SlideShare une entreprise Scribd logo
1  sur  26
Utilitarianism
An Introduction to the Moral
Theories of Jeremy Bentham
and John Stuart Mill
Ethical Judgments
 Ethical philosophy differs from the
sciences because it is normative or
prescriptive, rather than descriptive.
 In other words, ethics tell us how we
ought to act or what we should do,
while the sciences are more likely to
observe how things are in nature or
society.
Making Ethical Judgments
Areas of Emphasis in Making Moral
Judgments
Purpose or
Motive
Act, Rule,
or Maxim
Results or
Consequences
Making Ethical Judgments in
Utilitarianism
 Utilitarianism says that the Result or the
Consequence of an Act is the real
measure of whether it is good or bad.
 This theory emphasizes Ends over
Means.
 Theories, like this one, that emphasize
the results or consequences are called
teleological or consequentialist.
Jeremy
Bentham
Bentham’s Formulation of
Utilitarianism
 Man is under two great masters, pain and
pleasure.
 The great good that we should seek is
happiness. (a hedonistic perspective)
 Those actions whose results increase
happiness or diminish pain are good. They
have “utility.”
Jeremy Bentham’s Hedonistic
Calculus
 In determining the quantity of happiness
that might be produced by an action, we
evaluate the possible consequences by
applying several values:
 Intensity, duration, certainty or
uncertainty, propinquity or remoteness,
fecundity, purity, and extent.
Four Theses of Utilitarianism
 Consequentialism: The rightness of actions is
determined solely by their consequences.
 Hedonism: Utility is the degree to which an act
produces pleasure. Hedonism is the thesis that
pleasure or happiness is the good that we seek
and that we should seek.
 Maximalism: A right action produces the greatest
good consequences and the least bad.
 Universalism: The consequences to be
considered are those of everyone affected, and
everyone equally.
Two Formulations of Utilitarian
Theory
Principle of
Utility: The best
action is that
which produces
the greatest
happiness
and/or reduces
pain.
Greatest Happiness:
We ought to do
that which
produces the
greatest
happiness and
least pain for the
greatest number
of people.
Two Types of Utilitarianism
 Rule: An action is right
if and only if it conforms
to a set of rules the
general acceptance of
which would produce
the greatest balance of
pleasure over pain for
the greatest number.
(John Stuart Mill)
 Act: An Action is
right if and only if it
produces the
greatest balance of
pleasure over pain
for the greatest
number. (Jeremy
Bentham)
Application of Utilitarian Theory
 A) You attempt to
help an elderly
man across the
street. He gets
across safely.
 Conclusion: the
Act was a good
act.
 B) You attempt to
help an elderly man
across the street.
You stumble as you
go, he is knocked
into the path of a car,
and is hurt.
 Conclusion: The Act
was a bad act.
Application of Utilitarian Theory
 If you can use eighty soldiers as a decoy in
war, and thereby attack an enemy force and
kill several hundred enemy soldiers, that is
a morally good choice even though the
eighty might be lost.
 If lying or stealing will actually bring about
more happiness and/or reduce pain, Act
Utilitarianism says we should lie and steal
in those cases.
Application of Utilitarian Theory
Actual Cases
 The decision at Coventry during WWII.
 The decision was made not to inform the town
that they would be bombed.
 The Ford Pinto case: A defective vehicle
would sometimes explode when hit.
 The model was not recalled and repaired by Ford
because they felt it was cheaper to pay the
liability suits than to recall and repair all the
defective cars.
Criticisms of Bentham’s theory
Bentham’s theory could mean that if 10
people would be happy watching a man
being eaten by wild dogs, it would be a
morally good thing for the 10 men to kidnap
someone (especially someone whose death
would not cause grief to many others) and
throw the man into a cage of wild, hungry
dogs.
John Stuart Mill’s Adjustments to
Utilitarianism
 Mill argues that we must consider the
quality of the happiness, not merely the
quantity.
 For example, some might find happiness
