Ethical theories and approaches
in Business

Ethical theories provide a framework for judging
right or wrong decisions.
There are two types of Ethical theories
1.consequentialist
2.Non consequestialist

Concequentialist theories
• If the consequences are good, the action is
right; if they are bad, the action is wrong.
There are two theories under this category :
• Egoism
• Utilitarianism

Egoism as an ethical theory
• The view that equates morality with self-
interest is referred to as egoism.
• An egoist contends that an act is morally right
if and only if it best promotes his interests.

• Moral philosophers distinguish between two
kinds of egoism:
• personal and
• impersonal.
• Personal egoists claim they should pursue their
own best interests, but they do not say what
others should do.
• Impersonal egoists claim that everyone should
let self-interest guide his or her conduct.

UTILITARIANISM
• Utilitarianism tells us to bring about the most
happiness for everyone affected by our
actions.
• Jeremy Bentham and JohnStuart Mill were
important early utilitarians.

Six Points about Utilitarianism
• First, when deciding which action will produce
the greatest happiness, we must consider
unhappiness or pain as well as happiness.
• Second, actions affect people to different
degrees.

• Third, because utilitarian's evaluate actions
according to their consequences and because
actions produce different results in different
circumstances, almost anything might, in
principle, be morally right in some particular
situation.

• Fourth, utilitarians wish to maximize
happiness not simply immediately but in the
long run as well.
• Fifth, utilitarians acknowledge that we often
do not know with certainty what the future
consequences of our actions will be.
Accordingly, we must act so that the expected
or likely happiness is as great as possible.
• Sixth : my pleasure as pain should be equally
treated as others

Use of utilitarianism in organizational
context
Formulating policies
Second, utilitarianism provides an objective and
attractive way of resolving conflicts of self-
interest.
Third, utilitarianism provides a flexible, result-
oriented approach to moral decision making.

Non-Utilitarian theories
1. Formulate the maxim of the action. That is,
figure out what general principle you would
be acting on if you were to perform the
action.
("in situations in which I need money and know I
can't pay it back, I will falsely promise to pay
it back.")

2. Universalize the maxim. That is, regard it not
as a personal policy but as a principle for
everyone.
( "in situations in which anyone needs money
and knows he or she cannot pay it back, he or
she will falsely promise to pay it back."

3. Determine whether the universalized
maxim could be a universal law, that is,
whether it is possible for everyone to act as
the universalized maxim requires.
(if everyone started making false promises, the
institution of promising would disappear, so
no one would be able to make a false
promises, since there would be no such thing
as a promise to falsely make.)

Humanity as an End, Never as Merely
a Means
• Treat human being as end not as a mean :
Human are worth in themselves so you should
respect their rights
All effort should be done to improve the well
being of human being.

Organizational implications
There are two alternative formulations of the
categorical imperative. The first is that an act
is right only if the actor would be willing to be
so treated if the positions of the parties were
reversed.
The second is that one must always act so as to
treat other people as ends, never merely as
means.