LECTURE 1 MORALS & ETHICS
Concise but detailed exam-ready summary — Crane, Matten, Glozer & Spence
(2019), Ch. 3 (pp.85–135): “Evaluating Business Ethics: Normative Ethical Theories”
What this chapter does (one line):
It sets out the main Western normative ethical theories managers use to justify and
evaluate business choices, explains their core premises, strengths/weaknesses, and
how they map onto business problems.
1) The role of ethical theory (quick)
• Purpose: give systematic, defensible rules or principles for “how we ought to
act” in business (vs. descriptive accounts of how people actually decide).
2) Theories covered — core premise, decision-rule, quick pros/cons, business
example
A. Consequentialism → Utilitarianism
• Core idea: Right action = one that produces the best overall consequences
(greatest good for the greatest number). Decision rule: maximize aggregate
welfare.
• Strength: practical, outcome-focused, good for policy-level cost–benefit
thinking.
• Weakness: can justify rights violations if overall utility rises; hard to
measure/compare harms across stakeholders.
• Business example: Approving a plant closure if overall social/economic gains
(company survival + shareholder jobs elsewhere) exceed the harms to local
workers — but must account for distribution.
,B. Ethics of duty → Deontology (Kantian)
• Core idea: Morality rests on duties/principles (e.g., honesty, keep promises);
some acts are morally wrong regardless of outcomes. Use categorical
imperatives (universalize your maxim).
• Strength: protects individual rights and respects persons as ends, gives clear
rules.
• Weakness: rigid when duties conflict; less guidance on balancing competing
duties.
• Business example: Refuse to lie in financial reports even if lying would avert
bankruptcy.
C. Rights & Justice (contractualist / Rawlsian ideas)
• Core idea (Rights): Individuals have moral/legal claims that constrain actions
(e.g., human rights, employee rights).
• Core idea (Justice/Rawls): Principles of fairness (justice as fairness); design
rules behind a “veil of ignorance” so institutions are fair to all.
• Strengths: focuses on fairness, protection of vulnerable, institutional design.
• Weaknesses: abstraction can be hard to operationalize in micro-decisions.
• Business example: Allocating severance/compensation using fair procedures
rather than pure utility.
D. Egoism (ethical/self-interest theories)
• Core idea: Agents (or firms) should act to maximize their own long-term self-
interest.
• Strength: aligns with profit-maximizing behavior and strategic thinking.
• Weakness: can excuse unethical conduct toward stakeholders unless
constrained by law/reputation.
,E. Virtue Ethics
• Core idea: Morality = cultivation of virtuous character traits (honesty, courage,
prudence); right actions flow from a good character.
• Strength: emphasizes motives, corporate culture and long-term character-
building.
• Weakness: less specific about what to do in particular dilemmas; depends on
shared conception of virtues.
F. Feminist / Care Ethics (briefly noted in the chapter)
• Core idea: Emphasizes relationships, care responsibilities, context-sensitive
responses rather than universal rules.
• Use in business: helpful for employee relations, stakeholder care, and contexts
where relationships matter more than abstract rules.
3) How the chapter organizes theory (useful for exam framing)
• Distinguishes consequentialist (outcome-focused) vs non-consequentialist
(duty, rights, character) approaches, and contrasts ethical absolutism vs
relativism; it highlights that each theory supplies different decision tools and
blind spots.
4) Compare & contrast — the bite-sized differences (memorize these)
• What matters most: Consequentialists → results; Deontologists → rightness of
act/duty; Virtue ethicists → agent’s character; Rights/Justice → protection and fair
institutions.
• Time horizon: Virtue & rights → long-term institutional/cultural concerns;
Utilitarianism → often short/medium-term aggregate outcomes.
, • Decision friction: Utilitarianism needs measurement; deontology needs rule-
hierarchies; virtue ethics needs shared norms/culture.
5) Practical pluralistic method (how to use the theories together — exam favorite)
1. Map stakeholders & consequences (utilitarianism): list who gains/loses and
roughly how much.
2. Check duties & rules (deontology/rights): are there absolute prohibitions or
contractual obligations you must honor?
3. Assess fairness & institutions (justice/Rawls): would the decision be
acceptable behind a veil of ignorance? Are procedures fair?
4. Reflect on character & culture (virtue ethics): what would a person/firm of
integrity do; what precedent will this set?
5. Seek reflective equilibrium: iterate between intuitions about particular cases
and general principles until coherent (balance competing judgements).
STAKEHOLDERS → DUTIES/RULES → FAIRNESS → CHARACTER → REACH BALANCE
6) Applied example — Whistle-blowing (useful because it ties to earlier material
you read)
• Scenario: You discover a manager falsifying safety test data. Should you report?
o Utilitarian: weigh harms prevented (public safety, company liability) vs
harms caused (job loss, reputation). If reporting prevents large harm,
utilitarianism supports whistleblowing.
o Deontology: ask whether you have a duty to tell the truth and protect
others; also consider duties of loyalty to employer — if duties conflict,
deontology requires a principled rule (e.g., “do not deceive about
safety”).
