Business Law and Ethics

UNIT IV

BUSINESS ETHICS

Ethics knows the difference between what you have a right to do and what is the right
thing to do.

Ethics, Morals & Law:

Ethics: Rational examination of moral beliefs and behavior; the study of morality.

Morality: Standards, conduct, and systems that provide guidance on how to act.

Law: Societys standards and values that is enforceable in court.

Ethics is the branch of study dealing with what is the proper course of action for man. It
answers the question, "What do I do?" It is the study of right and wrong in human endeavours
(deeds). At a more fundamental level, it is the method by which we categorize our values and
pursue them. Do we pursue our own happiness, or do we sacrifice ourselves to a greater cause?
Is that foundation of ethics based on the Bible, or on the very nature of man himself, or
neither?

Definition of Ethics?

Ethics is often defined as an underlying principle that would produce an action to prevent a
substantial harm to others, when an individual or group has an opportunity to do so for their
own benefit (Boddy, 2011).

Ethics is believed to be a set of moral beliefs and conduct that discourages acts of self-gain and
encourages honest and modest ways of generating business income (Ghosh et al.,2011).

Ethics is a set of moral principles or values which is concerned with the righteousness or
wrongness of human behaviour and which guides your conduct in Ethics is the activity of
examining the moral standards of a society, and asking how these standards apply to our lives
and whether these standards are reasonable or unreasonable, that is whether they are supported
by good reasons or poor ones.

What is Business Ethics?

Ethics in business, or business ethics as it is often called, is the application of the discipline,
principles, and theories of ethics to the organizational context. Business ethics have been
defined as principles and standards that guide behaviour in the world of business. Business
ethics is also a descriptive term for the field of academic study in which many scholars conduct
research and in which undergraduate and graduate students are exposed to ethics theory and
practice, usually through the case method of analysis.

1
 Business Law and Ethics

Ethical behaviour in business is critical. When business firms are charged with infractions, and
when employees of those firms come under legal investigation, there is a concern raised about
moral behaviour in business.

What is the purpose of business ethics?

Business ethics allow businesses to trust those they do business with and the customer to trust
those they buy products and services from. An ethical business will pay the agreed on price for
services or material, they will deliver what they say they will, when they say they will. If there
is a problem it will be dealt with fairly and equitably. For thousands of years businessmen have
dealt with each other in an ethical manner according to an agreed on set of practices. They had
to or no one would do business with them again.

Unfortunately some businesses try to take advantage of the customers, employees and
suppliers. That's why there are laws regarding the enforcement of contracts and consumer
protection laws protecting customers. The lawmakers tend to try to minimize the laws but
unethical businessmen keep coming up with new ways to defraud their fellow businesses and
customers.

Nature of Business Ethics:

Ethics and Business goals may differ
Ethical behaviour creates goodwill
People prefer ethical companies
Golden bridge between corporate interest with moral demands
Long run benefits and rewards

Need of Business Ethics:

Ethical steps by business improves society

Ethical programs maintain moral course
Improve teamwork and productivity
Support growth and meaning
Ensure legal compliances
Avoid criminal acts and lower fines
Help manage values associated with quality management, strategic planning and
diversity management
Promote a strong public image
Strengthens organizational work culture
Enhances quality of work

2
 Business Law and Ethics

Importance of Ethics in Business

Several factors play a role in the success of a company that are beyond the scope of financial
statements alone. Organizational culture, management philosophy and ethics in business each
have an impact on how well a business performs in the long term. No matter the size, industry
or level of profitability of an organization, business ethics are one of the most important
aspects of long-term success.

Ethics in Leadership: The management team sets the tone for how the entire company runs on
a day-to-day basis. When the prevailing management philosophy is based on ethical practices
and behavior, leaders within an organization can direct employees by example and guide them
in making decisions that are not only beneficial to them as individuals, but also to the
organization as a whole. Building on a foundation of ethical behavior helps create long lasting
positive effects for a company, including the ability to attract and retain highly talented
individuals and building and maintaining a positive reputation within the community. Running
a business in a ethical manner from the top down builds a stronger bond between individuals
on the management team, further creating stability within the company.

