313s99

PHL 313 – BUSINESS ETHICS
Lawrence P. Ulrich, Ph.D.

[email protected]
ETHICAL PRINCIPLES IN BUSINESS ETHICS

INTRODUCTION TO
THE ETHICAL PRINCIPLES.

[1] How are ethical
principles formulated?

Ethical principles
can be a part of any ethical system. They will always be formulated within
the context of the ethical goods and values that are identified in the
particular system. Their rankings relative to each other may also be determined
by the ethical system. For example, in the divine command version of natural
law ethics the principle of beneficence would probably outrank the principle
of autonomy because the moral law is not dictated by the individual agent
but by a divine source. The beneficent person would try, above all, to
apply the will of God to individual circumstances in an attempt to secure
the greatest benefit for the person involved in the particular set of circumstances.
In the Kantian and utilitarian systems the principle of autonomy would
enjoy preeminence because of the emphasis on the individual’s designing
the system of moral judgments and weighing the values to be considered.

Ethical principles
take the form of statements of obligation. Thus they always contain the
word “should” or some equivalent of it. For example, “One should . . .
” is a customary formulation. Concepts are not principles. Thus, “personal
dignity” is a concept rather than a principle. “One should respect the
personal dignity of patients” would be the statement of a principle. The
function of principles in moral discourse is to promote a particular value
or feature of a person or thing and, thereby, promote its well-being and
allow it to flourish.

[2] Does one find only
one ethical principle in an individual situation?

In any situation
a number of the ethical principles intersect. On occasion they will conflict.
When conflict occurs it is necessary to examine each principle to determine
how it arises in the particular set of circumstances. When such conflict
occurs, the principles will have to be balanced against each other and
a decision will ultimately have to be made about which principle(s) governs
the case. Business practices are not always governed by a single principle.
Often several principles will govern the decision to be made by providing
mutual support.

What follows is not
an attempt to analyze the place of each principle within the various systems.
Such an effort would be too complex for the purpose of this essay. What
will be attempted will be an explanation of each of the principles identified
and a brief explanation of how the principle manifests itself in contemporary
business practices. Since none of the principles seem to function with
an absolute status in contemporary situations, some of the modifications
on the exercise of the principles will be identified. Many of these restrictions
are matters of considerable debate. No attempt will be made here to resolve
these debates although, in some instances, some of the major features of
the controversies may be identified.

1. THE PRINCIPLE OF
AUTONOMY.

[3] What is the
principle of autonomy?

The principle
of autonomy has come to occupy a preeminent position in democratic societies
in light of their commitment to thoroughgoing self-determination.. This
principle may be formulated in the following way: A person should be free
to perform whatever action he/she wishes, regardless of risks or foolishness
as perceived by others, provided it does not impinge on the autonomy of
others. This principle gives ultimate control (self-governance) for a moral
action to the agent who is making the decision to perform the action.

[4] How does the principle
of autonomy relate to the notion of personal dignity?

Autonomy is
a principle of moral empowerment and places the responsibility for the
consequences of an action on moral agents themselves. Someone acting on
the principle of autonomy cannot legitimately blame another for adverse
consequences. Taking responsibility for one’s actions is a central feature
of personal dignity.

It should be noted
that the perceptions of others are not sufficient warrant to stop an autonomous
action. If the agent is competent or possesses decisional capacity, then
the possibility of risk to the agent which might impress an observer does
not give the observer the right to override the decision of the agent.
Even if the observer considers the action to be foolish as well as risky,
the agent still has final control over the action. Of course, the observer
is not obliged to assist the agent in performing the action unless there
is a specific contractual or professional relationship requiring the observer
to do so.

[5] How does supplying
consumers with information figure into the promotion of their autonomy?

It is difficult
to say that individuals ever act completely autonomously. Their behaviors
are frequently conditioned and they may lack some information that, if
known, might cause them to behave otherwise. However, others can maximize
the autonomy of moral agents by assisting them in reflecting on their proposed
actions and by providing appropriate information so that the agent can
have a more refined perspective on the anticipated action. Assisting consumers
and workers to be more autonomous may be one of the most important roles
of the business professional and the corporation.

Since there is such
a vast array of products and services available for consumption in the
contemporary marketplace, consumers need extensive information to be able
to make good choices. They also need the opportunity to be clear about
the values that drive their decisions. Workers, as consumers of labor opportunities
also need information about their positions, particularly in a volatile
labor market often driven by the dynamics of “employment-at-will.”