Concise but detailed exam-ready summary — Crane, Matten, Glozer & Spence
(2019), Ch. 3 (pp.85–135): “Evaluating Business Ethics: Normative Ethical Theories”
What this chapter does (one line):
It sets out the main Western normative ethical theories managers use to justify and
evaluate business choices, explains their core premises, strengths/weaknesses, and
how they map onto business problems.
1) The role of ethical theory (quick)
• Purpose: give systematic, defensible rules or principles for “how we ought to
act” in business (vs. descriptive accounts of how people actually decide).
2) Theories covered — core premise, decision-rule, quick pros/cons, business
example
A. Consequentialism → Utilitarianism
• Core idea: Right action = one that produces the best overall consequences
(greatest good for the greatest number). Decision rule: maximize aggregate
welfare.
• Strength: practical, outcome-focused, good for policy-level cost–benefit
thinking.
• Weakness: can justify rights violations if overall utility rises; hard to
measure/compare harms across stakeholders.
• Business example: Approving a plant closure if overall social/economic gains
(company survival + shareholder jobs elsewhere) exceed the harms to local
workers — but must account for distribution.
,B. Ethics of duty → Deontology (Kantian)
• Core idea: Morality rests on duties/principles (e.g., honesty, keep promises);
some acts are morally wrong regardless of outcomes. Use categorical
imperatives (universalize your maxim).
• Strength: protects individual rights and respects persons as ends, gives clear
rules.
• Weakness: rigid when duties conflict; less guidance on balancing competing
duties.
• Business example: Refuse to lie in financial reports even if lying would avert
bankruptcy.
C. Rights & Justice (contractualist / Rawlsian ideas)
• Core idea (Rights): Individuals have moral/legal claims that constrain actions
(e.g., human rights, employee rights).
• Core idea (Justice/Rawls): Principles of fairness (justice as fairness); design
rules behind a “veil of ignorance” so institutions are fair to all.
• Strengths: focuses on fairness, protection of vulnerable, institutional design.
• Weaknesses: abstraction can be hard to operationalize in micro-decisions.
• Business example: Allocating severance/compensation using fair procedures
rather than pure utility.
D. Egoism (ethical/self-interest theories)
• Core idea: Agents (or firms) should act to maximize their own long-term self-
interest.
• Strength: aligns with profit-maximizing behavior and strategic thinking.
• Weakness: can excuse unethical conduct toward stakeholders unless
constrained by law/reputation.
,E. Virtue Ethics
• Core idea: Morality = cultivation of virtuous character traits (honesty, courage,
prudence); right actions flow from a good character.
• Strength: emphasizes motives, corporate culture and long-term character-
building.
• Weakness: less specific about what to do in particular dilemmas; depends on
shared conception of virtues.
F. Feminist / Care Ethics (briefly noted in the chapter)
• Core idea: Emphasizes relationships, care responsibilities, context-sensitive
responses rather than universal rules.
• Use in business: helpful for employee relations, stakeholder care, and contexts
where relationships matter more than abstract rules.
3) How the chapter organizes theory (useful for exam framing)
• Distinguishes consequentialist (outcome-focused) vs non-consequentialist
(duty, rights, character) approaches, and contrasts ethical absolutism vs
relativism; it highlights that each theory supplies different decision tools and
blind spots.
4) Compare & contrast — the bite-sized differences (memorize these)
• What matters most: Consequentialists → results; Deontologists → rightness of
act/duty; Virtue ethicists → agent’s character; Rights/Justice → protection and fair
institutions.
• Time horizon: Virtue & rights → long-term institutional/cultural concerns;
Utilitarianism → often short/medium-term aggregate outcomes.
, • Decision friction: Utilitarianism needs measurement; deontology needs rule-
hierarchies; virtue ethics needs shared norms/culture.
5) Practical pluralistic method (how to use the theories together — exam favorite)
1. Map stakeholders & consequences (utilitarianism): list who gains/loses and
roughly how much.
2. Check duties & rules (deontology/rights): are there absolute prohibitions or
contractual obligations you must honor?
3. Assess fairness & institutions (justice/Rawls): would the decision be
acceptable behind a veil of ignorance? Are procedures fair?
4. Reflect on character & culture (virtue ethics): what would a person/firm of
integrity do; what precedent will this set?
5. Seek reflective equilibrium: iterate between intuitions about particular cases
and general principles until coherent (balance competing judgements).
STAKEHOLDERS → DUTIES/RULES → FAIRNESS → CHARACTER → REACH BALANCE
6) Applied example — Whistle-blowing (useful because it ties to earlier material
you read)
• Scenario: You discover a manager falsifying safety test data. Should you report?
o Utilitarian: weigh harms prevented (public safety, company liability) vs
harms caused (job loss, reputation). If reporting prevents large harm,
utilitarianism supports whistleblowing.
o Deontology: ask whether you have a duty to tell the truth and protect
others; also consider duties of loyalty to employer — if duties conflict,
deontology requires a principled rule (e.g., “do not deceive about
safety”).