Employee Ethics:

When management is leading an organization in an ethical manner, employees follow in those

footsteps. Employees make better decisions in less time with business ethics as a guiding
principle; this increases productivity and overall employee morale. When employees complete
work in a way that is based on honesty and integrity, the whole organization benefits.
Employees who work for a corporation that demands a high standard of business ethics in all
facets of operations are more likely to perform their job duties at a higher level and are also
more inclined to stay loyal to that organization.

Business Ethics Benefits:

The importance of business ethics reaches far beyond employee loyalty and morale or the
strength of a management team bond. As with all business initiatives, the ethical operation of a
company is directly related to profitability in both the short and long term. The reputation of a
business from the surrounding community, other businesses and individual investors is
paramount in determining whether a company is a worthwhile investment. If a company's
reputation is less than perfect based on the perception that it does not operate ethically,
investors are less inclined to buy stock or otherwise support its operations. With consistent
ethical behavior comes increasingly positive public image, and there are few other
considerations as important to potential investors and current shareholders. To retain a positive
image, businesses must be committed to operating on an ethical foundation as it relates to
treatment of employees, respect to the surrounding environment and fair market practices in
terms of price and consumer treatment.

Ethics concern an individuals moral judgment about right and wrong. Decisions taken within
an organization may be made by individuals or groups, but whoever makes them will be
influenced by the culture of the company. The decision to behave ethically is amoral one;

3
 Business Law and Ethics

employees must decide what they think is the right course of action. This may involve rejecting
the route that would lead to the biggest short-term profit.

Ethical behavior and corporate social responsibility can bring significant benefits to a business.
For example, they may:

Attract customers to the firms products, thereby boosting sales and profits. This makes
maintenance of employees I the business, reduce labor turnover and therefore increase
productivity.

Attract more employees wanting to work for the business, reduce recruitment costs and
enable the company to get the most talented employees.

Attract investors and keep the company share price high, there by protecting the business
from takeover. Unethical behavior or a lack of corporate social responsibility, by comparison,
may damage a firms reputation and make it less appealing to stakeholders. Profits could fall as
a result.

Build public image of the company, as it complies with rules and regulation of the country
which provides aesthetic value and sense of satisfaction to stake holders.

CLASSIFICATION OF ETHICS

Ethics is divided into descriptive ethics (which provides the scientific description of what
ethics is), normative ethics (which involves both the standard normative ethical theory and also
its application to particular disciplines, actions, classes of actions), and meta-ethics ( which is
about the methods, the meaning and the language of ethics).

Descriptive Ethics are scientific description of ethics. Sound logic for ethics is presented.
These moral standards can be applied to human action to judge their moral character, that is,
whether they are right or wrong. Examples of some of the moral standards are utility, duty,
conscience, use of right means for right ends, justice, prudence, and stewardship. Just as there
are several standard to measure distance, such as meter, yard, mile, etc., so also there are
several standards to judger an action right or wrong.

Normative ethics Norms or standard are also known as values or codes. Norms set clear
guidelines for social interaction in a community. Normative ethics is a subject of study wherein
student study moral Business ethics comes under this classification. Normative standards of
moral judgment are applied by business managers to the business decisions they take. The
ethical element is part and parcel of the integral process of decision making on a business
management problem. Business ethics, therefore, deals with the application of normative
standards to specific business experiences.

The study of business ethics is as essentials for a businessman as the study of professional
norms for a medical practitioner. We expect a doctor to diagnose correctly so that the right
medication is given. There are chances that he could diagnose a simple ailment but report it as
a serious one in order to exploit the patient financially. Likewise, a client places trust on a

4
 Business Law and Ethics

businessman fort a transition and hopes that the latter does not deceive. Thus, applied ethics is
strictly professional ethics.

Meta-ethics The Greek word meta stands for beyond. Thus meta-ethics laterally means beyond
ethic, suggesting an in-depth study of the discipline. In other words, it is scientific study of the
concepts of ethics in itself. You many not fine these concepts practical, because nowhere in the
world will you find a perfect human being who is ideas that are considered as supra- standard ,
and are concept that can be conceived as perfectly as perfection itself.

We study these concepts as ultimate principal- principle such as good and evil, right and
wrong. We study them just the way we study theoretical physics when dealing with the
principles of gravitation, energy, or light. The character of these principles is universal in
nature. For instance, if we handle duty as an ethical principal, it would be applicable as a
standard of ethical judgment in all the cases of duty. Hence, meta-ethics is a study of the
general principles that govern right and wrong human actions.