with a pitcher of beer and a pizza. Others
may find happiness watching a fine
Shakespearean play. The quality of
happiness is greater with the latter.
Mill’s Quality Arguments
“It is better to be a human being dissatisfied
than a pig satisfied; better to be Socrates
dissatisfied than a fool satisfied. And if the
fool, or the pig, are of a different opinion, it is
because they only know their own side of the
question. The other party to the comparison
knows both sides.”
Mill’s Quality Arguments
“As between his own happiness and that
of others, utilitarianism requires him to be
as strictly impartial as a disinterested and
benevolent spectator. In the golden rule
of Jesus of Nazareth, we read the
complete spirit of the ethics of utility. ‘To
do as you would be done by,’ and ‘to love
your neighbor as yourself,’ constitute the
ideal perfection of utilitarian morality.”
Criticisms of Utilitarianism
If I am to bring the greatest happiness to the
greatest number, not putting my own
happiness above others, that may lead to a
dilemma. I live in a neighborhood where
83% of my neighbors use drugs. I could
make them most happy by helping supply
them with cheap drugs, but I feel
uncomfortable doing that. What should a
utilitarian do?
Criticisms of Utilitarianism
 Bernard Williams criticizes the implied
“doctrine of negative responsibility” in
Utilitarianism. For example, a thug breaks
into my home and holds six people
hostage, telling us he will kill all of us.
“However,” the thug says, “if you will kill
two of your family, I will let you and the
other three live.”
 With Utilitarianism, the good thing to do is
to kill two members of my family.
Criticisms of Utilitarianism
 Utilitarianism plays fast and loose with
God’s commandments. If lying, stealing,
or killing could lead to an increase of
happiness for the greatest number, we are
told we should lie, steal or kill. Isn’t that a
rejection of God’s commands?
Mill’s Answer to the “Godless
Theory” Criticism
 What is the nature of God?
 Does God make arbitrary rules just to see
if we will obey?
 Does God make rules that He knows will
lead to our happiness?
 If the latter statement is true, doesn’t it
make sense God would want us to use
our God-given reason to look at the
situation?
Mill’s Answer to the “Godless Theory”
Criticism
“If it be a true belief that God desires, above
all things, the happiness of his creatures,
and that this was his purpose in their
creation, utility is not a godless doctrine, but
more profoundly religious than any other. . .
. .whatever God has though fit to reveal on
the subject of morals must fulfill the
requirements of utility in a supreme degree.”
A Second Criticism of Utilitarianism
If one must decide the probable outcome of
an act before knowing whether it is good or
bad, how can children learn to evaluate
acts, since they know so little of what
consequences might arise from their
actions?
Mill’s “Rule” Utilitarianism
“ . . . Mankind must by this time have acquired
positive beliefs as to the effects of some
actions on their happiness; and the beliefs
which have thus come down are the rules of
morality for the multitude, and for the
philosopher until he has succeeded in finding
better.” Mill concludes, however, that we should
always seek improvements.
Rights and Utilitarianism
 Many philosophers hold that we have certain
rights, either from God, nature, or from a social
contract
 Can the idea of rights be made compatible with
Utilitarianism?
 If ignoring rights brings about more happiness to
the greatest number, should we ignore so-called
rights?
 Mill’s rule-based view in On Liberty; having a
right to liberty will bring the greatest happiness
Consequences of Unethical Practices
 Baucus & Baucus (2000)
 Singled out 67 companies out of the Fortune 500
that had at least one illegal act – ex: antitrust,
product liabilities, discrimination
 Performance of the convicted firms were
compared to unconvicted firms (five year after the
fraud was committed)
 Convicted firms experienced significantly lower
return on sales (three year lag)
 Multiple convictions are more disastrous
 Unethical activities can affect long term
performance

