While I was going through this discussion board topic, I thought about different theories which I could use. My approach to meta-ethics is utilitarianism. Therefore, in this discussion, I will apply utilitarianism theory as my theory and apply it in business ethics. Utilitarianism is a normative ethical theory which points out that action is said to be right or wrong based on its outcomes. It is a moral viewpoint whereby the happiness of the highest number of individuals in society is taken as the greatest good. According to Lyons (2015), based on this theory, an act is morally right when its consequences result in happiness (lack of pain), and wrong when it leads to unhappiness (pain).
Utilitarianism is applied often when business leaders make critical decisions relating to things such as layoffs, hiring, store closings and expansion. All businesses focus on creating and increasing their profits as their primary goal, which could make them engage in unethical activities (Lyons, 2015). However, through the use of utilitarianism, when business managers are making important business decisions, they will have to weigh between what could be lost and what could be gained. Managers should make a utilitarian determination in considering the cost-benefit analysis of their significant decisions. The managers should use utilitarianism to determine the consequences of their decisions on all business stakeholders which will be affected by the decision.
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Also, as a practical means to measure value, managers can use utilitarianism in risk management. Müller-Schneider (2013) states that the potential for loss or benefit, or utility function, may be transformed into decision-making, strategic planning and risk assessment. Along with data analytics, financial projections and market evaluations, the utility function could give managers tools which can use to measure the viability of future projects. It could even provide them with an opportunity for exploring objections about impractical and mechanical nature of utilitarianism, particularly from a consumer point of view.
Utilitarianism might inspire people in the company to take the initiative, become more responsible, and take actions which promote the company's reputation instead of damaging it. The first question in attempting to reach a business decision could be, does the decision cause harm to other people in the organization? When the answer is yes, the management should make a utilitarian calculation to decide if there is still a greater good for the highest number (Müller-Schneider, 2013). Also, the managers should think about the other people they should consider in their decisions – whether it is all stakeholders or only stakeholders. It is also essential to determine what the harm entails, and who resolves whether a suggested decision may be harmful. Through this, the business decision will be made in consideration with the greatest good to the greatest number of people.
In conclusion, utilitarianism in business could result in a bottom-line mentality whereby decisions are founded on attaining the greatest good for the company as it relates to the greatest number of stakeholders, which include shareholders and all others impacted by the organization's actions. The outcome is the defining factor, not the intent of the decision makers or whether individuals are treated humanely. Overall, the ethical locus of utilitarianism is that people must be happier and suffer less. It should be noted that because utilitarianism changes the lives of people in multiple ways, the same could be replicated in the companies that the people work. It makes individuals have the urge of being as effective as possible to transform the world and make it a better place. Most businesses consider utilitarianism when making decisions like hiring, laying off, expanding their operations or closing stores, with the hope that their actions will result in the greater good for the business and all its stakeholders.
References
Lyons, D. (2015). Utilitarianism. Wiley Encyclopedia of Management, 1-4.
Müller-Schneider, T. (2013). Jeremy Bentham: An Introduction to the Principles of Morals and Legislation. In Hauptwerke der Emotionssoziologie (pp. 50-54). Springer VS, Wiesbaden.
