07 - Sustainable Entrepreneurship - STRI

Slides: [[L7 - Sustainable entrepreneurship - Slides - STRI 1.pdf]]

Home readings

• (W7) Conscience as a Mindset - Personal and Organizational - K. Goodpaster
• (W7) Morality and the Invisible Hand - C. McMahon

Lecture

Justice seen as a Social Contract Theory

Individuals jointly agree on the rules of society

Western Individualism:

Politics and business ethics

• In politics most important thing is power: competition is on power
• In economics most important thing is wealth: competition is on wealth

Introduction

Values

It emerges initially in the context of businesses. It then is imported into ethics.

Things people feel should be strived for in general to be able to lead a good life or make a good society.

Ethics vs morality

• Morality: set of rules people follow that enables us to live together
• Ethics: systematic and critical reflection on morals and morality
  • theories that try to give you ideal ways of judging

Ethics vs law

The intersection is the The law that includes set of morality that we want to enforce.

Cheating is immoral but not illegal

There are things that are legal but immoral.

Business ethics

The study of all moral problems associated with free enterprise or, more broadly, market systems

Companies are treated as persons:

• Accountability
• Goals, system of believes
• They can make decisions

In some things they are not persons:

• They don't have an individual mind

Most important part of business ethics is accountability.

• Casual contribution
• Foreseeability
• Freedom of action

Corporations can have a set of values.

Moral development of companies

Goodpaster

What makes a person moral?

• Moral consciousness
• The values you hold

Ghoughtfulness (awareness, conscience) vs thoughlessness

Hannah Arendt on Adolf Eichmann: A life without thinking is quite possible – but it is not fully alive. Unthinking men are like sleepwalkers”

The Milgram experiment

How people react to authority when they are told to do something that is immoral.

https://www.youtube.com/watch?v=xOYLCy5PVgM

Conscience starts with thinking for yourself

Polarity 1: the self vs the other

Conscience develops from the golden rule: "one should treat others as one would like others to treat oneself"

Polarity 2: the self vs the many

Universal identification
vs
Impartial Generalisation

Polarity 3: the ideal vs the real

On a personal level
vs
On a company level

Summary of Goodpaster

Typology

• Type1: conscience as a guide to self-interest
• Type 2: conscience as a systemic variant
• Type 3: conscience a s an authorative guide

Took this theory from Jean Piaget theory.

He did a lot of research on how children develop moralitu.

• Stage of egoism
  • A baby doesn't do anything because it has do finish to develop
• Stage of Moral Realism
• Stage of Autonomy

Kohlberg's stage of moral development

Lawrence Kohlberg

Level 1 - pre-conventional

1. Obedience and punishment orientation (how can I avoid punishment?)
2. Self-interest orientation (what's in it for me?)

critics: You are doing the right thing for the wrong reason. Not because it's good, just because you want to avoid consequences.

Game theory:

• Optimistic interpretation: it explains how cooperation works but we are all egoist/selfish. We cooperate because it's in our interest
• Pessimistic: Cooperation will always prevail

Level 2 - conventional

3. Interpersonal accord and conformity (social norms) (good boy/girl attitude)
4. Authority and social-order maintaining orientation (law and order morality)

Level 3 - Post conventional

5. Social contract orientation
6. Universal ethical principles (principled conscience)

Type 1 - Conscience as self-interest

May be a better idea to do something illegal if the counsequences are smaller than the cost of fixing it, doing the legal thing.

Type 2 - Conscience as systemic constraint

Type 2a - invisible hand

Implicit rules of the market.

Adam Smith: maximise self interest will also bring social good.
Why are we so rich yet there is so much poverty after industrial revolution.

Mismatch between economic growth of production and exponential growth of society.

Type 2b - visible hand

Focus not only on market, but also on laws. Deal with externalities of the market (ex: pollution)

Type 3 - Conscience as self-interest

Goes beyond the invisible hand by adopting an altruistic motive as a moral requirement.

Do things that maybe is not economically positive but you do it for moral reasons.

"Going beyond the market or the law" in not easy:

• Principle of mutual aid could result in inability to close down inefficient producers
• Principle of non maleficence could result in the obligation to install expensive environmentally friendly technologies
• Respect for the (Kantian) principle of autonomy could result in production inefficiencies

Assess a company moral's behaviour

Ethics has to do with coordinating our actions.

Usually 3 theories:

• Person: Virtue ethics: to do good, you need to be a good person. What are the traits that make you a good person
• Action: Deontology: a good action is one that you want everyone to follow
• Consequences: Outcome based (consequentialism < utilitarism)

Goodgasper adds a fourth one: community

4 theories

1. Interest based

Interest based

Go with the outcome that does the greatest good: greatest good of the greatest number

Happiness isn't measurable. Maybe do cost benefit analysis (transform everything into monetary terms).

Consequentialism: greatest happiness of the greatest number

Some of the problems:

• Doesn't talk about distribution
• How to account for future generations?
  • in C/B analysis we use discount rate: account less for future generations (otherwise it's too skewed to the future)

Rights based

Maximise the protection of the rights of individuals.

Here equal distribution is the most important thing: Equalise right protection

Problems:

• Can become overly paternalistic and overprotective

Duty based

This is the one that Goodpaster adds compare tot he 3 basics theories of ethics
Immanuel Kant is seen as the duty ethics guy.

In this context is duty towards your community.

Problems:

• Groups rights versus individual rights: individuals might get swallowed by a kind of collective
• Conflicting duties and divided loyalties, e.g. workplace <> family

Virtue based

“An ethical theory that focuses on the nature of the acting person. This theory indicates which good or desirable characteristics people should have or develop to be moral” (van de Poel & Royakkers, 2011, p. 95)

Probkems:

• What are the character traits of a good business leader?