Business Ethics - A Philosophical and Behavioral Approach

Business Ethics - A

Philosophical

and Behavioral

Approach

Christian A. Conrad

Business Ethics - A Philosophical and Behavioral

Approach

Christian A. Conrad

Business Ethics - A

Philosophical and Behavioral

Approach

ISBN 978-3-319-91574-6 ISBN 978-3-319-91575-3 (eBook)

https://doi.org/10.1007/978-3-319-91575-3

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© Springer International Publishing AG, part of Springer Nature 2018

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Christian A. Conrad

University of Applied Science

Hochschule für Technik und Wirtschaft des Saarlandes

Saarbrücken, Germany

Translated by Danica Webb

Hotchkiss, CO, USA

v

Foreword

This book is the result of more than 12 years of professional experience in a large

German bank, where I often worked with the management of international compa￾nies as a business consultant. The time period of this experience included the boom

and crash at the beginning of the new millennium and the financial crisis. These

practical impressions led to the conviction that there is a problem with ethics in the

economy and that the lack of ethics is not only harmful to people but also leads to

serious productivity losses. As a result, I have held seminars on business ethics in

the bachelor’s and master’s degree at the University of Applied Science HTW in

Saarbrücken. This teaching experience was incorporated into this book as well as an

extensive literature study.

I would like to thank Ms. Danica Webb (USA) for the translation of the major

part of this book.

Saarbrücken, Germany Christian A. Conrad

April 2018

vii

Introduction

The question of whether or not there is a need for ethics in business is still a scien￾tific discussion. However, in the context of the 2000 Enron crisis, the first doubts

arose as to whether a business enterprise without morality could work. Since the

financial crisis that began in 2007, the economy and business administrations are

increasingly confronted with the demand for more social responsibility. A common

feature of the crises was the immoral enrichment efforts of managers at the expense

of their companies and the system, and thus society. The market economy system

places the individual at the forefront of economic value creation and grants him a

great freedom of development. The pursuit of self-interest is intended to ensure the

greatest possible motivation for the individual, and thus a maximum result for the

general public seems to work less and less.

The central question to be answered in this textbook is the extent to which moral

values play a role as productive forces for the economy. Our underlying method is a

scientific approach. In this case, no normative approach is deliberately pursued and

a morality is not demanded a priori by the economy. This morality would have to be

subjectively and culturally relativized and could therefore claim no universality.

Moral values in themselves, such as the dignity of man, should not be regarded as a

requirement profile without logical reasoning, although they have a high target pri￾ority. Normative, moral, perhaps even emotional-related goals such as justice should

be mentioned, but should not be used for argumentation when they are not

productivity-enhancing. The aim is the optimal development of the productive

forces in companies and national economy, i.e., the simple increase in welfare

through output maximization while taking into account the welfare of all parties

involved. A system of ethics founded purely on logic will be devised, one which

stimulates the productive forces of the market economy. The aim is to reveal the

ethics implied by the market economy, an ethics that can also claim international

validity for the globalized economy. We hope to justify and promote ethics objec￾tively and thus convincingly.

The term “business ethics” encompasses, according to the international standard,

the ethics of companies in the business sector (meso level, corporate ethics, organi￾zational ethics), managerial ethics in companies (micro level, personal ethics), and

viii

even ethics within the national economic framework (systemic level, economic eth￾ics). The goal is to create a textbook for business ethics from the many ethical

approaches and partly also from different conceptual uses. The aim is to show how

ethics improves productivity in the economy. For practical application, specific eth￾ics tools are provided.

In order to work out how people behave ethically and unethically and how this

affects the economy, this book refers to newer research results from behavioral eco￾nomics, but also from other disciplines such as psychology and sociology, thus lead￾ing to new conclusions for business ethics. The knowledge relevant to the students

is first derived scientifically, and then the results are presented as summarized. After

the ethical assessment approaches have been explained, the students are given an

ethical assessment of economic behavior using case studies. Role-playing and

games are also used to explain the behavior of people in relation to ethics.

The book begins with the foundations of business ethics by defining terms and

delineating objectives. The importance of ethics for business, the economy, and the

society is also discussed here. Then the ethical evaluation approaches are presented,

which are intended to enable the reader to evaluate economic behavior ethically.

Man in business is the next chapter. Here we will deal with man and his behavior.

