Utilitarianism: Ethical Theories and Business

When it comes to determining a set of rules, guidelines or principles to follow in the business industry, many will agree that it is difficult for everybody to agree on one due to the complexities of dealing with human nature. Therefore, to a certain extent, the field of business ethics tries to come up with solutions to handle problems that arise within the business environment. On the contrary belief, one should not be confused with the meaning of morality and ethical theory. Morality has got to do with principles or rules that are used by people to decide between wrong and right (Jennings, 2008).

Meanwhile, ethical theory tends to provide guidelines that justify an action to be right or wrong when settling human conflicts (Jennings, 2008). This paper is going to discuss five different ethical theories. They consist of the utilitarianism, Kantian deontology, justice, rights and ethical relativism theories. After that, these ethical concepts will be used to identify some of the ethical issues that are presented in the article entitled ‘News of the World: What was it like on the inside? Finally, this paper is also going to come to a conclusion regarding the effectiveness of business theories and practices.

Ethical theories Utilitarianism The utilitarian theory insists that an action is considered to be right or wrong based on the consequences of the action and its effects on majority of the people (West, 2004). This means that an action or practice is ethically correct when it produces more positive consequences in comparison to negative ones to those who are involved. The forerunners for this school of thought are Jeremy Bentham and John Stuart Mill (west, 2004).

Therefore, utilitarianism goes by the rule that an action is evaluated to be ethical based on a set of rules or principles that can bring the greatest usefulness to the greatest amount of people (Mill, 2006). This is the total opposite to deontological ethics whereby utilitarian believes that there should not be any compromising when it comes to determining the stand point of morality. Tools such as cost benefit analysis and risk assessment are often depended on by utilitarian for decision making purposes.

However, there are some arguments regarding ‘the greatest happiness principle’ that is set forth by utilitarianism. This is due to the difficulty in measuring unit of happiness or in order to determine an action that will bring the most benefit comparing to other actions (Mill, 2006). Kantian deontology Kantian deontology stresses that an action is considered to be ethical if it can be accepted as a universal law by every individual (Makkreel & Luft, 2010). It is first introduced by a philosopher from Germany named Immanuel Kant.

He believes that morality must follow a set of rules without any exceptions. Therefore, this school of thought looks at categorical principles whereby they are imperatives and instructions are given on the way one must act (Holzhey & Mudroch, 2005). Besides that, Kantianism also emphasizes on treating each other with respect. A person should not be used as a mean to get to an end (Holzhey & Mudroch, 2005). This means that an individual is bound or obligated to their duty to follow a set of maxim in order to determine whether their actions are ethically right.

However, there have been arguments on Kantian deontology mostly due to the narrowness and inadequacy of this theory to handle various moral problems or dilemmas (Makkreel & Luft, 2010). For example, there is no moral guidance or solution when an individual’s rights and duties crosses path. Justice Justice can be defined as the importance of getting fair treatments, equality and having rights (Rawl, 1999). In order to grasp a better understanding on the theories of justice, this section is going to look at Nozick’s libertarianism and Rawl’s justice as fairness.

According to Nozick, every individual has the right to own a piece of property as long as it is acquired fairly without going against other people’s rights (Paul, Miller & Paul, 2005). In the world of economy and business, libertarian believes in a free market where it is no influenced by government policies or public services. When an organization or individual is taxed by the government for their property which they have obtained fairly, this action is considered to be unjust even if the money is distributed to public schools, prisons or fire departments (Paul, Miller & Paul, 2005).

However, many argue that absolute power that is encouraged by Nozick can bring about negative consequences such as oppression. For example, it is justified for a country to export all its food produce to another country in order to gain better profits and ignore the starvation experienced by its people. Meanwhile, Rawl’s theory of justice is called ‘Justice as Fairness’. There are two main principles in this theory. The first principle advocates that every individual should have equal rights to a fair distribution of social goods such as education, food and housing (Rawl, 1999).

The second principle stresses if there is any existence of social and economic inequalities, they should benefit members of society who are at the most disadvantage (Rawl, 1999). Therefore, unlike Nozick’s libertarianism, Rawl supports the redistribution of wealth and taxes to those who are socially and economically disadvantage. He believes that this action is just and promotes productive behavior. Many people argue Rawl’s theory of justice is too restrictive and pro-communism. Rights

The rights theory finds that the best method to deal with ethical issues is to form a basis of obligations in order to justify every individual’s entitlement to human rights (Shaw, 2010). Besides that, the rights theory also insists that human rights should be independent from the influence of other factors. Human right is simply the natural rights belonging to every person by virtue of being a human being (Shaw, 2010). There are two types of human rights; positive and negative rights. Positive rights are obligations put open people to provide goods and services to other people (Jennings, 2008).

On the other hand, negative rights are obligations imposed on people to stop them from interfering with other people’s freedom of action (Jennings, 2008). One of the major arguments pertaining to the rights theory is the lack of hierarchy to determine which rights has more value than the rest. Ethical relativism Ethical relativism is a theory that decides whether an action is right or wrong solely based on the moral norms that adheres to the culture of one’s society (Shomali, 2001).

