Business Law and Ethics Lecture Reviews 1-6

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Business Law and Ethics Review Notes
Lecture 1
Profit affect business decisions, but do we really have a free market to conduct our business in? BUSINESS DECISIONS
Internal Forces
Type of Business Structure
Ethics
CSR
Corporate Governance
External (Legal) Forces
Contract Law
Agency
Tort Law
Consumer Law
External (Structural) Forces
Legal System
Dispute Resolution
Regulation

Ethics: Concerned with how we should behave, and involves theories that describe the ‘right’ way to make a decision. Morality: Consists of what persons ought to do to conform to society’s norms of behaviour, whereas ethical theory concerns the philosophical reasons for and against aspects of social morality. E.G.: Morally, society says that stealing is wrong. Ethical theory examines and explains why.

Is ethics relevant to business? Some might argue that the concept of ‘business ethics’ is incompatible with a business’ goal of making a profit. Others argue that businesses should be ethical because being ethical is good for the bottom line (Harrison, p3), whilst others say that business should be ethical because being ethical is the right thing to do (Harrison, p3).

Kohlberg’s theory of moral development
Lawrence Kohlberg is famous for his theory of “cognitive moral reasoning and development” in which he mapped out various stages in which individuals pass through on their way to moral maturity.

LEVEL 1: PRE-CONVENTIONAL
“An individuals’ focus at this level is exclusively self-centred such that ethical decisions will only be made if they bring about a benefit. “ Stage 1: Act to avoid punishment: E.G. toddler will not draw on the wall because he will be punished Stage 2: Not wanting to miss out on good things: E.G.: Behaving in order to get dessert after dinner

LEVEL 2: CONVENTIONAL
“Individuals at this secondary stage are increasingly concerned with conforming and maintaining relationships within a community.” Stage 3: Being a good boy: E.G. doing things that appear to be correct in order to be socially accepted Stage 4: Lives in accordance of the law: E.G. Not killing someone because it is against the law

LEVEL 3: POST-CONVENTIONAL
“Individuals at this stage go beyond the mere compliance to the law and are motivated by moral/ethical principles.” Stage 5: Questioning the principles they follow: E.G. campaigning to change the law because society will be better off Stage 6: Able to give a rational defence of the moral principles that guide our actions.

Ethical Theory
Ethical theories attempt to systematize ordinary moral judgments, and to establish and defend basic moral principles. Ethical theory explains why actions are right or wrong by providing a decision-making procedure for resolving difficult cases. Ethical theory also makes it possible for an individual to explain and justify his/her decision to others.

Egoism
“Everyone ought to act on the basis of self interest”
Don’t always ignore the interests of others, but act if it suits one’s own interests to do so Not always greedy or selfish, but motivation for acting will be to gain self benefit

Utilitarianism
“Try and gain the best outcome for all the parties that are affected” Good outcomes is not limited to happiness or pleasure, but also friendship, knowledge and courage too Utility is measured as a whole, choosing option that gives the greatest good

Kantian Ethics
“One’s duty to do what is morally right and to avoid what is morally wrong, regardless of the consequences” Doing the right thing for the wrong reasons cheapens the result: actions must come from sense of duty Moral actions must be universally accepted, respecting others and reversibility: would you like to be on the receiving end of such action?

Virtue Ethics
“A set of personal characteristics that, if practised, will ensure that the individual is likely to make the ‘right’ choice in any ethical dilemma they are faced with” Virtues are personal qualities that provide the basis for...
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