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Business Ethics

<<< Previous THE ETHICS OF JOB DISCRIMINATION:Job Discrimination: Its Nature
Business Ethics ­MGT610
This lecture discusses one of the internal conflicts that arise in business, namely the issue of job
discrimination. It begins by quoting two long passages illustrating the current state of the
debate in the U.S.­one by former President Bill Clinton, one by former California Governor
Pete Wilson.
Clinton calls for the U.S. to preserve its affirmative action programs. He outlines many
inequities that still remain in American business, and argues that affirmative action is still
necessary to "give our nation a way to finally address the systematic exclusion of individuals of
talent on the basis of their gender or race." As long as there are no specific quotas, he
maintains, then the affirmative action's critics are wrong.
Wilson, on the other hand, cites Thomas Jefferson in his criticism of affirmative action. He
argues that it is unfair to award jobs based on any criteria other than merit. He sees affirmative
action as preferential treatment, "special privileges" for a select minority­in effect, a type of
reverse discrimination.
Because discrimination based on gender and race have been around for so long in business, its
consequences in this area have been substantial and persistent. This chapter examines the
nature of discrimination, discusses the ethical aspects of such behavior, and concludes by
considering affirmative action programs in particular.
Job Discrimination: Its Nature
Though more women and minorities are entering formerly white male-dominated jobs, they
still face discrimination. The experiment conducted by ABC shows that women and minorities
were systematically given less consideration in hiring: they received fewer job offers and less
desirable jobs than white males. Other research suggests that blacks and Hispanics were offered
jobs 50% fewer times than white males.
Discrimination in its root meaning is not at all wrong. It simply refers to the act of distinguishing
one object from another. However, in modern usage, the term refers to "wrongful
discrimination," or distinguishing among people on the basis of prejudice instead of individual
Discrimination in employment involves three basic elements:
1. It must be a decision not based on individual merit.
2. The decision must derive from racial or sexual prejudice.
3. The decision must have a harmful impact on the interest of employees.
Discriminatory acts themselves can be categorized according to the extent to which they are
intentional and institutionalized. An act may be part of the isolated behavior of a single
individual who:
1. Intentionally discriminates based on personal prejudice.
2. An act may be part of the routine, institutionalized behavior of a group.
3. The act must intentionally discriminate out of personal prejudice.
Business Ethics ­MGT610
4. An act may be part of the isolated behavior of a single individual who unintentionally
discriminates because he or she uncritically adopts the practices and stereotypes of his
or her society.
An act may be part of the systematic routine of a group that unintentionally discriminates
because group members uncritically incorporate the discriminatory practices of society.
Whereas in the early 1960s discrimination was generally seen an intentional and individual, by
the 1970s a shift had occurred to emphasize the effects of unintentional forms of
discrimination. A group would be guilty of discrimination if minority group representation
were not proportionate to the minority group's local availability.
Subsequently, people came to criticize this view. They argued that discrimination was the act of
individuals, that individual minority and women were its victims. The problem with this
criticism is that it is often difficult to know whether a specific individual, was discriminated
against. The only way of telling whether a process is fair or discriminatory is to see what
happens to minorities as a group. American society has gone back and forth on this issue ever
since. Many even believe that though businesses in the U.S. used to be discriminatory, they are
no longer so.
Discrimination: Its Extent
An indication of discrimination exists when a disproportionate number of a certain group's
members hold less desirable positions despite their preferences and abilities. We can make
three types of comparisons to provide evidence of this type: comparisons of average benefits
given to various groups, comparisons of the proportion of a group found in the lowest levels of
the institution, and comparisons of the proportion of a group found in the most advantageous
positions in the institution. When we make these three comparisons, it seems clear that some
form of discrimination is still present in the U.S., though for some groups it is not as intense as
it used to be.
Income comparisons are the most suggestive indicators of discrimination. The income gap
between whites and blacks, counter to what many think, has not decreased (black average
family income remains about 65% that of whites). There are similar inequalities found based on
gender as well. Though the ratio between male and female earnings is getting more equal, this
is largely due not to a rise in female earnings but to a drop in, male earnings. Disparities begin
immediately after graduation; in fact, female college graduates earn about as much as male
high school graduates. In every occupational group, women earn less than men. Blacks fare a
bit better than females, but not much. For black male college graduates, the picture is better:
they now earn about what white male college graduates do.
