Professor Louise Crawford PhD CA Aberdeen Business School Robert Gordon University Scotland Presentation given at: University of Bergamo, April 2017

Transcription

1 Ethics, Governance and Accountability Professor Louise Crawford PhD CA Aberdeen Business School Robert Gordon University Scotland Presentation given at: University of Bergamo, April 2017

2 Governance - meaning Governance = to direct, rule or guide; the process of steering/guiding and organisation towards its goal. It involves: determining the objective of the organisation and directing the organisation towards achieving its objective Managing the relationships between all of the various stakeholders involved in the organisation Captures broad range of activities: leadership; effectiveness; accountability; remuneration; relationship with shareholders These responsibilities are locations of ethical conflict; they require decisions to be taken, within a particular context, where the outcome of decisions will impact individuals/society/organisations in different ways.

3 How? Behaviour Follow codes of conduct/behaviour Act in your own self-interest? Act to capture the interests of all society participants affected by corporate activity Information Interpret, decipher, use, conclude. Scientific context Social contructivism context

4 There is no right or wrong

5 There is right and wrong in science

6 Interpretation; seeking truth? Elephant parable

7 Is there right and wrong in ethics? instinctive.

8 How do you decide what is ethically right and ethically wrong? Probity principle based decision making; [Immanuel Kant, ; John Rawls, 1971] knowing what to do in a situation will be determined by a set of principles that have been established by deductive reasoning, independent of, or before, the specifics of decision in hand have been considered. Context and consequences of a decision are irrelevant Fisher et al., pg 108 The categorical imperative unconditional command/principle; universal thou shalt not kill do unto others as you would have done unto yourself.. Inflexibility is it ever OK to lie? Or Consequence utility based decision making; [Jeremy Bentham, ; John Stewart Mills, ]

9 How do you decide what is ethically right and ethically wrong? Consequence utility based decision making; [Jeremy Bentham, ; John Stewart Mills, ] Decisions are based on utility the greatest happiness of the greatest number is the foundation of morals and legislation A calculative approach, assumes quality and quantity of happiness can be weighed Need to consider in utilitarianism based decision making Intensity, duration, Certainty the probability of happiness or pain Extent the number of people affercted Closeness pleasure or pain now or later? Richness will it lead to more pleasure? Purity is the happiness independent or is it mixed with unhappiness?

10 Is ethical progress possible? Progress towards truth, right and wrong.

11 Elephant parable Unethical industries?

12 Ethics in managerial Decision-Making Decision-making is generally understood as : a process in which a problem is defined, in order to solve it, the decision maker seeks and selects a goal or set of objectives, from which a set of action alternatives are generated and evaluated, and finally one is chosen

13 Holistic approach and the primacy of ethics humans have bounded rationality, meaning that humans are limited in their decision-making by limitations on information and time available, and by the informationprocessing ability of the mind....holistic decision-making tries to make optimal decisions considering all relevant dimensions and using a multi-criteria approach. Mele, pg 50

14 A Holistic View of Decision-Making (i) (ii) (iii) (iv) (v) (vi) (vii) Formulation of the problem Outlining a goal and outcome Generation of alternative courses of actions Analysis and evaluation of alternatives Election of one alternative Implementation of the action Evaluation of the outcome Spider in the urinal

15 Decision-making: four interrelated dimensions (Mele, p48/49) The instrumental dimension refers to the business results sought in performing an action. The relational dimension...regards the future relations with the people affected by the action.. The internal dimension refers to the learning produced by the internal effects of the decision and the subsequent action..

16 The ethical dimension refers to the ethical evaluation of the alternatives by the decision-maker, and its influence on the intentionality of the agent in performing an action. These 4 dimensions are interdependent

17 Fundamental Evaluative Criteria for each Dimension Instrumental Cost-benefit analysis Relational Pros and cons of future relations Internal Development and degradation of internal capabilities Ethical right and wrong; better or worse. But we will end up with, within and between individuals and institutions. Congruent evaluations Conflicting evaluations

18 The Role of the Manager s Moral Conscience (Mele, p54) ethics is about virtues, principles and norms, and values, while moral judgements refer to the ethical evaluation of different alternative courses of actions. Practical Rationality provides intellectual discernment between good and evil and permits us to make moral judgements. Practical rationality formulates moral judgements regarding particular situations. It requires acquiring ethical knowledge and developing practical wisdom. So, Deontology and Consequentialism are used together

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20 The Triple Font of Morality Theory Every decision entails the deliberation and election of an end, and an action chosen as a means to achieve that end. Thus, the will of the decision-maker concerns both the end and the means. In addition, sound deliberation cannot ignore the predictable consequences of the action and other morally relevant situational circumstances.

21 Three fonts or sources to evaluate morality of a decision 1. Intention 2. Action chosen 3. Circumstances - predictable consequences of the actions and situational factors. The Triple Font of Morality Theory holds that a decision is morally good if, and only if, all of these elements are good the morality of a decision is basically determined by intention and the action chosen and complemented by the consideration of consequences and situational circumstances, which aggravate or attenuate its seriousness.

22 Ethical Analysis of the Morality of a Decision with Bad Secondary Effects Seven stages that can help analyse the morality of a decision (next slide)... Choose a character in Margin Call and 1. What decisions does your chosen character make. 2. Which of these decisions has a fundamental and significant ethical component, why? 3. Work through these seven stages to determine: Was the decision morally right?

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24 Reading References Business Ethics and Values, 4 th Ed. Fisher, Lovell and Valero-Silva. Chapter 3. Dominic Mele, Management Ethics Placing Ethics at the Core of Good Management