This paper is a report on business ethics. It evaluates the action of the stakeholders based on the normative theories, which are utilitarian, Kantian, and virtue ethics and how each approach evaluates the activities ethically. It also looks at the stakeholders in this case and how they can be classified according to power, legitimacy, and urgency. Lastly, it explores other additional and essential issues and ideas from the course that might be applicable and related to business ethics.
Business ethics refers to a reflection of the standard of business that either an individual or business uses when conducting transactions.
Business ethics enable one to make responsible decisions. Business ethics are essential as they shield a company as no one can dare invest in a company that has weak business ethics, they lead to the growth of the company for people like investing in companies which value business ethics, it gives room to the individuals to avoid given legal implications, and save money.
As per what I learned in class and other relevant sources, and business ethics are essential and can be applied in various ways. Therefore, this paper aims at evaluating business ethics as per the normative theories how they assess ethics, the stakeholders concerned with business ethics and their classification based on power, legitimacy, and urgency, as well as other relevant issues and ideas applicable to business ethics.
Application of Normative Theories To Business Ethics
Is Business Bluffing ethical?
Business ethics deviates from other forms of ethics like law, religion, and etiquettes. Business ethics contain various principles among them, the principle of charity. Testing this principle entails assuming the most reliable possible form of potential argument against a point of view. According to Carr, 1968, business ethics differ from other types of ethics, and business ethics applies differently as compared to other ethics. Carr argues that under no circumstance is business or businesspeople perceived ethical. Carr further states that business success and ethics are incompatible. Regular ethical standards cannot be applied in the business world. Therefore, the business has its set standards however, the rules are acceptable in business alone. For instance, Carr states that in industry, bluffing is expected and acceptable. In business praising oneself is ethically right. Just like any other specialized activity, the company has its own rules and standards which are supposed to be evaluated. Business ethics, however, impacts those that are not ready to venture in it.
According to Carr, business is like any other game. It values winning at the end of it all. No person does marketing for a loss, but all aim at getting profit. One has to be an outright liar to achieve business goals. You have to persuade the customer that your product is the best. This goes to the extent of lying or confusing the buyer. That is why Carr discourages the application of regular ethics to business. One might evaluate Carr’s statements and conclude that indeed, the company has no ethics.
Nevertheless, in as much as business gives room for non-ethical activities, rules must apply. In any given game, some laws govern them – breaking the rules results in punishment. Therefore, in business too, in as much as bluffing is allowed, it must be within the rules. Besides, ethics has to apply. Authenticity is essential also. Following the law is not enough as breaking the law is not always immoral and vice versa. That is why business ethics is vital more so, normative business theories.
Principles of Morals and Legislation
Normative ethical theories are used to assess ethics. There exist three normative methods, which include virtue ethics, utilitarian ethics, and Kantian ethics. With the assumptions, one might conclude that business ethics do exist or business is just a game whereby winning is what matters.
According to the utilitarian approach, an act is considered right based on the consequence. If the action triggers happiness in the end, it is deemed to be ethical, and if it triggers pain, then it is immoral. However, the theory indicates that all kinds of happiness are essential regardless of the amount. More so, it does not matter who is happy in the end, but as long as someone is satisfied, then the action is right. Therefore based on theory, laws are not applicable here but a human feeling. According to Bentham, ‘by the principle of utility is meant that principle which approves or disapproves of every action whatsoever, according to the tendency which it appears to have to augment or diminish the happiness of the party whose interest is in question,’ As per Bethan’s statement, human beings value pleasure more than anything else. Everyone desires to be happy anyway. Everything we do links us to happiness. No one in their right sense would want to hurt themselves. Therefore, in any given organization, its leaders have to be conscience on the repercussions of individual decisions and ideas lest they hurt someone.