For most other blacks, however, the picture remains grim. Lowest income group comparisons
and desirable occupation comparisons give similar results. Statistically, larger proportions of
minorities and women are poor, and larger proportions of white males have the most desirable
occupations. In fact, the more women who work in an occupation, the lower the average pay
for that job. Though perhaps some of the disparities between white males and women or
minorities can be accounted for by the preferences of the latter (who voluntarily choose to work
in the lower paying jobs), the disparities are so large that it cannot entirely be accounted for in
this way.
Business Ethics ­MGT610
The difficulties for minorities seem to be getting worse. Though they will soon be a majority of
the labor force, studies indicate that many of the new jobs that will be created will require
education beyond high school, and most minorities are falling behind in their educational
attainment. For women, another obstacle exists: unwanted sexual attention.
Finding that our economic institutions generally seem to embody discrimination, as this section
proves it, does not in itself prove that any particular business is discriminatory, however.
Discrimination: Utility, Rights, and Justice
Given the inequalities found in U.S. businesses, we must address the issue of whether these
inequalities are wrong and, if they are, how they should be changed. Arguments against
discrimination fall into three groups: utilitarian arguments, rights arguments, and justice
arguments. The utilitarian argument against discrimination maintains that society's productivity
will be highest when jobs are awarded based on competence or merit. Discrimination based on
anything else is inefficient and, therefore, counter to utility.
Utilitarian arguments have been attacked on two fronts. First, if jobs should be assigned on the
basis of job-related qualifications only so long as such assignments will advance the public
welfare, then if public welfare would be advanced to a greater degree by assigning jobs on the
basis of some factor not related to job performance, then the utilitarian would have to hold that
in those situations jobs should not be assigned on the basis of job related qualifications, but on
the basis of that other factor. Second, it might be true that society as a whole would benefit by
having some group discriminated against.
Other, non-utilitarian arguments against discrimination maintain that it is wrong because it
violates people's basic human rights. Kant, for example, says that humans should be treated as
ends in themselves and never as a means to an end. Therefore, discrimination is wrong because
it violates people's rights to be treated as equals. In addition, some Kantian thinkers argue that
discrimination is wrong because the person who discriminates would not want to see his or her
behavior universalized (at least they would not want to change places with the victim of their
own discrimination).
A third group of arguments against discrimination views it as unjust. Rawls argues that it is
unjust arbitrarily to give some people more opportunity than others. Another related argument
sees it as a form of injustice because individuals who are equal in all relevant respects cannot
be treated differently just because they differ in other, non-relevant respects. The problem with
this argument is that it is difficult to define precisely what counts as relevant and to explain
why sex and race are not relevant, but intelligence is.
Despite the difficulties with these arguments against discrimination, there are five widely
recognized categories of discriminatory practices:
1. Recruitment practices that rely on the word-of-mouth referrals of present employees
will tend to recruit only from the groups already represented.
2. Screening practices that include qualifications not relevant to a job (such as requiring a
certain level of education for very low-level jobs).
3. Promotion practices that place groups on separate tracks or that rely solely on seniority
when past discrimination has kept women or minorities out of senior positions.
4. Conditions of employment that do not award equal wages and salaries to people doing
essentially the same work.
Business Ethics ­MGT610
5. Discharging an employee based on race or gender, or layoff policies that rely solely on
Women are victims of a different and troublesome type of discrimination: sexual harassment.
Generally, the guidelines against sexual harassment are clearly morally justified. However,
there are some aspects of the guidelines that must be examined. They prohibit more than just
particular acts of harassment; they also prohibit creating an intimidating, hostile, or offensive
working environment.
This raises some difficult questions. Are mechanics who hang pin-up calendars guilty of sexual
harassment? Though most people now say yes, there are a number of critics who say that these
kinds of environments were not intended to degrade women, and besides, women have the
power to take care of themselves. In addition, the guidelines say that verbal or physical contact
is harassment if it has the effect of unreasonably interfering with the victim's work
performance. This means, claim some critics, that sexual harassment depends on the purely
subjective judgments of the victim; what is unreasonable to one person may seem perfectly
acceptable to another.
