ETHICS & THE FUTURE OF BUSINESS
Session 1 – Morals & Ethics
• Lecture 1
1. Introduction to business ethics
Morality: humans’ ability to distinguish right and wrong.
Ethics: systematic study of morality (what’s right and wrong? Analyze it)
Ethical theories: principal and rules that determine right and wrong in different situations.
Normative ethics: study of how we ought to behave.
Ethics examines right and wrong from the perspective of a human being
(anthropocentric). Key questions:
• What kind of moral principles should guide our actions?
• What kind of aims should we have?
In economics thinking outcomes are relevant. So, ethics tries to give practical advice. Ethical
theories can give contradictory solutions to the same problem.
Business ethics: the study of business situations, activities, and decisions where issues
of right and wrong are addressed. Challenges:
• Comprehensive: Addresses challenging questions at individual, organizational and
societal levels.
• Cross-disciplinary: Philosophy, management, econ, political science, earth system
sciences...
• Abstract nature: It can be difficult to recognize the practical implications of ethical
theories.
• Critical thinking: You should not take the theories and related practices as given.
• Experience: experience in business can be helpful
Do we need ethics when we have the law?
In society, morality is the foundation of the law. Law and ethics are partly overlapping:
1. Law does not cover all ethical issues
2. Not all legal issues are ethical
3. Law and ethics can involve contradictions
The road from unethical to illegal is short and slippery. For example companies can operate
in locations with lacking legal infrastructure.
2. Normative ethical theories
• Ethical egoism (Hobbes, Smith, Rand)
o Not considered an ethical theory, even if influential in economics. Is a
predominant view.
1
, o An action is morally right if the
decision-maker freely decides
in order to pursue their short-
term desires or long-term
interests.
o Links to the perception of ideal
markets and Smith’s
“invisible hand”
o Problems:
§ Moral view based on short-term satisfaction of needs is contradictory
with our principles
§ Enlighted egoism focuses on meeting the long-term human interests.
§ Enlighted egoism does not take a stance on the nature of the interests
and desires of individuals, which can still lead to problems due to
conflicting interests.
§ The theory needs to be complemented by more developed ethical
theories.
o Self driving car:
§ if ethical egoist is buying it →protect the people inside the car
§ if ethical egoist is manufacturing → serve egoist customers to sell more
cars
• Utilitarianism (Bentham, Mill)
o An act is morally right if it results in the greatest amount of good to the
greatest amount of people affected by the action.
o Very influential in normative economics, which is related to the egoistic view
of humans in economics.
o Egoism in economics tend to function within a utilitarian societal moral theory.
o Act utilitarianism: Whether a single act is right or wrong depends on the
amount of common good it produces.
o Rule utilitarianism: Focuses on creating rules that produce the most common
good.
o Utilitarianism becomes a cost/benefit analysis.
o Problems:
§ Subjective, context-dependent, difficult to compare between people.
§ Difficulties in questions related to the just distribution of wealth.
§ Can be contradictory with the idea of respecting basic rights.
§ Maximizing is not the best approach to addressing all values.
§ No idea of reciprocity.
o Self-driving car:
§ Act utilitarianism: Conduct a cost/benefit analysis of what causes the
most benefit or least harm in each situation. Aim to harm as few as
possible.
§ Rule utilitarianism: self-driving vehicles should minimize causalities.
They should be introduced only if they are likely to make driving in
general safer.
• Ethics of duties (Kant)
2
, o Central concepts: duty, consistency, dignity, and universality.
o Duties do not mean mechanistically following rules, but they involve human’s
ability to develop moral law and moral rules.
o Kant’s deontological theory develops principles or categorical imperatives to
guide our actions.
o Categorical imperatives:
§ Consistency
• What is right for one is right for all, i.e., the rules you apply to
yourself should be applicable to others.
§ Dignity
• A human being is in itself a valuable autonomical being, and not
as a means to an end or a tool.
§ Universality
• Check that the principle is acceptable to every human being.
o Problems:
§ Abstract theory
§ Morality can be seen as a heavy burden to bear
§ Morality too strictly on the use of reason
§ Ethics of duties undervalues outcomes of actions.
o Self driving Car
§ Determine general rules that apply to all, e.g. if the owner of the car is
seen as responsible for the consequences of it, then the persons inside
the car should be sacrificed.
§ Human moral reasoning should be central
• Rights & Justice (Locke, Rawls)
o Natural human rights are certain basic, important, inalienable elements that
should be respected and protected in every single situation. These are based
in human dignity and lead to a duty for others to protect, respect, and support
them.
o Main natural rights: right to life, freedom, property, speech, privacy,
conscience, and fair trial among others.
o Central in Western political and ethical thought and foundation of the
universal human rights.
o Justice: The simultaneous fair treatment of individuals in a given situation with
the result that everybody gets what they deserve.
o Key ideas: procedural vs. distributive fairness; veil of ignorance; social
contract; system of basic liberties, judgement of society by the state of the
least advantaged, and equal opportunity.
o Problems:
§ Lists of basic rights can be seen to be relatively arbitrary. Rights
criticized to be too western.
§ Basic rights presuppose institutions that allow for recourse in case of
breach.
o Self-driving car:
§ We can neither discriminate by age, gender, physical appearance or
status, nor we can take someone’s life for crossing on a red light. The
entire traffic system needs to be fair in considering e.g., those who
3
Session 1 – Morals & Ethics
• Lecture 1
1. Introduction to business ethics
Morality: humans’ ability to distinguish right and wrong.
