Ethical Theories: Overview

Understand the meaning of various ethical theories and key business ethics terminology.

What is Ethics?

Ethics refer to moral principles that govern a person’s behaviour or the conducting of an activity. It’s the branch of knowledge that deals with moral principles.

More definitions:

“Morality is concerned with the norms, values and beliefs embedded in social processes which define right and wrong for an individual or a community.”

“Ethics is concerned with the study of morality and the application of reason to elucidate specific rules and principles that determine right and wrong for a given situation. These rules and principles are called ethical theories.”

So morality is the starting point, ethics is our attempt to rationalise this and this leads to ethical rules (theories).

Related: Lawrence Kohlberg’s Moral Development Process

Categories of Ethical Theories

Scholars have divided theories of ethics into 3 categories:

• Normative Ethics
• Meta-ethics
• Applied Ethics

Normative Ethics

Normative ethics is an ideal, theorized ethics standard that philosophers developed through their rational thinking. These standards or theories are divided into the following main groups:

• Consequential / Utilitarian – concerned with the consequences of an action
• Deontology / Categorical Imperative – concerned with the rightness of the action itself
• Virtue ethics – concerned with the character of the person performing the action
• Excursus theory –minimal ethics, principlism and communitarianism
• Natural law – moral purpose and plan –Thomas Aquinas (1225–1274)

Meta-ethics

This category refers to the abstract study of ethics, how theories of ethics work, the origins and meanings of ethics.

• Can we ever know what is right and wrong?
• Is it rational to commit oneself to acting morally?

Applied Ethics

This is the application of ethics or moral considerations to real life.

• Private life – Should we lie or cheat under any circumstances?
• Public life – Ethical considerations in law making, e.g., abortion etc.
• Constitutions of countries, international organisations, political parties
• Professional life – Most professional bodies now have codes of ethics. E.g., teachers, accountants, doctors
• Business life –Duty of companies to uphold certain standards and implement proper practices

Life is rarely simple and sometimes it is not easy to see the correct decision, so it is vital for organisations to have an ethical framework in place.

Utilitarianism & Categorical Imperative

Utilitarianism & Categorical Imperative are two important normative theories of ethics that have had huge impact on Western society. Both try to answer the same questions but reach different answers.

Utilitarianism

Utilitarianism is a branch of Consequentialism, and was founded by English philosopher Jeremy Bentham and developed by John Stuart Mill.

At its simplest – Look for the greater good.

Here, utility means the sum of pleasures over pains, or happiness. Everyone is equal, but the benefit of the majority outweighs pain of the minority.

It is the consequences of an action that matter. An action is deemed right if it will cause more happiness than pain for everyone affected by that action. The greatest good to the greatest number, with everyone having an equal right to happiness.

The ends justify the means. I can look at the probable consequences and decide to lie to save a life.

Categorical Imperative

Categorical Imperative is a branch of Deontology (from the Greek for duty), and was devised by German philosopher Immanuel Kant (1724-1804).

This is Kant’s well known supreme principle of morality, which he claims should guide all our action. It is an attempt to articulate what it may mean to act on the basis of duty, rather than, say, from desire.

It is now associated with the idea of a universalizable morality, that is, with a morality that endorses as morally valid only those principles of action that can be valid for all persons irrespective of their particular situations and circumstances.

• At its simplest – Treat others the way you want to be treated
• If it is right for me to take this action, it is right for everyone. No exceptions.
• Based on a rational adherence to moral duty, not to be swayed by sympathy

Business Perspective – Applied Ethics

Macroeconomic Perspective – Applied Ethics

Concerns:

• International trading agreements and national policy
• Commercial regulation
• Charters to protect human rights

Public policy is likely to be influenced by utilitarian principles, where the greatest overall benefit for the majority of the population is the desired outcome.

Mesoeconomic Perspective – Applied Ethics

Concerns:

• Ethics at organisational level
• The key area of business ethics

Different influences are evident here:

• Virtue ethics –Integrity, honesty, fairness
• Utilitarianism – Make decisions based on greatest good
• Categorical Imperative – Focus on duty and duty to uphold stakeholder rights

Business Ethics aims to balance the profit making and society serving roles of a business.