Business Ethics and the Changing Environment

Businesses & governments operate in changing technological, legal, economic, social

& political environments with competing stakeholders & power claims.

Stakeholders are individuals, companies, groups & nations that cause and respond to
external issues, opportunities, and threats.

The rate of change and uncertainty in which stake- holders & society must make &
manage business & moral decisions have accelerated due to the impact of:

Internet and information technologies

Globalization

Deregulation

Mergers

Wars

Environmental Forces and Stakeholders

Local, national, and international environments are increasingly moving toward and into a
global system of dynamically interrelated interactions among local, national, and regional
politics, economies, regulations, technologies, demographics, and international law.

Economic environment
Technological
Political
Governmental and regulatory
Legal
Demographic

5
 Business Law and Ethics

Why does ethics matter in business?

1. Doing the right thing matters

2. To companies and employers, acting legally and ethically means saving billions of
dollars each year in lawsuits, settlements, and theft.

3. CNN reported that an estimated one out of three business closes because of employee
theft.

4. Costs to businesses also include deterioration of relationships; damage to reputation;

declining employee productivity; creativity, and loyalty; ineffective information flow
throughout the organization; and absenteeism.

5. For business leaders and managers, managing ethically also means managing with
integrity

6. Integrity will shape and influences the values, tone, and culture of the organization; the
communications among the members; and the realism, commitment, and imagination
of everyone in a company.

Levels of Business Ethics

Because ethical problems are not only an individual or personal matter, it is helpful to see the
different levels at which issues originate and how they move to other levels. We cannot avoid
ethical issues in business any more than we can avoid them in other areas of our lives. In
business, most ethical questions fall into one or more of four categories: societal, stakeholder,
internal policy, or personal.

Societal: At the societal level, we ask questions about the basic institutions in a society. The
problem of apartheid in South Africa was a societal-level question: Is it ethically correct to
have a social system in which a group of people indeed, the majority is systematically
denied basic rights? Although recent changes in South Africa have ended the apartheid system,
it is difficult to project how smoothly the transition to equality will go. Companies wishing to
do business there still face a complex set of issues as political, economic, and social dynamics
change; the situation can be still present an ethical conundrum for many companies.

Another societal-level question concerns the merits of capitalism. Is capitalism a just system
for allocating resources? What role should the government play in regulating the marketplace?
Should we tolerate gross inequalities of wealth, status, and power? For some people, the
relatively huge increases in executive compensation in the past decade or so in the United
States are part of this issue. For example, in the United States from 1980 to 1990, while worker
pay increased 53 percent and corporate profits 78 percent, CEO pay rose by 212 percent. In
1980 the chief executives average pay was $624,996 with total compensation 42 times the pay

6
 Business Law and Ethics

of a factory worker. In 1992 the average CEO made a record $3,842,247 in total pay 157
times what factory workers earned. By way of contrast, in Japan CEOs make less than 32 times
as much as the rank and file.. In 1992 there were only eight Japanese CEOs whose
compensation was over a million dollars.

Societal level questions usually represent an ongoing debate among major competing
institutions. As managers and individuals, each of us can try to shape that debate. Andrew
Carnegie (along with other early theorists of corporate social responsibility) worked at this
level when he argued that the proper role of a business such as his own Steel was to apply the
principles of charity to assist the poor and unfortunate.

Stake holder: The second kind of ethical questions concerns stakeholders suppliers,
customers, shareholders, and the rest. Here we ask questions about how a company should deal
with the external groups affected by its decisions, as well as how the stake holders should deal
with the company.

There are many stakeholders issues. Insider trading is one; another is a companys obligation
to inform its customers about the potential dangers of its products. What obligations does a
company have to its suppliers? To the communities where it operates? To its stockholders?
How should we attempt to decide such matters? Kinkos managers face the ethical question of
whether to respect the rights of copyright holders as stakeholders.

Internal policy: A third category of ethics might be called internal policy Here we ask
questions about the nature of a companys relations with its employee. What kind of
employment contract is fair? What are the mutual obligations of managers and workers? What
rights do employees have? These questions too, pervade the workday of a manager. Layoffs
benefit work rules, motivation and leadership are all ethical concerns here.

