moral principles, and indeed it would seem absurd to try to deny that it

SUMMARY Nonconsequentialists typically emphasize

moral rights— entitlements to act in a certain way or to have others act in a certain way. These rights can rest on

special relationships and roles, or they can be general

human rights. Rights can be negative,

protecting us from outside interference,

or they can be positive, requiring

others to provide us with certain benefits

or opportunities.

82088_ch02_ptg01_043-082.indd 67 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

68 PART ONE MORAL PHILOSOPHY AND BUSINESS

is wrong to cause needless suffering or that making a promise imposes some obligation to keep it. Only someone the moral equivalent of colorblind could fail to see the truth of these statements; to reject them would seem as preposterous as denying some obvious fact of arithmetic—for example, that 12 + 4 = 16. Like- wise, it appears obvious—indeed, as Thomas Jefferson wrote, “self-evident”—that human beings have certain basic and inalienable rights, unconditional rights that do not depend on the decrees of any particular government.

Yet we must be careful. What seems obvious, even self-evident, to one culture or at one time in human history may turn out to be not only not self-evident but actu- ally false. That the earth is flat and that heavier objects fall faster than lighter ones were two “truths” taken as obvious in former centuries. Likewise, the inferiority of women and of various nonwhite races was long taken for granted; this supposed fact was so obvious that it was hardly even commented on. The idea that people have a right to practice a religion that the majority “knows” to be false—or, indeed, to practice no religion whatsoever—would have seemed morally scandalous to many of our forebears and is still not embraced in all countries around the world. Today many vegetarians eschew meat eating on moral grounds and contend that future generations will consider our treatment of animals, factory farming in particular, to be as morally benighted as slavery. So what seems obvious, self-evident, or simple common sense may not be the most reliable guide to morally sound principles.

2. Can nonconsequentialists satisfactorily handle conflicting rights and principles? People today disagree among themselves about the correctness of certain moral prin- ciples. Claims of right, as we have seen, are often controversial. For example, do em- ployees have a moral right to their jobs—an entitlement to be fired only with just cause? To some of us, it may seem obvious that they do; to others, perhaps not. And how are we to settle various conflicting claims of right? Jones, for instance, claims a right to her property, which she has acquired honestly through her labors—that is, she claims a right to do with it as she wishes. Smith is ill and claims adequate medical care as a human right. Because he cannot afford the care himself, acknowledging his right will probably involve taxing people like Jones and thus limiting their property rights.

To sum up these two points: First, even moral principles that seem obvious or a matter of common sense have to be examined critically; and second, nonconsequentialists should not rest content until they find a way of resolving disputes among conflicting prima facie prin- ciples or rights. This is not to suggest that nonconsequentialists cannot find deeper and theoretically more satisfactory ways of grounding moral claims and of handling disputes between them. The point to be underscored here is simply the necessity of doing so.

UT IL ITA R IA NISM ONCE MORE Until now, our discussion of utilitarianism has focused on the classic and most straight- forward version of it, namely, act utilitarianism. According to act utilitarianism, we have one and only one moral obligation, the maximization of happiness for everyone concerned, and every action is to be judged by this standard. But a different utilitarian approach, called rule utilitarianism, is relevant to the discussion of the moral concerns

SUMMARY In an organizational

context, nonconsequentialism

(in its non-Kantian forms) stresses the

plurality of moral considerations to be weighed.

While emphasizing the importance of respecting moral rights, it acknowledges

that morality has limits and that

organizations have legitimate goals

to pursue. Critics question whether

(1) nonconsequentialist principles are

adequately justified and whether (2)

nonconsequentialism can satisfactorily handle conflicting

rights and principles.

82088_ch02_ptg01_043-082.indd 68 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER TWO NORMATIVE THEORIES OF ETHICS 69

characteristic of nonconsequentialism—in particular, relevant to the nonconsequential- ist’s criticisms of act utilitarianism. The rule utilitarian would, in fact, agree with many of these criticisms. (Rule utilitarianism has been formulated in different ways, but this discussion follows the version defended by Richard Brandt.)

Rule utilitarianism maintains that the utilitarian standard should be applied not to individual actions but to moral codes as a whole. The rule utilitarian asks what moral code (that is, what set of moral rules) a society should adopt to maximize happiness. The principles that make up that code would then be the basis for distinguishing right actions from wrong actions. As Brandt explains:

A rule-utilitarian thinks that right actions are the kind permitted by the moral code op- timal for the society of which the agent is a member. An optimal code is one designed to maximize welfare or what is good (thus, utility). This leaves open the possibility that a particular right act by itself may not maximize benefit. . . . On the rule-utilitarian view, then, to find what is morally right or wrong we need to find which actions would be permitted by a moral system that is “optimal” for the agent’s society.14

The “optimal” moral code does not refer to the set of rules that would do the most good if everyone conformed to them all the time. The meaning is more complex. The optimal moral code must take into account what rules can reasonably be taught and obeyed, as well as the costs of inculcating those rules in people. Recall from Chapter 1 that if a principle or rule is part of a person’s moral code, then it will influence the per- son’s behavior. The person will tend to follow that principle, to feel guilty when he or she does not live up to it, and to disapprove of others who fail to conform to it. Rule utilitar- ians must consider not just the benefits of having people motivated to act in certain ways but also the costs of instilling those motivations in them. As Brandt writes:

