Lecture 2

Different approaches in Business

Ethics (historical perspective)

Lecturer: Markhabo Nazarova

Email: m.nazarova@bmu-edu.uz
Office hours: Tuesday 12.00 – 13.00
Wednesday 12:00-13:00
Overview
Locate the role of ethical theory
Highlight international differences in perspectives
Provide critical overview of traditional ethical theories
Explore contemporary ethical theories
 What are normative ethical theories?

Ethical theories are the rules and principles that determine

right and wrong for any given situation

Normative ethical theories are those that propose to prescribe

the morally correct way of acting

As opposed to descriptive ethical theories which seek to

describe how ethics decisions are actually made in business
 The role of ethical theory
Two extreme positions (De George 1999)
1.Ethical absolutism (dogmatic) (Strict & Fixed Rules)
1. This view says that moral rules are always the same, no matter the situation.
2. Right and wrong are clear, objective facts that anyone can figure out using logic.
3. Example: Stealing is always wrong, no matter the reason.
4. Often linked to traditional moral theories (like religious or philosophical rules
that never change).
2.Ethical relativism (pragmatic) (Flexible & Context-Based)
1. This view says that morality depends on the situation and culture.
2. There are no universal right or wrong rules, because different people and
societies see things differently.
3. Example: Stealing might be okay in some cases, like if someone is starving.
4. More common in modern ethical thinking, where context matters.
• In short:
• Absolutism = fixed, universal moral rules.
• Relativism = morality depends on culture and situation.
 Ethics of rights and justice
Human rights
1. Everyone has them just because they are human—no exceptions. Based on a shared belief
in human dignity (the idea that all people deserve respect and fair treatment).Becoming more
important globally, especially in rules like the UN Global Compact and Ruggie Principles.
Ruggie Principles have three key ideas: Protect – Governments must protect human rights.
2. Respect – Businesses and organizations must respect human rights.
3. Remedy – If rights are violated, people should have a way to get justice.
Justice
• Justice means treating people fairly so that everyone gets what they deserve.
• It includes:
• Fair procedures (Procedural Justice) – The process of making decisions must be fair.
• Fair outcomes (Distributive Justice) – The results should be fair for everyone.
• In short:
• Human Rights = Basic rights everyone has, no matter what.
• Justice = Fair treatment and fair results for all.
 Normative Ethical Theories and
Religious and philosophical theories tend to have the same aim: to inform us about the right
Religion
things to do.
Two main differences:
1. Sources of rules & principles. Where the Rules Come From
• Religious Morality: Says that rules come from God or organized belief systems (like holy
books or religious leaders).
• Philosophical Morality: Uses human reasoning (logic, debate, and discussion) to decide
what is right or wrong.
2. Consequences of morality (or immorality)
• Philosophy: Focuses on real-world effects—how actions help or harm society. Religion:
Includes spiritual consequences, such as:
Enlightenment (gaining wisdom or truth).
• Reincarnation (being reborn after death).
• Damnation (eternal punishment in hell for bad deeds).
• Salvation (being saved by God and avoiding punishment for sins).
 Normative ethical theories

Deontological & Teleological

 Teleological Approach to Ethics
A teleological approach to ethics is based on the concept of
seeking a “telos” in ethical decision-making. Telos is a Greek
word meaning “end” or “goal”; thus, teleological ethics is
concerned with how choices will affect a particular desired moral
outcome. Generally, we can speak of two main teleological moral
philosophies: utilitarianism/consequentialism, and the virtue
ethics promoted by ancient and medieval moral philosophers.

Teleological approach based on outcome of the action. In other

words, what matters most is whether a decision leads to
a desirable moral result.
 Founders of Utilitarianism