Personal: Here we ask questions about how people should treat one another within an
organization. Should we be honest with one another, whatever the consequences? What
obligation do we have both as human beings and as workers who fill specific work roles to our
bosses, our employees, and our peers? These questions deal with the day-to-day issues of life
in any organization. Behind them lie two broader issues: Do we have the right to look at other
people primarily as means to our ends/can we avoid doing so?

Myths About Business Ethics:

Business ethics in the workplace is about prioritizing moral values for the workplace and
ensuring behaviors are aligned with those values its values management. Yet, myths
abound about business ethics. Some of these myths arise from general confusion about the
notion of ethics. Other myths arise from narrow or simplistic views of ethical dilemmas.

1. Myth: Business ethics is more a matter of religion than management.

Diane Kirrane, in Managing Values: A Systematic Approach to Business Ethics,(Training

and Development Journal, November 1990), asserts that altering peoples values or souls isnt

7
 Business Law and Ethics

the aim of an organizational ethics program managing values and conflict among them is

2. Myth: Our employees are ethical so we dont need attention to business ethics.

Most of the ethical dilemmas faced by managers in the workplace are highly complex. Wallace
explains that one knows when they have a significant ethical conflict when there is presence of
a) significant value conflicts among differing interests, b) real alternatives that are equality
justifiable, and c) significant consequences on stakeholders in the situation. Kirrane
mentions that when the topic of business ethics comes up, people are quick to speak of the
Golden Rule, honesty and courtesy. But when presented with complex ethical dilemmas, most
people realize theres a wide gray area when trying to apply ethical principles.

3. Myth: Business ethics is a discipline best led by philosophers, academics and theologians.

Lack of involvement of leaders and managers in business ethics literature and discussions has
led many to believe that business ethics is a fad or movement, having little to do with the day-
to-day realities of running an organization. They believe business ethics is primarily a complex
philosophical debate or a religion. However, business ethics is a management discipline with a
programmatic approach that includes several practical tools. Ethics management programs
have practical applications in other areas of management areas, as well. (These applications are
listed later on in this document.)

4. Myth: Business ethics is superfluous it only asserts the obvious: do good!

Many people react that codes of ethics, or lists of ethical values to which the organization
aspires, are rather superfluous because they represent values to which everyone should
naturally aspire. However, the value of a codes of ethics to an organization is its priority and
focus regarding certain ethical values in that workplace. For example, its obvious that all
people should be honest. However, if an organization is struggling around continuing occasions
of deceit in the workplace, a priority on honesty is very timely and honesty should be listed
in that organizations code of ethics. Note that a code of ethics is an organic instrument that
changes with the needs of society and the organization.

5. Myth: Business ethics is a matter of the good guys preaching to the bad guys.

Some writers do seem to claim a moral high ground while lamenting the poor condition of
business and its leaders. However, those people well versed in managing organizations realize
that good people can take bad actions, particularly when stressed or confused. (Stress and
confusion are not excuses for unethical actions they are reasons.) Managing ethics in the
workplace includes all of us working together to help each other remain ethical and to work
through confusing and stressful ethical dilemmas.

6. Myth: Business ethics in the new policeperson on the block.

Many believe business ethics is a recent phenomenon because of increased attention to the
topic in popular and management literature. However, business ethics was written about even
2,000 years ago at least since Cicero wrote about the topic in his On Duties. Business ethics

8
 Business Law and Ethics

has gotten more attention recently because of the social responsibility movement that started in
the 1960s.

7. Myth: Ethics cant be managed.

Actually, ethics is always managed but, too often, indirectly. For example, the behavior of
the organizations founder or current leader is a strong moral influence, or directive if you will,
on behavior or employees in the workplace. Strategic priorities (profit maximization,
expanding marketshare, cutting costs, etc.) can be very strong influences on morality. Laws,
regulations and rules directly influence behaviors to be more ethical, usually in a manner that
improves the general good and/or minimizes harm to the community. Some are still skeptical
about business ethics, believing you cant manage values in an organization. Donaldson and
Davis (Management Decision, V28, N6) note that management, after all, is a value system.
Skeptics might consider the tremendous influence of several codes of ethics, such as the 10
Commandments in Christian religions or the U.S. Constitution. Codes can be very powerful
in smaller organizations as well.

