Philosophy of Business

The Philosophical Background of Business

Reporter: Tefanny F. Pesons

Subject: BM 215
Professor: Dr. Roel A. Monsanto
Date Submitted: August 2, 2019
Learning Objectives:
 Compare and contrast ethics and philosophy
 To know the divisions of philosophy
 Differentiate ethics from morality
 To understand why ethics is considered a normative science

THE PHILOSOPHICAL BACKGROUND OF BUSINESS

What is Philosophy?
 Etymologically – “love of wisdom”
 As a science:
o interested in the meaning of reality including human experiences
o seeks to explain the ultimate cause of everything by use of human reason alone
o gives the one philosophizing an opportunity not just to reflect and think but also to
analyze the contents of his thoughts
o subject that is directed towards meaningful activity as a result of profound reflection
and analysis
 Plato – highest form of inquiry
 William James – a collective name for questions that have not been answered to the
satisfaction of the one asking question
 Philosophy is the world view of the person (weltanschauung, in German) or the person’s
philosophic view of the universe or reality in relation to purpose of actions and events.

These different definitions of philosophy only affirm that it is a metaphysical science which basically
deals with abstractions. It is from this perspective that Business Ethics, as an applied branch of
philosophy, must be discussed since it involves investigating the human values which are basically
metaphysical in nature and which are operative in fiduciary relationships both in business
transactions and in the corporate world.

Divisions of Philosophy

Theoritical or Speculative Philosophy studies the truth to be known

Cosmology kosmos universe studies the origin and destiny of the universe, evolution and the
ultimate fate of the entire universe

Ontology Onta being deals with the nature of existence of things and the status of
reality; also referred to as the theory of being
Meta beyond studies the nature of the mind, the self and consciousness; it also
Metaphysics investigates the nature of religion, existence of God, the
physikon nature concepts of time, space, cause and chance
psyche soul study about the nature of the soul of the person and other
Psychology
logos science/study entities; a science that studies human and animal behavior

theos God also known as Rational Theology; investigates the nature, being
Theodicy and the attributes of God not based on the bible and divine
Dike justice revelation but by logical abstractions and reasoning

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 addresses the philosophical problems surrounding the theory of
knowledge; concerned with the definition & related concepts,
Epistemology episteme knowledge the sources and criteria, the kinds of knowledge possible, the
degree of its veracity and the exact relation between the one
who knows and the object known
Practical Philosophy studies the truth to be acted upon
Sema sign/mark studies the meaning of words and its linguistic forms, their
Semantics
semantikos significant functions and their relationships to other words
axios worthy the discourse or study of the philosophy or system of value
Axiology judgements or worthiness; studies values, its origin, types and
logos discourse/study characteristics
one is perceptive of
things through his aims to establish the general principles of art and beauty; study
Aesthetics aisthetikos sensations, feelings of the beauty and art; emerged in the early 18th century
and intuitions

originally "the deals with the nature of thinking and reasoning using empirical
word" or "what is support to establish the truth; it is the study aimed at
Logic logos spoken"; coming to
determining the conditions under which one is justified in
mean "thought" or
"reason" passing from given statements , called premises, to a conclusion
that is claimed to follow from them
characteristic way
ethos of acting sometimes called a Moral Science or Moral Philosophy;
Ethics
manner, custom, philosophical science that studies the morality of human acts
mos/mores
usage or habit

What is Ethics?
 As a science – concerned with the analysis of the nature of the human conduct from the
point of view of morality. Meaning it does not only evaluate the morality of our human
conduct but also provides us with common understanding of the universal, subjective and
irreversible moral principles that should govern our human behavior and guide our moral
decisions.
o Two distinct and contradictory principles that operate within the structure of human
behavior:
 Man believes that there are certain things that should not do to anyone or to
others.
 Man believes that values are “subjective” and incapable of being disputed
between different individuals.
 Felix Montemayor (1994) Ethics: The Philosophy of Life
o the practical science of the morality of human acts
o a normative science based on reason which studies human conduct and provide
norms for its natural integrity and honesty
o practical science that guides us in our actions that we may live rightly and well
o the science which lays down the principles of right living
o the science of human acts with reference to right and wrong
o the scientific inquiry into the principles of morality

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  Involves the study of those standards and judgements which people create.
o Ethics assume that the standard exist and seeks to describe them, to evaluate them,
or to evaluate the premises upon which those standards exist.
 Basically investigates the nature of moral principles, ethical systems and moral norms that
people use to justify their moral judgements.
 E. Babor – ethics outlines the theories of right or wrong, good or bad actions
o vs. Morality – translates these theories into actions

Business Ethics
 Defined:
o the study of what is the right and wrong human behavior and conduct in business
o a study of perceptions of people about morality, moral norms, moral rules and
ethical principles as they apply to people and institutions in business
o the study, evaluation, analysis and questioning of ethical standards, policies, moral
norms and ethical theories managers and decision makers use in resolving moral
issues and ethical dilemmas affecting business
 Importance of ethics in business:
o common ground in our understanding of the fundamental idea of what is good and
what is bad in our human conduct
o manner in which business leaders and managers confront ethical issues and
problems affecting the flow and dynamism of business activities
o opens a novel way of resolving moral problems and ethical dilemmas affecting
business transactions
o enhance the human and interpersonal skills of managers so they can be more
effective in managing the human side of the organization
 The relationship between ethics and business
o Business is an integral part of human society. Therefore, the actions of
individuals and institutions in business must be subject to moral rules and
moral evaluation.
o Ethics provide us a clear distinction between morality and legality – “what is
legal may not necessarily be moral”.
o Laws are insufficient and sometimes absent or unclear in some areas of our
human conduct. Ethics is the unwritten law, written in the hearts of men. In
the absence of law, ethics will help us discern the correct conduct to follow
based on the dictated of conscience and reason.
 The businessman’s myths about business ethics:
o Ethics is a personal affair and not a public debatable matter
o Ethics and business do not mix
o Ethics in business is relative
o Good business means good ethics
o Business is a war

