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Emerging Issues in Management (Mgmt 440). Ethics Systems: Utilitarianism (Chapter 20) Professor Charles H. Smith Fall 2011. What is ethics?. Ethics is a systematic approach to moral judgments based on reason, analysis, synthesis, and reflection.
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Emerging Issues in Management (Mgmt 440) Ethics Systems: Utilitarianism (Chapter 20) Professor Charles H. Smith Fall 2011
What is ethics? • Ethics is a systematic approach to moral judgments based on reason, analysis, synthesis, and reflection. • Ethics addresses matters of importance to human well-being, autonomy, and liberty. • Ethics is based on moral standards that are independent of the declarations of governments or other authoritative bodies.
What is ethics? cont. • Ethics is the discipline concerned with judgments based on moral standards and the reasoning therefrom. • The focus of ethics also is not on issues involving direct mutual advantage.
Business ethics • Business ethics is the application of ethics principles to issues that arise in business. • The study of business ethics should not be separate from the study of ethics – think of “ethics” as a set and “business ethics” as a subset that is completely within the “ethics” set.
Business ethics vs. personal ethics • As opposed to personal ethics, where an individual is the principal, business ethics pertains to situations in which individuals are in an organizational position and act as agents of the company and its owners. • Business ethics also differs from personal ethics because a manager has accepted the responsibilities associated with the position occupied. • Is the individual more accountable when he/she acts for him/herself or on behalf of the company?
Business ethics vs. personal ethics – amorality • Business should be amoral and therefore not guided by the full range of society’s ethical standards. • These “compromised ethics” are acceptable since competition causes business’ actions to result in benefits to society. • Example – businessperson active in church but then will engage in “big lies” such as deceptive business practices or even just “little lies” like using contrivances to avoid communications from “undesirable” clients, vendors, etc.
Business ethics vs. personal ethics – moral unity • Business should be judged by same ethical rules as other parts of society because there should not be different ethics for work and the rest of life. • Example – businessperson applies principles of his/her religion to business practices (Jim Edson painting, Chick-Fil-A Sunday closure).
Utilitarianism A consequentialist system with two particular features: • First, consequences are to be evaluated in terms of the preferences of individuals • Second, those preferences are to be aggregated. Please note: • Utilitarianism is often defined as “the greatest good for the greatest number” but this definition may be too simplistic; instead, the definition should be “the action that yields the greatest good” (see next slide).
Summary of the components of utilitarianism Utilitarianism is a moral philosophy which holds • Moral good is judged in terms of consequences; • Consequences are evaluated in terms of human well-being; • Human well-being is evaluated in terms of individual preferences; • The rightness of an action is judged by the aggregate well-being, or good, it yields, and • The morally justified action maximizes aggregate well-being.
Methodology for the application of utilitarianism • Identify the alternatives – rules of behavior and actions. • For each alternative, identify the set of consequences for all persons affected. • Determine which of the consequences are social costs and which are social benefits. • Evaluate and estimate the social costs and social benefits. • Choose the action or rule that yields the greatest difference between social benefits and social costs.
Case study and giving credit • Case study – “Tax Shelters” on 677-79; read on your own and discuss with small groups. • Finally, giving credit where credit is due . . . • This PowerPoint presentation is based on a PowerPoint presentation provided by the publisher of your textbook (Pearson Education). • But, please note that your professor has made numerous additions to, deletions from, and other changes to the PowerPoint presentation provided by Pearson Education.