Contenu connexe

Similaire à 3. Utilitarianism.ppt (9)

Good recap and rule utilitarianism
Good recap and rule utilitarianismGood recap and rule utilitarianism
Good recap and rule utilitarianism
 
Ethical Theory and Business
Ethical Theory and BusinessEthical Theory and Business
Ethical Theory and Business
 
ethics week 7 Utilitarianism.pptx
ethics week 7 Utilitarianism.pptxethics week 7 Utilitarianism.pptx
ethics week 7 Utilitarianism.pptx
 
Essay On Utilitarianism
Essay On UtilitarianismEssay On Utilitarianism
Essay On Utilitarianism
 
Sandel intro
Sandel introSandel intro
Sandel intro
 
Unit 4 Utilitarian Ethics
Unit 4   Utilitarian EthicsUnit 4   Utilitarian Ethics
Unit 4 Utilitarian Ethics
 
Chapter 6: Utilitarianism
Chapter 6: UtilitarianismChapter 6: Utilitarianism
Chapter 6: Utilitarianism
 
Utilitaranism.( greatest good for the gretest number of people)
Utilitaranism.( greatest good for the gretest number of people)Utilitaranism.( greatest good for the gretest number of people)
Utilitaranism.( greatest good for the gretest number of people)
 
Utilitarianism
UtilitarianismUtilitarianism
Utilitarianism
 

Plus de FroilanTindugan2

Plus de FroilanTindugan2 (20)

the philosophical discussions on the constructivist school of thoughts
the philosophical discussions on the constructivist school of thoughtsthe philosophical discussions on the constructivist school of thoughts
the philosophical discussions on the constructivist school of thoughts
 
1. art as a humanistic discipline.pptx
1. art as a humanistic discipline.pptx1. art as a humanistic discipline.pptx
1. art as a humanistic discipline.pptx
 
1. gender, sex, sexuality.pptx
1. gender, sex, sexuality.pptx1. gender, sex, sexuality.pptx
1. gender, sex, sexuality.pptx
 
5. filipino values and culture.pptx
5. filipino values and culture.pptx5. filipino values and culture.pptx
5. filipino values and culture.pptx
 
Socio-legal dimensions of gender (part 1).pptx
Socio-legal dimensions of gender (part 1).pptxSocio-legal dimensions of gender (part 1).pptx
Socio-legal dimensions of gender (part 1).pptx
 
6. the filipino way.pptx
6. the filipino way.pptx6. the filipino way.pptx
6. the filipino way.pptx
 
school culture.pptx
school culture.pptxschool culture.pptx
school culture.pptx
 
4. The seven areas of sociology.pptx
4. The seven areas of sociology.pptx4. The seven areas of sociology.pptx
4. The seven areas of sociology.pptx
 
4. Socio-legal dimensions of gender.pptx
4. Socio-legal dimensions of gender.pptx4. Socio-legal dimensions of gender.pptx
4. Socio-legal dimensions of gender.pptx
 
3. Dimensions of human sexuality.pptx
3. Dimensions of human sexuality.pptx3. Dimensions of human sexuality.pptx
3. Dimensions of human sexuality.pptx
 
Art as a humanistic discipline.pptx
Art as a humanistic discipline.pptxArt as a humanistic discipline.pptx
Art as a humanistic discipline.pptx
 
7. Universal Values.pptx
7. Universal Values.pptx7. Universal Values.pptx
7. Universal Values.pptx
 
2. moral dilemma.pptx
2. moral dilemma.pptx2. moral dilemma.pptx
2. moral dilemma.pptx
 
6. Key signatures.ppt
6. Key signatures.ppt6. Key signatures.ppt
6. Key signatures.ppt
 
4. planning teaching constructive alignment.ppt
4. planning teaching constructive alignment.ppt4. planning teaching constructive alignment.ppt
4. planning teaching constructive alignment.ppt
 
6. the spiritual self.ppt
6. the spiritual self.ppt6. the spiritual self.ppt
6. the spiritual self.ppt
 
9. ICT as a learning and teaching tool.ppt
9. ICT as a learning and teaching tool.ppt9. ICT as a learning and teaching tool.ppt
9. ICT as a learning and teaching tool.ppt
 
SOCIAL ORGANIZATIONS AND INSTITUTIONS.pptx
SOCIAL ORGANIZATIONS AND INSTITUTIONS.pptxSOCIAL ORGANIZATIONS AND INSTITUTIONS.pptx
SOCIAL ORGANIZATIONS AND INSTITUTIONS.pptx
 
7. bloom's revised taxonomy.ppt
7. bloom's revised taxonomy.ppt7. bloom's revised taxonomy.ppt
7. bloom's revised taxonomy.ppt
 
1. Culture and Society.ppt
1. Culture and Society.ppt1. Culture and Society.ppt
1. Culture and Society.ppt
 

Dernier

Activity 01 - Artificial Culture (1).pdf
Activity 01 - Artificial Culture (1).pdfActivity 01 - Artificial Culture (1).pdf
Activity 01 - Artificial Culture (1).pdf
ciinovamais
 
Making and Justifying Mathematical Decisions.pdf
Making and Justifying Mathematical Decisions.pdfMaking and Justifying Mathematical Decisions.pdf
Making and Justifying Mathematical Decisions.pdf
Chris Hunter
 
