Session 4

Since the last time we metAndrea Rosal Mourns Death of Newborn Daughterhttp://bulatlat.com/main/2014/05/18/andrea-rosal-mourns-death-of-2-day-old-daughter/9/11 Memorial Museum's gift shop sparks outrage with some familieshttp://edition.cnn.com/2014/05/19/us/9-11-memorial-museum-gift-shop/index.html?hpt=hp_t3The guy who tried to rig gold prices and cost his bank $44 millionhttp://money.cnn.com/2014/05/23/investing/barclays-gold-rigging/index.html?hpt=ibu_c2eBay faces investigations over massive data breachhttp://www.bbc.com/news/technology-27539799

Why should there be ethics in business? What does ethics mean? What is it not?What is the role of culture? What is cultures relationship with ethics?

Approaches to Ethics

You are a salesman and you have a product that everyone wants to buy. When you open your shop a horde of buyers descends on it and creates chaos. Will you allow the chaos to persist?

You want order to prevail over your selling what can you do to achieve that? Now that everyone is lined up, you conclude that there will be enough products for everyone who wants to buy. You observe that there are elderly folk who are having a difficult time lining up so you make a separate and faster line for the elderly. Is this wrong?

Now you have two lines, you see your brother and sister lined up in the regular line. You fight the urge to move them up the line and instead let them stay where they are. Why is this right?

You discover that your product is crap.. You do not tell the buyers however and soon some of them discover harmful effects from its use. Good or bad?You also continue to sell the product. Anything wrong with this?

Approaches to ethics UtilitarianismRights Justice and fairnessCareVirtue

The Utilitarian Approach Some ethicists emphasize that the ethical action is the one that provides the most good or does the least harm, or, to put it another way, maximizes benefits and lessens harm. The utilitarian approach deals with consequences; it tries both to increase the good done and to reduce the possible harm.

Basic Insights of UtilitarianismThe purpose of morality is to make the world a better place.Morality is about producing good consequences, not having good intentionsWe should do whatever will bring the most benefit (i.e., intrinsic value) to all of humanity.

Was Niccolo Machiavelli therefore correct in saying that the ends justify the means?

Act-Utilitarian Principle:An action is right if and only if the sum total of utilities produced by that act is greater than the sum total of utilities produced by any other act the agent could have performed in its place.The right action is the one that will produce the greatest net benefits or the lowest net costs (when all alternatives have only net costs).Utilitarianism is a consequentialist approach to ethics.

Rule-Utilitarian Principle:Follow those rules that, in light of experience, promote the general good, i.e. the greatest good for the greatest number, or produce the greatest net benefits.A moral rule is correct if and only if the sum total of utilities produced if everyone were to follow that rule is greater than the sum total of utilities produced if everyone were to follow some alternative rule.

An ExampleImagine the following scenario. A prominent and much-loved leader has been rushed to the hospital, grievously wounded by an assassins bullet. He needs a heart and lung transplant immediately to survive. No suitable donors are available, but there is a homeless person in the emergency room who is being kept alive on a respirator, who probably has only a few days to live, and who is a perfect donor. Without the transplant, the leader will die; the homeless person will die in a few days anyway. Security at the hospital is very well controlled. The transplant team could hasten the death of the homeless person and carry out the transplant without the public ever knowing that they killed the homeless person for his organs. What should they do?

For rule utilitarians, this is an easy choice. No one could approve a general rule that lets hospitals kill patients for their organs when they are going to die anyway. The consequences of adopting such a general rule would be highly negative and would certainly undermine public trust in the medical establishment.For act utilitarians, the situation is more complex. If secrecy were guaranteed, the overall consequences might be such that in this particular instance greater utility is produced by hastening the death of the homeless person and using his organs for the transplant.

We often speak of utilitarian solutions in a disparaging tone, but in fact utilitarianism is a demanding moral position that often asks us to put aside self-interest for the sake of the whole.Utilitarianism is a morally demanding position for two reasons:It always asks us to do the most, to maximize utility, not to do the minimum.It asks us to set aside personal interest.