The more intense and widespread an aversion to a certain sort of behavior, the less frequent the behavior is apt to be. But the more intense and widespread, the greater the cost of teaching the rule and keeping it alive, the greater the burden on the indi- vidual, and so on.15

Thus, the “optimality” of a moral code encompasses both the benefits of getting people to act in certain ways and the costs of bringing that about. Perfect compliance is not a realistic goal. “Like the law,” Brandt continues, “the optimal moral code normally will not produce 100 percent compliance with all its rules; that would be too costly.”16

Some utilitarian thinkers in earlier centuries adopted or came close to adopting rule utilitarianism (although they did not use that term). For example, the nineteenth- century legal theorist John Austin wrote: “Utility [should] be the test of our conduct, ultimately, but not immediately. . . . Our rules [should] be fashioned on utility; our con- duct, on our rules.”17 This accords well with the rule-utilitarian idea that we should apply the utilitarian standard only to the assessment of alternative moral codes; we should not try to apply it to individual actions. We should seek to determine the specific set of prin- ciples that would in fact best promote total happiness for society. Those are the rules we should promulgate, instill in ourselves, and teach to the next generation.

WHAT WILL THE OPTIMAL CODE LOOK LIKE? Rule utilitarians such as Brandt argue strenuously that the ideal or optimal moral code for a society will not be the single act-utilitarian command to maximize happiness. They

The notion of an optimal moral code takes into account the difficulty of getting people to follow a given set of rules.

Rule utilitarians believe that the optimal moral code will not consist of just one rule—to maximize happiness.

82088_ch02_ptg01_043-082.indd 69 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

70 PART ONE MORAL PHILOSOPHY AND BUSINESS

contend that teaching people that their only obligation is to maximize happiness would not in fact maximize happiness.

First, people will make mistakes if, before they act, they try to calculate the consequences of each and every thing they might possibly do. Second, if all of us were act utilitarians, prac- tices such as keeping promises and telling the truth would be rather shaky, because we could expect others to keep promises or tell the truth only when they believed that doing so would maximize happiness. Third, the act-utilitarian principle is too demanding, because it seems to imply that each person should continually be striving to promote total well-being.

For these reasons, rule utilitarians believe that more happiness will come from instilling in people a pluralistic moral code, one with a number of different principles. By analogy, imagine a traffic system with just one rule: Drive your car in a way that maximizes happiness. Such a system would be counterproductive; we do much better in terms of total human well-being to have a variety of traffic regulations—for example, obey stop signs, yield to the right, and pass only on the left. In such a pluralistic system we cannot justify cruising through a red light with the argument that doing so maximizes total happiness by getting us home more quickly.

The principles of the optimal code would presumably be prima facie in Ross’s sense—that is, capable of being overridden by other principles. Different principles would also have different moral weights. It would make sense, for example, to instill in people an aversion to killing that is stronger and deeper than the aversion to telling white lies. In addition, the ideal code would acknowledge moral rights. Teaching people to respect moral rights maximizes human welfare in the long run.

The rules of the optimal code provide the sole basis for determining right and wrong. An action is not necessarily wrong if it fails to maximize happiness; it is wrong only if it conflicts with the ideal moral code. Rule utilitarianism thus gets around many of the problems that plague act utilitarianism. At the same time, it provides a plausible basis for deciding which moral principles and rights we should acknowledge and how much weight we should attach to them. We try to determine those principles and rights that, generally adhered to, would best promote human happiness.

Still, rule utilitarianism has its critics. There are two common objections. First, act utilitarians maintain that a utilitarian who cares about happiness should be willing to violate rules in order to maximize happiness. Why make a fetish out of the rules?

Second, nonconsequentialists, while presumably viewing rule utilitarianism more favorably than act utilitarianism, still balk at seeing moral principles determined by their consequences. They contend, in particular, that rule utilitarians ultimately subordinate rights to utilitarian calculation and therefore fail to treat rights as fundamental and inde- pendent moral factors.

MOR AL DEC IS ION MAK ING: A PR ACT ICAL A PPROACH Theoretical controversies permeate the subject of ethics, and as we have seen, philoso- phers have proposed rival ways of understanding right and wrong. These philosophical differences of perspective, emphasis, and theory are significant and can have profound practical consequences. This chapter has surveyed some of these issues, but obviously it cannot settle all of the questions that divide moral philosophers. Fortunately, however, many problems of business and organizational ethics can be intelligently discussed and

SUMMARY Rule utilitarianism

is a hybrid theory. It maintains that the correct principles of right and wrong

are those that would maximize

happiness if society adopted them.

Rule utilitarianism applies the utilitarian standard not directly to individual actions

but rather to the choice of the moral principles that are to guide individual

action. Rule utilitarianism avoids

many of the standard criticisms of act

utilitarianism.

Critics of rule utilitarianism raise two

objections.

82088_ch02_ptg01_043-082.indd 70 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER TWO NORMATIVE THEORIES OF ETHICS 71

even resolved by people whose fundamental moral theories differ (or who have not yet worked out their own moral ideas in some systematic way). This section discusses some important points to keep in mind when analyzing and discussing business ethics and offers, as a kind of model, one possible procedure for making moral decisions.

