Lecture 4 – Business Ethics
Normative Ethical Theories
Ethical theories are the rules and principles that determine right and wrong for any given situation
Crane and Matten (2010) • Normative ethical theories are those that propose to prescribe the
morally correct way of acting • As opposed to descriptive ethical theories which seek to describe
how ethics decisions are actually made in business
Morality: Relativism, Universalism, and Pluralism
Relativism
… assumes there is no rational, universal basis to determine what is right or wrong • Moral
evaluations are actually just personal opinions or feelings, not “truths” • We can make statements of
personal approval or disapproval, but we cannot claim any inherent standards of right and wrong •
Different people and cultures hold different (morally acceptable) views on what is right and wrong •
What is right is context dependant
Universalism (or absolutism)
Assumes that right and wrong are objectively determined and that the same system of ethical rules
or principles applies to everyone, everywhere. • Rules or principles are drawn from rational reason •
E.g. UN Declaration of human rights • Business ethics thinking is often universalist
Pluralism
Accepts different moral perspectives while suggesting that a consensus on basic principles and rules
in a certain social context can be reached • Rather than a single universal theory, Crane and Matten
present the different theoretical frameworks as complementary resources or conceptual tools to
make practical, systematic assessments of right and wrong
Utilitarianism vs. Deontology
Utilitarianism
‘an action is morally right if it results in the greatest amount of good for the greatest amount of
people affected by the action’ Practical and common in business Cost benefit analysis
Criticism
• Subjectivity • Quantification • Distribution of utility
Deontology (Ethics of Duty)
Asserts that some actions are universally right or wrong • Assumes that motives, not just
consequences matter • Most common formulation is the ‘golden rule’ • e.g. responsible downsizing
– Danone: “no employee should be left alone to deal with a job problem and jobs must be created
wherever they are destroyed.”
Two Kantian categorical imperatives
1. ‘act only according to that maxim by which you can at the same time will that it should become a
universal law’
Normative Ethical Theories
Ethical theories are the rules and principles that determine right and wrong for any given situation
Crane and Matten (2010) • Normative ethical theories are those that propose to prescribe the
morally correct way of acting • As opposed to descriptive ethical theories which seek to describe
how ethics decisions are actually made in business
Morality: Relativism, Universalism, and Pluralism
Relativism
… assumes there is no rational, universal basis to determine what is right or wrong • Moral
evaluations are actually just personal opinions or feelings, not “truths” • We can make statements of
personal approval or disapproval, but we cannot claim any inherent standards of right and wrong •
Different people and cultures hold different (morally acceptable) views on what is right and wrong •
What is right is context dependant
Universalism (or absolutism)
Assumes that right and wrong are objectively determined and that the same system of ethical rules
or principles applies to everyone, everywhere. • Rules or principles are drawn from rational reason •
E.g. UN Declaration of human rights • Business ethics thinking is often universalist
Pluralism
Accepts different moral perspectives while suggesting that a consensus on basic principles and rules
in a certain social context can be reached • Rather than a single universal theory, Crane and Matten
present the different theoretical frameworks as complementary resources or conceptual tools to
make practical, systematic assessments of right and wrong
Utilitarianism vs. Deontology
Utilitarianism
‘an action is morally right if it results in the greatest amount of good for the greatest amount of
people affected by the action’ Practical and common in business Cost benefit analysis
Criticism
• Subjectivity • Quantification • Distribution of utility
Deontology (Ethics of Duty)
Asserts that some actions are universally right or wrong • Assumes that motives, not just
consequences matter • Most common formulation is the ‘golden rule’ • e.g. responsible downsizing
– Danone: “no employee should be left alone to deal with a job problem and jobs must be created
wherever they are destroyed.”
Two Kantian categorical imperatives
1. ‘act only according to that maxim by which you can at the same time will that it should become a
universal law’
