Bus iness eth ics

8t h e di t ion

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Copyright 2012 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.

Will iam H. Shaw San Jose State Univers i ty

Bus iness eth ics

8t h e di t ion

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Printed in the United States of America 1 2 3 4 5 6 7 16 15 14 13 12

Business Ethics, Eighth Edition William H. Shaw

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v

Preface  ix

pa rt one | mor a l philosoph y a nd busine ss 1

cha pter 1 the nature of Mor al it y 1 Ethics  3 Moral  versus Nonmoral  Standards  5 Religion  and Morality  10 Ethical  Relativism  13 Having Moral  Principles  15 Morality  and Personal Values  19 Individual  Integrity  and Responsibility  20 Moral  Reasoning  24 Study Corner  30 Case 1.1: Made  in  the U.S.A.—Dumped  in  Brazil, Africa,  Iraq  .  .  .  31 Case 1.2:  Just Drop off  the  Key,  Lee  34 Case 1.3: The A7D Affair  37

cha pter 2 norMat iv e theor ies of e th ics 4 0 Consequentialist  and Nonconsequentialist Theories  42 Egoism  43 Utilitarianism  46 Kant’s  Ethics  53 other Nonconsequentialist  Perspectives  59 Utilitarianism once  More  66 Moral Decision Making: A  Practical Approach  68 Study Corner  70 Case 2.1:  Hacking  into  Harvard  71 Case 2.2: The  Ford  Pinto  74 Case 2.3:  Blood  for  Sale  77

cha pter 3 Just ice and econoMic d istr iBut ion 80 The Nature  of  Justice  83 The Utilitarian View  86 The  Libertarian Approach  90 Rawls’s Theory  of  Justice  97

contents

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vi CONTENTS

Study Corner  106 Case 3.1:  Eminent Domain  107 Case 3.2:  Battling  over  Bottled Water  109 Case 3.3:  Poverty  in America  111

pa rt t wo | a mer ic a n busine ss a nd its basis 114

cha pter 4 the nature of ca p ital isM 114 Capitalism  116 Key  Features  of  Capitalism  119 Two Arguments  for  Capitalism  121 Criticisms  of  Capitalism  125 Today’s  Economic Challenges  133 Study Corner  139 Case 4.1:  Hucksters  in  the  Classroom  140 Case 4.2:  Licensing  and  Laissez  Faire  142 Case 4.3: one Nation  under Walmart  144 Case 4.4: A New Work  Ethic?  147 Case 4.5:  Casino  Gambling  on Wall  Street  148

cha pter 5 corpor at ions 150 The  Limited-Liability  Company  152 Corporate Moral Agency  154 Rival Views  of  Corporate  Responsibility  158 Debating  Corporate Responsibility  164 Institutionalizing  Ethics within  Corporations  169 Study Corner  176 Case 5.1: Yahoo!  in China  177 Case 5.2: Drug Dilemmas  179 Case 5.3:  Levi  Strauss  at  Home  and Abroad  182 Case 5.4:  Free  Speech  or  False Advertising?  186 Case 5.5:  Charity  to  Scouts?  188

pa rt thr ee | busine ss a nd societ y 191

cha pter 6 consuMers 191 Product  Safety  193 other Areas  of  Business Responsibility  205 Deception  and Unfairness  in Advertising  214 The Debate  over Advertising  224

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CONTENTS      vii

Study Corner  227 Case 6.1:  Breast  Implants  229 Case 6.2:  Hot Coffee  at McDonald’s  231 Case 6.3:  Sniffing Glue Could  Snuff  Profits  232 Case 6.4:  Closing  the Deal  234 Case 6.5: The Rise  and  Fall  of  Four  Loko  236

cha pter 7 the en v ironMent 239 Business  and  Ecology  242 The  Ethics  of  Environmental  Protection  246 Achieving our  Environmental Goals  251 Delving  Deeper  into  Environmental  Ethics  256 Study Corner  264 Case 7.1:  Hazardous Homes  in Herculaneum  265 Case 7.2:  Poverty  and Pollution  267 Case 7.3: The  Fordasaurus  269 Case 7.4: The  Fight  over  the Redwoods  270 Case 7.5:  Palm oil  and  Its  Problems  273

