Business Ethics: Analyzing Ethical Philosophies in Business Context

This essay delves into the critical importance of business ethics, examining two primary ethical philosophies: utilitarianism and deontology. It provides a comprehensive comparison of these contrasting approaches, highlighting their underlying principles and implications for business practices. The essay explores how utilitarianism, focused on maximizing overall utility, differs from deontology, which emphasizes moral duty and intrinsic value. Through real-world examples, such as the pharmaceutical industry and the Ford Pinto case, the essay illustrates the practical application of these philosophies and their impact on stakeholder interests, profitability, and long-term sustainability. The analysis emphasizes the importance of ethical decision-making in fostering brand recognition, customer loyalty, and employee engagement. The essay concludes by arguing that while both philosophies have merits, deontology offers a more robust framework for ethical business conduct, ensuring the equal treatment of stakeholders and promoting long-term success, while acknowledging the need for managers to balance ethical considerations with the practical demands of a competitive market. This paper is contributed by a student to be published on Desklib, a platform which provides all the necessary AI based study tools for students.

Running head: BUSINESS ETHICS
Business Ethics
Name of the Student:
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Introduction:
The importance of ethics in business can never be overstated. There is no gain stating the
fact that organizational success of a company is not merely determined by the financial
statements. Rather, the organizational culture or the management philosophy plays an integral
role in determining the long-term sustenance of a company. Hence, the moral vision of a
company should always be taken into serious consideration. There are two principal ethical
philosophies that are usually applied to the business organizations worldwide- Utilitarianism and
Deontology (Carroll and Buchholtz 2014). However, the very philosophy underpinning the two
theories are highly distinct and contradictory to each other. While on the one hand, Utilitarianism
determines the goodness of an action, based on its ability to produce consequences for the
greatest number of people, Deontology states that the moral goodness of an action is heavily
dependent on its intrinsic value. In other words, even if the end result is not desirable, the action
must be guided by a good motive, and the morality lies in the motive rather than the end result.
Any business organization is guided by a set of ethical rules and principles that allow it to
safeguard the company from various unethical principles (Bowie 2017). Hence, accordingly it is
important to analyze the best ethical practice that the business organizations should adopt in
today’s world.
Discussion:
Before analyzing which of the two ethical philosophies can help in enhancing the
profitability of a company, it is important to develop an understanding of the two ethical theories
in the first place. First of all, as far as Utilitarianism is concerned, the ethical theory was
introduced by J. S Mill and others, who believed that the morality of an action is heavily reliant

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on its ability to maximize the overall utility, and promote maximum welfare (Valentinov 2017).
The end should justify the means, and the means will barely matter in case of this ethical theory.
Accordingly, as per Utilitarianism, even if a pharmaceutical company is well-aware of the fact,
that its drug is producing considerable side-effects for a group of people, it will still continue
with its production, as the major group of consumers will be able to cure disease without any
side-effect. Thus, this particular theory takes up a consequentialist approach and intends to
achieve maximum welfare. On the other hand, Deontologist view states that even if the ultimate
end of an action is morally desirable, an action may still not be morally just. An action is
ethically correct if the doer has a moral purpose behind it, and as such even if the outcome is not
desirable, the action should be encouraged, on ground of morality (Vadastreanu et al. 2015). In
this connection, it would be interesting to draw the example of a Marijuana drug seller Eddy
Lepp, who produced a distinct drug made from Marijuana that had soothing effects on the nausea
problems of the Cancer patients. However, the action was also breaking the law of North
California, as marijuana was regarded as an addictive drug. Yet since the drug was introduced
with the purpose of relieving the Cancer patients, the non-compliance of Lepp with the
regulatory framework of the government of the country would be seen as a moral alternative
(Swenson 2016). However, the question still remains that if an organization decides to adhere to
moral values, which ethical philosophy should it choose.
While discussing about the best moral course of action, it is important to consider the
factors which would encourage an organization behave in a morally just way. First of all, once an
organization decides to act morally, it can ensure easily value the priorities of the stakeholders-
especially the consumers and the employees, which in turn would ensure greater goodwill and
higher profitability. A morally strong decision helps an organization enhance its brand

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recognition, develop customer loyalty, increase employee engagement and ultimately improve its
financial position. Considering this, it should be important to understand which of the two above
discussed ethical approaches can best serve the needs of the business. The Utilitarianism
approach is one where the business tends to be driven by the profit motive. Since the company
would aim to achieve the best possible end, often organizations following this approach, would
tend to focus on the long-term end, that is the annual profit, while overlooking the ethical
questions in the process (Marques 2015). An organization dealing with cloth retail stores, may
instantly decide to quit operating business via the physical stores, and quickly choose to move to
the online stores. Now, as per the theory of Utilitarianism, this is highly desirable as it would
help in ensuring customer convenience, as well as generating huge profit for the administrative
and managerial employees, as well as offering high returns to the investors as well. However, the
decision may not be ethically justified as it would eventually lead to the elimination of jobs, and
would result in unemployment for a large number of people. However, since Utilitarianism
would consider the end result, this decision would be morally permissible, as it would help in
boosting the sales growth of the organization, assuring the existent stakeholders of maximum
profit and return on investment. The company would tend to overlook the harm it does to a small
set of people, by highlighting the good done to a larger number of people. However, despite the
fact that it has helped in maximizing welfare for a large number of people the action cannot be
considered to be a morally just. This is because a morally right action would never land, even a
small number of people, in unemployment problem.
On the other hand, when a business organization intends to follow the Deontological
approach, it will aim at ensuring overall well-being, without looking at the consequence.
Accordingly, even if the end may not be as profitable as expected, its motive will remain morally

