Ethical Theory and Its Application: of Auto Companies in China - Case Study Example

Running Head: ETHICAL THEORY AND ITS APPLICATION TO THE CASE STUDY Ethical Theory and Its Application to the Case Study: The Auto Companies in China Name Institution Ethical Theory and Its Application to the Case Study: The Auto Companies in China Introduction Ethics is a branch of philosophy that is concerned with principles that allow us to make decisions about what is right and wrong. This case study will take a look at five ethical principles and concepts namely: Utilitarianism, Kantian deontology, Justice (3a Rawls and 3b Nozick), Rights, and Normative ethical relativism. An explanation and discussion of the theories will be given. These theories will then be used to highlight ethical issues in a case study of the Auto companies in China. The ethical question in this case study will be “Was it wrong for the car companies to help China expand its auto industry?” Finally, a brief discussion about business ethics in theory and practice will be done. Utilitarianism Utilitarianism is the ethical theory of the greatest happiness. In this theory, happiness is defined as increase in pleasure and decrease in pain. Basically the theory is based on the Principle of Utility. This principle states that a person should always choose that action which produces the greatest good for the greatest number of people affected by the alternatives open to him. It therefore stipulates that a person should perform only those actions which conform to the Principle of Utility (Carey, 2013). The moral implication (rightness or wrongness) of an action is thus determined not by the action itself but by consequences of the action. Because of this, utilitarianism is sometimes called theory of consequential ethics. There are various different views that dictate what makes a consequence of an action good or bad. Classical view states that happiness dictates the consequence of an action. The effect of happiness on people therefore makes a consequence good or bad. Hence, a consequence is good if it increases the happiness of majority and is bad if it reduces the happiness. In summary, utilitarianism defines the acceptable course of action as that which produces the greatest good for the greatest number of people affected by it. It is therefore based on the interests of the majority. The theory is however criticized for ignoring justice and being too demanding. On the case study, there are several ethical issues that relate to utilitarianism. These include the happiness of the car buyers, the happiness of the environmentalists, the happiness of the government, and the general happiness of the Chinese people. According to utilitarian, the happiness of majority of the people in China determines whether the consequences of foreign automakers expansion into China are good or bad. If most Chinese are happy they can buy the car they now want then the consequence of their action is good. The resulting environmental implications of this expansion are therefore in-determinant. Similarly, if the majority of Chinese people think that environmental degradation outweighs the need to own a car, the actions of the auto makers become morally wrong. Kantian Deontology Unlike Utilitarianism which bases the morality of an action in the consequences produced by the action, Deontology bases the morality of an action on the action itself. Therefore, the consequences of such an action are indeterminate. It argues that it is our obligation or duty to perform an action if it has the relevant features. Many different versions of deontology exist. One of them is Kant deontology. Kant argues that it is our obligation to perform an action if it satisfies “the categorical imperative”. A categorical imperative prescribes what we ought to do without reference to any consequences. He was of the view that all actions that have been reasoned and considered can be regarded as involving maxims. Kant suggests that one should act only according to that maxim that he can and at the same will. He argues that this should become a universal law. According to Kant, one should also act to treat humanity, whether in his own person or in that of another, always as an end and never as a means only. Lastly, he argues that every rational being must so act as if he were through his maxim always a legislating member in the universal kingdom of ends. He formulated various versions of the imperative. Two of them are categorical imperative and hypothetical imperative. Maxims are subjective or personal. They can also be thought of as being candidate for moral rules. When such maxims pass the test imposed by the categorical imperative, then such actions can be said to be right. Moreover, the maxims cease to be personal and subjective once they pass the test. They now gain the status of objective rules of morality that hold for everyone. The test of generalization is imposed on maxims by the categorical imperative.The central idea of the test is that a moral maxim is one that can be generalized to apply to all cases of the same kind.This means that one must be willing to see his rule adopted as a maxim by everyone who is in a situation similar to his. He must also be willing to see his maxim universalized, even though it may turn out on some other occasion to work to his disadvantage. In our case study, the ethical issue based on this theory is whether foreign car manufacturers have a duty to fulfill the needs of their customers in China. In increased demand of their cars in China has made them focus more on that market. They therefore take it as an obligation to satisfy their customers. Their maxim would be “When a customer demands for a car, always satisfy customer at any cost”. This maxim can be generalized to become a universal law. It would then become “When car demand is high, always satisfy the need at all cost”. Obviously, this is not contradictory to business practices. It is the rule of the business. The automakers would then be willing the existence of such a practice. It can also be argued that the automaker acted on good will when they decided to venture into China. They knew well of the consequences of their actions. Nevertheless, since Kant suggests that good will is the only thing that is good without qualification, the consequences of the actions of the automakers action cannot be used to determine if they have good will. Moreover, the automakers can be said to have acted in such a way to ensure Chinese get cars that they wanted. The actions of the foreign car companies can be said to be in good will.  