Business Ethics and Virtue Ethics - Case Study Example

Business ethics and virtue ethics Introduction Virtue ethics is an agent-based approach to business ethics. Virtue ethics focuses on the integrity, character and motivation of the individual agent (Mizzoni 105). Virtue ethics involves individuals rationally acting morally as a goal in itself. Virtuous agents do not follow any defined rules in making decisions; instead, they take decisions that are consistent in achieving a certain excellence that involves the use of sound moral decision making guided by virtues such as honesty, fairness, temperance and integrity. The core of virtue ethics is perfecting attributes such as integrity that makes the individual truly ethical (Crisp 87). Virtue ethics requires the existence of a society that supports and nurtures these virtues. Virtue ethics also requires identification of role models in the society or the moral exemplars that disseminate morality or act of benchmarks of moral character in the society. A virtuous individual will try to emulate the moral exemplars in the community (Mizzoni 105). Virtues develop through continuous learning and practice in ethical decision making. According to Aristotle, a person will improve his integrity and character through repeated self-discipline (Crisp 92). Business ethics entails the principles and standards that shape behavior in the business world. Management roles and especially leadership requires an individual to exercise high ethical standards in making decisions ((Hursthouse 36). For instance, the human resource manager should not disclose employee private information like disease history (Hursthouse 29). Managers face many instances of conflict of interest in day to day running of the business. The management is supposed to make ethical decisions that cater for the welfare of all employees. Most business transactions involve elements of trust, fairness and self-control (Hursthouse 63). Virtue ethics can be applied in business ethics to reduce the instances of corruption and fraud. For instance, a virtuous employee who value trustworthy will consider it wrong to receive kickbacks from a supplier of the organization. Other employees will such employee ethical, but they will also consider the society expectations on such behavior. Unethical behavior results to lost business revenues and high costs of operation thus adversely affecting the profitability and return to the stakeholders. Virtuous salespersons will advise the customer on the health risks associated with the product before closing the sale (Darwall 82). Virtues like trust will eliminate the agency costs associated with monitoring contracts and agreements with stakeholders. Empathy will help the business in identifying and meeting customer needs since economic success depends on courteous treatment of the customers (Statman 45). Honesty is a human characteristic that defines a virtuous person. Honest agents will tell the truth and make true promises (Dobson 1). An honest person can easily be trusted by others since he never lie, steal or cheat. Virtue ethics assert that if children are directed to be honest, they must also be taught the prize of truth. Fairness is another ethical virtue that guides ethical decision making. Fairness entails compliance with the accepted standards of conduct and making decisions without discrimination (Darwall 37). According to Fairness approach by Aristotle, favoritism will benefit a section of the society without any justifiable reason (Dobson 3). Another ethical virtue that individuals try to nurture is justice. Aquinas has defined justice as the consistent will to render everyone his due. Justice entails doing what is right; therefore, the moral agent has an obligation to render justice and respect the other people in the society. Commutative justice serves equality in the society by restitution (Hursthouse 66). For instance, employees should be compensated according to the efforts and time invested in their work. Deceiving customers on quality of goods and demanding a higher price for inferior goods is unjustified since it violates the moral virtue of justice (Dobson 2). Virtue ethics assert that individuals strive to achieve certain ideals like integrity while making decisions. Individuals follow the traits of moral exemplars and pursue certain socially accepted virtues such as fairness, justice and honesty (Dobson 2). The above virtues could be used to guide the actions and policies of Mattel Inc such as the working conditions, employment policies and remuneration. Virtue ethics could have been used to guide policies on attitudes towards the environment and product safety (Dobson 4). Mattel Products aimed at the children, but the Company violated the rights of children by offering them employment in the factory. According to fairness virtue, the company violated an ethical standard since it took advantage of poverty and abundant labor to shift its operations where low-wage labor existed. Fairness could have assisted Mattel Inc to set fair wage levels for the employees and include overtime pay that meets the legal standards in those countries. Honesty entails telling the truth thus Mattel Inc would not suffer losses if it