ETHICS 203: ETHICS

CHAPTER 2: The Philosophical Background of Business Ethics

MX. LALAINE P. COCHON, MPA – DHVSU COLLEGE OF BUSINESS STUDIES
BS ACCOUNTANCY | 1ST SEMESTER A.Y. 2022-2023

THE PHILOSOPHICAL BACKGROUND OF BUSINESS ETHICS Morality refers to the quality of goodness or
badness in human act. Good is described as moral and bad
Introduction is described as immoral. It means conformity to the rules of
Business Ethics as an applied branch of General Ethics must the right conduct. It implies judgment and refers to what we
be studied from the perspective of philosophy. This is because could call moral standards and moral conduct while ethics is
ethics is a part of philosophy, and t it is unthinkable to discuss used to refer to the formal study of those standards and
conduct. For this reason, Ethics is also often called “moral
ethical concepts and moral principles without being
philosophy.”
philosophical. Secondly, the process of moral reasoning
involves use of metaphysical technologies and concepts that Ethics, on the other hand, involves the study of
is best understood only in the light of philosophical those standards and judgment which people create. Ethics
abstractions. assumes that the standards exist and seeks to describe
them, to evaluate them, or to evaluate the premises upon
A. Ethics and Philosophy which those standards exist. Ethics, basically indicates the
nature of moral principles, ethical systems and moral norms
What is Philosophy? that people use to justify their moral judgment.

Philosophy, etymologically, came from two Greek A. ETHICS AS NORMATIVE SCIENCE

words “philos,” which means love, and “sophis,” which
means wisdom. Philosophy means “love of wisdom.” As Ethics is a branch of philosophy and it is considered as a
a science, philosophy is interested with the meaning of normative science because it is concerned with the
reality, including our human experiences. It is a science that systematic study of norms of human conduct. Ethics is a
seeks to explain the ultimate cause of everything by the use normative science because it involves a systematic search
of human reason alone. To philosophize means to wonder for moral principles and norms that are used to justify our
about life, to question reality and to find sense in what we do moral judgments.
as human beings.

Other definition of Philosophy;

1. Philosophy according to Plato, is the highest form of

inquiry.
2. For William James, philosophy is a collective name for
questions that have not been answered to the
satisfaction of the one asking question. Questions like;
Who am I? How do live? Where am I going?
3. Philosophy is also defined as the science that studies
the ultimate causes or explanation of things attained by
the use of human reason alone.

These different definitions of philosophy only affirm that There are three categories of General Ethics;
it is a metaphysical science which basically deals with
abstractions. It is from this perspective that Business Ethics, 1. Descriptive Ethics consists of studying and describing
as an applied branch of philosophy must be discussed since the morality of people, culture, or society. It also makes
it involves investigating the human values which are comparisons and contrasts on the different values,
basically metaphysical in nature and which are operative in principles, code of ethics, beliefs, and practices of
fiduciary relationships both in business transactions and in people. It does not prescribe or attempt to assess the
the interactions of people in business organizations and in moral soundness of any ethical system but only to
the corporate world. describe objectively the values and belief of people.

DEFINITION OF ETHICS Examples:

• Ethics is a practical science of the morality of a. Psychological Egoism

human acts. A concrete example of Descriptive Ethics is
• Ethics is the study conduct from the standpoint of the study of human motivation. Is says nothing
morality. about what is God or bad or right or wrong, rather
• Ethics is a practical science that guides us in our it simply declares results based on various
actions that we live rightly and well. scientific studies.
• Ethics is the science which lays down the
principles of right living. b. Cultural Relativism

B. ETHICS AND MORALITY It does not prescribe how people should act,
rather it describes how people, when grouped and
The term ethics and morality are often used observed in their own cultural realities, actually
interchangeably. Indeed, these terms usually can mean the differ in their behaviour. What is good or bad,
same thing, and in casual conversation there is not a moral or immoral according to this theory is
problem with switching between one and the other. relative to the people’s own culture or sets of
However, there is a distinction between them in philosophy. cultural beliefs and practices.

Notes by: NALA, MARY JOY C. “Mind over matter.”

