The Philosophical Background of Business Ethics

Introduction

Business Ethics as an applied branch of General Ethics must be studied from the
perspective of philosophy. The process of moral reasoning involves the use of metaphysical
terminologies and concepts that is best understood only in the light of philosophical abstraction.

Ethics and Philosophy

Philosophy, etymologically, came from two Greek words “philos,” which means love,
and “sophia,” which means wisdom. A philosopher is one who literally loves wisdom. As a
science, philosophy is interested with the meaning of reality including our human experiences.
To philosophize means to wonder about life, to question reality and to find sense in what we do
as human beings.

Other definitions of philosophy:

○ Philosophy, according to Plato, is the highest form of inquiry.

○ For William James, philosophy is a collective name for questions that have not been
answered to the satisfaction of the one asking the question.

○ For others, philosophy is a conceptual analysis or thinking or simply reflecting on the

contents of our thoughts.

○ Philosophy is also defines as the science that studies the ultimate causes or explanation of
thins attained by the use of human reason alone.

Divisions of Philosophy

Theoretical or Speculative Philosophy

○ Studies the truth to be known, e.g., God, immorality of the soul, origin of the universe,
among others.

Practical Philosophy

○ Studies truths to be acted upon, e.g., axiology, semantics, and the like.

THEORETICAL:

Cosmology

• This studies the origin and destiny of the universe, evolution and the ultimate fate of the
entire universe.
Ontology

• It deals with the nature of existence of things and the status of reality. The word “onta”
is a Greek word which means “being”

Metaphysics

• This studies the nature of the mind, the self and consciousness

Psychology

• For the Greeks, it is the study about the nature of the soul of the person and other entities.
It was the philosopher Aristotle who coined the word Psychology which came from the
words psyche meaning soul and logos meaning science or study.

Theodicy

• Investigates the nature, being and the attributes of God not based on the bible and divine
revelation but by logical abstraction and reasoning.

Epistemology

• It addresses the philosophical problems surrounding the theory of knowledge.

PRACTICAL:

Semantics

• This studies the meaning of words and its linguistic forms, their relationship to other
words.

Axiology

• This studies values, its origin, types and characteristics.

Aesthetics

• This aims to establish the general principles of art and beauty.

Logic

• It deals with the nature of thinking and reasoning using empirical support to establish the
truth.

• Deductive Reasoning- reasoning from universal truth or particular.

• Inductive Reasoning- reasoning from particular to universal or general principles.

Ethics
 • The term Ethics is derived from the Greek word “ethos” which means characteristic way
of acting, which is proper to man as a rational being. Ethics is sometimes called a Moral
Science or Moral Philosophy.

• Ethics is a philosophical science that studies the morality of human acts.

Definitions of Ethics

Ethics is a practical science of the morality of human acts.

Ethics is the study of human conduct from the standpoint of morality.

Ethics is a normative science based on reason which studies human conduct and provides
norms for its natural integrity and honesty.

Ethics is a practical science that guides us in our actions that we may live rightly and
well.

Ethics is the science which lays down the principles of right living.

Ethics is the science of human acts with reference to right and wrong.

Ethics is the scientific inquiry into the principles of morality.

Ethics and Morality

Morality

- It refers to the quality of goodness or badness in a human act. Good is described as moral
and bad as immoral. It implies judgement and refers to what we would call moral
standards and moral conduct while ethics is used to refer to the formal study of those
standards and conduct.

Ethics

- Involves the study of those standards and judgments which people create. Ethics basically
investigates the nature of moral principles, ethical systems and moral norms that people
use to justify their moral judgments.

Ethics as a Normative Science

Ethics is a branch of philosophy and is considered a normative science because it is concerned

with the systematic study of the norms of human conduct, as distinguished from formal sciences
such as Mathematics, physical sciences such as Chemistry and Physics, and empirical sciences
such as Economics and Psychology.
Ethics is a normative science because it involves a systematic research for moral principles and
norms that are used to justify our moral judgements.

There are three categories of General Ethics

1. Descriptive Ethics- consists of studying and describing the morality of a people, culture,
or society.it also makes comparisons and contrast on the different values, principles, code
of ethics, beliefs and practices of people.
2. Normative Ethics- involves moral judgment based on ethical norm or theory. This
consists both of the basic moral principles and values and the particular moral rules that
govern people’s behavior, which is right or moral and wrong or immoral.
3. Meta Ethics- it is concerned with analysis of the meaning of words and the logic of
moral reasoning, e.g., it analyzes moral terms. Both Normative and Descriptive Ethics
involve some Meta ethical activity.