Beyond the EU: DORA and NIS 2 Directive's Global Impact
Beyond the EU: DORA and NIS 2 Directive's Global ImpactBeyond the EU: DORA and NIS 2 Directive's Global Impact
Beyond the EU: DORA and NIS 2 Directive's Global Impact
PECB
 

Dernier (20)

Key note speaker Neum_Admir Softic_ENG.pdf
Key note speaker Neum_Admir Softic_ENG.pdfKey note speaker Neum_Admir Softic_ENG.pdf
Key note speaker Neum_Admir Softic_ENG.pdf
 
Advanced Views - Calendar View in Odoo 17
Advanced Views - Calendar View in Odoo 17Advanced Views - Calendar View in Odoo 17
Advanced Views - Calendar View in Odoo 17
 
SOCIAL AND HISTORICAL CONTEXT - LFTVD.pptx
SOCIAL AND HISTORICAL CONTEXT - LFTVD.pptxSOCIAL AND HISTORICAL CONTEXT - LFTVD.pptx
SOCIAL AND HISTORICAL CONTEXT - LFTVD.pptx
 
ICT Role in 21st Century Education & its Challenges.pptx
ICT Role in 21st Century Education & its Challenges.pptxICT Role in 21st Century Education & its Challenges.pptx
ICT Role in 21st Century Education & its Challenges.pptx
 
Application orientated numerical on hev.ppt
Application orientated numerical on hev.pptApplication orientated numerical on hev.ppt
Application orientated numerical on hev.ppt
 
Ecological Succession. ( ECOSYSTEM, B. Pharmacy, 1st Year, Sem-II, Environmen...
Ecological Succession. ( ECOSYSTEM, B. Pharmacy, 1st Year, Sem-II, Environmen...Ecological Succession. ( ECOSYSTEM, B. Pharmacy, 1st Year, Sem-II, Environmen...
Ecological Succession. ( ECOSYSTEM, B. Pharmacy, 1st Year, Sem-II, Environmen...
 
Mattingly "AI & Prompt Design: Structured Data, Assistants, & RAG"
Mattingly "AI & Prompt Design: Structured Data, Assistants, & RAG"Mattingly "AI & Prompt Design: Structured Data, Assistants, & RAG"
Mattingly "AI & Prompt Design: Structured Data, Assistants, & RAG"
 
Paris 2024 Olympic Geographies - an activity
Paris 2024 Olympic Geographies - an activityParis 2024 Olympic Geographies - an activity
Paris 2024 Olympic Geographies - an activity
 
Accessible design: Minimum effort, maximum impact
Accessible design: Minimum effort, maximum impactAccessible design: Minimum effort, maximum impact
Accessible design: Minimum effort, maximum impact
 
Activity 01 - Artificial Culture (1).pdf
Activity 01 - Artificial Culture (1).pdfActivity 01 - Artificial Culture (1).pdf
Activity 01 - Artificial Culture (1).pdf
 
Making and Justifying Mathematical Decisions.pdf
Making and Justifying Mathematical Decisions.pdfMaking and Justifying Mathematical Decisions.pdf
Making and Justifying Mathematical Decisions.pdf
 
Beyond the EU: DORA and NIS 2 Directive's Global Impact
Beyond the EU: DORA and NIS 2 Directive's Global ImpactBeyond the EU: DORA and NIS 2 Directive's Global Impact
Beyond the EU: DORA and NIS 2 Directive's Global Impact
 
Mehran University Newsletter Vol-X, Issue-I, 2024
Mehran University Newsletter Vol-X, Issue-I, 2024Mehran University Newsletter Vol-X, Issue-I, 2024
Mehran University Newsletter Vol-X, Issue-I, 2024
 
Explore beautiful and ugly buildings. Mathematics helps us create beautiful d...
Explore beautiful and ugly buildings. Mathematics helps us create beautiful d...Explore beautiful and ugly buildings. Mathematics helps us create beautiful d...
Explore beautiful and ugly buildings. Mathematics helps us create beautiful d...
 
