Business Ethics Chapter # 2 Normative Theories

1. Business Ethics Chapter # 2 Normative Theories By Aaftab Ullah

2. Contents Normative theories Consequencialist theory Egoism Utilitarianism Non- consequentialist theory Rights principle Distributive Justice Ethics of Care Virtue Ethics

3. Normative Theories literally “Normative” means setting standards or rules of behavior”. Normative theories propose some actions or principles for distinguishing right actions from wrong actions. These theories can be divided into 01: Consequentialist 02: Non- consequentialist approaches.

4. 01:Consequentialists Theory Many philosophers (Jeremy bentham) have argued that the moral rightness of an action is determined solely by its results or consequence. • If the results are good , then the act is right. • If the results are bad , then that act is wrong. It can be further divided into two more approaches : A: Egoism B: Utilitarianism

5. Egoism(Consequentialist) The view that associates morality with self interest is referred to egoism. Egoists contends that an act is morally right if and only if it best promotes an agents self interest (agent refers to particular group or organization). Egoists use their self interest as the standard for measuring the actions rightness.

6. Egoism(Consequentialist) According to egoism we care for others because it is in our best self interest. “ I am not required to act in the interest of others, but I should if that is the only way to promote my own self interest”. Example… Providing more and more facilities to your employees does not mean that you are caring for your employees, but you want them to be more productive(profit).

7. Utilitarian( consequentialist ) Utilitarianism Proposes that an action is right if it produces the most utilities(benefits) for all persons affected by the action (including the person performing the act). Example: Is it right to let one patient die in order to harvest his organs and perhaps save five lives?

8. Utilitarian (cont’s) Utilitarianism:Holds that actions and policies should be evaluated on the basis of the “benefits” and “costs” they will impose on society. In any situation the right action or policy is the one that will produce the greatest net benefits and less cost. Note: Benefits here means happiness and satisfaction or monetary benefits.

9. Utilitarian (cont’s) Example: The government may appropriate private property for public use, usually with compensation to the owner. Thus the government may legally purchase your house from you to widen the highway- even if you don’t want to sell the house or want more money than the government is willing to pay. The public interest is served at your private expense. Is this just?

10. Utilitarianism and Organization Utilitarianism make it appealing as a standard for decision making in business and non-business organizations. Utilitarianism provides a clear and straightforward basis for formulating policies. By utilitarian standards, an organizational policy, decision or action is good if it promotes the general welfare.

11. 02:Non consequentialist Theory These philosophers contend that right and wrong are determined by more than the likely consequences of an action. Example: Tom to break his promise to Fred is wrong not simply because it has bad results ( Fred hurts feelings). but because of the inherent character of the act itself.

12. Rights Principle • Rights Principle: The morally correct action is the one that you have a moral right to do. • According to this view, all people have natural rights to life, liberty, and property, and everyone is morally permitted to do anything they wish, provided that their actions do not violate the rights of other people.

13. Rights principle Rights are entitlements • Example: Right to free speech • Example: Right to freedom of religion • Example: Right to an education

14. Distributive Justice Distributive Justice Principle: The morally correct action is the one that produces a fair distribution of resources(benefits and burdens). Each person receives resources according to how much they deserve (in terms of contribution, effort or merit.)

15. Distributive Justice (Fairness) General Fairness Principles: • People who are similar in relevant respects should be treated similarly • People who differ in relevant respects should be treated differently. • If Jack and Jill both do the same work, and there is no relevant difference, then in justice they should be paid the same wages. • And if Jack is paid more than Jill simply because he is a man, or because he is white, then we have an injustice

16. Ethics of Care Care Principle: The morally correct action is the one that appropriately cares for the people with whom you have relationships. • Example: love toward son or daughter versus love toward a stranger

17. Ethics of Care • Care for the needs of people with whom you have relationships. Examples: ( Care for your own needs) • Family • Friends • Employees • Customers • Stockholders

18. Virtue Ethics Virtue Principle: The morally correct action is the one that displays good moral virtues(moral excellence), and that does not display bad moral vices(activities/specific form of evildoing).

19. Virtue Ethics Examples of virtues: compassion(kindness), conscientiousness(care), cooperativeness, courage, fairness, generosity(The trait of being willing to give your money or time), honesty, industriousness (Persevering determination to perform a task), loyalty, self-control, self-reliance(confidence), tolerance

20. Virtue Ethics • Examples of vices: cowardice(weakness/The trait of lacking courage), deceit (The quality of being fraudulent), dishonesty, laziness, neglect, selfishness

21. THANKYOU