 ETHICS 203: ETHICS
CHAPTER 2: The Philosophical Background of Business Ethics
MX. LALAINE P. COCHON, MPA – DHVSU COLLEGE OF BUSINESS STUDIES
BS ACCOUNTANCY | 1ST SEMESTER A.Y. 2022-2023

2. Normative Ethics involves moral judgment based on ● Utilitarianism is another example of a

ethical norm or theory. This consists both of the basic consequentialist theory. This school of thought,
moral principles and values and the particular moral maintains that the “greatest good is the greatest
rules that govern people’s behaviour, which is right or happiness or pleasure of the greatest number.” This
moral and wrong is immoral. means that if the action can provide the greatest
happiness to the greatest number of the people
The three tasks of Normative Ethics are the following; who are affected by the action, the action s to be
considered morally good.
● To form into a related whole the various norms,
rules and values of a society’s morality. Implications of the Deontological and Teleological
● To find the basic principle from which the particular Ethics to Decision Making
norm can be derived.
● To justify an ethical norm or moral principle. These two approaches to the ethical evaluation of
the human conduct are also used by the managers in the
3. Metaethics is a branch of Normative Ethics. In some decision-making process. Some managers decide on the
other ways, both Normative and Descriptive Ethics basis of their personal principles and convictions. In this
involve some mathematical activity. Metaethics is regard, managers are said to be biased towards
concerned with analysis of the meaning of words and deontological perspective because of their principle-oriented
logic of moral reasoning. It analyses moral terms like, decision-making process. On the other hand, some
“good”, “bad”, “moral”, “immoral”, “moral obligation”, managers could be result-oriented in terms of decision
and the like. Metaethics does not describe moral belief making. In this regard, they favor the perspective of
of people, does not evaluate the process of moral Teleological Ethics because they focus on the consequence
reasoning but simply analyses the usage and meaning or the result of the action regardless of the intention of the
of words. motive of the one performing the action.

B. DEONTOOGICAL VERSUS TELEOLOGICAL F. THE “MORAL SENSE” IN US

APPROACHES TO ETHICAL EVALATION OF
THE HUMAN CONDUCT One of the basic questions in ethics is to determine how
people develop their fundamental concepts of good and evil.
1. Deontological Ethics or non-consequentialist approach Traditional ethics believes that man has a natural insight to
is a body of ethical theories that measures and morality, this being the gift the Creator who gave man a
evaluates the nature of a moral act based on the validity “moral sense.”
of the motive of an act. This means that the motive or
intention is good, then regardless of the consequences, 1. The Synthesis of Man According to St. Thomas
the whole action is good. Aquinas
According to Aquinas, the moral sense in man is manifested
Examples: and expressed in three ways;

● Kantianism is also known as the categorical ● Man is able to distinguish or to know what is good
imperative approach, the idea that one or what is bad. Of all creatures, only man has the
should always base his action on maxims or capacity to know the difference between good
rules that are believed to be universal. For and bad action.
Kant moral goodness or badness of the act ● Man is always obligated to do good and to avoid
does not depend on the consequences of the evil. In any given circumstance, man is the only
act but on the motive or intention of the actor, creature who feels time primary duty to do what is
the motive is good if it is an expression of the good and to avoid what is evil.
person’s sense of duty. ● Man knows that he is accountable for his actions-
good or bad. Of all creatures, only man realize
● Divine Command Theory holds that the that the performance if an action entails reward
standard of right and wrong is the will or law and punishments. If he does an evil action, he
of God. The Christian Ethics is an example of expects punishment.
an ethical system that uses deontological
approach in evaluating the morality of human 2. Freud’s Theory of the Id, Ego, and the Superego
conduct, the will of God is expressed in the
Bible and in tradition of Roman Catholic Freud believes that the human mind has three important
Church. components, that of the preconscious, conscious, and
unconscious. No other psychologist except Freud has
2. Teleological Ethics or consequentialist theory studied the unconscious part of the human mind.
measures the morality of an action based on its
consequences and not in the motive or intention of the Freud founded the Psychoanalysis Theory where the
actor. If the consequences is good, regardless of the approach is to understand human behavior which views men
motive, then act is always morally good. and women as constantly between internal unconscious
forces and external social forces. The key points of
Examples: psychoanalytic theory are the following;

● Hedonism or the view that measures is the only ● Man must learn to control his inborn desires.
good as an end. ● Man must achieve fulfilment in ways that are
harmonious with others.

Notes by: NALA, MARY JOY C. “Mind over matter.”

