Corporate Social Responsibility (Fach) / Chapter 3: Evaluating Business Ethics - Lecture 2 (Ethical Theories) (Lektion)

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• Ethical Theories Are the rules and priciples that determine right and wrong for a given situation can help to clarify different moral presuppositions of the various parties involved in a decision 
• Ethical absolutism claims that there are eternal, universally applicable moral principles right and wrong are objective qualities that can be rationally determined
• Ethical relativism morality is context-dependent and subjective no universal right and wrongs that can be rationally determined depends on the person making the decision and the culture in which they are located normative theory
• Descriptive relativism suggests that different cultures have different ethics
• Contemporary Ethical Theories often tend towards a more relativistic position
• Pluralism position between absolutism and relativsm (moderate view) accepts different moral convictions and backgrounds while at the same time suggesting that a concensus on basic principles and rules in a certain social context can and should be reached
• Morality social phenomenon we need morality because we constantly have to establish the rules and arrangements of our living together as social beings about harm and benefit (Kaler 1999); Right and wrong are largely about avoiding harm and providing benefits
• Normative Ethical Theories: a European perspective - Individual vs. institutional morality US more individualisitic perspective on morality normative ethical theories tend to be more applicable to individual behaviour Europe: tend to focus more on the economic system and the wider governing institutions design of institutions in the economic system seems to be the main influence in developing and applying theory
• Normative Ethical Theories: a European perspective - Questioning vs. accepting capitalism US ethical problems occuring within the capitalist system, which it treats as given Europe relevant parts of business ethics focus on questioning the ethical justification of capitalism helps to develop a more critical and distanced approach to the institutions which govern and determine business decisions helps in understanding and theorizing a number of ethical dilemmas in busines life (corp. governance, employee rights, stakeholder involvement)
• Normative Ethical Theories: a European perspective - Justifying vs. applying moral norms US question of moral values as a given and focus chiefly on the application of morality to business situation mostly Christian-based values which are accepted as a given code of moral values Europe movement towards a non-religious form of organizing variety of other ideological and philosophical approaches
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• Traditional Ethical Theories generelly offer a certain rule or principle whuch one can apply to any given situation (absolutist in intention?) normative theories, start with assumption about the nature of the world and more specific assumptions about the nature of human beings) well defined rule of decision provide us with a fairly unequivocal (=eindeutig) solution to ethical problems 
• Traditional Ethical Theories - Consequentialist Theories based on the intended outcomes, the aims or the goals of a certain action teleological (Greek word for goal) Egoisim and Utilitarianism
• Traditional Ethical Theories - Non-Consequentialist Theories base the moral judgement on the underlying principles of the decision makers motivation quite closely linked to Judeo-Christian thinking and start from the reasoning about the individuals rights and duties philosophic theories (deontological theories, = duty) Theories: Ethics of duties; Ethics of rights and justice
• Consequentialist Theories - Egoism one of the oldest philosophical ideas an action is morally right if the decision maker freely decides in order to pursue either their (short term) desires or their (long term) interest Adam Smith: invisible hand, individual self-interest (Egoism) The egoistic view of the economic actor is very influential in economics Disadvantages Real Markets are always not ideal (externailites, efficiency, pricing) Enlightened egoism focuses on the meeting of long-term interests conflicting interests (not regarding the individuals interests) Although taking care of your needs and interests is morally important, the theory needs to be complemented by more developed ethical theories
• Consequentialist Theories - Ulitarism an action is morally right if it results in the greatest amount of good for the greatest amount of people affected by the action (greatest happiness principle) Jeremy Bentham, John Stuart Mill has been one of the most commonly acepted ethical theories in the Anglo-Saxon world  influential in normative economics, which is to related to the egoistic view of humans in economics cost-benefit analysis (analysis of advantages/disadvantages) act utilitarianism looks to single actions and bases the moral judgement on the amout of pleasure and the amount of pain this single action causes Hendonistic view: maximize pleasure, minimize pain Eudemonistic view: Happiness and Unhappiness Ideal view: intrinsically valueable human goods Problems: Subjectivity, difficult to compare between people problems of quantification distribution of utility (wealth) (overlook minorities)