Factors:

• Equal opportunity:
  Respecting the rights of every stakeholder – deontology
  Making difficult decisions to preserve the company – utilitarianism
• Consumer moral foundation theory – taking variation in consumer ethics. into account. E.g., making illegal downloads vs. buying fair-trade goods
• Responsible innovation – making sustainable product choices

Microeconomic Perspective – Applied Ethics

Concerns

• Individual behaviour within an organisation
• Decisions made by owners, directors, managers, staff

The ethical tone of an organisation comes from the top

• Authentic Leader – role model of integrity – virtue ethics influence
• Ethical Leader – focus on compliance with standards – deontology influence
• Servant Leader –focus on empowering others – utilitarian influence

Various Ethical Theories

Deontological Theories

This is a TYPE of ethical theories, rather than a theory in its own right.

Deontological theories focus on the preservation of individual rights and on the intentions associated with a particular behaviour rather than on its consequences i.e. following the rules.

An example of this may be genocide.

The deliberate and systematic extermination of a national, racial, political, religious or cultural group.
Can this be justified? How? By whom?

Deontological:

• deon = obligation / duty
• logia = speech
• telos = end / goal

Kant’s categorical imperatives (a deontological theory)

Kant’s categorical imperatives is a deontological theory.

Consistency – act only according to that maxim by which you can, at the same time, will that it should become a universal law.

Human dignity – act so that you treat humanity, whether in your own person or in that of another, always as an end and never as a means only

Universality – act only so that the will, through its maxims, could regard itself at the same time as universally lawgiving

But in an allegedly post modern world can universality, or indeed ethics in general, provide transferable frameworks?

Religious Ethics (a deontological theory)

Many ethical decisions are influenced by religious beliefs. Religion reflects different views in both time and culture.

It can be hard to apply these to 21st Century life.

Human Rights (a deontological theory)

John Locke stated that all humans have fundamental rights because they exist.

Natural law: Life, Liberty, Property (this includes ‘intellectual property’).

Teleological Theories

This is also a TYPE of ethical theories, not a theory in its own right.

Teleological theories stipulate that acts are morally right or acceptable if they produce some desired result such as realisation of self interest or utility.

An example of this may be activism:
The doctrine or practice of vigorous action or involvement as a means of achieving political or other goals, sometimes by demonstrations, protests, etc.
Is this / can this be justified?

Egoism (a teleological theory)

Defines right or acceptable actions as those that maximize a particular person’s self interest as defined by the individual.

An example of this may be capitalism:
An economic system in which investment in and ownership of the means of production, distribution and exchange of wealth is made and maintained chiefly by individuals or corporations.
Is it / can it be fair?

Egoism states that because we can only have a limited idea of the outcome of our actions, the most sensible course of action is to focus on achieving our own desires or interests.

Egoism is particularly influential in modern economics.

Compare this to other teleological theories like Utilitarianism where the outcome is often viewed in more simplistic terms.

Economic Argument

“Following the theory of egoism, an action is morally right if the decision-maker freely decides in order to pursue either their (short-term) desires or their (long-term) interests” – Crane and Matten (2010, p.100)

The economic argument for Egoism was put forward by Adam Smith.
Free competition and good information will lead to a moral outcome.

• A business makes and sells poor quality goods
• In the short-term the consumer will suffer
• However when the consumer recognises the poor quality and chooses to buy from somewhere else, the business will lose customers and money
• This outcome is seen as beneficial to all parties

What Egoism is Not

Egoism is NOT selfishness, nor it is it Egotism (thinking only of oneself, thinking one is more important that everyone else).

An egoist will react to others’ distress as a way of reducing their own distress to it e.g. donating money to a good cause because it makes you feel better (rather than because it is the “right” thing to do).

A selfish person will be insensitive to the situation of others.

Egoism – Desire or Interest?

The definition we used talks about short-term desire and long-term interest.

A criticism of egoism is that where behaviour is based on desire rather than interest, the approach to life is very different.

A student who goes out drinking and socilaising every night is one who is acting on their short-term desire.

A student who works hard to get a first class degree is one who is acting in their long-term interest.

Therefore, acting on the long-term interest is more ethical than acting on short-term desire.

Criticisms/Limitations of Egoism

Egoism leads to abuse of power or resources where there is no mechanism to prevent one egoist pursuing their goals at the expense of others.

Economically we could argue that the free market is the mechanism to prevent this abuse.

However, the existence of a globalised economy where wealth is shared so inequitably and the debate around sustainability of resources or the impact of climate change on future generations who do not yet exist would demonstrate that these mechanisms are not always effective.