What motivates him? To what extent is it ethically oriented? Is there a sense of jus￾tice? Next, we will discuss the rules of the market. Does the market economy pro￾mote ethical behavior or is there a conflict of goals between ethics and market

economy? Do companies have a social responsibility? We note that the answers to

these questions are very much dependent on the legal framework of economic activ￾ity. In an economic anarchy, ethical behavior cannot be expected either by the com￾panies or by the individual actors, which is why we turn to ethics as an ordinance.

Here, the state as an actor has an important role to play. After analyzing the impor￾tance of ethics for productivity in the enterprise and in the economy, we present

so-called ethics tools as the instruments with which the management can promote

ethical behavior in their employees. The book concludes with an outlook and rec￾ommendations on business ethics as a discipline as part of economic education.

Introduction

ix

Contents

1 Basic of Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1.1 Basic Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1.2 What Is Business Ethics? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

1.3 Objective of Business Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

2 Ethical Valuation Approaches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

2.1 Classical Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

2.1.1 Ethics of Conviction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

2.1.2 Kant’s Rules for Ethical Reasoning . . . . . . . . . . . . . . . . . . . 13

2.1.3 Ethics of Duties (Deontological Ethics) . . . . . . . . . . . . . . . 15

2.1.4 Ethics of Responsibility or Ultimate

End (Teleological Ethics) . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

2.1.5 The Utilitarianism of Jeremy Bentham . . . . . . . . . . . . . . . . 22

2.1.6 Millian Utilitarianism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

2.1.7 Individual Ethics or Discourse Ethics? . . . . . . . . . . . . . . . . 25

2.2 Modern Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

2.2.1 Moral Economics: Morality Must Be Worthwhile . . . . . . . 32

2.2.2 Specific Ethical Assessment Principles . . . . . . . . . . . . . . . . 36

2.2.3 Justice as an Assessment and Behavioral Approach . . . . . . 38

2.3 Conclusion on Ethical Evaluation Procedures . . . . . . . . . . . . . . . . . 40

2.4 Application Examples . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

2.5 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

3 The Image of Humans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

3.1 The Classical View of Man: Homo Economicus . . . . . . . . . . . . . . . 47

3.2 Falsely Understood Egoism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

3.3 Individualism Versus Collectivism . . . . . . . . . . . . . . . . . . . . . . . . . . 52

3.3.1 Rolegame Individualism Versus Collectivism . . . . . . . . . . . 52

3.4 Fairness As Motivation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

3.5 Human Intelligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

x

3.6 The Cultural Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

3.7 Conclusion and Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

Literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

4 Ethical Problems of the Economy: Enron, Subprime

& Co. – From Crisis to Crisis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