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 What is Morality?
 The quality of goodness (moral) or badness (immoral) in a human act.
 Conformity to the rules of right conduct.
 It implies judgement and refers to what we would call moral standards and moral conducts.
o vs. Ethics – used to refer to the formal study of those standards and conduct
 E. Babor – morality is nothing else but a doing of ethics
 Framework for moral reasoning:

Moral Norm
Ethical REALITY Moral Standard Moral
Issues / Company Policy
Problems CHECK Judgement
Ethical Principles

SITUATION PROBLEM DECISION

RESOLUTION
ANALYSIS ANALYSIS ANALYSIS

Examples: - gravity of offense - company rules /

Graft - frequency of offense policies - Moral or immoral
Sexual Harassment - harm done - ethical principles - Legal or illegal
Theft - number of people - codes of conduct
Bribery affected - moral norms
- cost

 Characteristics of a Good Moral Standard (Shaw, 1999)

o One that looks at the issue as something that is very serious.
o Grounded on good moral argument. A good argument is an argument that always
tells the truth. A solid moral argument leaved no room for loopholes and counter
arguments.
o Objective and not subjective. It should be universally accepted and should apply to
all.
o When violated, brings about feelings of guilt, shame and remorse of conscience.
 Requirements for a Good Moral Judgement
o Must be logical – decision maker must arrive at an informed resolution of the issue
based on logical reasoning
o Must be based on facts and solid evidence – information used in the process of
moral reasoning must not come from weak sources like hearsay, rumors and
grapevine
o Must be based on sound and defensible moral principles – weak ethical principle is
open to lot of criticisms

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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. As a science, however, ethics must
follow the same rigors of logical reasoning as the other sciences.

Ethics is a normative science because it involves a systematic search for moral principles and
norms that are used to justify our moral judgements. The formation of a sound moral
judgement presupposes a profound analysis and justification of an ethical principle or
theory.

Three Categories of General Ethics:

1. Descriptive Ethics
- consist of studying and describing the morality of a people, culture, or society
- makes comparisons and contrasts on the different values, principles, code of
ethics, beliefs, and practices of people
- serves as the foundation of Normative Ethics and provides a standard of the
morality of a people, culture or society
- closely related to Anthropology, Sociology and Psychology as these disciplines
aim to discover the moral beliefs held by a given society, group or organization
- it does not prescribe or attempt to assess the moral soundness of any ethical
system but only to describe objectively the values and beliefs of people
- example:
o Psychological Egoism – it says nothing about what is good or bad or right
or wrong, rather it simply declares results based on various scientific
studies. [human motivation]
o Cultural Relativism – does not describe how people should act, rather it
describes how people, when grouped and observed in their own cultural
realities, actually differ in their behavior. What is good or bad, moral or
immoral according to this theory is relative to the people’s own culture or
sets of cultural beliefs and practices.
- Descriptive ethics is very objective in studying human behavior but it does not
provide a clear standard of morality. It simply describes how people act and does
not prescribe how people should act.
2. Normative Ethics
- involves moral judgement based on ethical norm or theory
- consists of both 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
- three tasks of Normative Ethics are the following:
a. to form into a related whole the various norms, rules and values of a
society’s morality

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 b. to find the basic principle from which the particular norm can be derived
c. to justify an ethical norm or moral principle
3. Meta Ethics
- a branch of Normative Ethics
- in some other ways, both Normative and Descriptive Ethics involve some
metaethical activity
- concerned with analysis of the meaning of words and logic of moral reasoning
o ex. It analyzes moral terms like good, bad, moral, immoral, moral
obligation and the like
- does not describe moral beliefs of people, does not evaluate the process or moral
reasoning but simply analyzes the usage and meaning of words

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. An action may be right for one person or society and
the same action taken in the same way may be wrong for another reason, and yet, both
persons are equally correct. While ethical relativism emphasizes the differences of moral
beliefs and practices from the point of view of culture, situational ethics (or moral
subjectivism) emphasizes moral differences based on personal beliefs and convictions.

Approaches to Moral Differences:

a. There is No Moral Truth [Moral Nihilism]
- this philosophical perspective believes that there is no ultimate right or wrong
- moral nihilism is akin to moral skepticism which holds that we cannot know whether or
not there are moral truth
b. There is No Universal Moral Truth [Ethical Relativism]
- 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 ethical paradigm maintains that there are moral truths that exist but these truths are
relative and dependent on cultures and beliefs of people
c. Deep Down, We Can Find Basic Moral Truth [Soft Universalism]
- this philosophical perspective believes that despite differences, people of different
cultures can still agree on certain moral basics
- people find some common ground on basic moral principles
d. There is One Universal Moral Truth [Hard Universalism or Moral Absolutism]
- this moral paradigm maintains that there is only one universal moral code that
everybody must follow
- because this moral code is universal and objective, moral problems and moral conflicts
can be solved through proper moral reasoning

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