Jeremy Bentham and John Stuart Mill, asserts that the morality of
an action depends on its consequences. The ultimate aim is to
maximise overall happiness or well-being—often summarised as “the
greatest good for the greatest number.”
Founders of Utilitarianism
 Act- and Rule-Utilitarianism
Act utilitarianism
Looks to single actions and bases the moral judgement on the amount of pleasure and the
amount of pain this single action causes.
• Example 1: A doctor has one dose of a life-saving medication and two patients—one
with a high chance of survival and the other with a slim chance. The doctor gives the
medication to the patient with the higher chance, maximising immediate well-being.
• Example 2: A person donates money to a homeless individual they encounter on the
street, knowing it will bring them immediate relief, even if it’s a one-time act.
Rule utilitarianism
Evaluates actions by examining whether the fundamental principles behind them result in more
overall pleasure than pain for society over time.
• Example 1: A city enforces traffic laws requiring people to stop at red lights. Even if no
cars are around at a particular intersection, obeying the rule contributes to long-term
safety and order for society.
• Example 2: An organization implements a policy of recycling paper and plastics in the
workplace. This principle promotes environmental sustainability, leading to greater
societal happiness and reduced harm over time.
 Problems with Utilitarianism
1. Subjectivity- Utilitarianism assumes happiness or utility can be universally
measured, but people's values and preferences are subjective.
• Example:
Imagine a city debating whether to build a park or a shopping mall. Some
citizens value green spaces for relaxation, while others want more shopping
opportunities. Whose happiness should be prioritized? The subjectivity makes
it difficult to decide.
2. Too Demanding- Utilitarianism asks people to always act in ways that
maximize happiness, even at great personal cost. This can be unrealistic and
overwhelming.
• Example:
Suppose you earn a good salary. A strict utilitarian might say you should
donate almost all of your income to charity because it would do more good for
others than for you. While noble, this expectation could leave you struggling
to meet your own needs.
 Problems with Utilitarianism
3. Favouring Short-Term Benefits Over Long-Term Costs- Utilitarianism can
prioritize immediate gratification while neglecting long-term consequences.
• Example:
A government decides to cut taxes to boost public happiness now but neglects
to fund infrastructure repairs. While citizens feel happy initially, the long-
term cost comes in the form of collapsing roads and bridges, which creates
far greater suffering.
4. Assuming All Values Can Be Reduced to Money- Utilitarianism often
reduces values like happiness, love, or justice to monetary terms, which
oversimplifies complex ethical considerations.
• Example:
A company calculates that paying fines for pollution is cheaper than investing
in eco-friendly practices. While this saves money, it disregards the long-term
environmental and health impacts on communities, which can’t be adequately
measured in dollars.
The 3 Generally Accepted Principles of Utilitarianism
State That
1. The Consequentialist Principle
What It States: The morality of an action is determined solely by its outcomes or consequences.
The goal is to maximise good consequences and minimize harm.
Example: A doctor prioritizes treating the patient with the most severe condition first because
this action has the greatest potential to save a life, leading to the best outcome.
2. The Utility Principle
What It States: Actions are judged based on their ability to produce the greatest overall
happiness or pleasure for the greatest number of people. This is often summarized as "the greatest
good for the greatest number.”
Example: A city council allocates its budget to improve public transportation, benefiting
thousands of residents instead of funding a smaller project like a luxury park for a select few.
3. The Impartiality Principle
What It States: Every individual’s happiness counts equally; no one’s pleasure or pain is
considered more important than another’s. Decisions should be made without favouritism or bias.
Example: A charity distributes aid to all flood victims equally, regardless of their social or
economic status, ensuring fairness in helping those in need.
 Deontological Ethical Theory

Deontological Ethics is a way of deciding what’s right or wrong by

focusing on the action itself, not the results it brings. It’s about
following rules or duties because they are the right thing to do, no
matter what happens afterward.

For example, if you believe lying is always wrong, you would tell the
truth—even if it gets you into trouble—because being honest is the
right thing to do. Deontological ethics is like having a moral compass
that always points to “what’s right,” no matter where the path leads.
 Immanuel Kant

Kant believed that an action is morally valuable only when

done out of duty, not for personal gain. He distinguished
between hypothetical imperatives (actions based on desires) and
categorical imperatives (actions that are inherently morally
necessary).

Hypothetical imperatives depend on personal goals, while

categorical imperatives apply universally, driven by moral duty.
For example, “Be honest, so that people will think well of you!”
is an imperative that applies only if one wishes to be thought
well of.
 Ethics of duties
‘Categorical Imperative’ (Kant)
Maxim 1: Consistency
• “Only do something if you’d be okay with everyone doing the same thing.” Think about your action as a rule
for the whole world. Would it work if everyone followed it? If not, don’t do it.
• Example: If you lie, imagine a world where everyone lies. Trust would fall apart. Since you wouldn’t want that, it’s
wrong to lie.

Maxim 2: Human Dignity

• “Always treat people with respect, not as tools for your own gain.” People aren’t objects you can use to get what
you want. Treat them as valuable individuals with feelings and rights.
• Example: Don’t pretend to be someone’s friend just to get a favour from them. That’s treating them as a tool
instead of respecting their dignity.

