Utilitarianism theory in business ethics. Applying Utilitarianism in Business 2022-10-23

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Utilitarianism is a ethical theory that holds that the best action is the one that maximizes utility, or happiness, for the greatest number of people. In the context of business ethics, utilitarianism suggests that businesses should make decisions that maximize the overall happiness or well-being of all stakeholders, including employees, customers, shareholders, and the larger community.

One way that businesses might apply utilitarianism is by considering the potential consequences of their actions on all stakeholders. For example, a company might decide to invest in more environmentally friendly practices, not just because it is the right thing to do, but because it will also lead to long-term cost savings and improved public relations, which will benefit shareholders and customers.

Another way that utilitarianism might be applied in business is through a focus on creating the greatest good for the greatest number of people. This might involve prioritizing the needs and well-being of the most vulnerable stakeholders, such as low-income customers or marginalized communities. For example, a company might decide to donate a portion of its profits to a charitable organization that helps people in need, even if it does not directly benefit the company in the short-term.

Utilitarianism can also be used to justify certain business practices that might be viewed as controversial or unethical. For example, a company might decide to lay off a large number of employees in order to cut costs and remain competitive, even if it causes hardship for those employees. From a utilitarian perspective, this decision might be justified if it leads to the long-term survival and success of the company, which ultimately benefits all stakeholders, including the remaining employees.

However, utilitarianism is not without its criticisms. Some argue that it can be difficult to quantify and compare the utility or happiness of different individuals or groups, and that it might lead to negative consequences for some stakeholders. Additionally, utilitarianism does not take into account issues of fairness or justice, and might justify actions that are unethical or discriminatory if they lead to the greatest overall utility.

Overall, utilitarianism offers a useful framework for considering the ethical implications of business decisions, but it is important for businesses to also consider other ethical theories and principles, such as respect for autonomy, fairness, and justice.

Utilitarianism In Business Ethics

utilitarianism theory in business ethics

The rule imperatives significantly underpin the general form of this theory Liuzzo 23. For example, a business may manufacture and sell substandard and unsafe products in their quest for more. The first element is consequentialism, which is the understanding that the wrongness or rightness of actions is entirely determined by their actions Mack 64; Suikkanen 1. Facts Both Henry and Clare hold positions which come with business obligations and responsibilities. In essence, creditors suffer financially from organizations that purpose to falsify information so that they would receive more funding.

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Utilitarianism and Golden Rule in Business Ethics

utilitarianism theory in business ethics

It is a world where it is very difficult to make decisions based on just whether they are right or wrong. The death incidence occurred at the Upper branch of the coalmine around Mont coal in the West Virginia district. There are three specific premises for Utilitarianism which must go under review when determining the correctness of any action taken. Removing the minority might involve genocide or mass deportations, both of which seem morally problematic. For example, you might decide to hold the drug back and not release it because you don't want to risk that some people might have a bad reaction. This kind of a problem is common in the business world where decisions are constantly made by company managers, workers or any other employees.


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Utilitarianism: What It Is, Founders, and Main Principles

utilitarianism theory in business ethics

Consider another example from Williams. We use this system for voting because the information it provides represents what the will of the people happen to be. Employees should enjoy favorable working conditions and companies should never subject employees to any form of humiliation at the expense of corporate gain Arnold et al. Rule utilitarians focus on the effects of actions that stem from certain rules or moral guidelines e. When your focus is on what makes you happy before anything else, then your spirituality is something that you can personally direct at all times. Based on Rail's theory of Justice, this action is considered to be unethical.

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Applying Utilitarian Theory in Business

utilitarianism theory in business ethics

But perhaps more apt is the application of the shareholder model of business management that significantly appeals to reason and respectively, finds justification in Kantianism. Once the company knows the negative and positive probabilities for each decision, they will be able to figure out which is the best decision based on which one has the highest probability for positive outcomes. Ethical issues in the article 'News of the World: What was it like on the inside? It is at this point that reason alone, i. In addition, they have caused him to adopt unconventional means to compensate for his loss. If you abandon the idea of rules, regulations, and laws in society to pursue happiness, then you are forced to rely on the choices that others make to not bring harm into your life.

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Business Ethics. Utilitarianism and Kantianism

utilitarianism theory in business ethics

For instance, we know that the war against terrorism portends the greatest good to all mankind. And, moreover, should we really follow a rule when, in the moment, we can perform an act that will increase the happiness of others? The theory of utilitarianism can be applied in business in many ways. Indeed, simply taking the job will ensure that someone who has great enthusiasm for chemical and biological warfare does not get the job. While these concepts may seem far removed from real business decisions, without realising it, many managers apply these principles when they think about effects on shareholders, customers, employees or other stakeholders. When we focus on the long-term consequences of the above cases, the Utilitarian answer will change. Kantian demonology Kantian demonology stresses that an action Is considered to be ethical If It can be accepted as a universal law by every Individual Mackerel ; Left, 2010. Henry does not accept the offer from Clare The golden rule lays emphasis on the reciprocity of actions by either party in an issue.

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Utilitarian Views on Business Ethics The utilitarian theory

utilitarianism theory in business ethics

This is proven when some of them try to help Jews to escape from their country. These are some questions that we need to ask ourselves in regard to the Utilitarian theory. Utilitarians argued, for instance, in favour of rights for women and for people of various races. A deadening explosion had cleaved through the underground coalmine and unfortunately trapped an unidentified number of shift miners inside the mine. Deciding not falsify information in the financial statements as told by Art passes for human autonomy as it benefits several parties, including the creditors, herself and moral inclinations, the employees, and the customers at large.

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8 Utilitarianism Examples in Business

utilitarianism theory in business ethics

For example, research has shown that a goof number of people living in poor nations in lack are much happier than people living in rich nations in excess. By Kantian thought, good reason will determine that a wrong has already been committed, and there is nothing subsequent good conduct can reverse. This makes it accessible to anyone. According to the utilitarianism concept, human beings should enjoy uninterrupted peace, pleasure if possible, and that maximization of happiness goes in hand with the actions of intentions. However, a company may put into place policies for protecting and rewarding whistleblowers. The consideration of pleasure applies equally to everyone. Utilitarianism is a theory of morality that advocates actions that foster happiness or pleasure and oppose actions that cause unhappiness or harm.

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Justice Theory: Business Ethics, Utilitarianism, Rights, Caring, and Virtue

utilitarianism theory in business ethics

At the same time, it is reasonably sound to argue that reducing profits to save the environment is equally a good cause. Act utilitarianism argues that Utilitarianism And Consequentialism 908 Words 4 Pages As per this theory the outcome of any action should minimize the pain and maximize the pleasure. The obvious weakness that shows up immediately when considering the application of this theory is the difficulty that comes with an attempt to measure happiness. There are two main principles in his theory. Furthermore, in NOW, Journalists are awarded base on their success to get a Juicy story for publication. Harbor Town, New York: Career Education, 2009.

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