MGT610 Notes

Lecture 1.

Merck and Company had a drug called Ivermectin that could save lives. It treated river blindness, a painful disease affecting 18 million poor people in Africa and Latin America.

However, there were problems:

The people who needed the drug were too poor to pay for it. Developing the drug for humans would cost around $100 million. If the drug had bad side effects, it could hurt sales of the animal version, which made $300 million per year.

Merck had to decide whether to develop the drug despite the potential financial losses.

Companies have to choose between making money and doing the right thing. Merck, a big pharmaceutical company, chose to give away a life-saving drug for free to people who couldn't afford it.

This decision seems to go against the idea that companies only care about making money. However, some people think that Merck's kindness will ultimately benefit the company in the long run.

The problem is that companies have a responsibility to make money for their shareholders. If they spend all their money on non-profitable projects, they might go out of business.

This book argues that doing the right thing is usually the best business strategy in the long run. However, it's not always clear what the right thing is, and sometimes being ethical can be costly.

The goal of this book is to help managers understand the ethical issues they face and make better decisions. It's not about giving moral advice, but rather about providing knowledge and understanding of ethical principles and concepts.

Ethics is a big word that can mean different things. It's about the rules that guide how people and groups behave.

There are two main meanings of ethics:

1. Ethics are the principles or rules that guide how individuals or groups behave.
2. Ethics is the study of morality, which is about what's right and wrong.

To illustrate this, let's consider the story of Kermit Vandivier, an employee at B.F. Goodrich. He was asked to lie about the quality of brakes the company was producing for the US government. Vandivier chose to lie, even though it went against his personal moral standards.

This story shows that ethics is not just about having moral standards, but also about living up to them. Moral standards are rules that guide our behavior, especially when it comes to hurting or helping others. Here are five key features of moral standards:

1. They're about serious harm or benefit: Moral standards deal with important issues that can seriously hurt or help people, like stealing, lying, or physical harm.
2. They're not set by authorities: Moral standards aren't created or changed by governments, laws, or other authorities. Instead, they're based on good reasons and justification.
3. They come before self-interest: We should prioritize moral standards over our own self- interest. This doesn't mean we can never act in our own interest, but rather that we shouldn't choose self-interest over doing what's right.
4. They're fair and impartial: Moral standards are based on what's fair and right, regardless of who benefits or gets hurt. For example, lying is considered wrong, even if it benefits someone.
5. They're linked to strong emotions: Moral standards are often tied to strong feelings like guilt, shame, or remorse. These emotions help us understand the importance of moral standards.

Ethics is the study of moral standards. It helps us understand and examine the rules that guide our behavior.

When we do ethics, we ask questions like:

What do these moral standards mean for my life?

Do these standards make sense?

What are the good and bad reasons for these standards?

Should I keep believing in these standards?

Let's consider Kermit Vandivier's story. He was asked to write a false report about brake safety. To do ethics, we would ask:

Was it really wrong for Vandivier to write the report, given his responsibility to support his family? Would the company, not Vandivier, be responsible for any faulty brakes?

If Vandivier didn't cooperate and got fired, would the brakes still be made and installed?

By thinking about these questions, we start to do ethics. Ethics helps us develop moral standards that make sense and are reasonable to follow.

Lecture 3.

There's a debate about whether companies can be held morally responsible for their actions. Some people think that only individuals, not companies, can be morally responsible. Others believe that companies can be seen as moral entities because they have goals and actions, just like individuals. A middle ground is that while companies themselves can't make decisions, their policies and culture can influence individual employees' actions. So, it's reasonable to hold companies accountable for the effects of their policies and culture.

This issue becomes more complex when dealing with multinational corporations, which operate in multiple countries with different laws and moral standards. These companies must navigate varying environmental regulations, labor laws, tax laws, and moral codes.

In summary, the question of whether companies can be morally responsible is complex. While individuals within companies make decisions, the company's policies and culture also play a significant role. As companies operate globally, they face additional challenges in navigating different moral standards and laws.

Ethical relativism is a theory that says:

Different cultures and societies have different ideas about what is right and wrong. There is no universal or absolute way to determine what is morally right or wrong. What is considered right or wrong depends on the cultural or societal norms of a particular place.

In simple terms, ethical relativism suggests that:

There is no one "right" answer to ethical questions. Companies should adapt to local customs and norms when operating in different cultures. The idea is to respect and follow local norms, rather than imposing one's own moral standards.

There are two ideas: Cultural Relativism and Ethical Relativism.

Cultural Relativism:

This idea says that different cultures have different ideas about what is right and wrong. Just because a culture thinks something is right or wrong, it doesn't mean it's actually right or wrong. We can still discuss and try to understand if a moral belief is correct or not.

Ethical Relativism:

This idea says that there is no universal right or wrong. What a culture believes is right is actually right for that culture. There's no way to question or justify moral beliefs because each culture has its own standard. This means all moral beliefs are seen as equally valid, without criticism.

Just because different cultures have different answers to moral questions, it doesn't mean all answers are correct. There are similarities in moral values across different cultures, despite some differences. Disagreements about morality don't necessarily mean there's no universal truth.