pa rt Four | the orG a niZ ation a nd the people in it 276

cha pter 8 the Work pl ace (1) : Bas ic issues 276 Civil  Liberties  in  the Workplace  277 Hiring  283 Promotions  289 Discipline  and Discharge  291 Wages  295 Labor  Unions  298 Study Corner  307 Case 8.1: AIDS  in  the Workplace  308 Case 8.2: Web Porn  at Work  310 Case 8.3:  Speaking out  about Malt  311 Case 8.4:  Have  Gun, Will Travel  .  .  .  to Work  312 Case 8.5:  Union Discrimination  314

cha pter 9 the Work pl ace ( 2 ) : today’s challenges 316 organizational  Influence  in  Private  Lives  317 Testing  and Monitoring  323 Working Conditions  329

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viii CONTENTS

Redesigning Work  337 Study Corner  341 Case 9.1:  Unprofessional  Conduct?  342 Case 9.2: Testing  for  Honesty  344 Case 9.3:  She Snoops  to Conquer  346 Case 9.4:  Protecting  the Unborn  at Work  348 Case 9.5:  Swedish  Daddies  351

cha pter 10 Mor al choices fac ing eMpl oy ees 353 obligations  to  the  Firm  354 Abuse  of official  Position  358 Bribes  and Kickbacks  364 Gifts  and  Entertainment  368 Conflicting obligations  370 Whistle-Blowing  372 Self-Interest  and  Moral obligation  377 Study Corner  381 Case 10.1: Changing  Jobs  and  Changing  Loyalties  382 Case 10.2: Conflicting  Perspectives  on Conflicts  of  Interest  383 Case 10.3:  Inside Traders  or Astute  observers?  384 Case 10.4: The Housing Allowance  386 Case 10.5:  Ethically Dubious Conduct  388

cha pter 11 JoB d iscr iMinat ion 390 The Meaning  of  Job Discrimination  393 Evidence  of Discrimination  394 Affirmative Action: The  Legal  Context  399 Affirmative Action: The Moral  Issues  404 Comparable Worth  408 Sexual  Harassment  410 Study Corner  414 Case 11.1: Minority  Set-Asides  415 Case 11.2: Hoop Dreams  417 Case 11.3:  Raising  the Ante  419 Case 11.4: Consenting  to  Sexual  Harassment  420 Case 11.5:  Facial  Discrimination  423

SuggeStionS for further reading  425

noteS  429

index  449

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ix

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 eighth 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  felonious 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 profes- sional 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.

Case studies enhance the main text. These cases vary  in kind and  in  length, and are 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.

preface

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x PrEfaCE

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, 5.1, 5.2, 5.3, 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,  is devoted  to  this  topic.  In particular,  it  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 and general content of the book  familiar. They will, however, also be struck by its fresh design and by the graphs, tables, photographs, and  other information that now supplement the pedagogical features introduced in previous editions.

Feedback from students and instructors suggests that readers benefit greatly not only from marginal  summaries and highlights but also from visual breaks, visual guidance, and visual presentation of data and  information. So, the new design was crafted to help readers navigate the text more easily, retain content  more effectively, and review and prepare for tests more successfully. In addition, the Study Corner now  also includes “For Further Reflection,” a set of open-ended questions intended to help students articulate  their own response to some of the issues discussed in the text. An updated Suggestions for Further Reading is intended to provide appropriate material for independent research by students on topics cov- ered in Business Ethics.

The text itself has been thoroughly revised. I have updated and reorganized material throughout the  book in order to enhance the clarity of its discussions and the accuracy of its treatment of both philosophi- cal and empirical issues. At all times the goal has been to provide a textbook that students will find clear,  understandable, and engaging.

Forty-nine  case  studies—more  than  ever  before—now  supplement  the  main  text.  of  the  cases  that are new to this edition, two relate to the financial and mortgage industries: Case 1.2, “Just Drop off  the Key, Lee,” broaches the ongoing foreclosure crisis while Case 4.5, “Casino Gambling on Wall Street,”  discusses one of the financial instruments involved in the recent financial meltdown. Case 4.1, “Hucksters

Copyright 2012 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      xi

in the Classroom,” deals with commercial intrusion into schools. The ethics of sales is the focus of Case  6.4, “Closing the Deal,” while Case 6.5, “The Rise and Fall of Four Loko,” highlights the question of regu- lating consumer products on paternalistic grounds. Case 8.5, “Union Discrimination,” examines some of  the ethical issues posed by unions. The environment and the push and pull between business and envi- ronmentalists are well illustrated in Case 7.5, “Palm oil and Its Problems.” Case 9.5, “Swedish Daddies,”  shows how the sometimes conflicting demands of parenthood and work life challenge today’s employees  and employers. Cases 10.2, “Conflicting Perspectives on Conflicts of Interest,” and 10.3, “Inside Traders  or Astute observers?,” provide recent examples of some of the ethical struggles employees can confront.  Finally, the issue of comparable worth is the focus of Case 11.3, “Raising the Ante.”

Your Media Tools The Business Ethics CourseMate is new to this edition. It can be accessed by searching for this book on  CengageBrain.com. There you will find an array of online tools designed to reinforce theories and concepts  and help students to understand and better retain the book’s content, and to review and study for tests:

Self-Tests Tutorial Quizzes (with answers) Essays Flashcards Current Events Glossary  PowerPoint Slides Web Links

In addition to these CourseMate offerings, video tutorials will complement each chapter. Watching and  reflecting on these can help students improve their grades.

Finally, Global Business Ethics Watch exposes viewers to a wealth of online resources, from photo- graphs to videos and articles. Updated several times a day, the Global Business Ethics Watch is an ideal  one-stop site for classroom discussion and research projects for all things related to business ethics. You and  your students will have access to the latest information from trusted academic journals, news outlets, and  magazines. You also will receive access to statistics, primary sources, case studies, podcasts, and much more.

• • •

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.

Copyright 2012 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.

xii PrEfaCE

• • •

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 of 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,  12th  ed.  (Belmont,  Calif.: Wadsworth/Cengage  Learning,  2013).

Copyright 2012 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.

1

part one | mor al philosophy and business

Ch a p t er 1

The N aT ure of Mor a l iT y

sometimes the riCh and mighty fall. Take Kenneth Lay, for example. Convicted by a jury in 2006 of conspiracy and multiple counts of fraud, he had been chair- man and CEO of Enron until that once mighty company took a nose dive and crashed. Founded in the 1980s, Enron soon became a dominant player in the field of energy trading, grow- ing rapidly to become America’s seventh biggest company. Wall Street loves growth, and Enron was its darling, admired as dynamic, innovative, and—of course— profitable. Enron stock exploded 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.

After Fortune magazine voted it “the most innovative company of the year” in 2000, Enron proudly took to calling itself not just “the world’s leading energy company” but also “the world’s lead- ing 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 legendary financial prowess was illusory and the company’s success built on the sands of hype. And the hype continued to the end. Even with the com- pany’s financial demise fast approaching, Kenneth Lay was still recommending the company’s stock to its employees—at the

same time that he and other executives 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.

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

IntroductIon

the reason enron’s

collapse caught investors by surprise . . . was

that enron had always made its financial

records and accounts as opaque as possible.

