Business Ethics

The Penguin Dictionary of Philosophy defines that branch of ethics that is most
pertinent to business as: Rational inquiry into, or a theory of, the standards of right
and wrong, good and bad, in respect of character and conduct, which ought to be
accepted by a class of individuals. This class could be mankind at large, but we can
think of medical ethics, business ethics, etc. as a body of standards that the
professionals in question ought to accept and observe.

Utilitarianism
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that Action is best, which procures the greatest Happiness for the
greatest Numbers; and that, worst, which, in like manner, occasions
Misery.
Utilitarianism offers a relatively straightforward method for deciding the
morally right course of action for any particular situation we may find
ourselves in. To discover what we ought to do in any situation, we first
identify the various courses of action that we could perform. Second, we
determine all of the foreseeable benefits and harms that would result
from each course of action for everyone affected by the action. And third,
we choose the course of action that provides the greatest benefits after
the costs have been taken into account.
At work, utilitarianism is displayed by working to make sure the
workplace is a positive environment for your co-workers to be in, and
then make it so for yourself.
There are two types of utilitarian ethics practiced on the job, rule
utilitarianism and act utilitarianism. Rule utilitarianism is put in place to
benefit the most people by using the fairest methods possible. Act
utilitarianism makes the most ethical actions possible for the benefit of
the people.

Application of utilitarianism to business ethics

Employees and Employers

In act utilitarianism any action is permissible given that it increases pleasure for the
greatest number of people and a successful business does exactly this. Therefore,
there is no correct way to treat employees. It is completely fine to exploit workers.
Rule utilitarianism however differentiates between the material pleasures of the
consumers and shareholders and the the higher pleasures of taking care of
employees. This implies that there should exist a code of conduct on how to treat
employees. Preference utilitarians look at all the preferences and keeping workers
happy is one of the companys preferences because it determines how motivated
people are and hence the productivity of the firm. For this reason it is important to
treat employees properly. Whistle-blowing is an acceptable activity for utilitarians
because it produces pleasure for consumers, employees and the market.
Business and Consumers
According to Bentham all of the pleasures of consumers should be met as they are
the biggest stakeholder and so a business should do everything they want e.g. lower

price, provide customer service etc. Mill would say, obviously consumer happiness is
important but this should not override the pleasures of employees who work for that
business. Preference utilitarianism suggests that a mid-point should be found between
this trade-off of consumers material preference and employees welfare preferences.
The Ford Pinto case is where Ford realised that their batch of cars was faulty but still
decided to sell them on the grounds that compensation was a lot cheaper. However,
this raises questions about utilitarianism. In principle utilitarianism should agree what
Ford did. The consumers were happy because they found compensation and so was
the shareholders however this means that the faulty cars could have caused an
accident and this makes utilitarianism a lesser consumer friendly ethical theory.
Business and Globalisation
This section is mainly concerned with cheap labour used overseas in places like India
and China. Bentham as we can imagine would have no problem with this because the
pain of the group of employees is significantly less than the material happiness that
consumers find from the products. Mill would be in total disagreement and would
forbid child/slave labour as he said before the welfare pleasures of employees are
much higher than any financial and material pleasures. Singers belief in human
intrinsic worth would prevent humans from being utilized to make cheap products
overseas.
Business and the Environment
This is similar to when we look at issues in environmental ethics. The environment for
Mill and Bentham has no intrinsic worth only instrumental. Therefore, Bentham would
suggest that businesses would have every right to exploit the environment as long as
consumer pleasure was being met. Mill again would disagree and say, no, businesses
are allowed to use the environment but in moderation and they should not exploit it
because caring for the environment is a higher pleasure than destroying it. Singer
believed that the environment has intrinsic worth and so he argues that businesses
should limit the amount of damage they do and care about the environment.
Strengths

Businessmen and women like Benthams version of utilitarianism because it

provides an easy to use cost-benefit way of working out what is right and
what is wrong.

The purpose of satisfying the greatest good for greatest number seems
logical, practical and realistic.

It is an egalitarian theory - no one person is worth more. (Well consumers are

in act utilitarianism.)

Weaknesses

The greatest good for greatest number, seems to be focused around greatest
good for consumers which makes an unequal distribution of good arise.

Not always possible to predict consequences or calculate utility particularly

when large amount of data are required (particularly if this theory were to be
used in reality).

No common definition of good exists.

It has some dangerous implications e.g. the subjection of workers

There are mixed views which means it does not fit exactly in stakeholder or
shareholder theory and makes it confusing.

Deontology

1. Act only on maxims that you can will to be universal laws of nature.
2. Always treat the humanity in a person as an end, and never merely as a means.
3. So act as if you were a member of an ideal kingdom in which you were both
subject and sovereign at the same time.

The deontological approach to ethics regards morality as a duty, or a moral rule

that ought to be followed. Deontological ethics is about following universal norms
that prescribe what people ought to do, how they should behave, and what is
right or wrong. It is a morality of principles, not of consequences. More-over,
deontology resides in reason, not in utility-providing feelings. Reason is considered
to be the source of moral rules, expressed through the human will. In
deontological ethics, the moral problem is considered to be a rational
problem that involves finding the right moral rule.

An important implication of deontological ethics, emphasised by Kant himself,

is that human beings are considered to be equal and therefore should never
be turned into means for other peoples ends; people should always be
regarded as ends in themselves. This implies mutual respect and the protection of
human dignity, which in turn assumes moral limits to human behaviour or a bottomline of what is acceptable, irrespective of the economic consequences of such
moral norms.
However attractive this moral theory may seem, it has several shortcomings. First,
not all moral problems can be solved by rules. Human life is too complex to be
reduced to a set of rights and duties (Anscombe, 1997). Indeed, as Walsh (2003,p.
285) has concluded, deontology is limited to issues of the will. It excludes
vulnerabilities of human life that are outside the reach of the human will, such as
scarcity of means and various contingencies to which social and economic life
is so vulnerable. So morality needs to involve more than universalist reasoning and
a steadfast will.2As Putnam (2003, p. 405) has argued, it requires more than moral
rules, since there are other ways values are expressed besides rules telling us what
people must do.
There is no higher-level rule that enables a unique rank-ordering of moral rules
according to their relative importance; nor does the theory allow for
exceptions (Crisp & Slote, 1997). If killing is wrong and we find ourselves in a
situation in which killing one person would help to save the lives of a hundred
others, would we not, perhaps, reconsider the rule and look at its consequences
in this particular context?

Virtue Ethics
The word virtue comes form the Latin virtus meaning moral strength, valour,
worth, excellence, the sum of all the corporeal or mental excellences of man.
(Lewis, C. T. & Short, C., A Latin Dictionary)
A virtue is an excellence, a good quality in a person. (Penguin Dictionary of
Philosophy)
A good moral quality in a person, or the general quality of goodness in people.
(Cambridge Advanced Learners Dictionary)
The word vice comes from the Latin vitium which means a fault, offence, defect or
blemish. (Lewis, C. T. & Short, C., A Latin Dictionary)
A moral fault or weakness in someones character. (Cambridge Advanced
Learners Dictionary)