 ETHICS 203: ETHICS
CHAPTER 2: The Philosophical Background of Business Ethics
MX. LALAINE P. COCHON, MPA – DHVSU COLLEGE OF BUSINESS STUDIES
BS ACCOUNTANCY | 1ST SEMESTER A.Y. 2022-2023

Business Application hand is the stage of Social System and Conscience

Maintenance wherein one is oriented by the law and
A businessman may be tempted to cheat to his responding to the obligations of duty. A person is considered
customer in process of selling. He realizes however, that to a law-abiding citizen when he or she follows the law of
give in to this enticement could be a violation of Code of society but will be considered deviant when the same person
Ethics for Businessman and the other positive laws, like violates the same law.
Customer Act of the Philippines. He therefore discerns well
and begins to rationalize that it is better not to fool or cheat Business and Organizational Application
the customer. In this case, the perceived good action not
fooling the customer is a decision made by the ego as a Stage 3 of the second level describes the right behaviour
result of its interaction with the enticement of the id and the is one that conforms to conventional expectations, an
pressure of the superego. employee considers the importance of being loyal follower
to avoid conflicts. Stage 4 on the other hand, explains that
3. Kohlberg’s Theory of Moral Development the right behaviour consists of performance of duty, respect
for authority and maintaining social order, an employee
Kohlberg believe that the people progressed in their moral address to organizational rules and policies and obeys order
reasoning through a series of stage. His theory of moral from the superior.
development was based on the earlier works of Swiss
psychologist Jean Piaget. Kohlberg help to clarify the 3. Post-Conventional
general cognitive development approach of Piaget, through
the analysis of changes in moral reasoning or extending the This third level of moral thinking is one that Kohlberg felt is
approaches into a series of stage. not reached by majority of adults. Stage 5 is the Stage of
Prior Rights and Social Contract Utility. It is the stage of
Kohlberg Classification of the Person’s Moral Development understanding of rights and values. It gives the person a
sense of democracy but relativity of rules. This means that
LEVEL STAGE SOCIAL ORIENTATION people at this stage realize that there are fundamental
Obedience and Punishment concepts of right and wrong but the application of which is
Pre – 1 confined to their own culture and environment. Each
Individualism, Instrumentalism,
Conventional 2 person’s moral rights however, must be protected. The last
and Exchange
3 “Good Boy/Girl Image” stage (Stage 6) is the Stage of Universal Principles. It is
Conventional based on respect of universal principles and the demands of
4 Law and Order
5 Social Contact Rights individual conscience. At this stage Kohlberg believe that
Post – people do good and avoid evil because they are convinced
6 Principled Conscience
Conventional that there are universal ethical principles that govern and
7 Transcendental Morality
justify their actions.
1. Pre-conventional
Business and Organizational Application
This behaviour is generally found in young children and older
children. There are two stages in this level; (1) reaction to Stage 5 maintains that the laws may be important and must
punishment, (2) desire for the right behaviour that will satisfy be followed but they are not absolute, they can be changed
the person’s self-interest. Stage 1 explains the concept of if necessary. Stage 6 maintains that people could act in
being good by following commands and authority and accordance with their conscience and universal ethical
avoiding being punished. Stage 2 is the stage of individual principles, the individual is likely to act in accordance with
instrumental Purpose of Exchange. these principles rather than rules.

Business and Organizational Application

References
Some individuals do the right thing only to avoid punishment Business Ethics and Social Responsibility 2nd Edition by Fr.
or to obtain approval, an employee who thinks that the only Froliano C. Roa, https://prezi.com/_mvc-33lomgh/the-
person not to steal money from the employer is the currently philosophical-background-of-business-ethics/;https://www.slidesh
of getting and fired. The person at hi stage has little sense are.net/NeilDagohoy/the-philosophical-background-of-business-
of needs of the others. At second stage, the persons become ethics
aware that others have their needs also and begins to defer
to them to get what the individual wants.

2. Conventional

This level is generally found in an ideal civilized society,

hence, the name “conventional.” The first stage of this level
(Stage 3) is the Stage of Mutual Interpersonal Expectations,
Relationships and Conformity. This is characterized by an
attitude which seeks to do what will gain the approval of
others, commonly referred to us as “Putting oneself in the
other person’s shoes.” Stage 3 is also known as the “good
boy and good girl” orientation stage. This implies that a good
or bad behaviour of the person depends on his/her
conformity or non-conformity with the norms of his/her
immediate community or environment. Stage 4 on the other

Notes by: NALA, MARY JOY C. “Mind over matter.”