A more serious objection to such guidelines is that they violate people's right to free speech.
However, though these objections may be valid on college campuses, they are not at all
relevant to businesses, where free discussion and examination of ideas are not the focus.
A firm can be guilty of sexual harassment even if it did not know and could not have known
that the harassment was going on­indeed, even if the firm had expressly forbidden the
offensive act. Supporters of the guidelines point out that the harms caused by sexual
harassment should be considered a cost of doing business, which it is proper to internalize.
Groups other than women and racial minorities can be the victims of discrimination. The
disabled, victims of AIDS, homosexuals, and the overweight are all discriminated against.
Currently, there are no federal laws prohibiting discrimination against many of these groups.
Affirmative Action
So far, the policies discussed in this chapter are all negative, aimed at preventing further
discrimination. Affirmative action programs, in contrast, call for positive steps designed to
eliminate the effects of past discrimination. Such programs are now legally required of all firms
holding government contracts.
Affirmative action programs begin with a detailed study, a "utilization analysis" of the major
job classifications in an organization. The analysis is designed to discover whether there are
fewer minorities or women in a particular job classification than could reasonably be expected.
If the analysis shows that women or minorities are underutilized, then the firm must establish
practices to correct these deficiencies.
The U.S. Supreme Court has not been clear about the legality of affirmative action programs.
Rulings suggest significant vacillation on the issue. The main grounds for attacking them is
that, in attempting to correct the effects of past injustice, affirmative action may actually be
racially or sexually discriminatory itself.
In the face of this objection, supporters of affirmative action make two main counterarguments.
One of these is to interpret affirmative action as a form of compensation for past injuries. The
Business Ethics ­MGT610
other interprets preferential treatment as an instrument for achieving social goals. The former
arguments are backward looking, focusing on the wrongness of the past; the latter are forward
looking, instrumentalist arguments focusing on what the future ought to be.
Those who see affirmative action as a form of compensation maintain that white males must
pay reparations for unjustly injuring others by discrimination in the past. The difficulty with
such arguments is that the principle of compensatory justice requires that compensation should
come only from those specific individuals who intentionally inflicted a wrong, and should be
paid only to those specific individuals who suffered that wrong. It does not require that
compensation should come from all members of a group containing some wrongdoers, nor that
compensation should go to all members of a group containing some injured parties. Many have
attempted to counter this argument by claiming that every minority living today has been
injured by discrimination and that every white male has benefited from those injuries. Whether
these arguments are successful or not is unclear.
The second way of justifying affirmative action sees it as an instrument for social change.
Based on the statistics such as those at the beginning of this chapter, such arguments maintain
that race and gender provide an indicator of need. Since reducing this need is consistent with
utilitarian principles (as it will increase total utility), affirmative action is justified.
Objections made to this argument question whether the social costs of affirmative action
outweigh their benefits. However, even more elaborate and convincing arguments for
affirmative action are made. They argue that the goal of affirmative action is social justice, and
that affirmative action is a morally legitimate means for achieving this goal.
Presently, women and minorities do not have the equal opportunity that justice demands statistics
prove this. The conscious and unconscious bias that brings this injustice about must be
neutralized, along with the competitive disadvantages with which women and minorities are
burdened. The basic end, therefore, is a more just society, and preferential treatment is a morally
legitimate means to attain this end.
However, three reasons have been advanced to show that affirmative action is not, in fact,
morally legitimate. First, it is claimed that affirmative action discriminates against white males.
However, given the definition of discrimination, because the preferential treatment is not based
on contempt of white males, it cannot be said to be the same thing as discrimination against
minorities or women.
Second, some claim that preferential treatment violates the principle of equality because it takes
into consideration race, which is an irrelevant characteristic. Defenders of affirmative action
counter by saying that sexual and racial differences are actually relevant characteristics. Third,
critics claim that affirmative action actually harms minorities by implying that they are so
inferior to white males that they need special help to succeed. This claim is countered by saying
that, though affirmative action undoubtedly has some costs, the benefits of such programs
outweigh them. Moreover, they point out that affirmative action is not based on an assumption
of white male superiority but on recognition of bias in favor of white males. Finally, they point
out that though some minorities may feel inferior because of affirmative action, many more are
made to feel inferior because of racism­and besides, showing preference towards them does not
make them feel inferior. The arguments on both sides are powerful, and the debate continues.