• Non-Consequentialist Theories - Ethics of Duties Emanuel Kant Central concepts to Kant’s moral philosophy are: Duty,consistency, dignity, and universality Morality was a question of certain eternal, abstract and unchangeable principles (set of priori moral laws) that humans should apply to all ethical problems theoretical framework: categorical imperative, should applied to every moral issue regardless of who is involved, who profits and who is harmend by the principles Maxim 1 - Consistency act only according to that maxim by which you can at the same time will that it should become a universal law reflects the aspect of consistency action can only be right, if everyone could follow the same underlying principle Maxim 2- Dignity act so that you treat humanity, whether in your own person or in that of another, always as an end and never a means only humans deserve respect as autonomous, rational actors (human dignity) Maxim 3 - Universality act only so that the will through its maxims could regard itself at the same time as universally lawgiving scrutinizes the element of universality → Maxims could be used as tests for every possible action; action is morally right if it survives all three tests
• Non-Consequentialist Theories - Rights and justice Central authors: John Locke (1632-1714) and John Rawls (1921-2002) Natural rights are certain basic, important, inalienable entitlements that should be respected and protected in every single situation.  Main natural rights: Right to life, freedom, property,speech, privacy, conscience, fair trial among others These rights are based in human dignity and lead to a duty for others to respect, protect, and support them Rights-based thinking are a central part of Western political and ethical thought.  Rights-based thinking is the foundation of universal human rights Justice and fairness approach: basic freedoms guaranteed Arrangements are okay if  a. even the least advantaged are still better off and b. the least advantaged have the possibility to become the most advantaged 
• Virtue ethics Central theorist: Aristotle (384 BC-322 BC) instead of the principles guiding action or the consequences of action, virtue ethics focuses on the character of the individual decision-maker  The central aim is not to fulfill duties or aim for the greatest good, but to lead a good life  Morally correct actions are those undertaken by actors with virtuous characters  The development of a virtuous character is central to morality. In a virtuous character, reason and emotion are in balance A virtue is a trait of character that enable a person to lead a good life Problems: Most of us are not completely virtuous and developing a virtuous character as an adult is difficult Translating virtues into action can be difficult Virtue ethics sets an extremely challenging goal for individual morality  Societal structures favor specific character traits over others. Focusing only on individual character traits and their development is not enough. 
• Other normative ethical theories Feminist ethics Instead of abstract moral principles, feminist ethics emphasizes caring, empathy, and harmonious and healthy social relationships. Discourse ethics Discourse ethics focuses on solving ethical conflicts through democratic dialogue and providing a process of norm generation. Postmodern ethics Moving away from rationality, postmodern ethics focuses on emotional moral impulses towards others, and focuses on individual questioning of universal rules. 
• Non-Consequentialist Theories - Ethics of Duties - Problems Undervaluing outcomes little consideration of the outcomes of one`s actions in ehtics of duty no real way of assessing theses outcomes and they do not form a fundamental part of the theory itself Complexity specific formulations such as Kant`s categorical imparative can be quite complicated to apply principles-based way of evaluation a decision requires a certain amount of abstraction Optimism Theory is quite optimistic: view of man as a rational actor who acts consequently according to self-imposed duties seems more of an ideal than a reality with regard to business actors
• Non-Consequentialist Theories - Rights and justice - Problems Problem of Justice approach of human rights to ethics has a particular relation to economic and business decisions (agreement on a fair distribution of costs and benefits between the parties) Individual rights have to be realized in a certain social context in such a way that they are addressed and respected equally and fairly Fair procedures (= procedural justice) Fairness is determined according to whether everyone has been free to aquire rewards for his oder her efforts  Fair outcomes (= distributive justice) Fairness is determined according to whether the consequences are distributed in a just manner, according to some underlying principle such as need or merit
• Ethics of Rights and Justice - Egalitarian Approach justice is the same as equality burdens and rewards should be distributed equally and deviations are unjust egalitarian approaches have problems with the fact that there are differences between people tend to be inefficient (no incentives for innovation and greater efficiency)
• Ethics of Rights and Justice - Non-egalitarian apporach justice in economic systems is ultimately a product of the fair process of free markets justice is determined by the market forces of supply and demand leds to inequality 
• Global Governance describes regulatory activities and regimes on a global level without the supreme authority of a government involves originally non-political and non-state actors (NGOs, intergovernmental organizations or transnational organizations) following a soft law logic (blurring the lines between the strictly voluntary and mandatory sphreres for participants)

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