4.1 Enron, Worldcom and Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

4.1.1 The Consequences of Enron, Worldcom & Co. . . . . . . . . . . 72

4.2 The Subprime Crisis, the Biggest Financial Crisis After 1929 . . . . 73

4.3 Some Causes of the Financial Crisis . . . . . . . . . . . . . . . . . . . . . . . . 81

4.3.1 Technical Mistakes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

4.3.2 Exaggerated Belief in Figures . . . . . . . . . . . . . . . . . . . . . . . 86

4.3.3 Missing Moral Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90

4.4 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

Literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

5 Market and Morality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

5.1 Economy and Freedom – A Historical Overview . . . . . . . . . . . . . . 99

5.2 A Free-Market Without Social Rules? . . . . . . . . . . . . . . . . . . . . . . . 105

5.3 The Russian Transformation to an Unethical Market Economy . . . 106

5.4 How Does the Market Economy System Work? . . . . . . . . . . . . . . . 111

5.4.1 The Picture of the Perfect Market in the Welfare

Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112

5.4.2 Functions of Competition . . . . . . . . . . . . . . . . . . . . . . . . . . 114

5.4.3 Moral Goals and Market Economy . . . . . . . . . . . . . . . . . . . 118

5.4.4 Social Market Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124

5.5 Market Failure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129

5.5.1 Market Failure Due to Non-exclusion . . . . . . . . . . . . . . . . . 129

5.5.2 Market Failures Due to Asymmetrical Information . . . . . . . 130

5.5.3 Market Failure Due to Transaction Costs . . . . . . . . . . . . . . 133

5.5.4 Market Failure Due to External Effects . . . . . . . . . . . . . . . . 139

5.5.5 Market Failure Due to Corruption . . . . . . . . . . . . . . . . . . . . 140

5.6 Morality Within the Economic Division of Labor . . . . . . . . . . . . . . 146

5.7 The Company in the Market System . . . . . . . . . . . . . . . . . . . . . . . . 154

5.7.1 The Company’s Objective of Maximizing Profits . . . . . . . . 154

5.7.2 Weaknesses in Controlling . . . . . . . . . . . . . . . . . . . . . . . . . . 157

5.7.3 Corporate Social Responsibility . . . . . . . . . . . . . . . . . . . . . 158

Literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165

6 Institutional Ethics: The State Regulatory Framework . . . . . . . . . . . 171

6.1 The Ethical Prisoner Dilemma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171

6.2 Ethical Institutions and Organizations . . . . . . . . . . . . . . . . . . . . . . . 173

6.3 Is the State of Law Sufficient? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175

6.4 International Business Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178

6.4.1 Non-Governmental Organizations or Civil

Society Groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179

Contents

xi

6.4.2 International Quality Seals . . . . . . . . . . . . . . . . . . . . . . . . . . 179

6.4.3 Incentives to Overcome the International Prisoner’s

Dilemma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180

6.4.4 International Ethical Codes . . . . . . . . . . . . . . . . . . . . . . . . . 181

Literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184

7 Tools of Ethics for Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185

7.1 Institutional Ethics on Company Level . . . . . . . . . . . . . . . . . . . . . . 185

7.1.1 Corporate Principles and Vision . . . . . . . . . . . . . . . . . . . . . 185

7.1.2 Operative and Strategic Targets . . . . . . . . . . . . . . . . . . . . . . 189

7.1.3 Code of Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191

7.1.4 Ethical Control Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193

7.1.5 The Ethical Aspects of the Shareholder Value Concept . . . . . 196

7.1.6 Ethical Stakeholder Approach . . . . . . . . . . . . . . . . . . . . . . . 201

7.2 Organizational Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209

7.2.1 Organizational Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . 210

7.2.2 Ombudspersons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216

7.2.3 Ethics Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217

7.2.4 Ethics Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217

7.2.5 Whistleblowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218

7.3 Leadership Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222

7.3.1 Case Study of Enron . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223

7.3.2 Weaknesses of Corporate Governance . . . . . . . . . . . . . . . . . 223

7.3.3 Incentives, Risk and Compensation Schemes . . . . . . . . . . . 228

7.3.4 Ethical Corporate Culture . . . . . . . . . . . . . . . . . . . . . . . . . . 246

7.3.5 Ethical Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267

7.3.6 The Ethical Model of Company Management . . . . . . . . . . . 281

7.4 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297

7.4.1 Ethical Staff Selection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297

7.4.2 Ethical Personnel Development . . . . . . . . . . . . . . . . . . . . . . 309

Literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 318

8 Ethics in Business Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 327

8.1 Cultural Factors in Economics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 327

8.2 Economics as a Natural Science? . . . . . . . . . . . . . . . . . . . . . . . . . . 330

8.3 Ethics in Business Administration . . . . . . . . . . . . . . . . . . . . . . . . . . 333

Literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 339

Contents

xiii

About the Author

Prof. Dr. Christian A. Conrad teaches economics and business ethics at Saarland

University of Applied Science HTW. He published several books and papers about

ethics, business, economics and financial markets. He was previously Senior Key

Account Manager in the national and international corporate department of a major

German bank.

© Springer International Publishing AG, part of Springer Nature 2018 1

C. A. Conrad, Business Ethics - A Philosophical and Behavioral Approach,

https://doi.org/10.1007/978-3-319-91575-3_1

Chapter 1

Basic of Ethics

What Follows Why?

In addition to your business and economic courses, this chapter will provide you

with the concepts and the starting point of the applied discipline of business ethics.

Learning Goals

Students should be able to describe the basics of business ethics in their own words.

1.1 Basic Terms

Business ethics investigates the connections between ethics and economy, or to put

it more simply, moral behavior in the economy and in particular the importance of

moral behavior for the economy. Under the term “economy” we understand the

system that produces goods and services to fullfil the needs of a society. Do econ￾omy and ethics go together at all? Is it possible to measure economic contexts with

criteria such as good and evil? At first glance this seems unrealistic. Economy is

something abstract, subject to its own laws. How can one differentiate between

good and evil? Many people have tried to answer the last question, without having

been able to develop a universally applicable definition of good and evil. The dif￾ferentiation and designation of good and evil is greatly dependent on one’s point of

view, but one can speak to general tendencies. We almost always use good and evil

in relation to the effect on a third party. An action is good if it is advantageous for

others, and bad if it is harmful. It is impossible to reach a differentiation without

addressing the relationship to an advantage or benefit. Societal norms and values are

created in a process of trial and error, or cultural evolution. They express the behav￾ior a society desires because it is advantageous for the society and its members.