Because of concerns raised by opponents of affirmative action, guidelines have been suggested
to ensure that its more harmful effects will be lessened. Of course, the problems encountered by
Business Ethics ­MGT610
minorities differ markedly from those encountered by women. Recently, some proposals that
are more radical than affirmative action have been made to deal with sexual discrimination.
Since the jobs women have historically taken pay low wages and salaries, proponents of
comparable worth programs attempt not to place women into higher paying jobs, but to
increase the salaries of those jobs where women currently are employed.
In a comparable worth program, each job in a firm is assigned a certain number of points for
difficulty, skill requirements, experience, and other factors. Then, jobs are assumed to deserve
equal pay if they score similarly. The fundamental argument in favor of comparative worth is
the principle of justice. Opponents counter that the market is the most appropriate determining
factor of wages. If the market pays a certain job a low salary, they claim, it is because there is a
large supply of workers in that category.
In the near future, only a small proportion of new workers will be white males. Because of this
demographic trend, firms' enlightened self-interest will prompt them to give women and
minorities special consideration. If they do not accommodate themselves to these workers, they
may not be able to find the workers they need to compete in the world market.
Table of Contents:
  1. INTRODUCTION:Business Issues
  5. MORAL REASONING:Arguments For and Against Business Ethics
  7. UTILITARIANISM:Utilitarianism: Weighing Social Costs and Benefits
  8. UTILITARIANISM (CONTD.):rule utilitarianism, Rights and Duties
  11. JOHN RAWLS' THEORY OF JUSTICE:The Ethics of Care
  12. THE ETHICS OF CARE:Integrating Utility, Rights, Justice, and Caring
  13. THE ETHICS OF CARE (CONTD.):Morality in International Contexts
  14. MORALITY IN INTERNATIONAL CONTEXTS:Free Markets and Rights: John Locke
  16. LAW OF NATURE:Theory of Absolute Advantage, Comparative Advantage
  17. FREE MARKETS AND UTILITY: ADAM SMITH:Free Trade and Utility: David Ricardo
  18. RICARDO & GLOBALIZATION:Ricardo’s Assumptions, Conclusion
  19. FREE MARKET ECONOMY:Mixed Economy, Bottom Line for Business
  20. COMPETITION AND THE MARKET:Perfect Competition
  22. MONOPOLY COMPETITION:Oligopolistic Competition
  23. OLIGOPOLISTIC COMPETITION:Crowded and Mature Market
  24. OLIGOPOLIES AND PUBLIC POLICY:Ethic & Environment, Ozone depletion
  25. WORLDWATCH FIGURES:Population Year, Agriculture, Food and Land Use
  26. FORESTS AND BIODIVERSITY:The Ethics of Pollution Control
  27. THE ETHICS OF POLLUTION CONTROL:Toxic Chemicals in Teflon
  29. THE ETHICS OF POLLUTION CONTROL:Recommendations to Managers
  30. COST AND BENEFITS:Basis of social audit, Objectives of social audit
  31. COST AND BENEFITS:The Ethics of Conserving Depletable Resources
  32. COST AND BENEFITS:The Club of Rome
  34. THE ETHICS OF CONSUMER PRODUCTION AND MARKETING:Should Consumers Bear More Responsibility?
  38. ADVERTISING ETHICS:The Benefits of Advertising, The harm done by advertising
  39. ADVERTISING ETHICS:Basic Principles, Evidence, Remedies, Puffery
  40. ADVERTISING IN TODAY’S SOCIETY:Psychological tricks
  41. ADVERTISING IN TODAY’S SOCIETY:Criticism of Galbraith's Work
  44. ADVERTISING IN TODAY’S SOCIETY:Consumer Privacy, Accuracy
  45. THE ETHICS OF JOB DISCRIMINATION:Job Discrimination: Its Nature