In the abstract, it might seem impossible for people to reach agreement on con- troversial ethical issues, given that ethical theories differ so much and that people themselves place moral value on different things. Yet in practice moral problems are rarely so intractable that open-minded and thoughtful people cannot, by discussing mat- ters calmly, rationally, and thoroughly, make significant progress toward resolving them. Chapter 1 stressed that moral judgments should be logical, should be based on facts, and should appeal to sound moral principles. Bearing this in mind can often help, especially when various people are discussing an issue and proposing rival answers.

First, in any moral discussion, make sure that the participants agree about the rel- evant facts. Often moral disputes hinge not on matters of moral principle but on differing assessments of what the facts of the situation are, what alternatives are open, or what the probable results of different courses of action will be. For instance, the directors of an international firm might acrimoniously dispute the moral permissibility of a new over- seas investment. The conflict might appear to involve some fundamental clash of moral principles and perspectives when, in fact, it is the result of some underlying disagreement about the likely effects of the proposed investment on the lives of the local population. Until this factual disagreement is acknowledged and dealt with, little is apt to be resolved.

Second, once there is general agreement on factual matters, try to spell out the moral principles to which different people are, at least implicitly, appealing. Seeking to determine these principles will often help people clarify their own thinking enough to reach a solution. Sometimes they will agree on what moral principles are relevant and yet disagree over how to balance them. Identifying this discrepancy can be helpful. Bear in mind, too, that skepticism is in order when someone’s moral stance on an issue appears to rest simply on a hunch or an intuition and cannot be related to some more general moral principle. As moral decision makers, we are seeking not only an answer to a moral issue but an answer that can be publicly defended, and the public defense of a moral judgment usually requires an appeal to general principle. By analogy, judges do not hand down judgments based simply on what strikes them as fair in a particular case. They must relate their decisions to general legal principles or statutes.

A reluctance to defend our moral decisions in public is almost always a warning sign. If we are unwilling to account for our actions publicly, chances are that we are doing something we cannot really justify morally. In addition, Kant’s point that we must be willing to universalize our moral judgments is relevant here. We cannot sincerely endorse a principle if we are not willing to see it applied generally. Unfortunately, we occasionally do make judgments—for example, that Alfred’s being late to work is a satisfactory reason for firing him—that rest on a principle we would be unwilling to apply to our own situa- tions; hence the moral relevance of the familiar question: “How would you like it if . . . ?” Looking at an issue from the other person’s point of view can cure moral myopia.

OBLIGATIONS, EFFECTS, IDEALS As a practical basis for discussing moral issues in organizations, it is useful to try to approach those issues in a way that is acceptable to individuals with differing moral viewpoints. We want to avoid presupposing the truth of one particular theoretical

Recall that moral judgments should be logical and based on facts and sound moral principles.

SUMMARY Despite

disagreements on controversial

theoretical issues, people can make

significant progress in resolving practical

moral problems through open-

minded and reflective discussion. One useful approach is to identify the

(possibly conflicting) obligations, ideals,

and effects in a given situation and then to determine

where the emphasis should lie among

these different considerations.

82088_ch02_ptg01_043-082.indd 71 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

72 PART ONE MORAL PHILOSOPHY AND BUSINESS

perspective. By emphasizing factors that are relevant to various theories, both conse- quentialist and nonconsequentialist, we can find some common ground on which moral decision making can proceed. Moral dialogue can thus take place in an objective and analytical way, even if the participants do not fully agree on all philosophical issues.

What factors or considerations, then, seem important from most ethical perspec- tives? Following Professor V. R. Ruggiero, we can identify three shared concerns.18 The first is with obligations, that is, with the specific duties or moral responsibili- ties that we have in a given situation. Every significant human action—personal and professional—arises in the context of human relationships. These relationships, the roles we have assumed, and the expectations created by our previous actions can be the source of particular duties and rights. In addition, we are obligated to respect people’s human rights. Obligations bind us. In their presence, morality requires us, at least prima facie, to do certain things and to avoid doing others. Even utilitarians can agree with this.

A second concern common to most ethical systems is with the effects of our actions. When reflecting on a possible course of action, one needs to take into account its likely results. Although nonconsequentialists maintain that things other than consequences or results can affect the rightness or wrongness of actions, few if any of them would ignore consequences entirely. Almost all nonconsequentialist theories place some moral weight on the results of our actions. Practically speaking, this means that in making a moral decision, we must identify all the interested parties and how they would be affected by the different courses of action open to us.

The third consideration relevant to most ethical perspectives is the impact of our actions on important ideals. An ideal is some morally significant goal, virtue, or notion of excellence worth striving for. Clearly, different cultures impart different ideals and, equally important, different ways of pursuing them. Our culture respects virtues such as generosity, courage, compassion, and loyalty, as well as more abstract ideals such as peace, justice, and equality. In addition to these moral ideals, there are institutional or organiza- tional ideals: efficiency, product quality, customer service, and so forth. Does a particular act serve or violate these ideals? Both consequentialists and nonconsequentialists can agree that this is an important consideration in determining the moral quality of actions.

