Overview Of The Main Theories Of Business Ethics

Business ethics textbook was published by William Shaw at 1990. William Shaw's uniquely thorough and practical guide brings clarity to such critical topics as the nature of morality, individual integrity and responsibility, economic justice, concepts of capitalism, and the role of corporations in our society and real-life moral issues that arise in the workplace. Ethics has many nuances and it has been defined as inquiry into the nature and grounds of morality. Ethics is the study and philosophy of human conduct in deterring right and wrong. Besides that, ethics not only is the study of wrong and right, but also duty and obligation, moral norms, individual character, and responsibility. Ethics also described as philosophy. Moreover, business ethics comprises the principles, values and standards that guide behaviour that are universal and absolute.

Business ethics is the study of business policies and practices regarding to the potentially controversial issues, which is, bribery, insider trading, corporate social responsibility and etc. For example, would it be right for a manager to break a promise to a customer? Besides that, consequential theory is based on two principles, which is whether the action is right or wrong, they just depend on their results. For example, most people are agreed that lying is wrong, but if telling a lie would help a person or save a person’s life, consequential theory say it’s the right thing to do. For example, a thief stole rich people money to those people who are poor.

Furthermore, there have two example of consequentialism are egoism and utilitarianism. Egoism is the people that are motivated by their own interests and desires, and they cannot be described otherwise. Egoism also is the view that morality coincides with the self-interest of oneself or an organization one is part of. Egoists is those people who determine the moral value of an action based on the principle of self-interest. For example, if an action is morally right if it promotes one’s long-term self-interest, and if an action is morally wrong if it undermines the agent's self-interest. Based on a case, which is a children’s pajamas case that happen in USA. This case is about a company produce a fire-retardant children’s pajamas, it was famous, they first hit the market and was an overnight success. After that, they like a bot, there have some news talk about that the pajamas were killers. The US Consumer Product Safety Commission ban the sale and recall million. The pajamas contained the flame retardant chemical ‘TRIS” which had been found to cause kidney cancer in Children. After recall all the product, the sleepwear could not be thrown out, burnt, buried or sold, because of the toxicity. So the company decided to dump all the product in Brazil, Africa, and Iraq. It is consequential, because they company don’t have any choice, they also need to destroy all the product, but they can’t dump it in our country, so this is the only way that they can do.

Besides that, utilitarianism is one of the best known and influential moral among depends on their consequence. This theory was first developed by Jeremy Bentham (1748-1832) and further refined by his student, John Stuart Mill (1806-1873). The Cost Benefit Analysis was formulated by Jeremy Bentham. Furthermore, utilitarianism theory determined the amount of utility for each individual affected by an action as well as the amount of utility for the whole society, measured in monetary terms. The principles of utility are actions are right if they promote the greatest human welfare, and wrong if they do not promote the greatest human welfare. Moreover, there have six points concerning utilitarianism. First, in choosing between alternative courses of action, we should consider the net worth of happiness vs. unhappiness produced by each course of action. Second, we should give equal consideration to all individual preferences, then calculate the net worth of the various kind of pleasures and pains. Third, anything can be morally praiseworthy in some circumstances if it promotes the greatest balance of pleasure vs. pain for the greatest number of people. Forth, we should seek to maximize happiness, not only immediately, but in the long run. Fifth, we should do what is likely to cause happiness and likely not to cause suffering when we lack certainty. Last, we must guard against bias in our utilitarian calculations when our own interests are at stake. So it is advisable to rely on rules of thumb. Utilitarianism is concerned with the amount of happiness produced, not how the amount is distributed, so the theory can run counter to principles of justice. Besides that, the strength of Cost Benefit Analysis is result-oriented, provides a relatively precise and objective method for moral decision making. Other than that, it also favour among economist, as it can help to explain and predict a wide-range of economic phenomena such as price and allocation of resources.

The weakness of Utilitarianism and Cost Benefit Analysis is that the theory does not give account of the right we have and what is just and fair. Besides that, happiness and satisfaction cannot rationally be the main objective. The theory is degrading to humans, it degrades human being to the level of animals, because the theory suggest that people's goal of life is attaining pleasure. Utilitarianism encourages selfishness, as it propogates one should be concerned with maximizing's one's own happiness. Utilitarianism is self-serving. This principle will be abused in order to serve particular interest. This theory is too time consuming and impossible to calculate the amount of pain and pleasure.