Behavior considered by the society to be positive is rewarded with social approval.

On the other hand, negative behavior damaging to a society is punished through

social exclusion or through the justice system as societal institutions. We say people

2

are good if they bring benefit to other people and evil if they are harmful. The cat￾egorical imperative from the famous philosopher Immanuel Kant will be discussed

later in detail as an example that expresses the same idea; act in such a way that your

behavior could be the basis for a universal law. One could also follow the golden

rule; do unto others, as you would have them do unto you. This we would consider

moral behavior.

We can transfer this idea to the economy. Economics is a relatively abstract con￾cept due to its complexity, yet the institutions and organizations were created by

humans, for humans. An ethics of economics is thus legitimate if it asks whether the

people acting economically and/or the institutions and organizations are good

because they are good for the community. An ethics of economics can thus be

reduced to the question of what economic actions, or the economy as a whole or in

part, offers the society. Ethics in economics thus places people above the economy,

and assumes that the economy should serve the people.

Moral or ethical is therefore to be defined in the following book as a human

behavior that does not harm other people (living beings) objectively, and that their

welfare is not diminished (definition).

It is conceivable that the agent did not intend this effect, that is, his mind was not

moral. We also do not exclude that the action was objectively beneficial for the other

person, but he does not care. For example, it would certainly be wrong to say that to

give someone €100 is not moral only because he is a millionaire. Active action is not

a prerequisite for unethical behavior. Inaction can be considered unethical, for

example, if one does not help someone in an emergency situation.

Because we need an objective assessment criterion, our definition of moral dif￾fers from the common use of “moral” as the subjective viewpoint of society. Our

definition of moral therefore also differs as an adjective from the corresponding

noun “morality”.

The word “morality” comes from the Latin: the custom (Lat: mos, mores custom,

customs). According to this, morality depends on the time, that is to say, it is subject

to fluid societal trends, as well as dependent on the particular culture, that is, from

country to country. The applicable law covers only a part of these standards.

Norms are social behavioral guidelines (definition).

For instance: Do not smoke if others are eating. Respect the property of others,

etc. The elementary norms are incorporated into the laws of a society.

Empirical studies show that apart from the damage caused by an action, the

social norms, or the ethical consensus, are decisive for whether a person behaves

ethically or unethically.1

For sociology, norms are the unwritten rules that make the conflict-free coexis￾tence of many people in a society possible. Unclear or missing norms lead to

anomie-producing situations, meaning a lack of social integration. Too much or too

restrictive of norms cause special stress situations and contradictory norms create

norm conflicts. If a society has many different groups or sub-societies (pluralistic

1See Singhapakdi, A./Vitell, S. J./Kraft, K. L. (1996); Frey, B. F. (2000) and Butterfield, K. D./

Treviño, L. K./Weaver, G. R. (2000).

1 Basic of Ethics

3

society), it will also have many different and conflicting norms, as each sub-society

has its own norms. If a person moves in different sub-groups he must inevitably

violate the behavior norms of the sub-groups. This applies not only to immigration

but also between generations. A youth must behave according to the rules of his age

group in order to be recognized there, but he is also dependent on the acceptance of

his parents. And there are other norms of behavior. In contrast to norms, conventions

are voluntary agreements between people, for instance the terms for objects in a

language, or shaking hands with greetings.

What is ethics? The Roman Cicero (born January 3, 106 BC in Arpinum, †

December 7, 43 BC at Formiae) translated the Greek term êthikê (ethics) with phi￾losophia moralis. Thus ethics is the philosophy of morality.2

Ethics (from the ancient

Greek “ta ethika”, translated as the moral doctrine) is then the science of morality,

whereby the goal of this science as part of philosophy (the friend of wisdom) is to

regulate the world and in particular the behavior of man. To investigate what

includes not only the being of man, but how he should be in the world. For us, ethics

answers the question of how we should behave properly. It is also called practical

philosophy. So, ultimately, it is no more and no less than the meaning of life and the

meaning of our existence as human beings. We want to understand ethics as the sci￾ence of the analysis and assessment of human behavior with effects on third parties

or all living beings.