In isolating these three concerns common to almost all ethical systems—obligations, effects, and ideals—Ruggiero provided a kind of practical synthesis of consequentialist and nonconsequentialist thought that seems appropriate for our purposes. A useful approach to moral questions in an organizational context will therefore reflect these con- siderations: the obligations that derive from organizational relationships or are affected by organizational conduct, the ideals at stake, and the effects or consequences of alter- native courses of action. Any action that honors obligations while respecting ideals and benefiting people can be presumed to be moral. An action that does not pass scrutiny in these respects will be morally suspect.

This view leads to what is essentially a two-step procedure for evaluating actions and making moral choices. The first step is to identify the important considerations involved: obligations, effects, and ideals. Accordingly, we should ask if any basic obligations are involved. If so, what are they and who has them? Who is affected by the action and how? How do these effects compare with those of the alternatives open to us? What ideals does the action respect or promote? What ideals does it neglect or thwart? The second step is to decide which of these considerations deserves emphasis. Sometimes the issue may

A two-step approach to moral decision making

is to identify the relevant obligations, ideals, and effects and then decide

which consideration deserves the most

emphasis.

82088_ch02_ptg01_043-082.indd 72 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER TWO NORMATIVE THEORIES OF ETHICS 73

be largely a matter of obligations; other times, some ideal may predominate; still other times, consideration of effects may be the overriding concern.

If two or more obligations conflict, it is obvious that we should choose the stronger one, and when two or more ideals conflict, or when ideals conflict with obligations, we should obviously honor the more important one. Similarly, when rival actions have dif- ferent results, we should prefer the action that produces the greater good or the lesser harm. But in real-world situations, deciding these matters is often difficult, and there is no easy way of balancing obligations, effects, and ideals when these considerations pull in different directions. The fact is that we have no sure procedure for making such com- parative determinations, which involve assessing worth and assigning relative priorities to our assessments. In large part, the chapters that follow attempt to sort out the values and principles embedded in the tangled web of frequently subtle, ill-defined problems we meet in business and organizational life. It is hoped that examining these issues will help you (1) identify the obligations, effects, and ideals involved in specific moral issues and (2) decide where the emphasis should lie among the competing considerations.

S T U D Y C O R N E R KEY TERMS AND CONCEPTS

act utilitarianism

business egoism

categorical imperative

consequentialist theories

egoism

eminent domain

good will

hedonism

human rights

hypothetical imperative

ideal

legal rights

maxim

moral rights

moral worth

negative rights

nonconsequentialist theories

normative theories

optimal moral code

positive rights

prima facie obligations

psychological egoism

rule utilitarianism

supererogatory actions

universal acceptability

utilitarianism

POINTS TO REVIEW

consequentialist vs. nonconsequentialist normative theories (p. 45)

personal vs. impersonal egoism (p. 46)

the difference between egoism as an ethical theory and egoism as a psychological theory (p. 47)

three problems with egoism (pp. 47–49)

Bentham’s and Mill’s differing views of pleasure (p. 50)

six points about utilitarianism (pp. 51–52)

three features of utilitarianism in an organizational context (p. 52)

MindTap MindTap is a fully online, highly personalized learning experience built upon Cengage Learning content. MindTap combines student learning tools—readings, multimedia, activities, and assessments—into a singular Learning Path that guides students through their course.

82088_ch02_ptg01_043-082.indd 73 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

74 PART ONE MORAL PHILOSOPHY AND BUSINESS

three critical inquiries of utilitarianism (pp. 52–55)

the deathbed-promise example (pp. 53–54)

business as combining self-interest and social good (or egoism and utilitarianism) (pp. 55–56)

the convenience store owner and acting from a sense of duty (p. 57)

Martin’s promise as an illustration of the categorical imperative (p. 58)

hypothetical imperatives vs. the categorical imperative (p. 58)

two alternative formulations of the categorical imperative (p. 60)

three features of Kant’s ethics in an organizational context (p. 60)

three critical inquiries of Kant’s ethics (pp. 61–62)

how Ross’s theory differs from utilitarianism and from Kant’s categorical imperative (p. 64)

four important characteristics of human rights (p. 66)

the difference between negative and positive rights (p. 66)

how rule utilitarianism differs from act utilitarianism (p. 68–69)

the optimal moral code and the analogy with traffic rules (p. 70)

two objections to rule utilitarianism (p. 70)

two points drawn from Chapter 1 that can help moral discussions (p. 71)

two-step procedure for morally evaluating actions and choices (p. 72–73)

FOR FURTHER REFLECTION

1. What value, if any, do you see in business students studying the basics of ethical theory?

2. Which normative theory or general approach to ethics do you find the most plausible or attractive, and why?

3. Can people who disagree about normative ethical theory still reach agreement on practical ethical questions in the business world? If so, how?