One of the related cases to this theory is the PINTO case. During the last decade of 20th Century, Ford Motor company began losing market share to Japanese Companies who were making compact, fuel efficient cars. Ford's president at that time, determine to regain its share of the market by quickly developing a small car called the Pinto. The Pinto would weigh less than 2000 pounds, cost less than 2000 and be on the market within 2 years instead of the normal 4 years. When an early model of then Pinto was crash tested, it was found that when struck from behind at 20 miles per hour, the gas tank would open. Gas would then spray out and enter passenger compartment as well as under and around the car. In a real accident, the doors will be jammed and trapping the victims to die.

Based on the Cost Benefit Analysis, if Ford repair modify the vehicle will cost 137 million USD. If the company modify the Pinto cars, they could prevent the loss about 180 burn deaths, 180 serious burn injuries and 21000 vehicles which cost 49. 15 million. Based on the analysis, $137 million versus the $49. 15 million, Ford managers decided to nonetheless to go ahead and manufacture the Pinto without modifying it due to many reasons. They felt that the car was safe and the design met all the legal standard. However, just because it was legal does not necessarily mean it was ethical.

Besides that, non-consequential also called deontology theories, it is defined as those do not only determine the moral rightness or wrongness of an action based on the action’s consequences. Kant’s moral theory is perhaps the most influential of all non-consequentialist approaches. According to Kant’s theory, they said that we have a duty to play towards fellow human beings. It is not matter of the individual weighing the consequences, and it is irrespective of the consequences. An action has to be internationally good, as a duty to be performed for fellow human beings. Furthermore, they determine the duty based on the idea of goodwill. Utilitarianism states that consequences will determine the moral judgement, but Kant believed that reason alone can give the absolute moral truth and discover our sense of duty. Moreover, Immanuel Kant comes out with the categorical imperative. An imperative is a command or duty whereas categorical means that it is without exception.

The first categorical imperative seems to reinforce moral actions should not be guided by our own inclination, but guided by a sense of duty to the universal law. The second categorical imperative implies that human being have dignity and should not be treated as an object. Moreover, there have a case which is Eli Lily case, their company concept is completely opposite with Kant’s theory. Based on Eli Lily case, before a newly discovered drug is approved for sale, the US Food and Drug Administration (FDA) requires that it be tested on healthy humans to determine whether it has dangerous effects. Unfortunately, most healthy people will not take an untested substance that is not intended to cure them of anything and that may have crippling or deadly effects. Test subjects can die, suffer paralysis, organ damage, and other debilitating injuries. Eli Lily a large company however discovered a group of volunteers willing to take untested drugs for only $85 a day plus free room and board; Homeless alcoholics, desperate for money. According to Kant’s theory the action of using human being for testing is totally wrong. The reason why it is wrong is because Kant says that Eli Lily company doesn’t treat those volunteers who are homeless and alcoholic as human being. They treat them like “animal” even though the company did provide them lots of benefits, such as money, free room, food and good medical care. Furthermore, after analysing Kant’s concept of goodwill, Ross William David takes up his argument that a morally good action must not simply conform with the moral law, but must be performed in order to conform with the moral law; that is, the act must be performed in recognition of and out of respect for the moral law. Ross basically accepts this claim and agrees that it is not enough merely to do the right thing. For an act to be morally good, we must perform it because it is the right thing. For example, if I repay a loan simply to avoid a heavy fine or some form of legal penalty, I will have done the right thing but my action will have no genuine moral significance. Only if I repay the loan out of a sincere sense of personal obligation and a willing adherence to principle will my right action also be morally good. However, while conceding this important point, Ross takes issue with Kant’s further claim that only actions performed in conformity with a priori moral laws can be morally good.

Moreover, virtue theory is concerned with pursuing a certain type of morally inclusive excellence, and Aristotle called it eudemonia, which can be roughly translated as happiness or human flourishing. Firstly, its primary attributes are a strong emphasis on the important of certain generally accepted virtues of character, indeed it is through honing and perfecting these virtues that an individual becomes truly ethical. Secondly, a strong emphasis is placed on the existence of an active community that nurtures this virtue. Thirdly, virtue ethics makes clear that in the moral like one cannot rely merely on rules or guidance, but one must be rationally moral. Furthermore, an essential feature of rationally within virtue ethics is that rather than focusing on the material goals of the agent, it focuses on the character and motivations of the agent and on the agent’s ability to pursue a certain particular type of excellences.

There have three scholars on virtue ethics, which is, Aquinas, Macintyre, and PINCOFFS. Aquinas think that virtues are habits that enable a person to live reasonably in the world. Macintyre consider virtues are dispositions that enable a person to achieve the good at which human produces aim, and PINCOFFS consider virtues as dispositions.