IBE-WG2

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• Studiejaar 1

Moral decision-making

International Business Ethics 

10 February 2022 

Brigitte Dekker

[e-mail]

Today

• Buy the book! 
• Looking back: stakeholder management 
• Moral decision-making 
• 15 minute break 
• Reward, incentive, compensation

Did you attend the lectures on Monday & Tuesday?

Yes

No

Only Monday

Only Tuesday

Stakeholder management 

• Friedman vs Freeman = shareholders vs stakeholders 
• Philanthro-capitalism
• Firm-centric stakeholder models and beyond

What is the separation fallacy?

Moving on: moral-decision making

 Consequentialism 

• No intrinsically good values or actions: it all depends on the consequences 
• Under normal circumstances people will choose those decisions and actions that serve their interests in other words: that have beneficial or useful consequences for them
  
• This is also known as 'rational choice theory'

Utilitarianism 

•  Jeremy Bentham: bring in more science / rationality in the moral debate.  Scientific approach is best approach. 

> big influence on economy, business administration etc. 

• Hedonistic calculus aiming at the maximization of pleasure
• Rationalism and morality should be intertwined 

Jeremy Bentham

Pleasure and pain should not be understood as personal or individual feelings or emotions. A good deed contributes to the pleasure of as many people as possible. It is never about individual happiness 

Utility = anything that increases pleasure for as many people as possible, that is what determines a virtuousness . 

Quantitative terms:  everything can be measured and expressed in numbers

Jeremy Bentham

Moral judgement should never be based on feelings of disgust or repugnance. Objective fundament for morality without qualitative assessment. 

The moral science Bentham opts for forbids you to disapprove certain lifestyles: if it adds more pleasure -->  you should allow them.  

John-Stuart Mill

You need balanced form of happiness: more sustainable, and disciplined form of happiness.  

Not hedonistic = instant happiness that you may regret later. 

Maximizing pleasurable outcomes for the greatest number of people in a given society

- makes distinction between quantity pleasures and quality pleasures 

Problems with utilitarianism

1. Empirical problem: do business people act like fully-fledged utilitarian > you cannot solely be a utilitarianist. 

2. Goods are incommensurable: you cannot easily compare them. They have no common measure. 

3. Who is determining what is right or good for so many people? (power-question)

4. Can people calculate happiness? And if so, how? 

Deontology

• Deontology: absolute rules that you have to adhere to. 
• Intentionalism: people can rationally choose the right principles but what is right is not determined by consequences but by intentions 
• Categorical imperative  of Kant

(1) human beings should never be subjected to any form of instrumental thinking. You can never treat anyone as a means to an end, but always as an end in themselves.

 (2) only act on those maxims that could be made universal law for all people at all times. (guideline on how to behave). 

Hence, to count as moral code it must be categorical (it must hold for all people at all times) and it must thus pass the universalization test. 

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Discussion! 

How can you balance an utilitarian and deontological perspective? 

in break-out groups

Alternative approaches to moral decision-making 

Virtue-based ethics: communicate with other people - they are not by nature good but they need development and social context in which they develop their characters. 

Bounded rationality: nobody is fully rational, because you cannot know everything on a particular given situation. This can be because of cognitive constrains or time limits. Herbert Simon includes  'make a satisfying decision'

Alternative approaches to moral decision-making 

Moral imagination: Werhanes theory of moral imagination 

Process-driven decision-making: a combination of approaches 

- decision-makers are instructed to gather 'facts' of the case, describe dilemma, defend position etc. 

Goodpaster's case analysis template scan (CAT scan) identified: describe, discern, display, decide and defend in moral decision making 

Continental responses 

Main challenges to what is available in business ethics  decision making is:

1. the abdication of individual responsibility that often characterizes rule-driven approaches in ethics

2. the loss of specificity that enters by means of universal formulations and overgeneralizations

3. a risk that is inherent in both (1 and 2) , instrumental reasoning makes ethics ‘handy’ in business while refusing to ask real ethical questions.

Continental responses 

Bauman: Instruments of moral guidance undermine and even efface the possibility of moral responsibility. Rules are dangerous because they undermine moral impulse.  (blame to depersonalization of actions) 

Levinas: Ethical responsibility is responding to the 'Other' in a singular way. 'we' glosses over the specific relationship between me and the other' 

Arendt:  hide behind rules and you lose morality and the ability to think for yourself 

Derrida: Undecidability and Difference 

Derrida: Undecidability: is there are real choice? 

-  Dealing with moral dilemma's instead of aporias - Business Ethicists want to offer decision making tools that help us out of the discomfort of a dilemma or offer us some immutable set of reasons for choosing one option over the other. 

Derrida wants to keep the discomfort. 

- haunted by the ghost of undecidability 

Same concerns keep cropping up: the loss of individual  responsiveness, specificity in decision-making, and glossing over  implications of seemingly mutually exclusive options – all undermining ethics as such.

 

Alternative to this? 

- Clegg et al, and this book: seek to create more opportunity for undecidability to be an acceptable aspect of any decision. This is not to say that decisions should not be made; a case however, be made for organizations creating more room for dissent and discussion of how options are phrased and what they imply.

- Acceptance that the decision is never completed or done with, when a certain course of action has been chosen. You can ponder upon it over time. Most important; let nobody hide behind rules.

Reward, incentive and compensation 

International Business Ethics 

10 February 2022 

Brigitte Dekker

[e-mail]

When do you think that an 'excessive' reward is justified?

John Rawls 

• Fairness in a society is that everybody has a fair chance for a good life
• Aporia: how do we know what is fair to all
  
  The veil of ignorance  
• Each person should have an equal right to liberty
  
• Social and economic inequalities should be arranged so that they are to everyone’s advantage and attached to positions and offices that are open to all

Short discussion 

if one finds oneself behind a veil of ignorance when organizing society to what extent are the established principles still a good reflection of reality? 

breakout groups 

Continental perspectives on rethinking rewards and compensation

Communitarianism 

Communitarianism = the idea that to understand people we must first understand the community (social context) in which they were born and bred

Our ideas about what is right and wrong are always grounded in certain social frameworks

The notion of ‘social practices’ developing their own ‘internal goods’ is important here!

Nietzsche 

• Problem of resentment and bad conscience
  
• Herd instinct
  
• Contextual awareness

Foucault 

• Idea of freedom (as based in an understanding of how social factors such as power determine who you are)
  
• We have to constantly question the status quo – not per se to change it but to just be aware. 
• On rewards: unpack our ideas about why we accept exorbitant remuneration for executives.  Not so much question of fairness but one of how we view ourselves and others, and how this view emerged over time and through practices. 

Questions? 

Next week: 

Chapter 4: Organizational Justice  

Chapter 6: Leadership