C A SE 2.1

Hacking into Harvard

an early glimpse at whether their ambition was to be fulfilled. While visiting a Businessweek Online message board, they found instructions, posted by an anonymous hacker, explain- ing how to find out what admission decision the business schools had made in their case. Doing so wasn’t hard. The universities in question—Harvard, Dartmouth, Duke, Carnegie

EVERYONE WHO HAS EVER APPLIED FOR admission to a selective college or who has been interviewed for a highly desired job knows the feeling of waiting impatiently to learn the result of one’s application. So it’s not hard to iden- tify with those applicants to some of the nation’s most presti- gious MBA programs who thought they had a chance to get

82088_ch02_ptg01_043-082.indd 74 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER TWO NORMATIVE THEORIES OF ETHICS 75

Mellon, MIT, and Stanford—used the same application soft- ware from Apply Yourself, Inc. Essentially, all one had to do was change the very end of the applicant-specific URL to get to the supposedly restricted page containing the verdict on one’s application. In the nine hours it took Apply Yourself program- mers to patch the security flaw after it was posted, curiosity got the better of about 200 applicants, who couldn’t resist the temptation to discover whether they had been admitted.19

Some of them got only blank screens. But others learned that they had been tentatively accepted or tentatively rejected. What they didn’t count on, however, were two things: first, that it wouldn’t take the business schools long to learn what had happened and who had done it and, second, that the schools in question were going to be very unhappy about it. Harvard was perhaps the most outspoken. Kim B. Clark, dean of the business school, said, “This behavior is unethical at best—a serious breach of trust that cannot be countered by rational- ization.” In a similar vein, Steve Nelson, the executive director of Harvard’s MBA program, stated, “Hacking into a system in this manner is unethical and also contrary to the behavior we expect of leaders we aspire to develop.”

It didn’t take Harvard long to make up its mind what to do about it. It rejected all 119 applicants who had attempted to access the information. In an official statement, Dean Clark wrote that the mission of the Harvard Business School “is to educate principled leaders who make a difference in the world. To achieve that, a person must have many skills and qualities, including the highest standards of integrity, sound judgment and a strong moral compass—an intuitive sense of what is right and wrong. Those who have hacked into this web site have failed to pass that test.” Carnegie Mellon and MIT quickly followed suit. By rejecting the ethically challenged, said Richard L. Schmalensee, dean of MIT’s Sloan School of Management, the schools are trying to “send a message to society as a whole that we are attempting to produce people that when they go out into the world, they will behave ethically.”

Duke and Dartmouth, where only a handful of students gained access to their files, said they would take a case-by- case approach and didn’t publicly announce their individual- ized determinations. But, given the competition for places in their MBA programs, it’s a safe bet that few, if any, offending applicants were sitting in classrooms the following semester.

Forty-two applicants attempted to learn their results early at Stanford, which took a different tack. It invited the accused hackers to explain themselves in writing. “In the best case, what has been demonstrated here is a lack of judgment; in the worst case, a lack of integrity,” said Derrick Bolton, Stanford’s director of MBA admissions. “One of the things we try to teach at business schools is making good decisions and taking responsibility for your actions.” Six weeks later, however, the dean of Stanford Business School, Robert Joss, reported, “None of those who gained unauthorized access was able to explain his or her actions to our satisfaction.” He added that he hoped the applicants “might learn from their experience.”

Given the public’s concern over the wave of corporate scandals in recent years and its growing interest in corporate social responsibility, business writers and other media com- mentators warmly welcomed Harvard’s decisive response. But soon there was some sniping at the decision by those claiming that Harvard and the other business schools had overreacted. Although 70 percent of Harvard’s MBA students approved the decision, the undergraduate student newspaper, The Crimson, was skeptical. “HBS [Harvard Business School] has scored a media victory with its hard-line stance,” it said in an editorial. “Americans have been looking for a sign from the business community, particularly its leading educational insti- tutions, that business ethics are a priority. HBS’s false bravado has given them one, leaving 119 victims in angry hands.”

As some critics pointed out, Harvard’s stance overlooked the possibility that the hacker might have been a spouse or a parent who had access to the applicant’s password and personal iden- tification number. In fact, one applicant said that this had hap- pened to him. His wife found the instructions at Businessweek Online and tried to check on the success of his application. “I’m really distraught over this,” he said. “My wife is tearing her hair out.” To this, Harvard’s Dean Clark responds, “We expect appli- cants to be personally responsible for the access to the website, and for the identification and passwords they receive.”

Critics also reject the idea that the offending applicants were “hackers.” After all, they used their own personal iden- tification and passwords to log on legitimately; all they did was to modify the URL to go to a different page. They couldn’t change anything in their files or view anyone else’s informa- tion. In fact, some critics blamed the business schools and

82088_ch02_ptg01_043-082.indd 75 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

76 PART ONE MORAL PHILOSOPHY AND BUSINESS

DISCUSSION QUESTIONS

1. Suppose that you had been one of the MBA applicants who stumbled across an opportunity to learn your results early. What would you have done, and why? Would you have considered it a moral decision? If so, on what basis would you have made it?

2. Assess the morality of what the curious applicants did from the point of view of egoism, utilitarianism, Kant’s ethics, Ross’s pluralism, and rule utilitarianism.

3. In your view, was it wrong for the MBA applicants to take an unauthorized peek at their application files? Explain why you consider what they did morally permissible or impermissible. What obligations, ideals, and effects should the applicants have considered? Do you think, as some have suggested, that there is a generation gap on this issue?

4. Did Harvard and MIT overreact, or was it necessary for them to respond as they did in order to send a strong message about the importance of ethics? If you were a business-school admissions official, how would you have handled this situation?