Egoism and SR

Following the theory of Egoism, an organisation might engage on SR activities to improve their reputation, increase their sales or improve employee retention (enlightened self-interest).

This brings us back to the question of whether it matters what the reasons are for socially responsible behaviour.

Utilitarianism (a teleological theory)

Defines right or acceptable actions as those that maximize total utility, or the greatest good for the greatest number of people.

Utilitarianism is a consequentialist theory of ethics. It was developed by a number of British Philosophers such as Jeremy Bentham and John Stuart Mill.

Utility in this context means usefulness, so the usefulness (utility) of the outcomes of the actions are the measure used. Therefore the right action to take is the one that results in the greatest benefits i.e. the greatest good of the greatest number.

Let’s consider the obese potholer (caver).

Twenty-six potholers are trying to get out of a deep cave that is rapidly filling with floodwater. As they rush to the cave exit, the largest member of the group tries to crawl through first and gets firmly stuck. However hard they try, his friends cannot move him.

The group decides that they must sacrifice their friend so that the remaining 25 can live and they place dynamite close by him to widen the exit. They do not purposively intend to kill him, but even if that does happen, their action will be right, because it will maximise the good for the majority.

Utilitarianism is frequently used from an economic perspective. Happiness and well-being are reliant on economic growth and wealth. Therefore growing the economy can be justified as being good, even if a few people suffer to make this happen.

An example would be:

An organisation has to lay off/make redundant some staff to ensure that the organisation can stay in business.

But, at what point would you decide this becomes unacceptable?

Utilitarianism can be further broken down into:

• Act utilitarianism where the evaluation and focus is on the act that the individual did which will produce most good
• Rule utilitarianism where the focus is on rules that produce the most good

It is criticised because:

It is a blurring between consequentialism and deontology

It does not tell us what to do in a given situation e.g. should one follow a rule even if it will lead to an undesirable outcome?

Let’s consider this case.

Jayne is a key member of the team you manage. She has been with organisation for a long time. She is hard working and popular. Jayne has an exemplary absence record, averaging less than 2 days per year over the whole of her employment history. She is diagnosed with an operable cancer; the treatment will consist of an operation to remove the cancer and further follow up treatment. At every stage, Jayne tells you about her appointments and continues to work until the day before her operation.

Following this, Jayne is off sick for several months whilst she recovers from the operation and receives further treatment. During this time, the organisation decides to deal more strictly with sickness absence. Due to Jayne’s absence record (which was due solely to her cancer) HR have requested that you, as her line manager, start the dismissal process with a view to ultimately dismissing Jayne.

What should her department manager do?

Justice (a teleological theory)

Evaluates ethicalness on the basis of fairness: distributive, procedural and interactional.

Political parties regularly talk about ‘fairness’ and trying to achieve it:

• Is our society currently ‘fair’?
• If not, give examples of why not?
• How could this be addressed
• Could it ever really be fair and who could/should judge this?

Virtue ethics (Ethics of Character)

Assumes that what is moral in a given situation is only what conventional morality requires, but also what the mature person with a ‘good‘ moral character would deem appropriate.

• Do you have a ‘good’ moral character?
• How do you know?
• Who set/s the ‘benchmark’?
• And who judges you by it?

Ethical Relativism (a separate category)

Evaluates ‘ethicalness’ subjectively on the basis of individual and group experiences.

An example of this may be academia:
Can questionable individual behaviour leading to better grades and thus classification be acceptable?
Is it more or less acceptable if everyone is doing it?

Teleological vs Deontological theories

In its simplest form:

• Teleological theories: the end (outcome) justifies the means by which we achieve it
• Deontological theories: we follow rules, no matter what the personal costs might be

More things to consider

Teleological theories

• Teleology, as a moral action, aims for ‘happiness’ but is happiness moral?
• Based on consequences, can teleologically-reasoned behaviour ever be justified as we can’t possibly know all the consequences?
• Simply put such theories suggest the ‘end justifies the means’ but can this always be justified?

Deontological theories

• What, developmentally-speaking, creates a morally disengaged individual?
• Does physiology, e.g. gender and/or demography play a part? So is it either predictable/preventable… perhaps via eugenics?
• How could it be addressed – personally by individuals and socially, but by whom? (More positively/ethically!)