The Problem of Ethical Relativism and Situation Ethics

Ethical relativism claims that when any two cultures or any people hold different moral values of
an action, both can be right. Ethical relativism emphasizes the differences of moral beliefs and
practices from the point of view of culture, situational ethics (or moral subjectivism)

Approaches to Moral Differences

1. There Is No Moral Truth- the philosophical perspective believes that there is no

ultimate right or wrong. This view is called moral nihilism.

2. There Is No Universal Moral Truth- each culture has its own set of rules that are valid
for that culture, and we have no right to interfere, just as they have no right to interfere
with our rules. This view is known as ethical relativism.

3. Deep Down, We Can Find Basic Moral Truths- this philosophical perspective believes
that despite differences, people of different cultures can still agree on certain moral
basics. This is called soft universalism.

4. There Is One Universal Moral Truth- this view is known as hard universalism or moral
absolutism

Deontological vs. Teleological Approaches to Ethical Evaluation of the Human Conduct

Deontological ethics or non-consequentialist approach is a body of ethical theories that measures

and evaluates the nature of a moral act based on the validity of the motive of an act.
The word teleology came from the Greek word “tele” which means far or remote. Teleological
Ethics or the consequentialist theory measures the morality of an action based on its
consequences and not on the motive or intention of the actor.

Implications of Deontological and Teleological Ethics to Decision Making

These two approaches to the ethical evaluation of the human conduct are also used by managers
in the decision making process. Some managers are said to be biased towards deontological
perspective because of their principle-oriented decision making process. On the other hand, some
managers could be result-oriented in terms of decision making. In this regard, they favour the
perspective of teleological ethics because they focus on the consequence or the result of the
action regardless of the intention or the motive of the one performing the action.

The “Moral Sense” in Us

One of the basic questions in ethics is to determine how people develop their fundamental
concepts of good and evil. Traditional ethics believes that man has a natural insight to morality.
This being a gift of the Creator who gave man a “moral sense.” A man knows the fundamental
distinction between what is good and bad, what is moral or immoral.

Three Theories attempt to explain the fundamental question of how people develop their
concept of morality

The Synderesis of Man According to St. Thomas Aquinas

• Italian philosopher, who developed a systematic Christian theology.

• According to Aquinas, this “synderesis” is the starting point of man’s moral reasoning
which takes place when a person reaches the “age of reason.”

Freud’s Theory of the Id, Ego, and the Superego

• He is the founding father of Psychoanalysis, which is a major school of Psychology.

• Freud founded the Psychoanalysis Theory where the approach is to understand human
behavior which views men and women as constantly torn between internal unconscious
forces and external forces.

• Superego, basically reflects social rules and values of the society that govern our
behavior.

• Ego, is the rational self or the conscious self. It is also known as the “reality-principle”.
Id, is the irrational part in us or the unconscious instincts. According to Freud, we are
born with the id which is also known as the “pleasure-principle” in each of us.

Kohlberg’s Theory of Moral Development

 • He believes that people progressed in their moral reasoning through series of stages.

• His theory of moral development was based on the earlier works of Jean Piaget a
psychologist. Kohlberg helped to clarify the general cognitive developmental approach of
Jean Piaget, through his analysis of the changes in moral reasoning or extending the
approaches into series of stages.

Kohlberg’s Theory of Moral Development

• He believes that most moral developments occur through social interactions. He also
believes that people can transcend their concept of good and evil by integrating them with
their religious convictions.

Two Ethical Systems

There are two general categories under which ethical theories are classified:

Atheistic Ethics

• Assumes that only matter exist and man is responsible only to himself since there is no
God who creates and rules the universe.

• Atheistic theories propose the following principles:

• Matter is the only reality

• Man is matter and does not have spiritual dimension.

• Man is free and must exercise his freedom to promote the welfare of society

• There is no life after death

• Man is accountable only to the State

Theistic Ethics

• Assume that God is the Supreme Lawgiver. Everything must conform to God’s eternal
plan of creation. Man is accountable for his actions and deserves either a reward or
punishment in this life or in the next.

• Theistic theories postulates the following truths:

• God is the Supreme Creator and Lawgiver.

• Man is free and must use his freedom to promote his personal and social interests
along with his fellowmen

• Man has an immortal soul which cannot die

• Man is accountable for his actions, both good and evil