Business Ethics

Chapter # 3

Ethical Principles, Quick Tests, and Decision-Making

Guidelines

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These can be used in ethical reasoning for choosing particular alternatives and justifying difficult decisions and actions. The principles are:

UtilitarianismUniversalismRelativismRights Justice

Jeremy Bentham and john Stuart mill are acknowledged as founders of the concept of utilitarianism.

The basic utilitarian view holds that an action is judged right, good or wrong on the basis of its consequences/results.

An action is morally right if it produces the greatest good for the greatest number of people affected by it.

The rightness or wrongness of the actions themselves are not judged, But rather their consequences.

How are the costs and benefits of no monetary stakes, such as health, safety, and public welfare, measured?

Utilitarianism as a principle does not consider the individual because their interests are not valued in a decision.

The principle of justice and rights are ignored in utilitarianism.

Because businesses use utilitarian principle when conducting a stakeholder analysis, you, as a decision maker, should:

1.Define how costs and benefits will measure in selecting one course of action over another.

2.Identify the procedures and policies you will use to explain and justify you cost-benefit analysis.

3.Ask yourself what moral obligations you have towards each of your stakeholders ?

Immanuel Kant (1724-1804) is considered one of the leading founders of the principle of universalism.

Universalism, which is also called “deontological ethics,” holds that the means justify the ends of an action, not the consequences.

The term “deontology” is derived from the Greek word Deon which mean duty.

These principles have lack of practical utility. It is difficult to think of all humanity each time one must make a decision in different situation.

It is hard to resolve conflicts of interests when using a criterion that states that all individuals must be treated equally.

Identify individual as well as groups and their welfare and risks when considering policy decisions and outcomes.

Identify the needs of individuals involved in a decision.

Ask if the desired action or policy would be acceptable to individuals involved . Under what conditions would they accept the decision?

Ethical relativism holds that no universal standards or rules can be used to guide or evaluate the morality of an act, i.e., what is right for you may be wrong for me.

This view argues that people set their own moral standards for judging their actions.

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.

This view contradicts everyday experience because moral reasoning are developed from conversation, interaction and arguments. For example : What I believe as facts in a situation may or may not be accurate.

When considering the principles of relativism in stakeholder analysis, ask the following questions:

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

What are my moral beliefs and principles in this decision?

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

Moral Rights: Moral rights are based on an individual perspective. e.g: right to work, safety, health, and happiness etc etc.

Legal Rights: Legal rights are limited to a particular legal system and jurisdiction. e.g: Every country’s Citizen is guaranteed, in the Declaration of independence, the rights to life, liberty and freedom to speech.

The entitlement justification of individual rights can be used to disguise and manipulate selfish, unjust political clams and interest.

Protection of rights can exaggerate (make it larger/better) certain entitlements in society at the expense of others. Fairness and equity issues maybe raised when rights of certain individuals and groups take precedence over the rights of others in similar situations.

The limits of rights come into question. To what extent should company and governmental practices that may benefit the entire society but threaten certain individual or group rights.

Identify the individuals whose rights that may be violated by a particular policy or course of action

Determine the legal and moral bases of these individuals rights does the decision violate these rights on such bases?