[6] What are the modifications
on the exercise of one’s autonomy?

The principle
of autonomy is not absolute. It functions contextually and its exercise
frequently depends upon other values, priorities, and social conditions
that are part of the corporate or consumer settings. The principle clearly
states that decisions cannot be made which impinge on the autonomy of others.
Actions cannot be justified under the principle of autonomy if they cause
harm to others. Just exactly how much harm must be done or the kind of
harm which must be done in order to override the principle of autonomy
requires extensive analysis and discussion in particular circumstances.
The importance of the principle of autonomy cannot be underscored too greatly
if human values are to be protected and human beings are to flourish.

2. THE PRINCIPLE OF
BENEFICENCE.

[7] What is the
principle of beneficence and what place does it hold in democratic societies?

The principle
of beneficence is a principle of long standing in the traditions of democratic
societies. The principle of beneficence can be stated in the following
way: One should render positive assistance to others (and abstain from
harm) by helping them to further their important and legitimate interests.
Earlier versions of the principle of beneficence in libertarian theories
that focused on respecting autonomy [There is no intrinsic opposition between
the principles of beneficence and autonomy; on the contrary, they are often
complementary.] generally took the form of the principle of nonmaleficence.
Today, however, the concept of harm is much more complex. We can identify
physical harms, psychological harms, social harms, and moral harms. In
order to apply even the principle of nonmaleficence properly a detailed
account of the possible harms is required.

[8] Why is it difficult
to practice beneficence in its positive form?

When promoting
benefit to the patient is the focus, the matter becomes even more complex.
There is an enormous variety of possibilities for benefiting individuals.
Added to the variety is the fact that individuals may have their own ideas
about what benefits them; ideas which may be at variance with those of
others. This principle requires individuals to be clear about what they
will consider to be beneficial and enter into a dialogue with others about
what they consider to be of significant benefit.

3. THE PRINCIPLE OF
FIDELITY.

[9] What is the
principle of fidelity and how is it a special form of beneficence?

A special
form of the principle of beneficence captures the quality of the commitment
that exists between professionals and others. It has been called the principle
of fidelity that can be formulated in the following manner: One should
keep his/her promises to others and maintain the trust necessary to retain
the relationships that bind them together. This principle captures in a
special way the element of trust that must exist between persons who are
mutually bound to each other by circumstances or choice.

[10] What special obligation
does the principle of fidelity place upon the business professional?

In an environment
that is permeated with a wide variety of interactions, the element of trust
is often overlooked to promote that which is expedient. Individuals become
vulnerable to professionals who may put profit above all else. The principle
of fidelity reminds individuals of the importance of loyalty and keeping
one’s promises in all interactions if human values are to be fostered.

4. THE PRINCIPLE OF
JUSTICE.

[11] What is the
principle of justice?

If there is
a candidate for an overriding principle of business ethics it may very
well be the principle of justice. This principle cuts a broad path across
ethical situations and the other principles are often applied within the
context of justice. The principle is a complex one and its brief statement
requires elaboration. One should give to persons what they are owed, what
they deserve, or what they can legitimately claim according to a proper
allocation of benefits and burdens where equals are treated equally unless
there is a morally relevant difference which constitutes a reason for treating
persons unequally.

[12] How can we determine
what individuals are owed when we are attempting to exercise the principle
of justice?

What individuals
are owed or deserve can be determined in a variety of ways. (1) Some might
say that this arises from the nature of the person. (2) It may be revealed
by the individual’s condition. (3) Finally, it may be determined by decisions
made by social institutions. In the first instance, the fundamental dignity
of the person may require a measure of respect calling for certain actions.
For example, to be able to exercise moral agency requires that the individual
have certain information available to her. Thus, the dispensing of accurate
information becomes a matter of justice in business ethics. In the second
instance, the individual may be in a situation where she may not be able
to make decisions immediately. Justice requires that more or sufficient
information be provided in such a way that she can come to a proper decision.
In the last instance, public policy decisions may be made to promote actions
that protect individuals from business practices that create environmental
threats

[13] What is the distributive
version of the principle of justice?