Same to business, as long as at the end of it all one feels happy, then business ethics are applied. For instance, if capitalism brings happiness in the end, then it is morally upright, but it depends on the number of people who would be happy in the end. If owning property individually will make someone happy, then, capitalism is ethical as per the utilitarian theory. The utilitarian approach puts into consideration the end product of the business. If it makes someone happy, then it is worth being done. Therefore, as per the consequential theory. Happiness and unhappiness have to be a priority. With the approach, the interest of many people is at hand. If a decision made favors many people, then the action is considered morally right.
However, this theory is not reliable to some extent. It does not consider the means and the motive behind making people happy. As long as one is satisfied at the end, then the action is right. This theory might be misleading in capitalism situation whereby the means to make a profit may be wanting like through theft or the motive behind owning property individually is not good. For instance, when one wants to exploit the poor. To evaluate these actions ethically, as per the consequential theory of ethics, specific rules have to be set. Different people define, best differently. What one can see as best could be worst to others. Therefore, an organization has to define best as per their business ethics. For instance, in the case of capitalism, one has to acquire wealth well using correct means, and their intention of acquiring wealth should be good. In case of exploitation of the poor, then capitalism should be rated as unethical.
It is also known as deontological ethics, which states that an action is considered ethical if it is at per with set rules. The morality of action bases on the adherence of the law. When one acts as per the requirements, then, they are morally upright. Kant urges that since requirements are set and no one is above them, then it is the set way to evaluate ethics. As per the Kantian ethics, respect for the autonomy and dignity of the individual are vital. In this case, motives are considered more than the consequences. Human actions should be based on intention rather than priorities. Before acting, one has to have a useful purpose for the work. When the target is good, the outcomes do not matter. More so, one has to act responsibly as per their required duties.
The Kantian theory might be based on applicable to capitalism. Owning of property individually can be considered ethical based on the intention or motive. ‘Act only in such a way that you treat humanity as an end in itself and not as a mere means, ‘Kant, 1785. Thus, Kant discourages capitalism as it benefits a few at the expense of many. A few become rich, whereas many are left poor as they have no means of acquiring the property. If all property is owned individually all over the world, what would be the repercussions? Will people live in peace and better lives? No, as many will be left property less while others will have more than they require. Therefore, as per the Kantian ethics theory, capitalism is immoral. The intention behind it is bad thus morally wrong. One should act in a manner that they can rationally will that any other individual act in the same situation. Kant discourages treating other people as a means to justify the end. Business bluffing, in this case, is treating people as a means to justify the end. With Kant, morally right action can be universalized. ‘Act only on that maxim through which you can and at the same time will that it should become a universal law,’ Kant, 1785. Pg73.
In as much as the theory encourages business ethics, it might not be the best for business. For instance, it brings about misunderstandings between different duties and rights. For example, as per the law, which Kantian theory considers right, everyone has a right to ownership of property. Therefore, if a person acquires a lot of wealth as per the law through best means, then, it is morally upright. Similarly, it does not look into the outcomes. What is the essence of applying business principle at the expense of gaining profit? It does not consider what would happen if capitalism is discouraged and communism encouraged. Since rules cannot change, a decision made finding Kantian theory cannot be altered either thus inflexible.
In this case, one’s character is at the center. The ability to judge and act in the right way at the right time and to the right amount. One has to work for a reason. The purpose of action can be rated as right or wrong. Before one acts, they tend to judge the effect. People should act wisely neither as per the results of their work nor set laws but as per what they believe is right. Aristotle stated that the virtuous person is bound to make moral decisions.
This theory is well applicable in capitalism, whereby, when a virtuous person acquires wealth, then the action is considered ethical. Noble people will make capitalism flourish as they would find others. It is easily used as the virtuous people are the ones depended on and trusted. For instance, if one buys a piece of land legally and uses it to establish an orphanage, the action would be considered ethical.
Nevertheless, the theory is not reliable as some virtuous people may not at one point agree to the right thing to do. For instance, they might acquire my land for themselves at the expense of others missing.
