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Business Ethics MGT610

LESSON 06

MORAL RESPONSIBILITY AND BLAME

Moral Responsibility and Blame

Moral responsibility is directed not only at judgments concerning right or wrong. Sometimes,

they are directed at determining whether a person or organization is morally responsible for

having done something wrong. People are not always responsible for their wrongful or

injurious acts: moral responsibility is incurred only when a person knowingly and freely acts in

an immoral way or fails to act in a moral way.

Ignorance and inability to do otherwise are two conditions, called excusing conditions, that

completely eliminate a person's moral responsibility for causing wrongful injury. Ignorance and

inability do not always excuse a person, however. When one deliberately keeps oneself

ignorant to escape responsibility, that ignorance does not excuse the wrongful injury. A person

is morally responsible for an injury or a wrong if:

1. The person caused or helped cause it, or failed to prevent it when he could and should have;

2. The person did so knowing what he or she was doing;

3. The person did so of his own free will.

Ignorance may concern the relevant facts or the relevant moral standards. Generally, ignorance

of the facts eliminates moral responsibility. This is because moral responsibility requires

freedom, which is impossible in the case of ignorance of the relevant facts. Inability eliminates

responsibility because a person cannot have a moral obligation to do something over which he

or she has no control. A person is NOT morally responsible for an injury or a wrong if:

1. The person did not cause and could not prevent the injury or wrong;

2. The person did not know he was inflicting the injury or the wrong;

3. The person did not inflict the injury or the wrong of his own free will;

In addition to the excusing conditions, there are also three mitigating factors that diminish

moral responsibility. They are:

1. Circumstances that leave a person uncertain (but not unsure) about what he or she is

doing;

2. Circumstances that make it difficult (but not impossible) for the person to avoid doing it;

3. Circumstances that minimize (but do not remove) a person's involvement in an act.

The extents to which these mitigating circumstances can diminish an agent's responsibility

depend on the seriousness of the injury. Generally, the more serious the injury, the less the

mitigating circumstances will diminish responsibility.

We begin with a discussion of apartheid-era South Africa and Caltex, an American oil

company operating in South Africa during that time. A large number of Caltex stockholders

opposed the company's operations in South Africa, and introduced a series of shareholder

resolutions requiring Caltex to leave South Africa, which they saw as racist and immoral.

Caltex's management did not agree. Rather than focusing on the financial assistance they were

giving the South African government, they pointed to the positive effects their operations had

on black workers.

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Business Ethics MGT610

South African leaders, such as Archbishop Desmond Tutu, were not convinced by Caltex's

arguments. He supported the shareholder resolutions, saying that comfort under an immoral

regime was not preferable to freedom, even at the cost of economic hardship.

The point of this example is to show how a real moral debate in business works. The arguments

on both sides appealed to moral considerations and four basic types of moral standards:

utilitarianism, rights, justice, and caring. The shareholders' argument referred to the unjust

policies of the apartheid government and the fact that these policies violated the civil rights of

black citizens. On the other side, Caltex's management made utilitarian arguments and

arguments about caring: it was in blacks' best interests to have Caltex jobs, and Caltex had a

duty to take care of these workers as best it could. In addition, both sides refer to the moral

character of the groups involved, basing these distinctions on what is called the ethic of virtue.

The following sections of this chapter explain each of these approaches, identifying their

strengths and weaknesses and showing how they can be used to clarify the moral issues we

confront in business.

Utilitarianism: Weighing Social Costs and Benefits

Utilitarianism (or consequentialism) characterizes the moral approach taken by Caltex's

management. Another example, Ford and its infamous Pinto, demonstrates just how closely the

weighing of costs and benefits can be done.

Ford knew that the Pinto would explode when rear-ended at only 20 mph, but they also knew

that it would cost $137 million to fix the problem. Since they would only have to pay $49

million in damages to injured victims and the families of those who died, they calculated that it

was not right to spend the money to fix the cars when society set such a low price on the lives

and health of the victims. The kind of analysis that Ford managers used in their cost-benefit

study is a version of what has been traditionally called utilitarianism. Utilitarianism is a

general term for any view that holds that actions and policies should be evaluated on the basis

of the benefits and costs they will impose on society. In any situation, the "right" action or

policy is the one that will produce the greatest net benefits or the lowest net costs (when all

alternatives have only net costs).

Many businesses rely on such utilitarian cost-benefit analyses, and maintain that the socially

responsible course to take is the utilitarian one with the lowest net costs.

Jeremy Bentham founded traditional utilitarianism. His version of the theory assumes that we

can measure and add the quantities of benefits produced by an action and subtract the measured

quantities of harm it will cause, allowing us to determine which action has the most benefits or

lowest total costs and is therefore moral. The utility Bentham had in mind was not the greatest

benefit for the person taking the action, but rather the greatest benefit for all involved. For

Bentham:

"An action is right from an ethical point of view if and only if the sum total of

utilities produced by that act is greater than the sum total of utilities produced by

any other act the agent could have performed in its place."

Also, it is important to note that only one action can have the lowest net costs and greatest net

benefits.

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Business Ethics MGT610

To determine what the moral thing to do on any particular occasion might be, there are three

considerations to follow:

1. You must determine what alternative actions are available.

2. You must estimate the direct and indirect costs and benefits the action would produce

for all involved in the foreseeable future.

3. You must choose the alternative that produces the greatest sum total of utility.

Utilitarianism is attractive to many because it matches the views we tend to hold when

discussing governmental policies and public goods. Most people agree, for example, that when

the government is trying to determine on which public projects it should spend tax monies, the

proper course of action would be for it to adopt those projects that objective studies show will

provide the greatest benefits for the members of society at the least cost. It also fits in with the

intuitive criteria that many employ when discussing moral conduct. Utilitarianism can explain

why we hold certain types of activities, such as lying, to be immoral: it is so because of the

costly effects it has in the long run. However, traditional utilitarian's would deny that an action

of a certain kind is always either right or wrong. Instead, each action would have to be weighed

given its particular circumstances. Utilitarian views have also been highly influential in

economics. A long line of economists, beginning in the 19th century, argued that economic

behavior could be explained by assuming that human beings always attempt to maximize their

utility and that the utilities of commodities can be measured by the prices people are willing to

pay for them.

Utilitarianism is also the basis of the techniques of economic costbenefit analysis. This type

of analysis is used to determine the desirability of investing in a project (such as a dam, factory,

or public park) by figuring whether its present and future economic benefits outweigh its

present and future economic costs. To calculate these costs and benefits, discounted monetary

prices are estimated for all the effects the project will have on the present and future

environment and on present and future populations. Finally, we can note that utilitarianism fits

nicely with a value that many people prize: efficiency. Efficiency can mean different things to

different people, but for many it means operating in such a way that one produces the most one

can with the resources at hand.