5. Assess the argument that the applicants who snooped were just engaging in the type of bold and aggressive behavior that makes for business success. In your view, are these applicants likely to make good busi- ness leaders? What about the argument that it’s really the fault of the universities for not having more secure procedures and not the fault of the applicants who took advantage of that fact?

6. One of the applicants admits that he used poor judgment but believes that his ethics should not be questioned. What do you think he means? If he exercised poor judg- ment on a question of right and wrong, isn’t that a matter of his ethics? Stanford’s Derrick Bolton distinguishes between a lapse of judgment and a lack of integrity. What do you see as the difference? Based on this episode, what, if anything, can we say about the ethics and the character of the curious applicants?

Apply Yourself more than they did the applicants. If those pages were supposed to be restricted, then it shouldn’t have been so easy to find one’s way to them.

In an interview, one of the Harvard applicants said that although he now sees that what he did was wrong, he wasn’t thinking about that at the time—he just followed the hacker’s posted instructions out of curiosity. He didn’t consider what he did to be “hacking,” because any novice could have done the same thing. “I’m not an IT person by any stretch of the imagination,” he said. “I’m not even a great typist.” He wrote the university a letter of apology. “I admitted that I got curious and had a lapse in judgment,” he said. “I pointed out that I wasn’t trying to harm anyone and wasn’t trying to get an advantage over anyone.” Another applicant said that he knew he had made a poor judgment but he was offended by having his ethics called into question. “I had no idea that they would have considered this a big deal.” And some of those posting messages at Businessweek Online and other MBA-related sites believe the offending applicants should be applauded. “Exploiting weaknesses is what good business is all about. Why would they ding you?” wrote one anonymous poster.

Dean Schmalensee of MIT, however, defends Harvard and MIT’s automatically rejecting everyone who peeked “because it wasn’t an impulsive mistake.” “The instructions are reason- ably elaborate,” he said. “You didn’t need a degree in com- puter science, but this clearly involved effort. You couldn’t do this casually without knowing that you were doing something wrong. We’ve always taken ethics seriously, and this is a seri- ous matter.” To those applicants who say that they didn’t do any harm, Schmalensee replies, “Is there nothing wrong with going through files just because you can?”

To him and others, seeking unauthorized access to restricted pages is as wrong as snooping through your boss’s desk to see whether you’ve been recommended for a raise. Some commentators, however, suggest there may be a generation gap here. Students who grew up with the Internet, they say, tend to see it as a wide-open territory and don’t view this level of web snooping as indicating a character flaw.

82088_ch02_ptg01_043-082.indd 76 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER TWO NORMATIVE THEORIES OF ETHICS 77

tanks and dangerous leaks. The only Pintos to pass the test had been modified in some way—for example, with a rubber bladder in the gas tank or a piece of steel between the tank and the rear bumper.

Thus, Ford knew that the Pinto represented a seri- ous fire hazard when struck from the rear, even in low- speed collisions. Ford officials faced a decision. Should they go ahead with the existing design, thereby meeting the production timetable but possibly jeopardizing consumer safety? Or should they delay production of the Pinto by redesigning the gas tank to make it safer and thus concede another year of subcompact dominance to foreign compa- nies? Ford not only pushed ahead with the original design but also stuck to it for the next six years.

What explains Ford’s decision? The evidence suggests that Ford relied, at least in part, on cost–benefit reasoning, which is an analysis in monetary terms of the expected costs and bene- fits of doing something. There were various ways of making the Pinto’s gas tank safer. Although the estimated price of these safety improvements ranged from only $5 to $8 per vehicle, Ford evidently reasoned that the increased cost outweighed the benefits of a new tank design.

How exactly did Ford reach that conclusion? We don’t know for sure, but an internal report, “Fatalities Associated with Crash-Induced Fuel Leakage and Fires,” reveals the cost– benefit reasoning that the company used in cases like this. This report was not written with the Pinto in mind; rather, it concerns fuel leakage in rollover accidents (not rear-end collisions), and its computations applied to all Ford vehicles, not just the Pinto. Nevertheless, it illus- trates the type of reasoning that was probably used in the Pinto case.

C A SE 2.2

The Ford Pinto

THERE WAS A TIME WHEN THE “MADE IN Japan” label brought a predictable smirk of superiority to the face of most Americans. The quality of most Japanese products usually was as low as their price. In fact, few imports could match their domestic counterparts, the proud products of Yankee know-how. But by the late 1960s, an invasion of foreign-made goods chiseled a few worry lines into the coun- tenance of U.S. industry. In Detroit, worry was fast fading to panic as the Japanese, not to mention the Germans, began to gobble up more and more of the subcompact auto market.

Never one to take a backseat to the competition, Ford Motor Company decided to meet the threat from abroad head-on. In 1968, Ford executives decided to produce the Pinto. Known inside the company as “Lee’s car,” after Ford president Lee Iacocca, the Pinto was to weigh no more than 2,000 pounds and cost no more than $2,000.20

Eager to have its subcompact ready for the 1971 model year, Ford decided to compress the normal drafting-board- to-showroom time of about three-and-a-half years into two. The compressed schedule meant that any design changes typically made before production-line tooling would have to be made during it.

