Ethics and Governance - Essay Example

Ethics and Governance BC315006S Level 3 (Semester 2) Module Leader: Stuart Wall of 2009/10 Submitted by: ID No Q1 (a) How relevant to business and management is a Kantian approach to ethics? Kant’s approach to business and management is through the ethical theory of deontoloy. This theory focuses on moral behavior and obligation to other people that involves customers, clients, shareholders, and employees. Human beings are free agents and they can do or act as they please (Boyte, 2004). However, one must act within a limit or a boundary that he or she will not harm other people. Kant’s ethics suggested that manager, owners, or employees should act according to right intention (Bowie, 1999). For example, it is morally wrong to borrow money from someone with the promise that he or she would repay the debtor, but there is not intention of doing so. According to Kant, it is morally wrong to lie. He argued, in general, business lies and it makes it difficult to obtain a balance credit if everyone lies. Kant also argued that ethics is irrelevant in the business because most business lies and behave immorally (ibid). In order to be ethical business, one must believe that shareholders and customer have dignity. They are valuable human beings and worth more than the stock or the price of the goods (ibid). Kant’s recipe for business management is (1) to treat people respectfully and consider they have dignity. Commercial transaction is not prohibited but one has to treat the others as an end not merely as a means. Acting deceptive in commercial transaction indicates dishonesty and lack of ethics, even without rational and moral capacities. This requires businesses not to coerce or deceive their shareholders or customers. Asymmetric information is common in business. Too often, managers or individuals with more information tend to consider themselves powerful and yet, are abusive to others. Kant suggested that (2) to reduce power abuse in business management, it is necessary there is open book management or transparency relationship between employers and employees. Said Bowie, when employees have full information, they have the incentive to behave responsibly. Case (1995) agreed with Kant concerning open book management. He said, open book management gives the opportunity to employees to take “a chance and act to take responsibility, rather than just doing their job… gets people on the job doing things right… teaches them to make smart decisions… because they can see the impact of their decisions on the relevant numbers” (p. 45-46). The practice of open management would correct asymmetrical information the managers have (Bowie, 1999). Since managers have more information, they tend to abuse their power, are suspicious to their employees, and more prone to do deceptive practices, manipulation, and abusive as well. Open book management would reduce these tendencies. (3) Give employees meaningful work or task. According to Kant, when workers are given meaningful work, they are more willing to work morally as they consider it as their obligation. According to Kant, business should operate (4) with moral principle and make it as its obligation to treat other people including shareholders, clients, colleagues, and employees respectfully and not to use the customers as means to an end. (4) Business should treat people justly. In dealing with commercial transaction, they should have pure motive without the tendency to deceive. They should not offer bribe either because it would lead them to corruption. (5) Competition causes radical evil. When the leader is evil, the employees are corrupt. (30 Marks) (b) Discuss the use of child labour in factories in developing countries from two different ethical perspectives (you might choose for example between virtue ethics, Kantian ethics, Rawls theory of justice or utilitarianism) Child labor has become a long and hot debated topic that carries ethical dilemma among multinational corporations, governments, families, social activist groups, and other interest groups. In general, child labor has become the common practice of the multinational corporations that operate in the developing countries. However, such practice has been adopted in the western and developed countries as well. The argument behind this practice is for the same hours of work, child labor is cheaper than adult labor (Isern, 2006). They are also less likely to change job (ibid) and more manageable (Kerschner, 2000) because they are seeking the opportunity to learn which they can’t afford in a traditional system of education due to economic hardship. Firms may argue that their manufactures are giving the opportunities to the local families to improve their economic condition, improve their quality and quantity of life, which have been equalized by those in favor of child labor. In other word, firms argued that they are doing good but their doing good is simply exploiting the innocent children because they are simply driven by cheaper cost of managing the operation of their firm while expecting the highest profit as possible. Said Isern, “Child labor is pervasive globally, including in so-called western or developed countries” (p. 1) and “poverty is one of the key drivers of child labor” (ibid). Individualism has been the fundamental values (ibid) that drives businesses. But this has an impact on the laws and ethics. De George (2005) argued that this value of individualism allows the system to let “adult person to make their own decisions, to follow their own ways of life, and within the limits set by the rights of others, to choose the values they wish to pursue” (Isern, 2006, p. 8). Sometimes, this individualism causes the manufacturing leaders to exploit more than doing good at the expense of the poor (Smith, 1993). According to Alexis Tocqueville, in his Democracy in America, Americans are addicted to practicality and ignorant about scientific realities. Andrew Sayer (1992), on the other hand, described that they nurture common sense mentality and it has caused them to be buried in knowledge naiveté. However, men consider themselves as superior being. Competition drives their desire to be number one (Smith, 1993), consider themselves as the fortunate being, and care for nobody but themselves (Mill, 1871). Their desire to show of their superiority has caused them to seek pleasure (White, 1974) in the field of employment while at the same time they are able to maximize their investment