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2      part one  moral philosophy and business2      part one  moral philosophy and business

the company 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 finan- cial 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 worried about its auditing and consulting fees than about its fiduciary responsibilities. Even worse, when the scandal began to break, a partner at Andersen organ- ized 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 obstruct- ing justice. The Supreme Court later overturned 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 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 part- nerships, loans, and derivatives. That may explain why, only days before Enron filed bankruptcy, just two of the sixteen Wall Street analysts who covered the company recom- mended that clients sell the stock. The large banks that Enron did business with played a corrupt role, too, by helping manufacture its fraudulent financial statements. (Subsequent lawsuits have forced them to cough up some of their profits: Citibank, for example, had to pay Enron’s victimized shareholders $2 bil- lion.) 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 deregula-

tory measures favorable to the energy company. Of the 248 members of Congress sitting on the eleven House and Senate committees charged with investigating 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 business 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 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?

enron’s stock price in u.s. dollars in late 2001, before its spectacular collapse

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chapter one  The naTure of moraliTy      3chapter one  The naTure of moraliTy      3

• • •

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 characteristics of good moral rea- soning, 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 char- acter and with the moral rules that govern and limit our conduct. It investigates questions  of right and wrong, fairness and unfairness, good and 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

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.

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 organization to advance their own interests? Is insider trading 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 activities 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 affirmative 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

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4      part one  moral philosophy and business

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 busi- ness context. For example, would it be right for a store manager to break a promise to a  customer 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  information 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  the Business roundtable  recently unveiled an  initiative to train the nation’s ceos in the finer points of ethics. 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 profit- ably 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.2

“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.

But this book takes a broader view as well because it is concerned with moral issues  that  arise  anywhere  that  employers  and  employees  come  together.  Thus,  it  addresses  organizational  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  organizational settings.

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.

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chapter one  The naTure of moraliTy      5

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  judgment,  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 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.3 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 standards 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  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

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.

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6      part one  moral philosophy and business

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 considered  bad etiquette to chew with your mouth open or to pick your nose when talking to some- one; 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  conduct 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 differ- ent 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  fifty or so 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 restau- rants. 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 underly- ing 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.

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.

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chapter one  The naTure of moraliTy      7

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 mor- ally 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 violates an ordi- nance that your community has voted in favor of. Some philosophers believe that  sometimes the illegality of an action can make it morally wrong, even 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 per- missible, 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

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.

Copyright 2012 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

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 philosopher  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 politi- cally, 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 ordinances, for they  are morally wrong.4

2. an action that is legal can be morally wrong. For example, it may have been per- fectly 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,5 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 mis- conduct). 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  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.

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).

*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.

Copyright 2012 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

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  unwritten and are part of the common understanding of members of a particular profes- sion—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 example, client confidentiality), of professional etiquette (for example, the billing  of services to other professionals), and of restrictions intended to benefit the group’s eco- nomic 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.

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.

Re ch

ita n

So rin

/ S hu

tte rs

to ck

.co m

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10      part one  moral philosophy and business

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 maintain that  morality just boils down to religion. others have argued for the doctrine of ethical rela- tivism, 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.

• • •

rel ig ioN a Nd 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

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.

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chapter one  The naTure of moraliTy      11

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, fidel- ity, 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 him- self. (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   relations and economic life. pope John paul II’s encyclical Centesimus Annus, the national  conference of catholic Bishops’ pastoral letter Economic Justice for All on catholic social  teaching and the U.S. economy, and the pontifical council for Social communication’s  reports on advertising and on ethics and the Internet stand in that  tradition––as does  pope Benedict XVI’s 2007 critique of the growing trend for companies to rely on short- term job contracts, which in his view undermines the stability of society and prevents  young people from building families.6

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12      part one  moral philosophy and business

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 im precise:  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.

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,

The idea that morality must be

based on religion can be interpreted in

three different ways, none of which is very

plausible.

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.

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chapter one  The naTure of moraliTy      13

so it is human reason to which you will have to appeal in order to support your ethical  principles and judgments.

• • •

e Thical 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 ethi- cal relativism, the theory that what is right is determined by what a culture or society  says is right. What is right in one place may be wrong in another, because the only crite- rion for distinguishing right from wrong—and so the only ethical standard for judging  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 cultural per- spective, 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 ethical 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, disa- greement in ethical matters does not imply that all opinions are equally correct.