8. Myth: Business ethics and social responsibility are the same thing.

The social responsibility movement is one aspect of the overall discipline of business ethics.
Madsen and Shafritz refine the definition of business ethics to be: 1) an application of ethics to
the corporate community, 2) a way to determine responsibility in business dealings, 3) the
identification of important business and social issues, and 4) a critique of business. Items 3 and
4 are often matters of social responsibility. (There has been a great deal of public discussion
and writing about items 3 and 4. However, there needs to be more written about items 1 and 2,
about how business ethics can be managed.) Writings about social responsibility often do not
address practical matters of managing ethics in the workplace, e.g., developing codes, updating
polices and procedures, approaches to resolving ethical dilemmas, etc.

9. Myth: Our organization is not in trouble with the law, so were ethical.

One can often be unethical, yet operate within the limits of the law, e.g., withhold information
from superiors, fudge on budgets, constantly complain about others, etc. However, breaking
the law often starts with unethical behavior that has gone unnoticed. The boil the frog
phenomena is a useful parable here: If you put a frog in hot water, it immediately jumps out. If
you put a frog in cool water and slowly heat up the water, you can eventually boil the frog. The
frog doesnt seem to notice the adverse change in its environment.

10. Myth: Managing ethics in the workplace has little practical relevance.

Managing ethics in the workplace involves identifying and prioritizing values to guide
behaviors in the organization, and establishing associated policies and procedures to ensure
those behaviors are conducted. One might call this values management. Values management
is also highly important in other management practices, e.g., managing diversity, Total Quality
Management and strategic planning.

9
 Business Law and Ethics

Why use ethical reasoning in business?

There are 3 reasons:

1. Many times laws do not cover all aspects or gray areas of a problem

E.g. tobacco industry.

2. Free market and regulated-market mechanisms do not effectively inform owners and
managers how to respond to complex issues that have far-reaching ethical consequences

3. Complex moral problems require an intuitive or learned understanding and concern for
fairness, justice, due process to people, groups, human, and communities. Ethics plays a role
in business because laws are many times insufficient or guide action.

Can business ethics be taught and trained?

Because laws and legal enforcement are not always sufficient to help guide or solve complex
human problems relating to business situations, the questions arise:

Can ethics help?

If so, how?

Can business ethics be taught?

Decisions depend on:

Facts

Inferences and rigorous

Ethical reasoning

Ethics courses and training can do the following:

Provide people with rationales, ideas, and vocabulary to help them participate
effectively in ethical decision making process

Help people make sense of their environments

Enhance sensitivity to moral issues and commitment to finding moral solutions

Enhance moral reflectiveness and strengthen moral courage

Improve the moral climate of firms by providing ethical concepts and tools for creating
ethical codes and social audits

Moral Reasoning

It is the process in which an individual tries to determine the difference between what is right
and what is wrong in a personal situation by using logic. To make such an assessment, one
must first know what an action is intended to accomplish and what its possible consequences

10
 Business Law and Ethics

will be on others. People use moral reasoning in an attempt to do the right thing. People are
frequently faced with moral choices, such as whether to lie to avoid hurting someone's
feelings, or whether to take an action that will benefit some while harming others. Such
judgments are made by considering the objective and the likely consequences of an action.
Moral reasoning is the consideration of the factors relevant to making these types of
assessments.

Thus, to know if "this direction" is the right direction to follow to get to a coffee shop, one
must first know where one is, where the coffee shop is, and the terrain between here and there
(to avoid blocks, etc).

Or, to know if this action is the right action to take, one must know what one wants to
accomplish, where one is, and the environment between here and the accomplished state (for
example, to impress my boss, I have to know what is likely to impress him/her, what I, myself,
can do at the work-place or where he/she would observe, etc).

Thus, to know if something (an idea, an action, a behavior) is "right" one has to know both
what one intends to accomplish and the environment that exists between "here" and "there. But
that alone is not enough! To go to a bank and threaten the cashier might well accomplish your
aim because you know security is weak and the prospect of capture is low. There is a third
consideration: is it good for the people who live around me, and supply the things my stolen
cash will buy. Here we have a further dilemma: a quick injection of stolen cash may well help
my closest suppliers, but where should we draw the boundary? The neighbourhood? The city?