Before producing the Pinto, Ford crash-tested vari- ous prototypes, in part to learn whether they met a safety standard proposed by the National Highway Traffic Safety Administration (NHTSA) to reduce fires from traffic collisions. This standard would have required that by 1972 all new autos be able to withstand a rear-end impact of 20 miles per hour without fuel loss and that by 1973 they be able to withstand an impact of 30 miles per hour. The prototypes all failed the 20-miles-per-hour test. In 1970, Ford crash-tested the Pinto itself, and the result was the same: ruptured gas

82088_ch02_ptg01_043-082.indd 77 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

78 PART ONE MORAL PHILOSOPHY AND BUSINESS

Thus, the costs of the suggested safety improvements outweighed their benefits, and the “Fatalities” report accord- ingly recommended against any improvements—a recom- mendation that Ford followed.

Likewise in the Pinto case, Ford’s management, whatever its exact reasoning, decided to stick with the original design and not upgrade the Pinto’s fuel tank, despite the test results reported by its engineers. Here is the aftermath of Ford’s decision:

Between 1971 and 1978, the Pinto was responsible for a number of fire-related deaths. Ford puts the figure at 23; its critics say the figure is closer to 500. According to the sworn testimony of Ford engineers, 95 percent of the fatalities would have survived if Ford had located the fuel tank over the axle (as it had done on its Capri automobiles).

NHTSA finally adopted a 30-miles-per-hour collision standard in 1976. The Pinto then acquired a rupture-proof fuel tank. In 1978, Ford was obliged to recall all 1971–1976 Pintos for fuel-tank modifications.

Between 1971 and 1978, approximately fifty lawsuits were brought against Ford in connection with rear-end accidents in the Pinto. In the Richard Grimshaw case, in addition to award- ing over $3 million in compensatory damages to the victims of a Pinto crash, the jury awarded a landmark $125 million in punitive damages against Ford (later reduced by the judge to $3.5 million).

On August 10, 1978, the 1973 Ford Pinto that eighteen-year- old Judy Ulrich, her sixteen-year-old sister Lynn, and their eighteen-year-old cousin Donna were riding in was struck from the rear by a van near Elkhart, Indiana. The gas tank of the Pinto exploded on impact. In the fire that resulted, the three teenagers were burned to death. Ford was charged with crimi- nal homicide. The judge in the case advised jurors that Ford should be convicted if it had clearly disregarded the harm that might result from its actions, and that disregard represented a substantial deviation from acceptable standards of conduct. On March 13, 1980, the jury found Ford not guilty of criminal homicide.

For its part, Ford has always denied that the Pinto is unsafe compared with other cars of its type and era. The company also points out that in every model year, the Pinto met or surpassed the government’s own standards. But what the company doesn’t say is that successful lobbying

In the “Fatalities” report, Ford engineers estimated the cost of technical improvements that would prevent gas tanks from leaking in rollover accidents to be $11 per vehicle. The authors go on to discuss various estimates of the number of people killed by fires from car rollovers before settling on the relatively low figure of 180 deaths per year. But given that number, how can the value of those individuals’ lives be gauged? Can a dol- lars-and-cents figure be assigned to a human being? NHTSA thought so. In 1972, it estimated that society loses $200,725 every time a person is killed in an auto accident (adjusted for inflation, today’s figure would, of course, be considerably higher). It broke down the costs as follows:

Future productivity losses

Direct $132,000

Indirect 41,300

Medical costs

Hospital 700

Other 425

Property damage 1,500

Insurance administration 4,700

Legal and court expenses 3,000

Employer losses 1,000

Victim’s pain and suffering 10,000

Funeral 900

Assets (lost consumption) 5,000

Miscellaneous accident costs 200

Total per fatality $200,725

Putting the NHTSA figures together with other statisti- cal studies, the Ford report arrived at the following overall assessment of costs and benefits:

Benefits Savings: 180 burn deaths, 180 serious burn injuries,

2,100 burned vehicles

Unit cost: $200,000 per death, $67,000 per injury, $700 per vehicle

Total benefit: (180 × $200,000) + (180 × $67,000) + (2,100 × $700) = $49.5 million

Costs Sales: 11 million cars, 1.5 million light trucks

Unit cost: $11 per car, $11 per truck

Total cost: 12.5 million × $11 = $137.5 million

82088_ch02_ptg01_043-082.indd 78 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

CHAPTER TWO NORMATIVE THEORIES OF ETHICS 79

by it and its industry associates was responsible for delaying for seven years the adoption of any NHTSA crash standard. Furthermore, Ford’s critics claim that there were more than forty European and Japanese models in the Pinto price and weight range with safer gas-tank position. “Ford made an extremely irresponsible decision,” concludes auto safety expert Byron Bloch, “when they placed such a weak tank in such a ridiculous location in such a soft rear end.”

Has the automobile industry learned a lesson from Ford’s experience with the Pinto? Many people would probably answer, yes, carmakers are more concerned about safety these days. That’s one reason it shocked the nation to learn in 2014 that General Motors had known for years that defec- tive ignition switches on some of its models prevent their airbags from deploying in crashes. (The bags need to draw on the car’s power system.) And yet—for reasons that are still unclear—the company did nothing about the problem, ignoring possible fixes proposed by its engineers and telling customers and accident victims that there was no evidence of a flaw. According to GM, the faulty switches have led to thirteen deaths, but an independent review of federal crash data puts the number of fatalities at 303.

DISCUSSION QUESTIONS

1. What moral issues does the Pinto case raise?

2. Suppose Ford officials were asked to justify their decision. What moral principles do you think they would invoke? Assess Ford’s handling of the Pinto from the perspective of each of the moral theories discussed in this chapter.

3. Utilitarians would say that jeopardizing motorists does not by itself make Ford’s action morally objectionable. The only morally relevant matter is whether Ford gave equal consideration to the interests of each affected party. Do you think Ford did this?

4. Is cost–benefit analysis a legitimate tool? What role, if any, should it play in moral deliberation? Critically assess the example of cost–benefit analysis given in the case study. Is there anything unsatisfactory about it? Could it have been improved upon in some way?

5. Speculate about Kant’s response to the idea of placing a monetary value on a human life. Is doing so ever morally legitimate?

6. What responsibilities to its customers do you think Ford had? What are the most important moral rights, if any, operating in the Pinto case?

7. Would it have made a moral difference if the savings resulting from not improving the Pinto gas tank had been passed on to Ford’s customers? Could a rational customer have chosen to save a few dollars and risk having the more dangerous gas tank? What if Ford had told potential customers about its decision?

8. The maxim of Ford’s action might be stated thus: “When the cost of a safety improvement would hurt the bottom line, it’s all right not to make it.” Can this maxim be universalized? Does it treat humans as ends in themselves? Would manufacturers be willing to abide by it if the positions were reversed and they were in the role of consumers?

9. Should Ford have been found guilty of criminal homi- cide in the Ulrich case?

10. Are carmakers these days concerned enough about safety? Why do you think GM failed to address the igni- tion switch problem?

11. Is it wrong for business to sell a product that is not as safe as it could be, given current technology? Is it wrong to sell a vehicle that is less safe than competing products on the market? Are there limits to how far automakers must go in the name of safety?

Some consumers knew their Pintos were dangerous.

Be ttm

an n/

Co rb

is

82088_ch02_ptg01_043-082.indd 79 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

 

 

80 PART ONE MORAL PHILOSOPHY AND BUSINESS

C A SE 2.3

Blood for Sale

In an important study, economist Richard Titmuss showed that the British system works better than the American one in terms of economic and administrative efficiency, price, and blood quality. The commercialized blood market, Titmuss argued, is wasteful of blood and plagued by shortages. In the United States, bureaucratization, paperwork, and administra- tive overhead result in a cost per unit of blood that is five to fifteen times higher than it is in Great Britain. Hemophiliacs, in particular, are disadvantaged by the U.S. system and have enormous bills to pay. In addition, commercial markets are much more likely to distribute contaminated blood.

Titmuss also argued that the existence of a commercialized system discourages voluntary donors. People are less apt to give blood if they know that others are selling it. Psychologists have found similar conflicts between financial incentives and moral or altruistic conduct in other areas.22 Philosopher Peter Singer has elaborated on this point in the case of blood:

If blood is a commodity with a price, to give blood means merely to save someone money. Blood has a cash value of a certain number of dollars, and the importance of the gift will vary with the wealth of the recipient. If blood can- not be bought, however, the gift’s value depends upon the need of the recipient. Often, it will be worth life it- self. Under these circumstances blood becomes a very special kind of gift, and giving it means providing for strangers, without hope of reward, something they can- not buy and without which they may die. The gift relates strangers in a manner that is not possible when blood is a commodity.

This may sound like a philosopher’s abstraction, far removed from the thoughts of ordinary people. On the contrary, it is an idea spontaneously expressed by British donors in response to Titmuss’s question-

SOL LEVIN WAS A SUCCESSFUL STOCKBROKER in Tampa, Florida, when he recognized the potentially profit- able market for safe and uncontaminated blood and, with some colleagues, founded Plasma International. Not every- body is willing to make money by selling his or her own blood, and in the beginning Plasma International bought blood from people addicted to drugs and alcohol. Although innovative marketing increased Plasma International’s sales dramati- cally, several cases of hepatitis were reported in recipients. The company then began looking for new sources of blood.21

Plasma International searched worldwide and, with the advice of a qualified team of medical consultants, did extensive testing. Eventually they found that the blood profiles of several rural West African tribes made them ideal prospective donors. After negotia- tions with the local government, Plasma International signed an agreement with several tribal chieftains to purchase blood.

Business went smoothly and profitably for Plasma Inter- national until a Tampa paper charged that Plasma was pur- chasing blood for as little as fifteen cents a pint and then reselling it to hospitals in the United States and South America for $25 per pint. In one recent disaster, the newspaper alleged, Plasma International had sold 10,000 pints, netting nearly a quarter of a million dollars.

The newspaper story stirred up controversy in Tampa, but the existence of commercialized blood marketing systems in the United States is nothing new. Approximately half the blood and plasma obtained in the United States is bought and sold like any other commodity. By contrast, the National Health Service in Great Britain relies entirely on a voluntary system of blood donation. Blood is neither bought nor sold. It is available to anyone who needs it without charge or obligation, and donors gain no prefer- ence over nondonors.

82088_ch02_ptg01_043-082.indd 80 9/3/15 8:55 AM

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.