Business Ethics as a Rational choice

 It is easy to read the title this way because we equate rational behavior with rational self-
interest.
 We believe that any tendency to care about others, to be “moral”, must be based on
emotion or cultural conditioning, rather than hardheaded reason.
 I chose the title to make a point.
 Rational behavior is much more than rational self-interest.
 Rationality requires us to consider the interests of others as well as ourselves –not
because doing so may eventually serve our own interests, but because neglecting others is
inherently illogical and self-contradictory.
 When managing a complex organization with multiple stakeholders, you can't rely on gut
feeling.
o You must have a conceptual framework and an ethical vocabulary to defend your
decision to others – and to yourself when the going gets tough.
 Analysis based on rational choice, by its very nature, provides a rational basis for
convincing oneself and others.
 Rational decision making is a skill, and like any skill, it requires practice.
 Ethics presents the theory and asks you to work through structured exercises until you
learn how to apply it
o it provides the conceptual equipment necessary to make reasoned and defensible
judgments.
 Society must agree on what is ethics and also act accordingly.
 Business ethics;
o Its task is to provide a conceptual framework for making defensible business
decisions that consider all stakeholders.
 Myth 1. We learn ethics as little kids. When we reach adulthood, it is too late to change
our behavior.
o Early childhood is important in character development, but decades of research in
developmental psychology show that ethical maturity grows with cognitive
ability.
o As we develop the capacity to think through our actions, our behavior tends to
become more ethical.
o Cognitive ability, in turn, can grow throughout life, right up into old age. Some
writers in moral development suggest that the highest stage of moral development
is reached only in the 60s or later, if ever.
o Training in ethical analysis is one way to move this process along, while
providing skills that relate directly to decision making.
 Myth 2. There is no point in studying ethics, because we all know what’s right. Then why
do we disagree all the time?
o I grant that there is a good deal of consensus on basic matters of right and wrong.
Otherwise, society would have fallen apart long ago, as I have already mentioned.
But there is a pressing need for greater consensus, particularly on complex issues
that require careful analysis, some of which may determine the fate of our
civilization.
  Myth 3. Business ethics is simple. Just don't do anything you wouldn't want to appear on
the front page of the newspaper, or you wouldn't want your mother to know about.
o The alternatives may have been even worse.
 Myth 4. There is no point in analyzing ethical issues, because ethics is just a matter of
opinion.
o I have my view and you have yours, and that's the end of it. Try to remember this
the next time you are mugged. Pardon my sarcasm, but it's hard for me to
 Myth 5. Studying ethics will have no effect, because human beings are motivated only by
self-interest, not ethical theories.
o Business ethics can refine and reinforce the human tendency to care about others
by placing it on a rational basis that is practical and convincing in a business
environment.

Critical Thinking for Business Ethics

Introduction
 What is critical thinking?
o Study of what you should believe and what
o How to sort out which points of view are well supported, and which ones are not
Critical thinking and ethics
 Essential for making good ethical decisions
 Provides business with set of tools for evaluating claims and opinions by asking where
claims and opinions are supported by arguments.
What is an Argument?
 Argument is an interrelated set of claims designed to convince the speakers or writers
audience to accept some claim or POV. They have 2 components.
o A conclusion- the claim or POV that the writer or speaker is trying to get his or
her audience to accept
o One or more premise – the reasons that speaker or writer provides to attempt to
convince his or her audience to accept the arguments conclusion.
What makes a Good ethical Argument?
 An ethical need to possess 3 crucial characteristics:
o It must have premises – starting points that are plausible.
 One that audience considers reasonable
 2 different kinds;
 Some factual premises – explain facts of the case you’re
considering (training material encourage our salespeople to lie to
customer)
 Ethical premises – bring some ethical rule or principle or value to
bear. (lying is unethical)
o Must have premises that are relevant to the question at hand.
 We musay immediately jump to accept arguments conclusion, without
critically thinking about the other premises presented are true and relevant
and support the question
 o Must have premises that provide sufficient support for its conclusion.
 Does a particular set of premises provide the suffice support to establish
truth pf a conclusion is very complex?
o If the premises taken together provide a little or no support for the conclusion then
the argument is a weak argument
o If the premises taken together make it very likely that arguments conclusion is
true, the then argument is a strong argument.

Sources of trouble
Fallacies
 Faulty arguments
 These arguments are psychologically attractive bc they look superficially like other
better kinds of arguments.
 They seem simple and support conclusions that fit with our own biases
Straw Man
 Straw man is any argument in which the arguer criticizes a weakened or distorted version
of his or her opponent point of view rather than dealing directly with that point of view.
 It is a FALLACY because it relies on premises that are typically entirely irrelevant to the
issue at hand.
 Criticizing something that your opponent didn't say and doesn't believe make you look
clever
Ad Hominem “appeal to person”
 Another form of argument this used in debates
 It focuses on criticizing a person rather than focus in go the strength of the persons
reasoning
 It is a FALLACY because typically the identity or character of the person making a claim is
not relevant to deciding whether it’s true or not.
Argument from the tradition
 An argument from the tradition argues that we should believe or do something simply
because some group we belong to has believe or done that thing for a long way
 It’s a fallacy bc history is irrelevant, that fact that a believe has a long history doesn’t
make it true
Argument from popularity
 An argument from popularity involved arguing that we should believe or do something
simply because believing it or doing it is popular.
 It is a fallacy bc the fact a lot of people believe something is very poor
 People are more poorly informed
False dilemma
 A false dilemma is any argument that tries to convince you that you only have two
options and must choose one when that is not really the case
Cognitive biases
 Trying to make good arguments is what are known as cognitive biases
 Well researched patterns of faulty reasoning to which human beings are being subject
  They are dangerous bc arguers are not aware of the ways in which they biases are
affecting their reasoning.
Framing effect
 The way we describe or frame a question has enormous effect on how we answer
 Positive thinking attracts positive
Confirmation bias
 Seek and remember information that confirms our own prior points of view or avoid ones
that change our minds
 Can result in overconfidence leading to poor decision making
False consensus effect
 Tendency of people to have to overestimate the extent to which other agree with their
points of view
Ingroup Bias
 Tendency of people to think well of to trust and give precentral treat to members of their
own group
 Ingroup bias may take place in form of racism or sexism
 People have a tendency to cluster into groups a treat each other differently on that basis
 Team spirit is a form of ingroup bias
Moral Luck
 Refers to the tendency to attribute moral credit and blame individuals as a result of
events that are not strictly speaking withing their control
Combatting cognitive biases
 Cognitive biases are a persuasive feature of all human reasoning
 Seek out a large point of view. Cognitive biases rely on too few sources of info
 When possible avoid intuition
o Relying on intuition is an excuse for lazy thinking.
o If numbers are involved exp

Conclusion
 Critical thinking is essential to ethical decision making
 It is a systemic approach to evaluating and formulating good arguments in defence of
specific beliefs or claims.
 All of us have beliefs and intuitions about world of business
o The challenges are to apply the tools of critical thinking so we can determine
thru convo which of those beliefs and intuitions can be well supported by
reasons that are acceptable