According to Boatright (2007), it is common to divide ethical theories into two major groups: teleological and deontological (p. 32). Teleological theories focus on the end result of the actions (Boatright, 2007, p.32). Thus the proverb “the end justifies the means,” is an excellent example of a teleological conclusion. The major teleological theory is utilitarianism. Deontological theories, on the other hand, believe that the outcome of an action is irrelevant in comparison to the nature of the action itself. According to deontologists, it doesn’t matter how something turns out as long as we do the “right” thing. Kantianism is the major theory in this group (Boatright, 2007, p.32).
The major proponent of utilitarianism is John Stuart Mill. Before him, utilitarian theorists simply measured outcomes based on the quantity pleasure (“good”) or pain (“evil”) produced. Mill took this theory and expanded it by showing that although quantity was important, there was a qualitative aspect to the outcome, as well. Even though Mill attempted to remove the flow of measuring all outcomes equally, he was unsuccessful in providing any true means by which to measure the quantity of quality of an outcome (Boatright, 2007, pp. 33-34).
One problem you can already see with utilitarianism is that an individual can easily get lost in the shuffle if the outcome of an action proves to be more beneficial to someone else. Without the concepts of rights and the defense of rights (or justice), there would be no way for the individual to fight against actions that might be good for an organization, but harmful to the individual (Boatright, 2007, pp. 37-38). Mill recognized this problem and wrote On Liberty specifically to attack the encroachment of governments on the rights of individuals. Mill (1859/1956) writes “the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others” (p.13). Justice is the defense of these individual rights.
The market system drives decisions regarding which goods and services are produced and how they are priced. This is the realm of supply and demand. According to the utilitarian argument, the laws of supply and demand produce the highest possible positive return for society. At the same time, the market system protects the individual rights of consumers (Boatright, 2007, p. 45). Free competition in the market prevents anti-consumer actions like price gouging. Without interference from a governmental body in the form of curbs and subsidies, businesses must offer the best product at the lowest price to win consumers.
Cost-benefit analysis is a decision-making process that analyzes the monetary value of an outcome in order to determine whether to proceed. This process is similar to the utilitarian idea that each outcome should weigh good against evil before proceeding. In a cost-benefit analysis, the same process is undertaken; only good and evil are given monetary values instead of pleasure and pain. Whichever action results in the largest gain is the course that is followed. Boatright (2007) points out that while businesses tend to analyze their own bottom-line when making cost-benefit decisions, public officials must look at the effects on everyone (pp. 52-53).
The other major philosophy associated with ethics is Kantianism. The main emphasis of Immanuel Kant’s theory is that actions themselves have a certain intrinsic value independent of the outcome. As Boatright (2007) puts it, “there are some things that we ought to do and others that we ought not to do” (p. 66). Kant (1785/1981) puts it thus, “I should never act except in such a way that I can also will that my maxim should become a universal law” (p. 14). In other words, Kant feels he should always act in such a way that he is always doing the “right” thing.
The egalitarian theory proposed by John Rawls is based on the works of Immanuel Kant. Rawls recognizes that society is composed of individuals working toward their own benefit. Problems arise in this society when the individual pursuit of self-interest comes into conflict with the interests of others. Rawls’ theory is that society must create institutions that allow conflicting interests to progress in mutual benefit (Boatright, 2007, p.72).
Like egalitarianism, libertarianism also has its roots in the work of Kant. Based principally in the works of Friedrich von Hayek and Robert Nozick, libertarianism combines Kant’s (1785/1981) individual freedoms (p. 49) with a completely unhindered market system. Hayek, for example, warned against state-planned economies (Boatright, 2007, p. 76). Nozick, on the other hand, is more concerned with the rights of individuals. Nozick especially believes that a society that distributes wealth according to set patterns robs the individual of their right to liberty (Boatright, 2007, p. 78-79).
In his Nicomachean Ethics, Aristotle (350BC/1962) postulated that by “human virtue we do not mean the excellence of the body, but that of the soul” (p.29). This is the essence of virtue ethics. Virtue ethics is less concerned with the actions of the individual and more focused on what makes a good person. Therefore virtue ethics strives to define what virtues a good person embodies, and then defend them as being virtuous (Boatright, 2007, p. 80-81).
All of these theories and concepts together cover the vast range of ethics. Each theory is ultimately concerned with the behavior of individuals; but each strives to direct that behavior by different means. Theories and concepts associated with utilitarianism tend to focus on the benefit of the outcome. The means by which the outcome is produced is of no significance. The other theories tend to focus on the actions of the participants. A business must take care to balance these theories when practicing ethical management.
Aristotle. (1962). Nicomachean Ethics (M Ostwald, Trans.). New York: Macmillan. (Original work published 350 BC).
Boatright, J. (2007). Ethics and the conduct of business, 5th ed. Upper Saddle River, NJ: Pearson.
Kant, I. (1981). Grounding for the Metaphysics of Morals (J. W. Ellington, Trans.). Indianapolis: Hackett. (Original work published 1785).
Mill, J. S. (1956). On Liberty (C. V. Shields, Ed.). Upper Saddle River: Prentice Hall. (Original work published 1859).