Business ethics is a tool used by the companies in order to ensure that the managers, directors and other officials perform their actions in a responsible manner in different situations in a business. The primary and the fundamental principles of a noble human behaviour is the ethics (Trevino and Nelson 2016). It involves the application of the universal values along with the practice of basic human rights, following the laws, allude for the health and safety of the people and protecting the natural environment. Ethical decision-making refers to the process of analyzing and choosing the alternatives that are dependable on the ethical principles. Ethical decision-making involves the process of commitment, consciousness and competency. Commitment means doing the right things and not keeping in mind the amount of cost incurred. To be able to act in a consistent way and applying the moral principles is the consciousness. Competency is the ability of a person to collect to evaluate the information as well as to predict the upcoming risks and avoiding them (Iphofen 2016). Ethical decision-making endeavours to promote the company in a wholistic manner rather than being profitable to an individual. When a company is found to be operating ethically, more investors are interested in buying the stocks of the company and vice-versa. The following paragraphs will discuss about the two theories of ethical decision making- deontological theory and teleological theory. Between these two theories which theory is better in the decision-making process is also discussed here.
The companies have to identify certain specific ethical standards in order to take efficient and ethical decisions. Different people considers this concept in different ways. As the organizations begin to flourish, more employees are hired, but not all the employees might have the same ethical standards compared to the employees who are already working in the organization. Difference in ethics among the employees often changes the decision making process (Werhane2014). The mission statement of the organization is used by the companies in order to build a design for the ethical design-making process. According to Ferrell and Fraedrich (2015) there are five types of ethical standards are followed in any organization. These are as follows: utilitarian, rights, justice, common good and virtue. The companies take help from the professional consultants, conducts seminars and other training methods in order to train the employees on the decision-making process in the business. However, these outside sources provide the companies the reviews on their present operations. They also give advises to the companies on the application of stronger ethical standards.
Ethical theories are an important part of decision-making as these acts as guidelines for the individuals who are involved in the process of decision-making. Each of the theories emphasizes on different points, making the style of the process different from each other. In order to understand the process of ethical decision-making, each person should have knowledge that the styles of the process differ from person to person and hence the decision changes (Bolman and Deal 2017). In order to understand ethical theory the persons should know the basic goals. These goals are benefice ne of all, doing the least harm, have respect for the autonomy and doing justice to all.
The business ethics are derived mainly from three sources namely, religion, culture and the laws of the particular nation. Every religion throws light on the actions of the people and determines which actions are right and which are wrong. The Principle of Reciprocity is the most common ethics that is found in all the religions of the world. The culture is the basic set of principles and norms that is shared and followed by all the people of a society. Culture teaches and inspires the members of an organization to give importance and achieve the goals of the organization. The laws along with the legal system of a country guide the human behaviour of the society. However, the society expects the organizations and the businesses to follow the laws, the organizations seldom do so. It is a common phenomenon to break the laws in the business (Giacalone and Promislo 2013).
The word “deontology” is derived from two Greek words, “deon” which means “duty” or “obligations” and “logos” means “reason” or “explanation”. The theory was proposed by a German philosopher, Immanuel Kant and the theory is known as the Kantian ethics (Bowen 2017). The theory states that every people always perform some actions that are wrong though they might have an ethical outcomes because the followers of this theory do not consider right and good to be the same and equal. Kant’s theory of ethics is based on the view that every humans are able to act in act rationally. According to Tuan and Shaw (2016), no other animals other than humans have the capacity to possess the tendency to have reasoned thought and action. This ability of humans forces them to perform their actions according to the moral actions and duties. This theory emphasizes to perform actions according to the duties of the person. Kant was of the belief that affection, emotions and outcomes do not have any role in ethical action. Morality provides people the structure of rational principles or rules that helps in guiding and restricts certain actions of humans.
The two theories of ethics- deontology and utilitarianism are different from each other in various respects. One major difference is in the construction of the theories. The theory of utilitarianism is concerned with maximizing the actions that are good in nature. The theory of deontology focuses more on the performance of actions. The will of the performer determines the ethical benefit of the actions. According to Kant, no other concepts other than the human will that can considered and determined as good or bad (Ferrell et al. 2013).
The theory can be explained well by providing an example. For instance, a man has drunk and driving back to his home. On the way, he runs into another car parked at his neighbour’s home. As a result, the car of the neighbour is damaged. According to the theory of deontology, besides, the damage that the person caused to the car is wrong, the action of the man was also wrong as he was driving having drunk.
Many scholars have criticized the deontological theory. Firstly, the duties are not real but absolute. That is why it is unable to help to resolve the conflicts of the actions and the duties. Secondly, the theory does not take into account certain emotions such as sympathy, affection, regret and mercy as appropriate and ethical cause of actions. Thirdly, the theory completely rejects the results of an action. The theory intentionally is blind towards the results of an action. These actions might not be completely moral but sometimes it tends to be (LaFollette 2014).