The allocation
of benefits and burdens is the heart of the distributive version of the
principle of justice. In distributive justice there is an identification
of the goods or benefits that should be available to individuals in society.
The principle requires that the benefits be available to all in some equitable
way. This principle also requires that the burdens, e.g., cost, for providing
these benefits should also be distributed in an equitable manner across
the population. No one person or group of persons should bear a substantially
greater burden than another. The application of this principle lies at
the heart of the practice of graduated taxation.

The debate about distributive
justice in society is an ongoing one. Once something becomes a commodity
in the free market distributive justice becomes the central issue.

[14] What issue lies
at the heart of the principle of justice?

Treating equals
as equals and unequals as unequals lies at the heart of the principle of
justice. In a democratic society we begin with the assumption that there
is a basic equality which runs through the population. The ethical mandate
based upon this assumption is that equals are to be treated equally. Thus,
if a right is recognized, e.g., the right to self-determination, then each
person should be able to act on such a right. The right cannot be arbitrarily
given
to some and not to others. However, it is also recognized that individuals
are not equal in every respect. Sometimes they are unequal. They are unequal
because there is some characteristic that counts as a morally relevant
difference between them. For example, individuals above age sixteen can
obtain a driver’s license, those below sixteen may not. So they are treated
unequally because they are truly unequal in this respect.

[15] What does it mean
to talk about morally relevant differences when attempting to apply the
principle of justice?

In attempting
to apply the principle of justice in any particular situation an investigation
must be carried out regarding the equality of the individuals involved
or whether there is a morally relevant difference which separates them.
For example, gender at one time counted as a morally relevant difference.
It was considered that women were unable to fill certain jobs or engage
in certain professions because of their genera and gender roles. Close
examination in recent years has demonstrated that the inequality with which
they were treated was morally unjustified. For this reason gender no longer
counts as a morally relevant difference. So what counts as a morally relevant
difference is often open to debate. Society engages in an ongoing debate
about what it considers morally relevant difference when it comes to treating
individuals as equals or unequals. Society’s values and political exigencies
often color this debate.

Strictly speaking there
can be no restrictions on the application of the principle of justice.
However, there may be some modifications to it. One can go beyond the principle
of justice. Compassion may prompt one to provide services to another even
though justice does not require it. A corporation engaged in downsizing
may take extra steps to find employment for its laid-off workers or retrain
them to give them a competitive advantage in seeking future employment.
An institution may have special mission considerations that go beyond the
strict requirements of justice, e.g., the practice of going beyond minimal
requirements to protect the environment when it is endangered by the practices
of a corporation.

[16] In what way might
the principle of justice be considered the overriding principle of business
ethics?

Thus far we
have seen three major principles: autonomy, beneficence (and its expression
in fidelity), and justice. We have seen that sometimes the principles of
autonomy and beneficence may conflict. We have also seen that a case can
be made that respecting the principle of autonomy can fulfill the principle
of beneficence. The three principles are often complementary. One is behaving
justly toward another by respecting her autonomy. Autonomy counts as a
morally relevant difference that requires equal treatment based upon self-determination.
When one behaves beneficently toward another in cases where beneficence
is required, one is also behaving justly because the individual is given
what she deserves. On the other hand, if an individual is autonomous and
is legitimately exercising her autonomy, a violation of the principle of
autonomy also entails a violation of the principle of justice. In a similar
way, a violation of the legitimate exercise of beneficence entails a violation
of the principle of justice. We shall see this extended to the principle
of paternalism in the next section.

5. THE PRINCIPLE OF
PATERNALISM.

[17] What is the
principle of paternalism?

The principle
of paternalism has been a strong guiding principle for governments and
corporations since the beginnings of structured societies. It is only within
the last two generations that the principle has been largely supplanted
by the growing emphasis on the principle of autonomy. The principle can
be stated in the following way: One should restrict an individual’s action
against his/her consent in order to prevent that individual from self-harm
or to secure for that individual a good which he/she might not otherwise
achieve.

[18] How does the notion
of a privileged position figure in the principle of paternalism?

The principle
of paternalism is based on one fundamental assumption, namely, that the
person acting paternalistically has a privileged position allowing her
to know what is best for the moral agent being restricted. The moral agent
is presumed to be in such an inferior position that she cannot determine
what is in her best interest. Sometimes the privileged position of the
intervene is due to age and/or relationship. For example, parents intervene
in the lives of their small children because the parents have a level of
experience due to their age and they have special responsibilities due
to their social roles as parents. For those who lack decisional capacity,
guardians intervene because of their special social role. Throughout history
governments have seen themselves as occupying a privileged position due
to their special knowledge and experience. The principle of paternalism
was employed to protect moral agents from their own errors in judgment.