• Maxim 3: Universality
• “Act in a way you’d be okay with everyone knowing and doing.” Before making a choice, ask yourself: Would I
be okay if everyone did this? Would I be embarrassed if my action was made public?
• Example: If you’re thinking about cheating on a test, imagine everyone cheating. Tests would become meaningless,
and fairness would disappear. If you wouldn’t like that, don’t cheat.
 Approaches based on character and integrity

Virtue ethics is a way of thinking about right and wrong that focuses
on a person’s character rather than just their actions or consequences.
Instead of asking, "What should I do?", virtue ethics asks, "What kind
of person should I be?”

According to virtue ethics, a morally good person naturally does the

right thing because they have good character traits(virtues) like
honesty, kindness, and courage. The goal is to develop these
virtues through learning and practice so that making moral choices
becomes a habit.
 Approaches based on character and integrity

Virtues are not something people are born with—they are learned through practice and experience.
Just like playing a sport or learning an instrument, the more you practice good habits, the more they
become part of who you are.
Two Types of Virtues
1. Intellectual Virtues (Using Your Mind Wisely)
These are traits that help you think, learn, and make smart decisions.
Examples: Wisdom, curiosity, critical thinking.
Example in Action: A scientist carefully tests their theories instead of jumping to conclusions,
showing curiosity and critical thinking.
2. Moral Virtues (Being a Good Person)
These are qualities that shape your moral character and help you do the right thing.
Examples: Honesty, kindness, integrity, courage.
Example in Action: A student finds money on the ground and turns it in instead of keeping it,
showing honesty and integrity.
 Founders of Virtue Ethics- Plato,
Aristotle, Stoics
• Plato- Emphasised that a virtuous life leads to harmony between the soul's three parts: reason, spirit, and
desire.
Key Virtues: Wisdom, courage, moderation, and justice.
Simplified Idea: A virtuous person is someone who balances their mind, emotions, and desires in a way
that creates inner harmony.
• Aristotle - Expanded virtue ethics by introducing the idea of practicing virtues to build good
character. He believed virtue lies in the “Golden Mean”—a balance between extremes (e.g., courage is
between recklessness and cowardice).
Key Virtues: Honesty, courage, generosity, and integrity.
Simplified Idea: Good habits lead to good character, and good character leads to good actions.
• Stoics- focused on self-control and rationality, teaching that virtue is the key to living a happy life
regardless of external circumstances. They believed in accepting what you can’t control and focusing on
what you can.
Key Virtues: Wisdom, courage, justice, and self-discipline.
Simplified Idea: Virtue is about staying calm and rational, even in tough situations, and living in harmony
with nature
Normative ethical theories: Summary
Normative ethical theories: Summary
 The Dark Knight
• Utilitarians, would endorse killing the Joker. By
taking this one life, Batman could save
multitudes.

• Deontologists, would reject killing the Joker

simply because it’s wrong to kill.

• Virtue ethicist “would highlight the character of

the person who kills the Joker. Batman is a
virtuous human being who doesn’t want to be the
kind of person who takes his enemies’ lives?”
Western modernist
ethical theories
Normative
ethical
theories
 Egoism
• Ethical egoism is one of the oldest philosophical ideas, and it
was already well known and discussed by ancient Greek
philosophers such as Plato. In the last three centuries, it has
been quite influential in modern economics, particularly in
relation to Adam Smith’s.
• Egoism suggests individuals should act in their own self-
interest. In other words, people should prioritize their own well-
being and happiness above the interests of others. There are
different forms of egoism, but the common thread is the
emphasis on personal advantage or benefit as the guiding
principle for ethical decision-making
 John Rawls’s
‘Theory of Justice’

1. Each person is to have an equal right to the most extensive total

system of basic liberties compatible with a similar system of liberty
for all.

2. Social and economic inequalities are to be arranged so that they are

both:
a. to the greatest benefit of the least advantaged;
b. attached to offices and positions open to all under conditions of fair equality
of opportunity.
https://www.youtube.com/watch?v=EM5G-cXH_9M
 Major normative theories
Ethical egoism Utilitarianism Ethics of duty Rights & Justice

Focus Individual desires or Outcomes and Duties Rights and the

interests collective welfare nature of justice

Guiding Maximization of Act/rule Respect for Universalisable

tenets desires/self-interest utilitarianism autonomy and rules for nature of
rational reasons justice and
respect for human
beings
Concepts Humans are objectively Humans are Humans are Human beings are
of human obliged to serve their motivated by rational moral distinguished by
beings self interest alone avoidance of pain actors with free dignity
and gain of will
pleasure
Source: Crane et al (2019)
 Limits of traditional Western Modernist ethical
theories

