In this chapter Velasquez introduces the subject of business ethics and defends it against detractors who deny that ethics has
any place in business. The case of Merck Inc. is cited as an example of ethical behavior being good business, and Velasquez
defends the thesis that “ethical behavior is the best long-term business strategy.” Ethical relativism is rebutted, while the
reality of moral diversity is noted in connection with the moral dilemmas peculiar to multinational corporations. Kohler’s
supposed stages of moral development are presented and the rudiments of moral reasoning explained. The concepts of moral
responsibility, mitigation, and excuse are explored along with issues of concerning corporate and individual responsibility.
Understand Velasquez's contention that ethical behavior is the best long term business strategy, his arguments for it,
and considerations backing those arguments.
Understand the meaning of "business ethics" and the scope of business ethics as including questions of systemic,
corporate, and individual morality.
Systemic—social systems or institutions within which businesses operate
i.e. morality of capitalism or of the laws, regulations, industrial structures, and social practices which
American business operate.
Corporate—an individual company taken as a whole
Include questions about the morality of the activities, policies, practices, or organizational structure of an
individual company taken as a whole.
Individual—a particular individual or individuals within a company and their behaviors and decisions
Morality of decisions, actions, or character of an individual.
Grasp the distinctions between, legality, "morality", and ethics.
Although ethics deals with morality, it is not quite the same as morality. Ethics is a kind of investigation—and
includes both the activity of investigating as well as the results of that investigation—whereas morality is the
subject matter that ethics investigates.
Understand ethical relativism and the arguments against it, along with moral diversity issues faced by multinational
Ethical Relativism is the view that there are no ethical standards that are absolutely true and that apply or should
be applied to the companies and people of all societies. Instead, relativism holds that something is right for the
people or companies in one particular society if it accords with their moral standards and wrong for them if it
violates their moral standards. I.e. in Arab societies, business bribery is morally acceptable, while it is not for
Critics of ethical relativism argue the following:
Some moral standards are found in all societies. All societies have norms against injuring or killing other
members of the society, norms about using language truthfully when communicating with members of one
society, and norms against taking personal goods of other members of one’s society.