[19] What are the basic
forms of the principle of paternalism?

There are
two basic forms of paternalism. Weak paternalism is exercised when individuals
have severely and permanently diminished decisional capacity. Such individuals
may still be able to make decisions but they have no way of calculating
the consequences of the decisions. The application of paternalism to situations
of this type is generally recognized as appropriate. Weak paternalism is
also exercised through interventions that are undertaken when it is unclear
whether the agent is autonomous or not. To be appropriate this intervention
must be time-limited. If the agent is ultimately considered to lack decisional
capacity, continuing paternalism is appropriate. If the agent is ultimately
considered to possess decisional capacity then the paternalism should cease
in deference to the principle of autonomy.

Strong paternalism
occurs when the liberty of a moral agent who is functionally autonomous
is restricted in order to prevent self-harm and to secure a benefit for
them. Current ethical thinking judges paternalism to be inappropriate in
this case. Most codes of ethics support this judgement and favor the principle
of autonomy in this case.

[20] What is the basic
restriction on the application of the principle of paternalism?

The major
restriction on the principle of paternalism is the principle of autonomy.
In any conflict that occurs between the two principles where a competent
person is concerned, the principle of paternalism must yield. One can never
act paternalistically and respect the principle of autonomy. On the other
hand, one can act both beneficently and paternalistically at the same time,
e.g., when looking out for the safety of workers who might be willing to
endanger their lives for higher pay. For those for whom weak paternalism
is appropriate, the principle of justice supports paternalistic interventions.
Lack of decisional capacity or questionable decisional capacity counts
as a morally relevant difference. On the other hand, to behave paternalistically
toward an individual who is autonomous is a serious violation of the principle
of justice.

The principle of paternalism
has often served individuals well over the years particularly when information
was too extensive, too inaccessible, or too complex to master. But as individuals
have become empowered by increased knowledge, the ability to have it communicated
effectively, and a more refined sense of their social role as responsible
moral agents, the principle has become largely transcended. The result
is a very positive one for all involved.

NEGOTIATING WITHIN
THE ETHICAL FOUNDATIONS.

[21] What does the
nature of human experience reveal about the employment of the ethical systems
and principles?

Even this
cursory examination of the ethical systems and principles underlying deliberations
in business ethics reveals a staggering web of complexity. It would be
easy to deal with the issues presented in business ethics if there were
only one ethical system or a clearly defined hierarchy of principles to
follow. But we are neither frozen in time nor conceptually confined. Throughout
the history of human reflection a variety of approaches to addressing the
moral life has developed. One way to view these developments is to see
them as creating confusion. Another way is to see them as reflecting the
richness and diversity of human experience and convictions. No one way
seems to provide a totally satisfactory method to construct the moral life
and resolve the problems that arise within it.

The ethical principles
might seem to provide a way to cut through some of the indecisiveness of
the individual systems. But even they often lapse into balancing abstract
formulas and are employed as an easy escape from more extensive ethical
reflections. Use of the principles is often accused of leading only to
quandaries that can only be eliminated through the exploration of virtue
ethics, which reflects the concrete circumstances, and priorities of individuals.

[22] Why is negotiation
an integral part of decision-making?

The brutal
fact remains that there are many approaches to the moral life and there
are many ways to address the issues that arise in business ethics. For
those who would approach the task of integrating ethical considerations
and business practices, careful reflection is necessary and moral commitments
are required. But from beginning to end negotiation is essential in order
to maintain both the integrity and dignity of all parties involved in an
interaction. Individuals and corporations do not always share the same
moral perspectives, values, and goals. The challenge of business ethics
is to recognize that no one occupies an absolutely privileged position
in determining the goods of the moral life. For those who would serve individuals
as they struggle with the issues of production, consumption, protection,
and safety, compassion, tolerance, and prudence are key ingredients for
a successful professional life. For those who would most successfully fulfill
their roles as consumers and workers, active participation in decisions
that affect their lives is indispensable to their well being. The challenge
and the indispensable key to negotiating in the face of a variety of ethical
pathways is to be open to possible interpretations, to explore them rigorously,
and ultimately to develop a careful moral foundation for decision-making.