Our Nation? or The whole world? Only this last reason: Good for all humanity, yields "moral

reasoning" Satisfactory solutions to problems are determined by using this principle. Problems
or behaviours are difficult to solve when either the environment or the desired accomplishment
are incompletely understood from a global perspective.

Stages of Moral development Kohlbergs study

Kohlberg defined moral reasoning as judgements about right and wrong. His studies of moral
reasoning are based on the use of moral dilemmas, or hypothetical situations in which people
must make a difficult decision.

Kohlberg defined a subject's level of moral reasoning from the reasoning used to defend his or
her position when faced with a moral dilemma. He thought this more important than the actual
choice made, since the choices people make in such a dilemma aren't always clearly and
indisputably right.

He noted that development of moral reasoning seemed to be related to one's age. However, he
also determined that the highest level of moral reasoning was not reached by all of his subjects.

Kohlberg's six stages can be more generally grouped into three levels of two stages each:
preconventional, conventional and post-conventional.

Level 1: Pre-conventional

11
 Business Law and Ethics

At this level judgement is based solely on a person's own needs and perceptions.

Stage 1: Obedience and Punishment (I do things so I dont get in trouble)

Those in the first stage are like a child, basing their decisions on compliance to an authority
and the risk of negative consequences for failing to obey. A negative consequence means the
person is wrong, and avoiding a negative consequence, or punishment, means the person is
right. They do not consider the impact on others, only the outcomes based on the negative
impact on themselves.

Stage 2: Individualism and Exchange (I do things so I get something out of it)

A stage two perspective is still childlike, but situations are no longer black and white, right and
wrong. There can be varying degrees of loss or gain; relative outcomes based on the value a
person receives from the activity. The person does not yet consider the impact on others, but
only sees decisions in relative befit to themselves.

Level 2: Conventional

The expectations of society and society's laws are taken into account in a decision about a
moral dilemma.

Stage 3: Good Interpersonal Relationships (I do things so you like me)

In stage three, the person begins to consider someone other than themselves. They think about
their immediate social circles, be it their family or friends, when they make decisions. The
person starts considering their actions based on the impact it might have to those they care
about or those they have relationships with.

Stage 4: Maintaining the Social Order (I do it because it is the law, and I respect the law)

The person in stage four extends their thoughts of others beyond their immediate circle of
family and friends. They make decisions out of respect for the social order and the law that
maintains that social order. They are not primarily concerned with fear of breaking the law, but
rather acknowledge the intent of the law for the greater good.

Level 3: Post Conventional

Judgements are based on abstract, more personal principles that aren't necessarily defined by

society's laws.

Stage 5: Social Contract and Individual Rights (I do it because of a social contract we have
with each other)

The stage five individual extends beyond the law for laws sake and makes decisions based on
what makes for a good society, at times irrespective of the law. The person acknowledges that
decisions made for the greater good can at times violate the letter of the law. Of primary

12
 Business Law and Ethics

concern in their decision-making are concepts such as morality, rights and democratic
processes.

Stage 6: Universal Principles (I do it because it is the right thing to do)

Stage 5 decisions may be right for the majority, but they may not be just. As such, the stage 6
individual is primarily concerned with justice. Whereas the person at stage 5 may be more
focused on establishing status quo, the person at stage 6 would possibly consider civil unrest
and revolution to effect a greater change for long-term social justice and sustainability.

Carol Gilligans Moral Development Theory

13
 Business Law and Ethics

Carol Gilligan was born on November 28, 1936, in New York City.

She graduated summa cum laude from Swarthmore College in 1958.

She went on to do advanced work at Radcliffe University receiving a Masters in

clinical psychology in 1960.

She earned her doctorate in social psychology from Harvard University in 1964.

Gilligan began teaching at Harvard in 1967 with renowned psychologist Erik Erikson.

In 1970 she became a research assistant for Lawrence Kohlberg.

Kohlberg is known for his research on moral development and his stage theory of moral
development, justice and rights.

Gilligan's primary focus came to be moral development in girls. Her interest in these
dilemmas grew as she interviewed young men thinking about enlisting for the Vietnam
War and women who were contemplating abortions.

Theory Background

While teaching at Harvard in 1968, Gilligan worked with Erik Erikson and Lawrence
Kohlberg, two of the leading theorists in mainstream psychology.