• Too abstract
• Too reductionist
• Too objective and elitist
• Too impersonal
• Too rational and codified
• Too imperialist
Alternative perspectives on ethical
theory
Alternative perspectives on ethical theory 2
Virtue Ethics Ethics of care Discourse ethics Postmodern
ethics

Focus Character Relationships Deliberative Moral impulse

Guiding Tenets Strive to be a good Our first Conflict resolution Ethics is context
person responsibility is to requires honest, and individual
our significant open exchange and specific
relationships discussion

Concept of Humans can lead Humans are Humans are Humans have an
human beings virtuous traits to relational and rational innate internal
lead a good life interdependent individuals who guide to ethics
can resolve
conflicts by a
process of
argumentation

Source: Crane et al (2019)

 Approaches based on ethics and responsibility

Feminist ethics
• An approach that prioritizes empathy, harmonious and healthy
social relationships, care for one another, and avoidance of harm
above abstract principles
Key elements
• Relationships
• Decisions taken in context of personal human interrelations
• Responsibility
• Active ‘taking’ of responsibility, rather than merely ‘having’ it
• Experience
• Learn and develop from experience
 Approaches based on procedures of norm generation

Discourse ethics
• Aims to solve ethical conflicts by providing a process of norm generation through
rational reflection on the real-life experiences of all relevant participants
Key elements
• Ultimate goal of ethical issues in business should be the peaceful settlement of
conflicts
• Different parties in a conflict should sit together and engage in a discourse about
the settlement of the conflict, and ultimately provide a situation that is acceptable
to all
• ‘ideal discourse’ criteria
 Approaches based on empathy and moral
impulse

Postmodern ethics
• An approach that locates morality beyond the sphere of rationality in an emotional
‘moral impulse’ towards others. It encourages individual actors to question
everyday practices and rules, and to listen to and follow their emotions, inner
convictions and ‘gut feelings’ about what they think is right and wrong in a
particular incident of decision-making.
 Pluralism?
Crane et al (2019) argue that for the practical purpose of making
effective decisions in business:
• Not suggest one theory or one approach as the best or true view of a
moral dilemma
• Suggest that all these theoretical approaches throw light from different
angles on one and same problem
• Complementary rather than mutually exclusive
Advocate position of pluralism
• Middle ground between absolutism and relativism
 Considerations in making ethical decision:
key insights from ethical theory 1
Consideration Typical questions you might ask yourself Theory
One’s own Is this really in my, or my organization’s, best long term interests? Egoism
interests Would it be acceptable and expected for me to think only of
consequences to myself in this situation?
Social If I consider all of the possible consequences of my actions, for Utilitarianism
consequences everyone that is affected, will we be better or worse off overall?
How likely are these consequences and how significant are they?

Duties to others Who do I have obligations to in this situation? What would happen Ethics of duty
if everybody acted in this same way as me? Am I treating people
only to get what I want for myself (or my organization) or am I
thinking also of what they want too?
Entitlements of Whose rights do I need to consider here? Am I respecting Ethics of
others fundamental rights and human dignity? rights
Fairness Am I treating everyone fairly here? Have processes been set up to Theories of
allow everyone an equal chance? Are there major disparities justice
between the ‘winners’ and ‘losers’ that could be avoided?

Source: Crane et al (2019)

 Considerations in making ethical decision:
key insights from ethical theory 2
Consideration Typical questions you might ask yourself Theory
Character and Am I acting with integrity here? What would a decent, honest Virtue ethics
integrity person do in the same situation?

Relationships How do (or would) the other affected parties feel in this situation? Ethic of care
and Can I avoid doing harm to others? Which solution is most likely to
responsibilities preserve healthy and harmonious relationship among those
involved?

Procedures of What norms can we work out together to provide a mutually Discourse
norm generation acceptable solution to this problem? How can we achieve a ethics
peaceful settlement of this conflict that avoids ‘railroading’ by the
most powerful player?

Empathy and Am I simply going along with the usual practice here, or slavishly Postmodern
moral impulse following the organization’s code, without questioning whether it ethics
really feels right to me? How can I get closer to those likely to be
affect by my decision? What do my emotions or gut feelings tell
me once I'm out of the office?

Source: Crane et al (2019)

 Summary

• Ethical theories are the rules and principles that determine right and
wrong for any given situation
• A variety of different ethical theories exist which all have their
individual strengths and weaknesses
• Ethical theories can serve as a prism for viewing ethical problems
• Ethical pluralism is the middle ground between absolutism and
relativism