The word “teleological” is derived from two Greek words- “teleos” meaning “end” or “goal” or “purpose” and “logos” means “reason” or “explanation”. The term as well as the concept of teleology first originated in the works of early Greek philosophers like Aristotle and Plato. The teleological theory of ethics is also known as the utilitarianism theories of ethics (Bernstien 2014). The theory in its present form was proposed between the eighteenth and the nineteenth centuries by some English philosophers and economist like Jeremy Bentham and John Stuart Mill. This theory mainly focus on the outcomes. The determination of the right and wrong depends solely on the outcome of the actions of the people. The theory moves beyond the sphere of the interest of a single individual and considers the interests of other people.
The teleological theory differs from other ethical theories that determines the rightness or wrongness of an action depending on the action and motive of the performer. The theory states that it is possible that a right action can be performed even with a bad motive. The people who follow this theory distinguish the appropriateness of blaming or praising a person by analyzing whether the action performed by him or her was right or wrong (Habermas 2015).
Proving an example can make the theory easier to understand. For instance, a father steals food from a shop in order to feed his family that is starving for a long a time. Though stealing anything is unethical, the followers of the theory do not consider it unethical. This is so because; the man stole the food to feed his starving family, which has a positive outcome.
Like all other theories, the teleological theory also has some weakness. The primary weakness of this theory is the justice. The main challenge to the theory is that it violates the justice. For example, it can be considered that a judge has to pass his orders after hearing a case of crime. Someone in a small town has committed a crime. There was some kind of social unrest that resulted in some injuries, conflict and riot. Had the judge punished the innocent person, the town would eventually calm down. In case the innocent person is not punished and set free, there can be more conflicts in the town and would cause harm to many people in the town. The teleological theory of ethics considers the punishing of innocent person as a right action. However, it is unjust to punish an innocent person as it violets his or her rights, the followers of this theory considers the happiness and justice of all the residents of the town (Broad 2014).
In the business, the ideal theory of ethical decision-making should be based on the teleological theory of ethics. This is so because the deontological theory of ethics considers the duty of a person as the main component of the decision-making process. However, teleological theory concentrates on the outcome of the action. The later theory of ethics takes into account the happiness and betterment of a large group of people and not on the betterment of a single individual. The business also considers the betterment and improvement of all the employees. It is quite difficult to judge a person by his or her duties. Moreover, the duties of person that are considered to analyze the ethics in a person is totally an absolute term rather than being real and hence deontological theory of ethical decision-making is not ideal and should not be adopted by any organizations. As the focus of any business is on the mass profit and mass outcome, the business can adopt the teleological theory of ethical decision-making, which has the same focus.
The business ethics has a lot of importance in the life of individuals. Firstly, it corresponds to the basic needs of humans. The basic need of every individual is to be a part of the organization to which the employees can show respect and be proud of and that is ethical to them. Secondly, it creates creditability with the employees. The employees of an organization think their workplace to be of high esteem when the employees are convinced by the ethical standards of the organization. Thirdly, it creates creditability among the public. People are more likely the products and services of the company that is honest and offers equal value for money. Fourthly, it helps in better decision making. The organization will be able to make better decisions if they are taken keeping in mind the interest of the public, employees and long-term benefit of the company. Lastly, it helps in protecting the society. When the laws are unable to protect the society, ethics can and always succeeds. A HR manager, who is ethically sound, can easily handle and motivate the employees who have aroused (Floyd et al. 2013).
Lack of ethics has a negative impact on the performance of the employees. In some cases, the employees are more engaged and inclined to earn money that they forget about the rule, regulations and the ethics of the companies. This often leads to additional paperwork as well as simple and careless errors and the task needs to be redone. Lack of ethics in businesses leads to breach of laws. In many cases, the companies do not follow the laws stated by the central and the state and have to pay penalties to the government. However, if the companies constantly break the laws, they have to undergo severe legal issues that might result in the demolition of the organization (Ferrell and Fraedrich 2015).
As stated by Carroll and Buchholtz (2014), lack of ethical behaviour among the managers results in loosing of respect from the sub ordinates in the companies. This often causes tension among the employees. When the lack of ethical standard comes to the knowledge of the public, the business will lose its value. Lack of ethics occur due to poor planning techniques as well as some other problems in the business. In order to prevent the lack of ethics and unethical behaviour, the company should set goals that are more realistic in nature. When the employees of an organization want to reach a certain position, they seek the help of unethical behaviour. In order to prevent such issues, the company must continuously monitor the performances of the employees and help to achieve their aimed goal or position (Bowie 2017).
From the essay, it can be concluded that ethical decision-making is of prime importance in business. Without proper decision-making process, an organization cannot perform well. The companies need to educate its employees according to the ethical standards of the company. The two theories of the ethical decision-making- the deontological theory and the teleological theory, focus on two different aspects. The former theory takes into account the duty of persons as the basis of distinguishing the right actions from the wrong, while the later theory focuses on the outcomes and mass happiness or sadness in order to distinguish the right actions from the wrong. As the business relies on the performance of all its employees, the companies and other business should follow the teleological theory of ethical decision-making. Lack of maintenance of ethical standards in an organization can lead to severe negative and fatal outcomes. It has been found that the companies regularly break the laws imposed of them due to lack of ethical standards and have to spend more capital on the paperwork and payment of penalties to the government.
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