Business ethics theories include utilitarianism, rights, justice, common good, and virtue. Each theory focuses on specific ethical principles to help companies solve business problems. Utilitarianism promotes actions that benefit society while minimizing harm, while the rights approach emphasizes treating individuals with respect. Justice ensures equal treatment for all, while the common good approach promotes societal values. The virtue-based approach seeks to replace current values with those that benefit humanity.
Theories of business ethics include the principles or moral codes implemented by a company to ensure that all individuals working in the company act in acceptable behaviors. Business owners and managers can employ any ethical theory they feel is most appropriate for use in their operations. There are a few different theories of business ethics, such as the utilitarian approach, rights, justice, the common good, and virtue. These theories can be used alone or in combination with each other. Each theory includes specific traits or characteristics that focus on specific ethical principles that can help companies correct business problems.
The utilitarian approach focuses on using ethical actions that will promote the greatest worth or value within a society while limiting the amount of harm to the fewest possible number of people. Among theories of business ethics, this is generally considered to be the oldest theory, as it was propagated by many philosophers, such as Jeremy Bentham, James Mill and John Stuart Mill, Mill’s son. Companies can use this theory to ensure that the outcome of various situations helps the maximum number of stakeholders.
An ethical approach to rights is based on the belief that all individuals have rights in life and should be treated with respect and dignity. Morals play a big part in this because individuals have to personally use ethical behavior to achieve the ultimate goal without mistreating people. Business ethics theories often use this approach by not imposing their missions, products, or systems on consumers.
Justice as an ethical approach is where all human beings are treated equally across society, regardless of rank, position, class, creed or race. This is also known as the equity approach in business ethics theories. If people are not treated fairly – such as one employee receiving higher compensation than another – there must be a justifiable reason, such as higher technical skills or exclusiveness of a job position.
The good common approach seeks to promote the common values and moral or ethical principles found in a society. This varies from place to place, based on the countries specific cultural or social beliefs. For example, the moral principles found in Japan will often be different from those in the United States. Business owners and executives often apply these principles to ensure that their company’s overall mission resonates with society as a whole.
The virtue-based approach is a little more difficult for businesses to implement, as its approach focuses on following ethical principles that should be evident in society. These principles or virtues seek to replace current values if they do not bring about the best or best development of humanity. Corporations can implement this approach, although it may go against the grain of society until values catch on with the general public.
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