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 160 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 stand- ards in the Middle ages.

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

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14      part one  moral philosophy and business

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 care- fully 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.7 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 concealment of pertinent facts in negotiation, lying about one’s age on a résumé,  deceptive packaging, automobile companies’ neglect of car safety, and utility companies’  manipulation 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 rela- tionships. The game calls for distrust of the other fellow. It ignores the claim of friend- ship.  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 business  because its standards of right and wrong differ from the prevailing traditions of moral- ity in our society.8

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  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

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.

Copyright 2012 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

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 evalu- ation 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  philosophers 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.9

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 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 evalu- ate 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

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.

Copyright 2012 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

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 dishon- est,  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-  understanding 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  independent 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.

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

Telling someone to “follow your

conscience” is not very helpful, and

sometimes it can be bad advice.

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.

Copyright 2012 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

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 fol- lowing 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 rec- ognize 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 someone 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  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.

Copyright 2012 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

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.10  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 hap- piness will generally be less happy than those who care about others. Moreover, people  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.

Morality restrains our self-interested

desires. A society’s moral standards

allow conflicts to be resolved by an

appeal to shared principles of justification.

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.

When morality and self-interest conflict, what you choose to

do will depend on the kind of person

you are.

Copyright 2012 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

• • •

Mor al iT y a Nd 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  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 businessperson  or being good at your job, as aristotle (384–322 bce) argued long ago. he underscored  the necessity of our trying to achieve virtue or excellence, not just in some particular field

Copyright 2012 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 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 per- son 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.

• • •

iNd iV 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, nar- rowly understood, that also influence the lives they lead. and we have seen the impor- tance of 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 diffi- cult 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 indi- vidual 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.

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.

Copyright 2012 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

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.11  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.12 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.”13

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.14

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  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.15

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:

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

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.

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22      part one  moral philosophy and business

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 subse- quent study found that students who stood firm in their judgments suffered more anxi- ety than those who switched. one student with the strength of his correct convictions  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 estab- lished 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  organization: being  transferred, dismissed,  frozen  in a position, or made an organiza- tional  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.

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 per- missible. 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

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.

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chapter one  The naTure of moraliTy      23

group actions frequently involve the participation of many people. as a result, responsi- bility 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 themselves 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  contributing  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 stud- ying 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 wit- nessed 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.

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  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.16

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 cer- tainly 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 corporations 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 concerns about the fact that the concentrate the company was pro- ducing for its “100% pure” apple juice contained nothing more than sugar, water, and  chemicals, his annual performance review described his judgment as “colored by naïveté  and impractical ideals.”17

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

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

Business corporations are no worse than other groups, but many of them do little to protect individual integrity and moral autonomy.

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24      part one  moral philosophy and business

“junk” or “dogs.”18 More dramatically, on June day in 2011, a US airways captain with  thirty years of experience stopped her flight from departing because she was worried that  a backup power system was defective. The company pressured her  to fly anyway, 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.19

often,  however,  the  problem  facing  people  in  business  and  other  organization  contexts 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:

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.

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chapter one  The naTure of moraliTy      25

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 consist- ent 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   obviously 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  sensible  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 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.

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26      part one  moral philosophy and business

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.

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 sup- porting 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 stand- ard, 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 stand- ards 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

Moral judgments should be supported

by moral standards and relevant facts.

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chapter one  The naTure of moraliTy      27

(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 oppor- tunity. analogous questions can be asked about the factual claims of arguments  5 and 6. answering them in the affirmative would require considerable support- ing data.

2. Challenging the moral standard. Moral disagreements do not always turn on fac- tual  issues. The moral  standard on which a given moral argument relies may be  controversial.  one  party  might  challenge  the  standard,  contending  that  it  is  implausible or that we should not accept it. The critic might do this in several differ- ent 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?

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.

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28      part one  moral philosophy and business

at this point, Sam, or any rational person in a similar position, has three alterna- tives:  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 advocate  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?