Advertisement

Journal of Business Ethics

, Volume 60, Issue 4, pp 393–410 | Cite as

Business Ethics versus Economic Incentives:Contemporary Issues and Dilemmas

  • Praveen Kulshreshtha
Article

Abstract

Contemporary economic thought presumes that individuals in a society always act according to their self-interest or private economic incentives, while important ethical motivations for action, such as a concern for others and public interest, are largely ignored. This paper is based on my experience of teaching an undergraduate course that highlighted the divergence between economic incentives and ethical motives for action in present-day life and business. Teaching tools such as lectures, case and group discussions were employed to address important ethical dilemmas of individuals and managers in contemporary societies. Readings underscored the evolving relationship of business ethics and economic incentives, and the relevance of ancient ethical principles (e.g., Ethics of Interdependence, and Ethics of Prudence and Self-Development) to present-day business ethics. The course emphasized the imminent need in contemporary societies to reduce the divergence between economic incentives and ethical motives for action, and called for a greater understanding of business ethics today, given the complex ethical concerns that managers confront in the current global environment.

Keywords

business ethics economic incentives ethical dilemmas ethics of interdependence ethics of prudence and self-development 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Baumol, W. J., Blackman, S. A. B. 1991Perfect Markets and Easy Virtue: Business Ethics and the Invisible HandBlackwellCambridge, MA and OxfordGoogle Scholar
  2. Baumol, W. J., Oates, W. E. 1993‘The Range of Policy Instruments’, Economics, Environmental Policy and the Quality of LifeGregg RevivalsAldershot, UK217229Google Scholar
  3. Becker G. S. 1968, ‘Crime and Punishment: An Economic Approach’, Journal of Political Economy 76 (March/April), 169–217.Google Scholar
  4. Benjamin, D.K., Miller, R.L. 1991‘Drug Test and Answers to Drug Test’, Undoing Drugs: Beyond LegalizationBasic BooksNew York23Google Scholar
  5. Benson, B. L. and D. W. Rasmussen: 1995, ‘The Opportunity Cost of Crime’, in M. Parkin (ed.), Economic Times: An Economic Journal of World Events (Addison-Wesley, Reading, MA) 4(1), 15–18.Google Scholar
  6. Collins, S.: 1995, ‘Cost of Crime: $674 Billion’ (compiled from U. S. News and World Report, January 17, 1994), in M. Parkin (ed.), Economic Times: An Economic Journal of World Events (Addison-Wesley, Reading, MA) 4(1), 13.Google Scholar
  7. Commoner, B. 1990‘At War with the Planet’, Making Peace with the PlanetPantheon BooksNew York318Google Scholar
  8. Covey, S. R. 1989The Seven Habits of Highly Effective People: Restoring the Character EthicSimon and SchusterLondonGoogle Scholar
  9. Covey, S. R. 1992Principle-Centered LeadershipSimon and SchusterLondonGoogle Scholar
  10. Cowan, R., Rizzo, M. J. 1995Profits and MoralityThe University of Chicago PressChicago and LondonGoogle Scholar
  11. Drucker, P. F. 1981‘What is ‘Business Ethics’?’The Public Interest631836Google Scholar
  12. Eatwell, J. 1998‘Ethics and Self-Interest’Jones, I.Pollitt, M. eds. The Role of Business Ethics in Economic PerformanceMacmillan, Hampshire and London and St Martin’s PressNew York2130Google Scholar
  13. Elster, J. 1989‘Social Norms and Economic Theory’Journal of Economic Perspectives399117Google Scholar