Therefore, an action can be seen as ethically right in one society does not mean it will be in another. Unlike Kantian eontology, ethical relativist believes that there is no such thing as a universal law when it comes to determining a set of maxim (Jhingran, 2001). Any sort of moral problems or disputes should be judged and handled within the members of a society by coming to an agreement (Jhingran, 2001). However, there are many people who argue against the theory of ethical relativism. Although moral practices may differ from one society to another but the underlying principles of these practices are the same (Shomali, 2001). As a result, skeptics consider the possibility of the universalization of ethical values to be conceivable.

For example, every society acknowledges that certain actions are deemed wrong such as the act of torture and slavery. Besides that, individuals from the same cultural background can hold different moral beliefs as well as practices and decide that these actions are right or wrong (Shomali, 2001). Despite being widely accepted by the Nazi society, the genocide of Jews is considered to be ethically wrong by many Germans. This is proven when some of them try to help Jews to escape from their country.

Ethical issues in the article ‘News of the World: What was it like on the inside? The article ‘News of the World: What was it like on the inside? ’ portrays the vicious competition among journalists and newspaper companies. When this situation happens, many individuals resort to unethical business practices in order to get ahead from the competitors (Ferrell & Fraedrich, 2012). There are many reasons that can lead to unethical business behavior. Therefore, this section is going to identify various ethical issues that happen in a newspaper company called ‘News of the World’ or NoW through the eyes of one of their journalists named Dan Arnold.

One of the most obvious ethical issues is the pressure from the supervisors to get a story no matter what cost it takes (George, 2009). Journalists for this newspaper are pushed to obtain newsworthy material by hook or by crook. Since the competition between NoW with Sunday Mirror and People are tight, the company uses their journalists as a mean to get ahead and of course, to obtain a larger profit margin. Journalists from this newspaper have to work extra hard and are moved from one project to another without any consideration for their health.

This action is considered to be unethical if it is based on Kantian deontology. He stresses that every individual should be treated with respect and should not be used as mean to reach an end. Besides that, the way NoW runs its company creates fear and paranoia in every journalists (Geroge, 2009). Their employees often have to work throughout the week and sometimes late into the evening. Apart from that, they also have to be on the pager 24 hours a day and they are expected to travel around the globe in a short period notice so that, they can catch the next big story.

As a result of living in fear of getting terminated from the ‘best’ newspaper company, journalists are often stressful and resort to drinking in order to curb with the pressure. Aside from that, the amount of time spend in offices also means they have neglected their families back home. This is considered to be unethical based on utilitarianism as the company’s action of pushing their journalists to work harder does not bring the greatest benefit to the greatest number of people. It only serves to bring larger profit for the company’s shareholders while sacrificing the happiness of their employees.

Not just that, people outside of NoW are scared of the journalists from this company and more often not, give in to interviews and provide information that are required although they may feel reluctant to do so (Ferrell & Fraedrich, 2012). This action is considered to be unethical based on the rights theory. These individuals or organizations have the freedom to say ‘no’ to the journalists from NoW without any negative consequences that may be inflicted upon them by the massive influence of a successful company.

Besides that, the action of firing journalists just because their stories are not publish in the newspaper is also against human rights. It is not the journalists’ faults if their stories are pushed aside by the newspaper committee for another piece that seems to be trendier due to a sudden change in circumstantial events. These journalists have also worked hard just like the others and deserve some sort of job security and protection from the newspaper company.

In addition, there seems to be an unequal distribution of wealth between the profit gain by the newspaper company with their employees as well as between the journalists (Ferrell & Fraedrich, 2012). For instance, journalists who successfully get their stories published are paid more in terms of salary and are also secure from termination. Based on Rawl’s theory of justice, this action is considered to be unethical. Every journalists in NoW has worked hard in order for the newspaper company to succeed in the industry.

Therefore, to be fair, salary should be equally distributed among the journalists. Furthermore, in NoW, journalists are awarded base on their success to get a juicy story for publication. There are instances whereby the company is willing to do anything in order to obtain the most current news. Sometimes, journalists are asked by NoW to offer cash and other bonuses such as cars as well as housing property to informants. This act of bribery can be seen as unethical based on the ethical relativism theory (George, 2009). In many societies around the world, bribing is against their moral norms.

Although the company may view this action as a mean to get their hands on precious information, it may be conflicting to certain employees who do not support bribery. However, they will have to push their norms aside to avoid being fired from their jobs.

Conclusion This paper has discussed the different ethical theories that are relevant to the business industry such as utilitarianism’s pursuit of happiness, Kantian deontology in coming up with a universal law, Rawl’s and Nozick’s definition of justice, human rights as well as ethical relativism’s belief in conforming to society’s cultural norms (Shaw, 2010).

Various academic literature provided by these philosophers can be used as guidance when it comes to practicing business ethics. However, there is no one discipline that can stand on its own. This is because the theory that is presented by one school of thoughts is not sufficient or practical enough in overcoming a multitude of moral problems which exist in real life situation. Currently, many businesses choose to adopt interdisciplinary theories in order to achieve better outcomes