MGT610 Midterm Short Notes by Mr Shahbaz

MGT-610 BUSINESS ETHICS · Mid-term Short notes by · Mʀ Sɦǟɦɮǟʐ · Lesson 01 – · Introduction to Business Ethics

Business ethics through a case study involving Merck and Company. The case revolves around the development of a potentially life-saving drug, Ivermectin, for treating river blindness in impoverished populations in Africa and Latin America. Despite the lack of profitability and potential risks, Merck chose to develop the drug and even gave it away for free, challenging the assumption that companies always prioritize profits over ethics.

1. Merck's Moral Obligation:

• Merck faced a moral dilemma in developing a drug with little profit potential for a disease affecting poor populations. Despite financial challenges, Merck believed it had a moral obligation to develop the drug and distributed it for free.

2. Long-Term View on Ethics:

• The lesson suggests that ethical behavior, though not always immediately profitable, is a better long- term business strategy. It emphasizes that ethical conduct can provide companies with significant competitive advantages over time.

3. Challenges in Ethical Decision-Making:

• Ethical choices are not always clear-cut, and companies must balance profitability with moral responsibilities. The lesson acknowledges that ethical behavior may sometimes be costly but argues for its long-term benefits.

4. Ethics vs. Morality:

• Ethics is presented as the study of morality, examining the moral standards of individuals or societies. It involves questioning, evaluating, and developing moral standards to guide choices in various situations.

5. Moral Standards Characteristics:

Moral standards address matters with serious consequences for humans, are not imposed by authoritative bodies, should be preferred over self-interest, are based on impartial considerations, and are associated with special emotions and vocabulary.

6. Ethics as a Normative Study:

• Unlike descriptive studies in social sciences, ethics is a normative study focused on developing and justifying moral standards for individuals and societies.

This introduction sets the stage for exploring ethical issues in business, emphasizing the importance of ethical behavior for long-term success.

Lesson 03 - Theory of Ethical Relativism

Theory of Ethical Relativism, focusing on its application to corporate ethics, multinational corporations, and the challenges presented by cultural relativism.

1. Corporate Responsibility:

Debate exists regarding whether corporations can be held "responsible" for their actions, with some arguing they are more like machines, and others claiming they act as moral agents. The lesson suggests a middle ground, acknowledging corporate accountability while emphasizing the role of individual members and corporate culture.

2. Multinational Corporations (MNCs):

Multinational corporations face ethical challenges when operating in multiple countries, including potential evasion of regulations and cultural differences. The lesson highlights dilemmas such as tax evasion, environmental standards, and deciding when a country is ready for new technologies.

3. Ethical Relativism:

Ethical relativism asserts that moral beliefs vary across societies, and there is no objective standard to determine the morality of an action. The theory argues that actions are right or wrong based on whether a particular society deems them so.

4. Cultural Relativism vs. Ethical Relativism:

Cultural relativism suggests that morality varies between cultures, but it doesn't deny the possibility of justification. Ethical relativism, however, asserts that there is no standard of right or wrong outside of a culture, leading to an uncritical acceptance of all moral beliefs within that culture.

5. Criticisms of Ethical Relativism:

Critics argue that ethical relativism has incoherent consequences, making it impossible to criticize practices of other societies. The lesson points out the logical flaw that just because societies have different moral codes doesn't mean all codes are equally correct.

6. Challenges of New Technologies:

The lesson concludes by noting that emerging technologies in the late 20th and early 21st centuries pose new ethical challenges. Questions about risk, compensation for victims, risk distribution, privacy, and property rights arise in the face of technological advancements.

This exploration sets the stage for understanding the complexities of ethical relativism and its implications for business ethics in a global context.

Lesson 04

Moral Developments and Moral Reasoning

The process of moral development and reasoning, highlighting Lawrence Kohlberg's six stages of moral development.

1. Changing Values throughout Life:

Contrary to the assumption that values are formed in childhood and remain static, psychological research indicates that individuals undergo profound changes in values as they mature. Moral development is viewed as a continuous process akin to physical, emotional, and cognitive development.

2. Kohlberg's Stages of Moral Development:

Kohlberg identified three levels of moral development, each with two stages: