Business Ethics Lecture by John Hooker

Introduction

• Presenter: John Hooker, Faculty at the TEPER School of Business, Carnegie Mellon University
• Purpose: Framework for analyzing ethical issues in business
• Premise: Ethical choices are rational and logical; not just about self-interest
• Content: Real-life case studies, historical context, and application

Outline

1. Why We Have Ethics
   • Purpose and common misconceptions
2. Historical Ethical Thought
   • 23 centuries of thought condensed into two sessions
3. Application to Real-Life Dilemmas
   • Practical application with case studies

Why We Have Ethics

• Assumption: Attendees want to be ethical, similar to how finance students want to make money
• Common Misconception: People act purely out of self-interest
  • Evidence: Research shows humans have altruistic tendencies (e.g., empathy due to mirror neurons)
• Role of Ethics: Rationalize our natural tendency to care for others to function in the real world

Misconceptions About Self-Interest

• Adam Smith: Misunderstood; he emphasized empathy in "The Theory of Moral Sentiments"; recognized both self-interest and regulation in "The Wealth of Nations"
• Historical Perspective: Mencius (Confucian disciple) argued that humans are naturally altruistic; used the example of saving a child in danger

The Job of Ethics

• Primary Function: Build rational consensus on caring for each other and living harmoniously
• Importance of Agreement: Essential for societal function; law enforcement alone is insufficient
  • Examples: Running red lights, breaking into homes
• Voluntary Compliance: Most people follow rules they agree with

Myths About Ethics

1. Myth: Ethics are learned as a child and it’s too late now

   • Fact: Ethical growth continues with cognitive maturity; successful leaders excel in ethical reasoning
   • Research: Lawrence Kohlberg - ethical development continues into the 60s

2. Myth: Sitting in class doesn’t change behavior

   • Fact: Education changes behavior by teaching how to accomplish goals

3. Myth: We already know what’s right and wrong

   • Fact: Constant disagreements show it’s not obvious

4. Myth: Ethics is just a matter of opinion

   • Fact: Ethics is about interpersonal values and building rational consensus

Western Approach to Ethics

• Rational consensus over 2300 years
• Example: Compliance with traffic laws we agree with, like not running red lights
• Religion and Ethics: Long tradition of rational ethical reasoning (e.g., Islam, Christianity, Judaism)

Tips for Objective Ethical Analysis

1. Ethics Judges Actions, Not People

   • Compares to a golf lesson: provides advice without personal judgment

2. Maintain Professional Distance

   • Leadership requires rational consensus and seeing all points of view

3. Learn to Analyze Ethical Issues

   • Importance of developing skills for ethical analysis

Conclusion

• Next Steps: Analyzing ethical issues in the next session
• Final Thought: Importance of ethical reasoning as a professional and leader