  14. Evensky, J. 1993‘Ethics and the Invisible Hand’Journal of Economic Perspectives7197205Google Scholar
  15. Farber D. A. 1986 ‘Abortion Economics’, The New Republic, July 14 and 21, 15–16.Google Scholar
  16. Farina, F.Hahn, F.Vannucci, S. eds. 1996Ethics, Rationality, and Economic BehaviorClarendon PressOxford, New YorkGoogle Scholar
  17. Frank, R. H. 1985‘Why do Ethical Systems Try to Limit the Role of Money?’, Choosing the Right Pond: Human Behavior and the Quest for StatusOxford University PressNew York178197Chapter 10Google Scholar
  18. Frank, R. H. 1988Passions Within Reason: The Strategic Role of the EconomicsW. W. Norton and CompanyLondon, New YorkGoogle Scholar
  19. Frank, R. H. 1988a‘Beyond Self-Interest’, Passions Within Reason: The Strategic Role of the EconomicsW. W. Norton & CompanyLondon, New York119Google Scholar
  20. Frank, R.H. 1988a‘Beyond Self-Interest’, Passions Within Reason: The Strategic Role of the EmotionsW. W. Norton and CompanyLondon New York119Google Scholar
  21. Frank, R. H. 1988b‘The Altruism Paradox’, Passions Within Reason: The Strategic Role of the EmotionsW. W. Norton and CompanyLondon New York2042Google Scholar
  22. Frank, R. H. 1988c‘A Theory of Moral Sentiments’, Passions Within Reason: The Strategic Role of the EmotionsW. W. Norton and CompanyLondon New York4370Google Scholar
  23. Frank, R. H. 2003What Price the Moral High Ground?: Ethical Dilemmas in Competitive EnvironmentsPrinceton University PressPrinceton, NJGoogle Scholar
  24. Frank, R. H., Gilovich, T., Regan, D. T. 1993‘Does Studying Economics Inhibit Cooperation?’Journal of Economic Perspectives7159171Google Scholar
  25. Graves P.E. (1995) ‘Statute Revision: Economical Approach to Crime Reduction’, in M. Parkin (ed.), Economic Times: An Economic Journal of World Events (Addison-Wesley, Reading, MA) 4(1), 19–21.Google Scholar
  26. Hammond, P. 1975‘Charity: Altruism or Cooperative Egoism?’Phelps, E. eds. Altruism, Morality and Economic TheoryRussell Sage FoundationNew YorkGoogle Scholar
  27. Hammond, P. 1987‘Altruism’Eatwell, J.Milgate, M.Newman, P. eds. The New Palgrave, A Dictionary of EconomicsMacmillanLondonGoogle Scholar
  28. Hardin, G. 1971‘The History and Future of Birth Control’Ray, J. D.,Jr.Nelson, G. E. eds. What a Piece of Work is Man.Little, Brown and CompanyBoston286301Google Scholar
  29. Hausman, D. M., McPherson, M. S. 1993‘Taking Ethics Seriously: Economics and Contemporary Moral Philosophy’Journal of Economic Literature31671731Google Scholar
  30. Hausman D. M. and M. S. McPherson 1996 ‘Rationality, Norms and Morality’, Economic Analysis and Moral Philosophy (Cambridge University Press), 51–64.Google Scholar
  31. Hume B.: 1997 ‘Aborting the Issue’, Brit Hume on Washington (Fox News Network), March 21.Google Scholar
  32. Jones, I.Pollitt, M. eds. 1998The Role of Business Ethics in Economic PerformanceMacmillan, Hampshire and London, and St. Martin’s PressNew YorkGoogle Scholar
  33. Lewis, A.Warneryd, K.-E. eds. 1994Ethics and Economic AffairsRoutledgeLondonGoogle Scholar
  34. Liddy, U. 1995‘The Ethics of Abortion’Social Alternatives143133Google Scholar
  35. Meeks J. G. T. (eds) 1991, Thoughtful Economic Man: Essays on Rationality, Moral Rules and Benevolence (Cambridge University Press).Google Scholar
  36. Miron, J. A.: 1995, ‘The Economic Effects of Drug Prohibition’, in M. Parkin (ed.), Economic Times: An Economic Journal of World Events (Addison-Wesley, Reading, MA) 4(1), 8–11.Google Scholar