Ethics: systematic study of morality (what’s right and wrong? Analyze it)
Ethical theories: principal and rules that determine right and wrong in different situations.
Normative ethics: study of how we ought to behave.
Ethics examines right and wrong from the perspective of a human being
(anthropocentric). Key questions:
• What kind of moral principles should guide our actions?
• What kind of aims should we have?
In economics thinking outcomes are relevant. So, ethics tries to give practical advice. Ethical
theories can give contradictory solutions to the same problem.
Business ethics: the study of business situations, activities, and decisions where issues
of right and wrong are addressed. Challenges:
• Comprehensive: Addresses challenging questions at individual, organizational and
societal levels.
• Cross-disciplinary: Philosophy, management, econ, political science, earth system
sciences...
• Abstract nature: It can be difficult to recognize the practical implications of ethical
theories.
• Critical thinking: You should not take the theories and related practices as given.
• Experience: experience in business can be helpful
Do we need ethics when we have the law?
In society, morality is the foundation of the law. Law and ethics are partly overlapping:
1. Law does not cover all ethical issues
2. Not all legal issues are ethical
3. Law and ethics can involve contradictions
The road from unethical to illegal is short and slippery. For example companies can operate
in locations with lacking legal infrastructure.
2. Normative ethical theories
• Ethical egoism (Hobbes, Smith, Rand)
o Not considered an ethical theory, even if influential in economics. Is a
predominant view.
1
, o An action is morally right if the
decision-maker freely decides
in order to pursue their short-
term desires or long-term
interests.
o Links to the perception of ideal
markets and Smith’s
“invisible hand”
o Problems:
§ Moral view based on short-term satisfaction of needs is contradictory
with our principles
§ Enlighted egoism focuses on meeting the long-term human interests.
§ Enlighted egoism does not take a stance on the nature of the interests
and desires of individuals, which can still lead to problems due to
conflicting interests.
§ The theory needs to be complemented by more developed ethical
theories.
o Self driving car:
§ if ethical egoist is buying it →protect the people inside the car
§ if ethical egoist is manufacturing → serve egoist customers to sell more
cars
• Utilitarianism (Bentham, Mill)
o An act is morally right if it results in the greatest amount of good to the
greatest amount of people affected by the action.
o Very influential in normative economics, which is related to the egoistic view
of humans in economics.
o Egoism in economics tend to function within a utilitarian societal moral theory.
o Act utilitarianism: Whether a single act is right or wrong depends on the
amount of common good it produces.
o Rule utilitarianism: Focuses on creating rules that produce the most common
good.
o Utilitarianism becomes a cost/benefit analysis.
o Problems:
§ Subjective, context-dependent, difficult to compare between people.
§ Difficulties in questions related to the just distribution of wealth.
§ Can be contradictory with the idea of respecting basic rights.
§ Maximizing is not the best approach to addressing all values.
§ No idea of reciprocity.
o Self-driving car:
§ Act utilitarianism: Conduct a cost/benefit analysis of what causes the
most benefit or least harm in each situation. Aim to harm as few as
possible.
§ Rule utilitarianism: self-driving vehicles should minimize causalities.
They should be introduced only if they are likely to make driving in
general safer.
• Ethics of duties (Kant)
2
, o Central concepts: duty, consistency, dignity, and universality.
o Duties do not mean mechanistically following rules, but they involve human’s
ability to develop moral law and moral rules.
o Kant’s deontological theory develops principles or categorical imperatives to
guide our actions.
o Categorical imperatives:
§ Consistency
• What is right for one is right for all, i.e., the rules you apply to
yourself should be applicable to others.
§ Dignity
• A human being is in itself a valuable autonomical being, and not
as a means to an end or a tool.
§ Universality
• Check that the principle is acceptable to every human being.
o Problems:
§ Abstract theory
§ Morality can be seen as a heavy burden to bear
§ Morality too strictly on the use of reason
§ Ethics of duties undervalues outcomes of actions.
o Self driving Car
§ Determine general rules that apply to all, e.g. if the owner of the car is
seen as responsible for the consequences of it, then the persons inside
the car should be sacrificed.
§ Human moral reasoning should be central
• Rights & Justice (Locke, Rawls)
o Natural human rights are certain basic, important, inalienable elements that
should be respected and protected in every single situation. These are based
in human dignity and lead to a duty for others to protect, respect, and support
them.
o Main natural rights: right to life, freedom, property, speech, privacy,
conscience, and fair trial among others.
o Central in Western political and ethical thought and foundation of the
universal human rights.
o Justice: The simultaneous fair treatment of individuals in a given situation with
the result that everybody gets what they deserve.
o Key ideas: procedural vs. distributive fairness; veil of ignorance; social
contract; system of basic liberties, judgement of society by the state of the
least advantaged, and equal opportunity.
o Problems:
§ Lists of basic rights can be seen to be relatively arbitrary. Rights
criticized to be too western.
§ Basic rights presuppose institutions that allow for recourse in case of
breach.
o Self-driving car:
§ We can neither discriminate by age, gender, physical appearance or
status, nor we can take someone’s life for crossing on a red light. The
entire traffic system needs to be fair in considering e.g., those who
3
