Business ethics theories guide workplace behavior and decisions. Deontological theory follows established rules, while utilitarianism considers consequences for the greatest number of people. Norm theory sets standards for conduct, and Kantian theory emphasizes treating humans as ends, not means.
Theories of business ethics form the basis for acceptable behavior and decisions in the workplace. For some professionals, their corporate values may parallel their religious codes of conduct. Most professional ethics are based on the idea of doing what is best for the group and focusing on the moral attitude of the action, rather than the result. The three main theories of business ethics are deontological theory, utilitarianism and norm theory. One of the major influences of modern ethical principles in business is Kantian theory, which is a type of norm theory.
Deontological theory states that ethical behavior should follow an established set of rules or principles in all kinds of situations. While the actual result of following established moral principles may differ, the result does not determine whether the action is ethical. For example, according to deontological theory, it would always be immoral to lie even if lying would prevent an unfavorable consequence, such as death.
Utilitarianism is the idea that the conduct of business should take into account the consequences that would benefit the greatest number of people. As far as business ethics theories are concerned, this is probably open to a great deal of interpretative difference. For example, in international trade, the consequences of deciding to impose tariffs might be more beneficial to the group of people on a particular side of the transaction. Furthermore, it could be argued that the consequences of the decision could benefit most people in the short term, but harm a greater number in the long run.
Norm theory states that certain standards of moral conduct should be followed by the whole group. Acceptable forms of conduct are typically defined for a variety of probable situations. An early example of norms theory in the business world is the idea of employee handbooks or company codes of conduct. These usually provide a framework for how employees should respond and behave in certain circumstances, with a deviation from the code resulting in disciplinary action.
The theories of business ethics related to the theory of the norm include the ethical principles of Kantian. These principles were developed by a Russian philosopher and theorist who proposed that ethical guidelines should speak to humanity as a collaborative group. Theories of business ethics based on Kant’s philosophy should treat human beings as ends rather than means. In other words, when developing a code of conduct, an individual should not use others to serve his own purpose or advantage.
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