Basic Civil Engineering first year Notes- Chapter 4 Building.pptx
Basic Civil Engineering first year Notes- Chapter 4 Building.pptxBasic Civil Engineering first year Notes- Chapter 4 Building.pptx
Basic Civil Engineering first year Notes- Chapter 4 Building.pptx
 
fourth grading exam for kindergarten in writing
fourth grading exam for kindergarten in writingfourth grading exam for kindergarten in writing
fourth grading exam for kindergarten in writing
 
Sports & Fitness Value Added Course FY..
Sports & Fitness Value Added Course FY..Sports & Fitness Value Added Course FY..
Sports & Fitness Value Added Course FY..
 
Measures of Central Tendency: Mean, Median and Mode
Measures of Central Tendency: Mean, Median and ModeMeasures of Central Tendency: Mean, Median and Mode
Measures of Central Tendency: Mean, Median and Mode
 
Grant Readiness 101 TechSoup and Remy Consulting
Grant Readiness 101 TechSoup and Remy ConsultingGrant Readiness 101 TechSoup and Remy Consulting
Grant Readiness 101 TechSoup and Remy Consulting
 
SECOND SEMESTER TOPIC COVERAGE SY 2023-2024 Trends, Networks, and Critical Th...
SECOND SEMESTER TOPIC COVERAGE SY 2023-2024 Trends, Networks, and Critical Th...SECOND SEMESTER TOPIC COVERAGE SY 2023-2024 Trends, Networks, and Critical Th...
SECOND SEMESTER TOPIC COVERAGE SY 2023-2024 Trends, Networks, and Critical Th...
 