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justified. Once the very motive is true, it is easier for an organization to sustain itself in future
(Sacco et al. 2017). For example, an organization may face intense competition from its rival
brands, and hence in order to stay in the competition, it starts offering cheaper and yet low
quality products to its consumers at cheaper rates. Initially, it might happen that larger number of
customers is buying products from this company, simply owing to its low price strategy.
However, since the quality itself is not good, the company will not be able to sustain its
competitive position for a long period of time. This is exactly the reason why a good motive was
essential here. In case, the organization had a good motive, it would have never be driven by the
end result of making higher profit, and would have remained mindful of its own vision-to serve
its customers better. As a result, the company would have been able to retain its goodwill as a
producer of good quality products in the long run. As and when an organization decides to
conduct business staying true to its motive, it can easily develop its business in future. However,
when the business is driven by the consequentiality of the issue, it might overlook the ethical
obligations it has towards its own stakeholders. This will tend to impede the long-term
sustainability of the company (Murphy 2016). This is simply the reason why Deontology as an
ethical approach is preferred by many. Another example may be used to illustrate this point.
Owing to the sudden increasing gas prices, the then president of Ford, Lee Iaccoca modeled the
Ford Pinto, as he wished to rush it into production to compete with the Japanese manufacturers
in producing fuel efficient smaller cars. Although during the testing phase, it was being observed
that the positioning of the gas tank in the rump of the car left it vulnerable to collisions in rear-
end of the car, the fact was dismissed by the company. The reason behind dismissing such an
important fact was that the management authority of Ford was driven by a Utilitarianism ethical
principle. It was being concluded that since the production of a fuel-efficient car was able to

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result in greater customer satisfaction, higher return on investments and increased financial
revenue, the company could easily do away with its moral responsibility of ensuring consumer
safety. While the motive of a car company should have been to ensure safe, high quality cars,
Ford miserably failed to adopt a morally sound motive. Now, regardless of the morality question,
the consequence of entirely dismissing the importance of working with a good motive, was too
hard. In fact, over the following ten years, as many as sixty people were died in fiery accidents,
and needless to state that the consumers became aware of the price they would have to pay if
they continue buying this model. This undoubtedly ruined the reputation of the company as well.
It is clearly evident that there lies a great danger in applying utilitarianism to business. An
organization may be focused on the larger picture, and in the process overlook a crucial factor
that can threaten the sustainability of the company in the long run (Gawronski and Beer 2016).
On the other hand, Deontological approach is completely based on a set of moral values and
ideas, and it is its strong adherence to the same, that will prevent the company from taking a step
that will threaten its sustainability in future (Xu et al. 2016).
Conclusion:
A company driven by the deontological approach will tend to perform the right simply
because it is the moral duty of any individual or entity to do the right thing, regardless of the fact
whether the ends are favorable or unfavorable. Performing the moral duty is the most important
thing as per this approach. Yet one of the drawbacks of this approach is that it tends to
undermine the importance of outcome, which can however, threaten the revenue earning capacity
of the company (Conway and Gawronski 2013). An organization in order to thrive in a highly
competitive market must ensure that it is able to adopt competitive strategies that can help it gain
a competitive edge over the other companies. Often companies require reducing the product

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prices so as to outrival the competition, and the low-price strategy can be profitable when the
company does agree to compromise with the quality or quantity of the product (Tenenbaum
2016). Although compromising with safety, as in the case of Ford, is highly unacceptable, yet the
company has to be discreet enough where it must adopt strategies that can enhance the
profitability, regardless of the morality of the intent. In case an organization is too focused on
well-being of each stakeholder, it might end up ruining its own chances of earning huge amount
of revenue, which might be compliant with the ideal of a non-profit seeking company, but not a
profit-seeking company. There can be no gain stating the fact that deontological approach is the
most desirable approach that ensures the equal treatment of each stakeholder, and yet it should be
remembered that at times, the approach can appear to be too impractical to be of any use to the
managers. On the other hand, since utilitarianism focuses more on the consequence, it pays keen
attention to the profitability it helps business managers to make discreet business decisions
(Jackson and Smith 2016).
To conclude, the idea of business ethics is a new one, and any organization that intends to
survive in a competitive market, must adopt an ethical approach to sustain for a long period of
time. This, in fact, is precisely the reason more and more organizations are engaging themselves
in corporate social responsibility acts. After critically analyzing as well as evaluating both the
ethical approaches, it can be said that though both have its drawbacks and benefits, Deontology
is far better an ethical theory when needs to be applied to any business practice. Despite its
negligence of the end result, it should be remembered that if the business intent is good, an
organization will be able to ensure profit in the long run, if not immediately. Deontology, unlike
Utilitarianism, strives to enhance equality amongst employees and ensure overall satisfaction of
all the stakeholders concerned. Utilitarianism can easily justify employee exploitation or

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customer deception as part of its strategy for doing good for the larger group, and hence cannot
be deemed to be the better alternative.

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