Business Ethics

Running head: BUSINESS ETHICS
Business Ethics
Name of the Student
Name of the University
Author note

BUSINESS ETHICS
1
Table of Contents
Answer to Question 1......................................................................................................................2
Answer to Question 2......................................................................................................................3
Answer to Question 3......................................................................................................................5
Reference.........................................................................................................................................7

BUSINESS ETHICS
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Answer to Question 1
The ethical theory which is probably the commonly applied and most widely understood
is utilitarianism. A decision concerning business conduct is proper under utilitarianism in an
organizational context, if that decision generates the greatest good for the greatest number of
individuals. ‘Good’ is normally referred to as the net benefits that accrue to the parties who are
affected by choice (Fok, Payne and Corey 2016). Example, the principle a pharmaceutical
company applying is, they can release drugs with few side effects that are officially approved to
benefit large number of people fight a disease than the number bothered by a small side effect.
Therefore, it is necessary to evaluate moral choices by determining the net benefits of each
alternative action available under utilitarianism. There exists many formulations of utilitarianism.
Utilitarian theory focuses on the whether the action selected generates more good consequences
than bad ones. Whereas, the foundation of morality of egoism is self-interest. Therefore, if the
doer is benefitted from the consequences of the action then it would be considered as ethical
egoism. Egoism and utilitarianism both are parts of consequentialism, but they contrast with each
other.
Another formulation of utilitarian theory is rule utilitarianism, which analyses whether
the overall utility is maximized for a choice that conforms to a rule. For acting rule utilitarian
focus on the rules rather than on individual actions. Other than providing any alternative rule, a
rule utilitarian is morally correct if it provides more social good (Rychalski and Hudson 2017).
Under rule utilitarians, the determination of wrong or right is done by rules. To solve the ethical
problems of the organization, business executives usually embrace consequentialist approach
like utilitarianism, as they are used to with traditional business approach. As these are based on
result-based theory, it helps to maximize return on investment, profit and share price by