CHAPTER 2ETHICAL PRINCIPLES IN BUSINESS

JUSTICE AND FAIRNESS

BUSINESS ETHICS-CONCEPTS AND CASES

VIVIN VINCYASB

. 13–2

JUSTICE AND FAIRNESSJUSTICE AND FAIRNESS

Managers who are fair in their dealings are generally more successful in motivating their subordinates than those who are not. A reputation for being unfair or biased is surely going to be a liability for managerial success.

FAIR UNFAIR

13–3

TYPES OF JUSTICETYPES OF JUSTICE

DISTRIBUTIVE JUSTICE

– Requires distributing society’s benefits and burdens fairly.

RETRIBUTIVE JUSTICE

– Requires fairness when blaming or punishing persons for doing wrong.

COMPENSATORY JUSTICE

– Requires restoring to a person what the person lost when he or she was wronged by someone.

DISTRIBUTIVE JUSTICEDISTRIBUTIVE JUSTICE

JUSTICE AS EQUALITY: EGALITARIANEgalitarians hold that there are no relevant differences among people that can justify unequal treatment. According to the egalitarian, all benefits and burdens should be distributed according to the following formula:

“Every person should be given exactly shares of a society’s or a group’s benefits and burdens.”

EGALITARIANISMEGALITARIANISM

POSITIVES:

When workers in a group receive equal compensation, they tend to become more cooperative with each other and also feel greater solidarity with each other. This has been found to be more effective especially in collectivistic cultures.

EGALITARIANISMEGALITARIANISM

CRITICISMS: There is no quality that all human beings possess precisely in the same degree i.e they differ in their abilities, intelligence, virtues, etc. If everyone is given the same things, the lazy will get the same as the industrious one or a sick will get the same as the healthy one. The individuals will have no incentives to exert greater efforts in their work. When lazy get as much as the industrious ones it demoralizes the industrious ones which would lead to decline in society’s productivity and efficiency. On the other hand, if the society did not provide for the sick, the needy and the crippled ones, then the value of care for one another would be eroded.

POLITICAL EQUALITY

Equal participation in, and treatment by, the political system.

ECONOMIC EQUALITY

Equality of income, wealth, and opportunity.

EGALITARIANISMEGALITARIANISM

DISTRIBUTIVE JUSTICEDISTRIBUTIVE JUSTICE

JUSTICE BASED ON CONTRIBUTION: CAPITALIST JUSTICEAccording to capitalist view of justice, when people engage in economic exchanges with each other, what a person gets out of the exchange should be at least equal in value to what the person contributed. In a more simple statement:

“Benefits should be distributed according to the value of the contribution the individual makes to a society, a task, a group, or

an exchange.”

CAPITALIST JUSTICECAPITALIST JUSTICE

NEGATIVES:

When workers are paid in accordance to the principle of contribution, it tends to promote among them an uncooperative and competitive atmosphere in which resources and information are less willingly shared and in which status differences emerge.

The value of contribution of individual should be measured in terms of work effort. Contribution should be rewarded in terms of productivity.

PURITAN ETHIC

– The view that every individual has a religious obligation to work hard at his or her calling(the career to which god summons each individual).

WORK ETHIC– The view that values

individual effort and believes that hard work does and should lead to success.

PRODUCTIVITY– The amount an individual

produces or that a group produces per person.

CAPITALIST JUSTICECAPITALIST JUSTICE

DISTRIBUTIVE JUSTICEDISTRIBUTIVE JUSTICE

JUSTICE BASED ON NEEDS AND ABILITIES: SOCIALISM

According to this concept, work burdens should to be distributed according to people’s abilities and benefits should be distributed according to people’s needs.Work should be distributed in such a way that a person can be as productive as possible i.e. according to people’s abilities. The benefits produced should be used to promote human happiness and well being.The socialist view is based on the notion that societies should be communities in which benefits and burdens are distributed on model of a family.

SOCIALISM SOCIALISM

CRITICISMS:There would be no relation between the amount of effort a worker puts forth and amount of remuneration the worker receives. Hence workers would have no incentive to put forth any work efforts at all, knowing that they will receive the same regardless of whether they work hard.It is unrealistic to think that entire societies could be modelled on familial relationships as human beings are intrinsically self-interest motivated. The counter argument by the socialists is that human beings are not intrinsically selfish but are trained to acquire the selfishness and competitiveness by modern social and economic institutions.The socialist principle would eradicate individual freedom. There will be no freedom of choice but everything is decided based on abilities and needs.