Ethical relativism holds that no universal standards or rules can be used to guide or evaluate the morality of an act. This view argues that people set their own moral standards for judging their actions. Only the individual’s self-interest and values are relevant for judging his or her behavior. This form of relativism is also referred to as naive relativism. Individuals, professionals, and organizations using this approach can consider finding out what the industry and/or professional standard or norm is with regard to an issue. Another suggestion would be to inflict no undue harm with a course of action taken.40 If Louise Simms were to adopt the principle of ethical relativism for her decision making, she might choose to accept the government official’s offer to promote her own standing in his firm. She might reason that her self-interest would be served best by making any deal that would push her career ahead. But Simms could also use ethical relativism to justify her rejection of the offer. She might say that any possible form of such a questionable negotiation is against her beliefs. The point behind this principle is that individual standards are the basis of moral authority. The logic of ethical relativism also extends to cultures. Cultural relativism argues that “when in Rome, do as the Romans do.” What is morally right for one society or culture may be wrong for another. Moral standards vary from one culture to another. Cultural relativists would argue that firms and business professionals doing business in a country are obliged to follow that country’s laws and moral codes. A criterion that relativists would use to justify their actions would be: “Are my beliefs, moral standards, and customs satisfied with this action or outcome?” The benefit of ethical and cultural relativism is that they recognize the distinction between individual and social values and customs. These views take seriously the different belief systems of individuals and societies. Social norms and mores are seen in a cultural context. However, relativism can lead to several problems. (It can be argued that this perspective is actually not ethical.) First, these views imply an underlying laziness.41 Individuals who justify their morality only from their personal beliefs, without taking into consideration other ethical principles, may use the logic of relativism as an excuse for not having or developing moral standards. Second, this view contradicts everyday experience. Moral reasoning is developed from conversation, interaction, and argument. What I believe or perceive as “facts” in a situation may or may not be accurate. How can I validate or disprove my ethical reasoning if I do not communicate, share, and remain open to changing my own standards? Ethical relativism can create absolutists—individuals who claim their moral standards are right regardless of whether others view the standards as right or wrong. For example, what if my beliefs conflict with yours? Whose relativism is right then? Who decides and on what grounds? In practice, ethical relativism does not effectively or efficiently solve complicated conflicts that involve many parties because these situations require tolerating doubts and permitting our observations and beliefs to be informed. Cultural relativism embodies the same problems as ethical relativism. Although the values and moral customs of all cultures should be observed and respected, especially because business professionals are increasingly operating across national boundaries, we must not be blindly absolute or divorce ourselves from rigorous moral reasoning or laws aimed at protecting individual rights and justice. For example, R. Edward Freeman and Daniel Gilbert Jr. ask, “Must American managers in Saudi Arabia treat women as the Saudis treat them? Must American managers in South Africa treat blacks as white South Africans treat them? Must white South Africans treat blacks in the United States as U.S. managers treat them? Must Saudis in the United States treat women as U.S. managers treat them?”42 They continue, “It makes sense to question whether the norms of the Nazi society were in fact morally correct.”43 Using rigorous ethical reasoning to solve moral dilemmas is important across cultures. However, this does not suggest that flexibility, sensitivity, and awareness of individual and cultural moral differences are not necessary. It does mean that upholding principles of rights, justice, and freedom in some situations may conflict with the other person’s or culture’s belief system. Depending on the actions taken and decisions made based on a person’s moral standards, a price may be paid for maintaining them. Often, negotiation agreements and understanding can be reached without overt conflict when different ethical principles or cultural standards clash. Finally, it could be argued that cultural relativism does provide an argument against cultural imperialism. Why should American laws, customs, and values that are embedded in a U.S. firm’s policies be enforced in another country that has differing laws and values regarding the activities in question? Figure 3.4 summarizes the ethical principles presented here. This figure can be used as a reference for applying these principles individually and in a stakeholder analysis with groups.

Ethical Relativism and Stakeholder Analysis When considering the perspectives of relativism in a stakeholder analysis, ask the following questions:

1. What are the major moral beliefs and principles at issue for each stakeholder affected by this decision?

2. What are my moral beliefs and principles in this decision?

3. To what extent will my ethical principles clash if a particular course of action is taken? Why?

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