Philosophical Approaches to Business Ethics

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Introduction

Business decision-making is commonly a complex issue that involves a multitude of factors and requires managers to integrate the interests of multiple stakeholders to validate a reasonable solution to any given problem. Whether dealing with everyday business operations or when solving a challenging ethical dilemma, philosophical frameworks are helpful in terms of identifying core elements in the decision-making process and making the right decision. In the contemporary business world, many companies operate under various philosophies and prioritize different ethical principles, which demonstrate the overall direction of a given business’ development. Since any corporate entity ultimately serves the needs of humanity, it is essential to prioritize ethical considerations. Therefore, in this paper, core philosophical approaches will be analyzed and exemplified to claim that the choice of a philosophical validation predetermines a company’s public image and its success in a given industry.

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Teleology

There are multiple philosophical approaches that are utilized in the business world when shaping workplace practices, corporate culture, and industry operations. According to Parmar, for a business to make an ethical and informed decision, it should have a theoretical, philosophical framework that directs the actions and validates solutions. Therefore, when choosing a philosophical approach, companies should be aware of the options and be acknowledged of the application opportunities of each of them. Teleology is one of the most popular philosophical frameworks, which holds that any decision is morally right if the consequences serve a good intended result. This branch of philosophy includes such elements as utilitarianism and egoism, which are similar in their validation of the consequence. However, utilitarianism is prevalent in many business cases as it requires a detailed analysis.

Utilitarianism

Utilitarianism implies that a consequence justifies means as long as the greatest good is delivered to the greatest number of people. Within the framework of this philosophical doctrine, the cost-benefit analysis procedure is widely used to validate ethical decisions. Several examples might illustrate the application of this philosophy, namely the Ford Company and the Philip Morris Company. Indeed, the case of Ford and its Ford Pinto car is indicative of utilitarian principles.

The car had its gas tank in the back, which caused many explosions in case of a rear collision and caused deaths and injuries. The company considered whether it should invest in putting a shield to protect the tank. Through cost-benefit analysis, the company found that it would be less costly to pay for fatalities upon court procedures than to add new detail to protect the tank (Strother 166-167). A company takes the risk of paying for fatalities instead of investing in the improvement of their produced vehicles to avoid the rise in prices for their cars. Thus, the greater good for the majority is prioritized, and the end result (lower prices for cars) justifies the means (acknowledging potential life losses). Another example is the Philip Morris’ study of the costs and benefits of smoking in the Czech Republic, the results of which showed that it was beneficial for the government if people smoked since the life losses and health impairments were justified by the monetary contribution through taxes (Thom 88-90). Thus, using utilitarianism, companies can claim their decision morally right if, in consequence, benefits outweigh the costs.

Deontology

Deontology is a philosophical approach that justifies moral judgment or ethical decisions on the basis of following the rules and not serving the greater good. On the contrary to utilitarianism, deontology is considered a non-consequential approach, implying that consequences do not play a pivotal role in ethical decision-making. Literature shows that “when benefits belong to desires and goodwill is one of the standards if people act only because they can get benefits but not goodwill, they could not be regarded as ethical” (Chen 784). For example, according to Chen, the case of Takata’s production of airbags with defects was guided by deontological principles (783). The application of deontology is validated by the fact that the company acted according to its rules, although the ultimate results of their actions as harmful to some people

Justice

Justice ethics validates the approach to business decision-making from the perspective of equal opportunity and fairness of attitude without bias. According to Zwolinski, justice ethics in the manifestation of the Rawlsian theory implies “not the actions of individuals or even of firms, but rather the basic institutional structure of society as a whole” (384). An example of the application of this theory is the equity approach to hiring in contemporary companies where candidates have an equal opportunity of being employed regardless of their gender, race, or ethnicity. In such a manner, a corporate structure is formed in a way that provides equal opportunity and manifests justice.

Virtue

Virtue ethics is another philosophical doctrine that finds its implementation in the business setting. According to this approach, ethical decision-making depends on the integrity of morality of a person and not on the moral act. In other words, virtues used as principles for moral reasoning validate ethical decision-making. According to Tsoukas, “life is worth living when it aims at becoming a good life (eudaimonia), namely, when it enables people to flourish, providing them with the ability to fulfill their potential” (328). A vivid example of applying virtue ethics to business might be a case of a company building an integrative corporate culture on the basis of the principles of mutual respect, non-bias, non-discrimination policy, and other virtues.

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Pragmatism

Pragmatism holds that any decision might be morally right if it is practical and reasonable. Therefore, any action in business would be justified if it serves practical reasons and helps meet the immediate needs of a business. For example, the case of United Airlines and its overbooking crisis vividly illustrates the application of pragmatism. The company has long used the practice of purposeful overbooking to avert the risks of monetary losses of last-minute cancelations. In the case when due to the overbooking, the number of passengers exceeded the number of seats; the company randomly chose a passenger and physically dragged him out of the plane (Ma et al. 193-194). The company acted in its own interests and resolved the issue pragmatically in order to obtain the benefits for its operations at passengers’ safety and dignity cost.

Conclusion

To summarize, ethics and business are closely intertwined, which is why any business decision should be made on the basis of the deliberate application of philosophical doctrines for validation and integrity. An abundance of philosophical approaches, including teleology, deontology, virtue ethics, justice, and pragmatism, have their application in the corporate world and allow companies to justify the morality of their business solutions. Thus, the understanding and throughout the application of a particular philosophical doctrine in accordance with company mission and goals might provide a solid framework for ethical decision-making.

Works Cited

Chen, Yunluan. “Deontology to judge the ethical business actions: The case of Takata.” Open Journal of Business and Management, vol. 7, no. 2, 2019, pp. 783-787.

Ma, Jie, et al. “Examining customer perception and behavior through social media research–An empirical study of the United Airlines overbooking crisis.” Transportation Research Part E: Logistics and Transportation Review, vol. 127, 2019, pp. 192-205.

Parmar, Bidhan L., et al. Using a Framework to Create Better Choices, 2016, Web.

Strother, Stuart. “When Making Money is More Important than Saving Lives: Revisiting the Ford Pinto Case.” Journal of International & Interdisciplinary Business Research, vol. 5, no. 1, 2018, pp. 166-181.

Thom, Michael. “Taxing Tobacco.” Taxing Sin. Palgrave Macmillan, Cham, 2021, pp. 87-121.

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Tsoukas, Haridimos. “Strategy and Virtue: Developing Strategy-as-Practice through Virtue Ethics.” Strategic Organization, vol. 16, no. 3, 2018, 323-351.

Zwolinski, Matt. “19. Beyond the Difference Principle: Rawlsian Justice, Business Ethics, and the Morality of the Market.” Wealth, Commerce, and Philosophy. University of Chicago Press, 2020, pp. 381-400.

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