She criticized both Eriksons theory of identity due to it reflecting his own life, and
Kohlbergs ideas about moral dilemmas which mirrored his own experiences and were
ultimately biased against women.

She found that Kohlberg's investigations concluded that women scored lower and less
developed than that of men. Her research found that neither theory represented women's
identity and experience (Medea, 2009).

Gilligan noticed that approximately fifteen of the twenty-five women who signed up for
Kohlbergs class on moral development dropped.

Only about five out of fifty men that enrolled were left. Gilligan found that women in the
class posed difficult questions of human suffering that could not be adequately addressed by
moral theories.

Her first paper about moral development,In a Different VoiceWomens Conceptions of

Self and Morality, included interview notes from the women who left the class about their
moral perspective (Hekman, 1997).

Her research reflected that womens development was set within the context of caring and
relationships, rather than in compliance with an abstract set of rights or rules (Young, 1999).

She asked four questions about women's voices:

14
 Business Law and Ethics

who is speaking?

what body?

what story?

what cultural framework is the story presented?

Gilligan found that a morality of care can serve in place of the morality of justice and rights
earlier theorized by Kohlberg. She views morality of care and morality of justice as distinct yet
also connected (Young, 1999). Gilligan would go on to criticize Kohlberg's work. This was
based on two things:

First, he only studied privileged, white men and boys. She felt that this caused a biased
opinion against women.

Secondly, in his stage theory of moral development, the male view of individual rights and
rules was considered a higher stage than women's point of view of development in terms of its
caring effect on human relationships.

She outlines three stages of moral development progressing from selfish, to social or
conventional morality, and finally to post conventional or principled morality.

Carol Gilligan has been instrumental in research on adolescence, moral development,

women's development and conflict resolution. As a feminist, scholar, professor and author, she
has helped to form a new direction for women.

"Women must learn to deal to their own interests and to the interests of others. She thinks that
women hesitate to judge because they see the complexities of relationships.

Pre Conventional
-Person only cares for themselves in order to ensure survival

15
 Business Law and Ethics

-This is how everyone is as children

In this transitional phase, the person 's attitude is considered selfish, and the person sees the
connection between themselves and others.

Conventional
-Responsibility
-More care shown for other people.
-Gilligan says this is shown in the role of Mother & Wife
-Situation sometimes carries on to ignoring needs of self.
In this transitional phase, tensions between responsibility of caring for others and caring for
self are faced.

Post Conventional
-Acceptance of the principle of care for self and others is shown.
-Some people never reach this level.

Principles of Ethics

16
 Business Law and Ethics

Beauchamp and Childress (2009) developed four Ethical Principles.

Respect for Autonomy
Beneficence
Non-malfeasance
Justice

Four fundamental ethical principles (a very simple introduction)

The Principle of Respect for autonomy

Autonomy is Latin for "self-rule" We have an obligation to respect the autonomy of other
persons, which is to respect the decisions made by other people concerning their own lives.
This is also called the principle of human dignity. It gives us a negative duty not to interfere
with the decisions of competent adults, and a positive duty to empower others for whom were
responsible.

Corollary principles: honesty in our dealings with others & obligation to keep promises.

The Principle of Beneficence

We have an obligation to bring about good in all our actions.

Corollary principle? We must take positive steps to prevent harm. However, adopting this
corollary principle frequently places us in direct conflict with respecting the autonomy of other
persons.

The Principle of nonmaleficence

(It is not "non-malfeasance," which is a technical legal term, & it is not "nonmalevolence,"
which means that one did not intend to harm.)

We have an obligation not to harm others: "First, do no harm."

Corollary principle: Where harm cannot be avoided, we are obligated to minimize the harm we
do.

Corollary principle: Don't increase the risk of harm to others.

Corollary principle: It is wrong to waste resources that could be used for good.

Combining beneficence and nonaleficence: Each action must produce more good than harm.

The Principle of justice

We have an obligation to provide others with whatever they are owed or deserve. In public life,
we have an obligation to treat all people equally, fairly, and impartially.

17
 Business Law and Ethics

Corollary principle: Impose no unfair burdens.

Combining beneficence and justice: We are obligated to work for the benefit of those who are
unfairly treated.

18