The Ford Pinto

Expected Costs (with fuel tank bladder)$11 x12.5 million = $137.5M

Expected Costs of not installing the bladder(180 burn deaths x $200,000) + (180 injuries x $67,000) + (2100 vehicles x $700) = $49.15M

What about Toyota?

Knew about its acceleration problem as early as 2002. Did not issue a recall until 2009. 16 deaths and 243 injuries.

Criticisms of Utilitarianism

ResponsibilityUtilitarianism suggests that we are responsible for all the consequences of our choices.The problem is that sometimes we can foresee consequences of other peoples actions that are taken in response to our own acts. Are we responsible for those actions, even though we dont choose them or approve of them?

IntentionsUtilitarianism is concerned almost exclusively about consequences, not intentions.Intentions may matter in morally assessing an agent, even if they dont matter in terms of guiding action.

Who does the calculating?Typically, the count differs depending on who does the counting.

This could lead to serious deficiencies in the analysis.

Who is included?When we consider the issue of consequences, we must ask who is included within that circle.Those in our own group (group egoism)Those in our own country (nationalism)Those who share our skin color (racism)All human beings (humanism or speciesism?)All sentient beingsShould utilitarianism also acknowledge the pain and suffering of animals, of the ecology? Should it not restrict the calculus just to human beings?

What are the costs and benefits of the following: Traffic in Metro ManilaOverseas employmentConditional Cash Transfer

Have you seen or experienced utilitarianism employed in your work?

Risk ManagementRisk management is the identification, assessment, and prioritization of risks (defined in ISO 31000 as the effect of uncertainty on objectives, whether positive or negative) followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities. Risks can come from uncertainty in financial markets, project failures (at any phase in design, development, production, or sustainment life-cycles), legal liabilities, credit risk, accidents, natural causes and disasters as well as deliberate attack from an adversary, or events of uncertain or unpredictable root-cause. Several risk management standards have been developed including the Project Management Institute, the National Institute of Standards and Technology, actuarial societies, and ISO standards. Methods, definitions and goals vary widely according to whether the risk management method is in the context of project management, security, engineering, industrial processes, financial portfolios, actuarial assessments, or public health and safety.

Risk ManagementDefine the relevant risks in the risk universe;Determine the: 1. probability and 2. severity;Identify strategies to manage the riskThe strategies to manage risk typically include transferring the risk to another party, avoiding the risk, reducing the negative effect or probability of the risk, or even accepting some or all of the potential or actual consequences of a particular risk.

Moral ImaginationMoral imagination includes an awareness of the various dimensions embedded in a particular situationin particular, the moral and ethical ones. It entails the ability to understand ones situation from a number of perspectives. Moral imagination enables managers to recognize a set of options that may not be obvious from within the overarching organizational framework; evaluate these options from a moral point of view; and actualize them.

Moral imagination is the ability to discover and evaluate possibilities within a particular set of circumstances by questioning and expanding ones operative mental framework. In managerial moral decision making, moral imagination entails perceiving the norms, social roles, and relationships entwined in any situation.

ABC Manufacturing produces steel cabinets and other office furniture. It has been in existence for 25 years, starting out as a small single-proprietorship by its owner, Mr. Garcia. As it expanded, it raised more capital by incorporating. Mr. Garcia is now retired and management of the company has been turned over to his eldest son, Junior who is the president and CEO. Lately, however, business has been very slow due to the low demand for cabinets since people now use digital storage and cloud technology for filing. ABC Manufacturing has a work force of 250 workers. About 10 are supervisors while the rest are rank and file employees working on the production line. About 50 of these employees have been hired as furniture makers to respond to the growing demand of office furniture that would accommodate modular personal computer- oriented cubicles. Mr. Junior leads the management team of about 7 people. There is a union of rank and file employees led by Mr. Sapul and they are in the process of negotiating a new CBA with management. Some of the union members/ employees have been with the company since the start of the business. Some employees were hired only recently, though. Management now wants to reduce the workforce in order to cut costs. It wants to do so ethically, however. What steps or actions should Mr. Junior and the rest of the management undertake to do this? Explain your actions.

For next week, access and read the following: Universal Declaration on Human Rights Article III of the 1987 Philippine Constitution

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