  37. Moore, S. 1992‘So Much for Scarce Resources’The Public Interest10697107Google Scholar
  38. Nadelmann, E. A. 1988‘The Case for Legalization’The Public Interest92331Google Scholar
  39. Paul, E. F.Paul, J.Miller, F. D. eds. 1985Ethics and EconomicsBlackwellOxfordGoogle Scholar
  40. Phelps, E. eds. 1975Altruism, Morality and Economic TheoryRussell Sage FoundationNew YorkGoogle Scholar
  41. Pollock, J. M. 1994a‘Ethical Dilemmas – Ethics in Business’, Ethics in Crime and Justice: Dilemmas and DecisionsWadsworth, Inc.Belmont, CA11Situation 2.Google Scholar
  42. Pollock, J. M. 1994b‘Ethical Dilemmas – Crime’, Ethics in Crime and Justice: Dilemmas and DecisionsWadsworth, Inc.Belmont, CA11Situation 3.Google Scholar
  43. Pollock, J. M. 1994c‘Ethical Dilemmas – Crime and Drugs’, in Ethics in Crime and Justice: Dilemmas and DecisionsWadsworth, Inc.Belmont, CA47Situation 2.Google Scholar
  44. Rangarajan, L. N. eds. 1992Kautilya: The ArthashastraPenguinNew DelhiGoogle Scholar
  45. Richard, P.B. 1989‘Alternative Abortion Policies: What are the Health Consequences?’Social Science Quarterly70941955PubMedGoogle Scholar
  46. Richardson, M. 1995‘Some Economics of the Illegal Drug Trade’Parkin, M. eds. Economic Times: An Economic Journal of World EventsAddison-WesleyReading, MA42454(1)Google Scholar
  47. Rogers, A. 1997‘Seeing Through the Haze: Can Marijuana ever be good medicine?’Newsweek1360JanuaryGoogle Scholar
  48. Rossouw, G. J. 2002‘Three Approaches to Teaching Business Ethics’Teaching Business Ethics6411433CrossRefGoogle Scholar
  49. Rothschild, K. W. 1993Ethics and Economic TheoryEdward ElgarAldershot, HampshireGoogle Scholar
  50. Sagoff, M. 1983‘On Preserving the Natural Environment’Scherer, D.Attig, T. eds. Ethics and the EnvironmentPrentice-HallEnglewood Cliffs, NJGoogle Scholar
  51. Sen, A. K. 1977‘Rational Fools: A Critique of the Behavioral Foundations of Economic Theory’Philosophy and Public Affairs6317344Google Scholar
  52. Sen, A. K. 1987On Ethics and EconomicsBlackwellOxfordGoogle Scholar
  53. Shaw, W. H., Vincent, B. 1992‘Job Discrimination’, Moral Issues in BusinessWadsworth Publishing CompanyBelmont, CA425–438, 444–450Google Scholar
  54. Smith, A.: 1759, in D. D. Raphael and A. L. Macfie (eds.), The Theory of Moral Sentiments (Clarendon Press, Oxford)Google Scholar
  55. Tierney, J.: 1996, ‘Recycling is Garbage’, The New York Times Magazine June 30, 24.Google Scholar
  56. Torres, A., Forrest, J. D. 1988‘Why do Women have Abortions?’Family Planning Perspectives20169176PubMedGoogle Scholar
  57. Vogel, D. 1991‘Business Ethics Past and Present’The Public Interest1024964Google Scholar
  58. Wilber, C. K. eds. 1997Economics, Ethics and Public PolicyRowman and LittlefieldLanham, MDGoogle Scholar
  59. Wilber, C. K.: 1998, ‘Economics and Ethics’, The Handbook of Economic Methodology, 138–142.Google Scholar
  60. Wilson, J. Q.: 1990, ‘Against the Legalization of Drugs’, Commentary (February), 21–28.Google Scholar
  61. Wilson, R. 1997Economics, Ethics and Religion: Jewish, Christian and Muslim Economic ThoughtMacmillanHampshire and LondonGoogle Scholar
  62. Yang, J. E.: 1997, ‘Abortion Battle Flares on Hill – Again’, The Washington Post, March 12, A04.Google Scholar

Copyright information

© Springer 2005

Authors and Affiliations

  1. 1.Department of Humanities and Social SciencesIndian Institute of Technology RoorkeeRoorkeeIndia

Personalised recommendations