3. Utilitarianism.ppt

  • 1. Utilitarianism An Introduction to the Moral Theories of Jeremy Bentham and John Stuart Mill
  • 2. Ethical Judgments  Ethical philosophy differs from the sciences because it is normative or prescriptive, rather than descriptive.  In other words, ethics tell us how we ought to act or what we should do, while the sciences are more likely to observe how things are in nature or society.
  • 3. Making Ethical Judgments Areas of Emphasis in Making Moral Judgments Purpose or Motive Act, Rule, or Maxim Results or Consequences
  • 4. Making Ethical Judgments in Utilitarianism  Utilitarianism says that the Result or the Consequence of an Act is the real measure of whether it is good or bad.  This theory emphasizes Ends over Means.  Theories, like this one, that emphasize the results or consequences are called teleological or consequentialist.
  • 6. Bentham’s Formulation of Utilitarianism  Man is under two great masters, pain and pleasure.  The great good that we should seek is happiness. (a hedonistic perspective)  Those actions whose results increase happiness or diminish pain are good. They have “utility.”
  • 7. Jeremy Bentham’s Hedonistic Calculus  In determining the quantity of happiness that might be produced by an action, we evaluate the possible consequences by applying several values:  Intensity, duration, certainty or uncertainty, propinquity or remoteness, fecundity, purity, and extent.
  • 8. Four Theses of Utilitarianism  Consequentialism: The rightness of actions is determined solely by their consequences.  Hedonism: Utility is the degree to which an act produces pleasure. Hedonism is the thesis that pleasure or happiness is the good that we seek and that we should seek.  Maximalism: A right action produces the greatest good consequences and the least bad.  Universalism: The consequences to be considered are those of everyone affected, and everyone equally.
  • 9. Two Formulations of Utilitarian Theory Principle of Utility: The best action is that which produces the greatest happiness and/or reduces pain. Greatest Happiness: We ought to do that which produces the greatest happiness and least pain for the greatest number of people.
  • 10. Two Types of Utilitarianism  Rule: An action is right if and only if it conforms to a set of rules the general acceptance of which would produce the greatest balance of pleasure over pain for the greatest number. (John Stuart Mill)  Act: An Action is right if and only if it produces the greatest balance of pleasure over pain for the greatest number. (Jeremy Bentham)
  • 11. Application of Utilitarian Theory  A) You attempt to help an elderly man across the street. He gets across safely.  Conclusion: the Act was a good act.  B) You attempt to help an elderly man across the street. You stumble as you go, he is knocked into the path of a car, and is hurt.  Conclusion: The Act was a bad act.
  • 12. Application of Utilitarian Theory  If you can use eighty soldiers as a decoy in war, and thereby attack an enemy force and kill several hundred enemy soldiers, that is a morally good choice even though the eighty might be lost.  If lying or stealing will actually bring about more happiness and/or reduce pain, Act Utilitarianism says we should lie and steal in those cases.
  • 13. Application of Utilitarian Theory Actual Cases  The decision at Coventry during WWII.  The decision was made not to inform the town that they would be bombed.  The Ford Pinto case: A defective vehicle would sometimes explode when hit.  The model was not recalled and repaired by Ford because they felt it was cheaper to pay the liability suits than to recall and repair all the defective cars.
  • 14. Criticisms of Bentham’s theory Bentham’s theory could mean that if 10 people would be happy watching a man being eaten by wild dogs, it would be a morally good thing for the 10 men to kidnap someone (especially someone whose death would not cause grief to many others) and throw the man into a cage of wild, hungry dogs.
  • 15. John Stuart Mill’s Adjustments to Utilitarianism  Mill argues that we must consider the quality of the happiness, not merely the quantity.  For example, some might find happiness with a pitcher of beer and a pizza. Others may find happiness watching a fine Shakespearean play. The quality of happiness is greater with the latter.
  • 16. Mill’s Quality Arguments “It is better to be a human being dissatisfied than a pig satisfied; better to be Socrates dissatisfied than a fool satisfied. And if the fool, or the pig, are of a different opinion, it is because they only know their own side of the question. The other party to the comparison knows both sides.”
  • 17. Mill’s Quality Arguments “As between his own happiness and that of others, utilitarianism requires him to be as strictly impartial as a disinterested and benevolent spectator. In the golden rule of Jesus of Nazareth, we read the complete spirit of the ethics of utility. ‘To do as you would be done by,’ and ‘to love your neighbor as yourself,’ constitute the ideal perfection of utilitarian morality.”
  • 18. Criticisms of Utilitarianism If I am to bring the greatest happiness to the greatest number, not putting my own happiness above others, that may lead to a dilemma. I live in a neighborhood where 83% of my neighbors use drugs. I could make them most happy by helping supply them with cheap drugs, but I feel uncomfortable doing that. What should a utilitarian do?
  • 19. Criticisms of Utilitarianism  Bernard Williams criticizes the implied “doctrine of negative responsibility” in Utilitarianism. For example, a thug breaks into my home and holds six people hostage, telling us he will kill all of us. “However,” the thug says, “if you will kill two of your family, I will let you and the other three live.”  With Utilitarianism, the good thing to do is to kill two members of my family.
  • 20. Criticisms of Utilitarianism  Utilitarianism plays fast and loose with God’s commandments. If lying, stealing, or killing could lead to an increase of happiness for the greatest number, we are told we should lie, steal or kill. Isn’t that a rejection of God’s commands?
  • 21. Mill’s Answer to the “Godless Theory” Criticism  What is the nature of God?  Does God make arbitrary rules just to see if we will obey?  Does God make rules that He knows will lead to our happiness?  If the latter statement is true, doesn’t it make sense God would want us to use our God-given reason to look at the situation?
  • 22. Mill’s Answer to the “Godless Theory” Criticism “If it be a true belief that God desires, above all things, the happiness of his creatures, and that this was his purpose in their creation, utility is not a godless doctrine, but more profoundly religious than any other. . . . .whatever God has though fit to reveal on the subject of morals must fulfill the requirements of utility in a supreme degree.”
  • 23. A Second Criticism of Utilitarianism If one must decide the probable outcome of an act before knowing whether it is good or bad, how can children learn to evaluate acts, since they know so little of what consequences might arise from their actions?
  • 24. Mill’s “Rule” Utilitarianism “ . . . Mankind must by this time have acquired positive beliefs as to the effects of some actions on their happiness; and the beliefs which have thus come down are the rules of morality for the multitude, and for the philosopher until he has succeeded in finding better.” Mill concludes, however, that we should always seek improvements.
  • 25. Rights and Utilitarianism  Many philosophers hold that we have certain rights, either from God, nature, or from a social contract  Can the idea of rights be made compatible with Utilitarianism?  If ignoring rights brings about more happiness to the greatest number, should we ignore so-called rights?  Mill’s rule-based view in On Liberty; having a right to liberty will bring the greatest happiness
  • 26. Consequences of Unethical Practices  Baucus & Baucus (2000)  Singled out 67 companies out of the Fortune 500 that had at least one illegal act – ex: antitrust, product liabilities, discrimination  Performance of the convicted firms were compared to unconvicted firms (five year after the fraud was committed)  Convicted firms experienced significantly lower return on sales (three year lag)  Multiple convictions are more disastrous  Unethical activities can affect long term performance