Stake Holders in Business Ethics
Stakeholders are any individuals who can be affected by the performance, objectives, and policies of the company regardless of having invested in it or not. The stakeholders, in this case, include suppliers, owners, employees, competitors, clients, government, media recipients, employee family, and clients’ clients. The stakeholders can be classified as internal or external. Internal stakeholders include manager, employees, and owners. External stakeholders include suppliers, shareholders, clients, government, clients’ clients, employee’s family, media, and society. However, as per the power, legitimacy, and urgent model, stakeholders, are categorized based on their prominent to a company. The model shows what time and attention would be given to various stakeholders. Therefore there exist eight stakeholders group, which include dormant, latent, demanding, dominant, dangerous, dependent, definitive, and non-stakeholders. Dormant stakeholders are those with power but lack legitimacy and urgency thus, their potential remains dormant hence should be informed regularly.
Latent stakeholders have legitimate claims but have no power to influence a company neither do they have urgency, thus should be informed only when necessary. Dominant stakeholders are those that are to be kept informed as they possess power and legitimacy, thus influence projects. Demanding stakeholders poses urged claims but zero power and legitimacy to enforce them hence, time will not be wasted updating them. Dangerous stakeholders have urgency and legitimacy but have no power but are capable of causing violence hence should be kept engaged fully and satisfied. Definite stakeholders possess power, legitimacy, and urgency hence, they should be kept informed always. Non-stakeholders, on the other hand, possess no power, legitimacy, and urgency hence, should not be informed.
Issues And Ideas From The Course That Are Most Applicable In Business Ethics
There is an ethical motivation for individual businesses to treat the environment well. This is achieved by being responsible. In this case, ethics theories apply. In this case, the consequential approach is not applicable as it bases on the end product. It encourages the use of fossil fuel to produce best products in a given country making it rule over other nations making the countries citizens happy at the expense of other people from a different state and the forthcoming generations.
Consequently, Kantian ethics are applicable. Since they emphasize on being responsible as per the required law, people are to take care of the environment other than producing more products through fossil. The natural law prohibits the use of fossil fuel and encourages the use of natural fuel, which is safe to the environment. In as much as fossil fuel is natural in production, it is against the environmental laws, and when made universal, it will have a severe impact on the environment.
Nonetheless, virtue ethics allows one to act virtually that is per the virtues. Since humility is a virtue, there is no need for using fossil fuel to have most products to rule other countries that do regulate the use of fossil fuel. Some states use fossil fuel because they want to be the richest thus proud of ruling over other countries. As moral ethics, this is not necessary. What is essential is to take care of the environment for the sake of future generation so that they can be able to enjoy the same context we live in of trees and wildlife.
Business ethics refers to the right or wrong way of carrying out business activities. Normative theories give different approaches to business ethics. As per the utilitarian theory of ethics, the end matters a lot than the means whereby, if at all, there is a pleasure at the end of action, then the effect is morally upright. However, the theory is not reliable in business as to pleasure it does not measure the amount of comfort either does it specify who is supposed to feel the happiness. Kantian ethics is also used to evaluate business ethics. It is the opposite of consequential theory as it states the action should be treated right or wrong based on the motive of the actor. With Kant, the intentions were good as per the law, the outcome does not matter, and the action is considered right. Virtues ethics, on the other hand, states that an operation is correct when performed by a virtuous person. For instance, an action performed by an honest person is considered right. However, the virtues of ethics cannot be reliable when a virtues person refuses to do what is expected of them. More so, it promotes egoism. These theories of ethics are not only applicable to capitalism but also in globalization and environmental ethics.
Kantian ethics is the best applicable way of evaluating ethics. It states that action is considered ethical if performed as per the set laws and regulations and of good intentions responsibly. With Kantian ethics, one can account for their actions. One desires to do what is expected of them according to their will in consideration of others. Kant states that to know if an effort is morally right, if applied universally, its consequences would be favorable to many individuals if not all. It discourages individualism and encourages communalism so that each person can benefit. Therefore, business companies should consider applying the Kantian theory of ethics in their businesses to maximize their production.
Cite this Business Ethics Report
Business Ethics Report. (2020, Aug 02). Retrieved from https://graduateway.com/business-ethics-report/