Elements of Business Ethics
Instructor: Dr. Jan Garrett
This page was last updated November 2, 2001.
1. Contract Theory, applied to commercial exchange
2. Due Care Theory, applied to commercial exchange
3. Contract Theory, extended to employer-employee relations
4. Due Care Theory, extended to employer-employee relations
I. Theories of Fair Exchange--The Original Model
A. Contract theory:B. Due care theory:
applies to conditions of rough equality centers on voluntary nature of deal-making
1. Precontractual duties
a. Duty to disclose nature of product/service(Problem: Is it permissible to consciously persuade the other party to wish and thus to act contrary to its true needs?)
b. Duty not to misrepresent nature of product/service
Statements of seller include factors such as reliability, ease of maintenance, service life, and safety of the product. (More on these below.)
If a contract is created, then these become promises that morally must be fulfilled.
VIOLATION OF DUTY NOT TO MISREPRESENT IS "FRAUD."
c. Duty not to "coerce" -- VIOLATION: "FORCE"Party superior in power must limit its ability to compel the other party to act contrary to its wishes.
2. The duty to comply, involving dimensions includingVIOLATION OF DUTY TO COMPLY: BREACH OF CONTRACT
reliability: probability that it will operate as buyer has been led to expect it will operate service life: how long will it be useful? maintainability: how easily serviced? safetyWhen is a product sufficiently safe?
all remaining risks are understood by consumer consumers can judge their probability and severity consumers voluntarily accept them consumers can cope with themII. Theories Extended to Employer-Employee Relations Applies in conditions of significant inequality.
Assumes that buyer lacks knowledge and resources of the seller and cannot easily acquire them
Seller is obliged to meet normal contractual obligations but also look out for the well-being of the buyer--above all, to do no harm to the buyer's interests.
Primum non nocere: The primary thing is "do no harm"
Caveat vendor (let the seller take care). Contrast with caveat emptor (let the buyer beware), which corresponds more closely to the Contract Theory
Due care must be exercised in:1. design, testing, and production of the productThe Precautionary Principle extends due care to third parties and to the environment
2. informing the user of the risks associated with the product
3. training, where necessary
4. research, to improve safety of the productNovel technologies are assumed to be harbor risks until careful study shows that they do not.
The more radical the innovation and the more extensive the proposed application of the novel technology, the more thorough the study required before use.
VIOLATION OF THE DUTY TO EXERCISE DUE CARE: NEGLIGENCE
A. Situations of rough equality1. on employer's side:B. Situations of significant inequality (employer's advantage)--duty to exercise due care (looking out for employee's interests)a. duty to disclose nature of job, on the job risks, chances for promotion, etc.2. on employee's side:
b. duty not to misrepresent the above
c. duty not to take advantage of economic desperation of workers
d. duty to comply with promises made in employment negotiationa. duty to disclose relevant facts about employee
b. duty not to misrepresent same
c. duty not to take advantage of employer's desperate need for services only you can provide
d. duty to comply with promises made1. in design of the production process
2. in the materials used
3. in scheduling tasks, breaks, rest periods, etc.
4. in providing income to meet the employee's needs
5. in training the worker to meet dangers that can occur.
III. Extended Variants of the Preceding Models
IV. ResponsibilityA. Key meaning: condition of a being (person) to which (moral) praise or blame can be attributed.
B. Moral praise/blame is distinguished, say, from technical praise/blame by the fact that moral p/b is measured by moral standards and technical p/b by technical standards.
C. Excusing conditions--ignorance and inability (to do otherwise)
BUT:D. Mitigating circumstances--These do not apply if the person wished a clearly evil act to succeed.
Ignorance of principle does not normally excuse unimpaired moral agents: "Ignorance of the law is no excuse."
Deliberate ignorance ("plausible deniability") does not excuse.1. duress--BUT the risk of losing one's promotion or profit margin does not normally count as duressE. Joint/corporate actions
2. smallness of the evil produced
3. uncertainty that an evil will result
4. smallness of the contribution to a joint act1. definition: an action which requires the intentional cooperation of 2 or more human or corporate actors.
2. responsibility: we are responsible (at least in part) for the results of corporate acts in which we participate if we anticipated or should have anticipated these results and could have done otherwise.