at the least possible cost (Smith, 1993). Driven by their utility or desire for pleasure and of its kind of amusement, to maximize profit at the least cost, it causes them to adopt and nurture common sense mentality, indulge in their practicality, and they have lost their taste of intellectuality, which eventually leads them lose their aspiration and creativity (Mill, 1871). They seek to indulge themselves more in child labor because it is not only cheaper but these children can easily be managed (De George, 2005) and controlled. They are inferior beings who are not only manageable and can easily be controlled but also are less likely to change job (Isern, 2006) because they are seeking for the opportunity to learn where they can’t find in a traditional system of education due to economic hardship. According to Mill, utilitarianism could be the right approach to solve child labor. It is an approach that could only attain its end by the general cultivation of nobleness of others, and his own, so far as happiness is concerned, were a sheer deduction from the benefit” (p. 16). Poff & Walluchow (1999) defined utilitarianism as the rightness and wrongness of an action and it is determined by the intrinsic value of the individual. Despite firms’ argument of doing good, Kantian’s theory of ethics reminds us that the true intention of doing good should be based on equal considerations – doing good for ourselves also doing good to others. If firms are exploiting children to maximize commercial and financial benefits, Kant suggested that this action represents using them as a means to an end and it is wrong and unethical. Utilitarianism, according to Poff & Walluchow (1999), is that rightness and wrongness of an action is determined by the intrinsic value of the individual. Those who have lost their intellectual taste (Mill, 1871), are competitive and prioritize on maximizing their individual wealth (Smith, 1993) will likely legitimize every action to please themselves. They’d be more interested in practicality, pleasure of its sorts, or beauty, of the ornaments of pleasure, and or its amusements (Mill, 1871). Said Mill, utilitarianism is about “superiority to frivolity and the mere pleasure of the moment” (p. 9). Ethically, the pleasure one has or seeking should be equally committed to the happiness of others. When people have no moral or human interest in the happiness or the welfare of other people (ibid), and seek only the desire to satisfy their curiosity by indulging in laboring the inferior children as economic experimentation for cost saving and maximizing profit, ethics diminished. Hence, rule utilitarianism emphasizes that the desire to do right or wrong should not be judged on the actions but on the consequences that are adopted by everyone as the general rule (Poff & Walluchow, 1999). Kantian’s ethics suggested that moral law should be individually imposed (De George, 2005). Child labor indicates that these children do not have the liberty to get proper education and make decision for themselves because they are being controlled. Therefore, they are at the mercy of the adults who recruit them for work and the parents who allow them to be taken to work in the manufacturers in exchange for small cash. Utilitarianism is an ethical approach and is considered morally acceptable for this case. It emphasizes on the golden rule “Do unto others what you want others do to you.” While Kant argued that a person’s moral right can be universally applied, Poff and Walluchow emphasized that doing the right thing is that one should not use others as a means to an end. Under utilitarianism, child labor carries negative consequences that outweigh the positive ones. Kant also argued that morally right or wrong “lies not in the happiness or pleasure it produces, but in the kind of action it produces” (Poff & Walluchow, 1999, p. 6). (40 Marks) c) It is sometimes argued that a major flaw of utilitarianism is that it is only concerned with maximising the total amount of good and is not concerned with the distribution of that good between people and groups. To what extent do you agree with this statement? To certain extent, yes. It is true that nothing is perfect. No theory is perfect. Wolff argued that utilitarianism is a problem theory because “it collapses into classical utilitarianism, or where it doesn’t, it raises serious problems for consequentialism.” John Rawls, on the other hand, commented on utilitarianism in his book A Theory of Justice and Political Liberalism because this theory has a couple of weaknesses. Though it emphasizes on doing, acting based on the right motive, like Rawls and Wolff, maximizing utility reduces one’s moral obligation, or it may lead to moral corruption Utilitarianism emphasizes on doing things right. It emphasizes on doing things that are morally right and acceptable. It emphasizes the golden rule, “Do unto others what you want others do to you.” However, in practice, when one wants to maximize his or her utility, it may deviate from this golden rule. Like competition, it triggers one’s sense of superiority. It leads toward marginalization and/or discrimination. It does not have concern with the distribution of that good between people and groups. It concerns more about maximizing his or her utility at the expense of the others. Hence, it deviates from the golden rule. It is no longer about “do unto others what you want others do to you” but more about using others as means to an end. As Kant put it that if one action is merely intended to maximize one’s utility and to serve as universal laws, that person would never treat people as mere means to his ends. Similarly and imperatively, he would not use people to satisfy himself but would treat other people based “on the intrinsic worth and dignity of rational creatures” (Walluchow in Poff & Walluchow, 1999, p. 19). Regardless of their weaknesses, utilitarianism would lead to social order even though Rawls argued that it does not take rights seriously. This, said Rawls, has become the greatest defect of the utilitarianism. Of one’s objective is to maximize his or her utility, there is a tendency that he or she may eventually become dictator. On the contrary, utilitarianism should lead to good order of a society, good standard and good person. “A person’s action should be judged according to the acceptable rules (ibid). The action is right if it conforms to rules, norms, standards, and principles. 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