Ethics can be described as descriptive, normative, but also as a method of teach￾ing. The latter form searches for the way “to enter the laws of pure practical reason

into the human mind, to influence the maxims. The objective-practical reason can

also make subjectively practical.”3

Material ethics, which is concretely evaluated, examines which behavior is moral

and can be differentiated from formal ethics, which provides methods for how moral

behavior can be generated or determined. An example of formal ethics would be the

rule that a just, and thus moral division of a single cake would be for the first person

to cut the cake into two pieces and then the second one to select their piece.4

The term ethos is used when the individual chooses a part of morality as a basis

for action, thus internalizes it (definition).5

Virtues (definition), on the other hand,

are practiced and internalized dispositions of inner attitudes, to do good, to behave

ethically (definition). The Cardinal Virtues of Socrates and Plato were bravery, pru￾dence, wisdom and justice. Virtues correspond to characteristics and are related to

the persons. Aristotle (384–322 BC) concluded here by formulating “virtue is the

way to happiness (eudaimonia)”. Christian ethics supplemented these virtues by

three more: faith, love, and hope.6

The heavenly virtues (and the contrary vices) of the Occidental Middle Ages

were widespread by the musical work of Hildegard of Bingen in the Christian West

2See Ritter, Joachim /Gründer, Karlfried/Gabriel, Gottfried (1984), p. 149.

3Kant, Immanuel (1788), p. 269.

4See Göbel, Elisabeth (2010), pp. 45.

5See Schmidt, Heinrich (1982), p. 172 and Göbel, Elisabeth (2010), p. 10.

6See Götzelmann, Arnd (2010), pp. 17 and Schmidt, Walter (1986), p. 40.

1.1 Basic Terms

4

of the Middle Ages: humility (arrogance), benevolence (avarice, greed), abstinence

(lewdness), moderation (gluttony), goodwill (envy), diligence (laziness), patience

(anger).7

Faithfulness, efficiency, consistency, thriftiness, reliability, cleanliness, punctu￾ality, diligence, conscientiousness, patience, order and self-discipline are called sec￾ondary virtues. They have the nickname “secondary” because they are not directly

moral, but are useful to society and are necessary for the implementation of moral

actions. A good intention, such as caring for the elderly, cannot have a moral effect

if discipline is lacking, and the care must be clean, punctual and orderly so that the

old do not suffer any harm. In general, it is also possible to paraphrase the secondary

virtues with a certain degree of certainty and reliability, which enables the good and

expected implementation of a moral action. Secondary virtues are therefore also

referred to as work ethos.8

Duties, goods and values are the basis of ethical action. Values are the highest

guiding principles of human behavior. They can apply to groups or individuals.

These conscious or unconscious orientation standards are the goal of all goods.

Values are the fundamental conceptions of the desirable.

Values are positive occupied guidance (goals) for behavioral orientation (defini￾tion). A good example are the three values of the French Revolution: égalité, frater￾nité and liberté. Values that are relevant to the company or the economy are, for

example, reliability, honesty, etc.

Values can apply to groups or individuals. These conscious or unconscious ori￾entation standards are the goal of all goods. A successful life is the supreme value

of Aristotle. (Born 384 BC in Stageira, † 322 BC in Chalkis).

Group Discussion: Value Clarification

Write your most important values in turn on a sheet in your script. In the following,

your lecturer will help you to become aware of your most important values through

open questions. This is called value clarification. Do you think that these values

should also apply in the business world?

What are the most important values for you when dealing with people? The open

method of questioning is named after Socrates’ Socratic conversation. By discuss￾ing in the group, a group consensus can be established. Unlike television talk shows,

it is not important to be right or to be good for the other participants, but to find the

truth for themselves and the group.

Socrates applied a special open questioning technique to move people to self￾knowledge (Socratic method, mäeutics, or even midwifery). It has been called mid￾wifery because the questions raised something from the interviewees that had

already been inside of them. This is a philosophical dialogue in order to gain an

insight in an open-ended research process. A result of Socrates’s ethics research is

that the right action follows from the right insight. Moreover, according to Socrates,

7See Kirste, Reinhard and von Bingen, Hildegard.

8See Leisinger, Klaus M. (1997), p.  144 and http://www.familie.de/eltern/sekundaertugenden￾foerdern-moral-538569.html

1 Basic of Ethics