Justice (3a Rawls and 3b Nozick) One theory of justice was formulated by philosopher John Rawls. It attempts to combine the strengths of both utilitarianism and deontology and avoid the weaknesses of each theoretical view. Rawls argued that the most crucial task of government is in preserving and promoting the welfare and liberty of individuals. Standards outlined as principles of justice are therefore needed for evaluating and designing social practices and institutions. Rawls argues that there are two fundamental principles of justice. These are: Each person is to have an equal right to the most extensive total system of equal basic liberties compatible with a similar system of liberty for all. Social and economic inequalities are to be arranged so that they are both to the greatest benefit of the least advantaged attached to offices and positions open to all under conditions of fair equality of opportunity. These two principles are taken to govern the distribution of liberty, property, wealth, and social privilege. The first principle has priority. It guarantees a system of equal liberty for all. The second principle governs the distribution of social goods other than liberty. Another theory of justice is that by Robert Nozick. This theory is concerned primarily with distribution of property. It argues that justice involves three ideas. These are justice in acquisition, justice in transfer and rectification of injustice. It argues that how a distribution of property came about determines whether it is just or not. Therefore, the right to self-ownership and right to property describe justice. It is unjust to deny an individual the right to own property. Likewise in our case study, it can be argued that the fundamental rights of all people in China must be upheld. Each person in China is at liberty to own a car as long as he can afford regardless of socio-economic consequences. Thus, the foreign auto companies can argue that they were fulfilling this right. The government of China is also seen to support the rapid expansion of this auto industry (Velasquez, 2012). An increase in wealth of China can be seen as a way for the Chinese to uplift their socio-economic status. This has led to a growing middle class who now are at liberty to buy cars. It can also be argued that the government together with the foreign car companies has moved to create an advantage for the least advantaged by creating jobs for them. A fair market is created by bringing the manufacturing of these cars to China as opposed to importing of finished cars. The fundamental rights for all must therefore before concluding whether the actions of the foreign car companies are just or not. Similarly, according to Nozick, as long as the Chinese people are willing to buy cars they are in titled to justice in transfer of property. The actions of the foreign auto makers are therefore not wrong. Rights Theory A right can be defined as a justified claim that a person can make upon another or society. The purpose of these rights is to provide protection of liberty, expression, life, and property. There exists a relationship between rights and duties. They are related in such a way that a duty follows from a right. This means that the rights of one person are the duties of another. Nevertheless, there is need to distinguish between valid and invalid rights. For this reason, moral and legal rules have to be created. Traditionally, four features are usually associated with moral rights. One of them is that rights are equal. This means that they are the same for all people. Normally, this is irrespective of the race, gender, religion, nationality, or body impairment. Secondly, rights are universal. This means that they do not change from area to area, nation to nation or even continent to continent. Thirdly, rights are natural. Thus, no governments, people, or institutions have invented them. Lastly, rights are inalienable. This basically means that they cannot be transferred to another person and one cannot forfeit his right for something else. The Rights Theory has also been widely criticized for its shortcomings. There has been a lack of agreement over who has rights. Similarly, the theory is based on individuals. It therefore neglects the interests of the community as well as organizations. These rights sometimes also lack compatibility with social virtues and motives. Lastly, the fact that rights can also be relinquished tends to weaken the theory. On the case study, the rights of the customers of the automakers, right of all Chinese people as well as that of the car companies should be considered. Of most concern is the right of the Chinese people who also include the customers. Every Chinese has a right to own property and is at liberty to buy one. This entitles the customers of the car companies to owning a car. This would make it right for car companies to help China expand its auto industry. Likewise, all people in China have a right to life. They are entitled to a clean and safe environment. However, the actions of foreign car companies have detrimental consequences. First, there will be an increase in pollution from the many cars. This will have adverse environmental impact of increasing greenhouse effects. Pollution is also a health hazard (Velasquez, 2012). Increased pollution will lead to increased cases of tuberculosis, lung cancer, and emphysema. This violates the right of life of the Chinese by putting their health at risk. Oil consumption will also increase due to expanding car production. This will put more pressure already diminishing oil supplies and is also responsible increase in prices of oil. Moreover, it promises future economic disruptions and political or military conflicts (Velasquez, 2012). The security of the people in China is thus threatened. This is a violation of their rights. Therefore, it can also be said that it was morally wrong for foreign car companies to expand in China. No clear conclusion can then be drawn on whether the actions of the foreign car companies are right or not.   Normative Ethical Relativism Moral or ethical phenomena can be described and explained using systematic attempts. Normative ethical theories represent such systematic attempts (Carey, 2013). The most general and fundamental principles that underlie normative ethical theories are represented by moral standards. General moral principles can be defined as principles that define the morality of all actions in a certain class. Specific moral principles also exist. These principles represent a moral judgment. In the case study, several principles can be put forward. The principle “All people in the world are entitled to own a car” justifies that the actions of auto makers were morally correct. Similarly, the principle “pollution is immoral” makes the actions of the auto makers to help expand the auto industry in China immoral. No clear conclusion can then be drawn on whether the actions of the foreign car companies are moral or not. Conclusion Business ethics in theory is usually complicated and confusing. This is because of the inconsistencies that arise due to application of the many theories in ethics. Some of these theories are also contradictory. This only adds to the complexity of the ethics problems in business. In practice however, the application of business ethics is plain and simple. The overall good of the actions is determined by the overall goal. The end therefore justifies the means. This end is usually predetermined and a clear action plan is drawn to achieve it. Though the consequences of such actions are not known, an estimation of them can be done. References Velasquez, M. (2012). Business Ethics: Concepts & Cases. 264-265. Carey, L.E. (2013). Business Ethics Managing Values and Corporate Responsibility. Pearson: Frenchs Forrest, Sydney. Read More