could take in to consideration the safety of toys to the customers. Honesty could have helped the company to manufacture toys that were safe for children (Sethi, Veral, Shapiro and Emelianova 2). Mattel Inc recalled 17.4 million toys that contained loose magnets that could be easily swallowed by children. Mattel Inc was aware of the poor working conditions in the factories that posed a danger to employee health and safety, but Fairness could have helped the Company to maintain all machinery and dispose hazardous waste responsibly. The Virtue of Justice could guide Mattel Inc in respecting employees’ cultural values and traditions. Justice entails doing what is right without discrimination; therefore, Mattel Inc should have used the virtue of justice to avoid discrimination in employment practices and in particular prohibit discrimination on the basis of traditions and cultural affiliation of employees (Sethi, Veral, Shapiro and Emelianova 3). Justice could have enable Mattel Inc to value and appreciate workforce diversity and respect all the employees. The virtue of Honesty and Justice could have enable Mattel Inc to respect and abide by all laws governing patents, copyrights and trademarks of other companies and business partners (Sethi, Veral, Shapiro and Emelianova 4). Honesty could have guided could have helped the company respect employee rights, motivate the employee through safe and healthy working environment. Mattel Inc ignored all the employment laws regarding to wages, working hours and benefits. The virtue of Justice could have helped the company to comply with the legal requirements on wage levels, benefits and the working hours set by the country laws. Mattel Inc was more concerned about the economic benefit of ethical standards at the expense of the implications of unethical decisions to employees, customers and the community (Sethi, Veral, Shapiro and Emelianova 5). Deontological approach to ethics can best describe Mattel Case. Deontological ethics regards moral judgment as a duty or a rule that should be followed in ethical decision making. Deontological ethics requires individuals to adhere to their duties when analyzing ethical decisions and dilemmas (Alexander and Moore 3). Upholding duty is considered ethically correct. Deontological ethics fails to offer guidance when an individual is faced with a complex ethical dilemma. For instance, the management of Mattel Inc had the duty to enhance the value of the firm and also cater for the welfare of the employees (Alexander and Moore 3). The rule based approach, failed to offer a solution on how much could be spent on monitoring the ethical standards and how the welfare of employees could be improved by implementing safe working environment and fair wages (Staveren 3). Deontological ethics ignores the consequences of the ethical decision since people act according to their moral duty regardless of adverse outcomes that may be experienced later. Mattel Inc moved operations in countries where there was poverty and abundant low-wage labor, but did not anticipate the negative consequences of offering low wages to its employees. Mattel Inc ignored product safety issues since it did not anticipate the massive protests that led to recalling of more than 17 million toys (Staveren 4). According to deontological ethics, people will do the right thing even if it produces more harm; therefore, Mattel Inc management could not avoid environment pollution even though it leads to more harm to the community. Deontological ethics is undoubtedly rule-based and lead to an overall reduction in happiness and quality of life in the society (Alexander and Moore 3). For instance, child labor and employment discrimination led to labor movements in many places of the world (Staveren 4). Conclusion Virtue ethics deals with integrity and character of the individual moral agent. Virtuous people follow certain virtues consistently in making their moral decisions. Examples of virtues include honesty, integrity, fairness, temperance, justice and kindness. Business ethics involves following the ethical code of conduct and making decisions that cater for interests of all stakeholders. Works Cited: Alexander, Larry and Moore, Michael. “Deontological ethics”, The Stanford encyclopedia of philosophy. Web. 22-03-2012. Crisp, Roger. Virtue ethics. Oxford. Oxford University Press. 1997. Darwall, Stephen. Virtue ethics. Malden. Blackwell. 2003. Dobson, John. Applying virtue ethics to business: the agent-based approach. Web, 12-11-2007. < http://ejbo.jyu.fi/articles/0901_3.html> Hursthouse, Rosalind. On Virtue ethics. Oxford. Oxford University Press. 2002. Mizzoni, John. Ethics: the basics. West Sussex. Blackwell. 2010. Sethi, S., Veral, E., Shapiro, H and Emelianova, O., “Mattel Inc: Global manufacturing principles (GMP) - A life cycle analysis of a company based code of conduct in the toy industry”, journal of business ethics. 99 (4): 483-517. Statman, Daniel. Virtue ethics. Washington, DC. Georgetown University Press. 1997. Staveren, Irene. “Beyond utilitarianism and deontology: ethics in economics”, review of political economy. 19, 1: (2007) 21-35 Tannsjo, Torbjorn. Understanding ethics: an introduction to moral theory. 2008. Read More