Is Utilitarianism the Most Useful Ethical Theory to Guide Company Decisions - Literature review Example

Client inserts his/her name Name of tutor Name of institution Course title Date of submission Is Utilitarianism the most useful ethical theory to guide company decisions? Introduction The theory of utilitarianism was propounded by Jeremy Bentham and James Mill. This school of thought advocated for the goal as the principle of ‘the greatest happiness of the greatest number’ as described by Bazelon (2005). This approach is admirable by many companies which serve as a guide for making business decisions. It is a stimulus response strategy which focuses on the pleasure and positive associations which come with good social actions and the pain and punishment which comes as a result of social evils. As a normative ethical theory, utilitarianisms places the principles of right and wrong on the consequences that befalls an individual for choosing one action over another. It thus goes beyond the interests of an individual and considers the interests of others (Hume, 2002). Bentham argued on an objective basis that could be accepted by the public. He propounded that the most promising and decent way of making good judgments and agreements is by advocating for a policy that creates the most benefits to the society after taking into account the level of disadvantages. Over the years, the theory of utilitarianism has taken different directions and thus there are many variations arising from developments and refinements on the entire principles (Bentham, 2009). In the 19th century, John Stuart Mill, argued about the conditions of pleasure and pain in terms of quality and intensity of such actions that brings benefits or harm to the people involved. The utilitarian today argues about benefits and harms in reference to the level of satisfaction of individual preferences most especially in economic and monetary terms (Dean, 2011). Application of utilitarianism as an ethical theory to guide company decisions When utilitarianism is exposed down to its fundamentals, it is a moral code that defines the greatest balance of advantages over the disadvantages that come with a course of action that is morally right in any given situation as argued by Gay (2002). This type of moral reasoning is applied frequently when making business decisions. It is the moral duty of anyone to perform a certain action and strive to achieve good results while minimizing the harm that may arise out of such an action. Companies are out to make profits and hence find the theory of utilitarianism beneficial. The benefits are well analyzed and decisions are made regarding what comes out certain business policies, resource investments, project establishment and other approvals. In this way, losses are minimized while profits are maximized hence moving the company to higher levels (Weaver, 2006). Utilitarianism is the most useful ethical theory to guide company decisions since it offers a relatively clear cut way of determining which course of action to take when faced with certain situation. In order to know what to do or which course of action to take, company managers can identify a variety of actions that may be performed. Secondly, they are free to determine and analyze possible benefits and harms that come with each identifiable course of action for everyone affected. After taking the costs are risks involved into account, a good decision is made that offers the greatest benefits to the company (Sheng & Sheng, 2004). According to John Stuart Mill, the principle of utilitarianism calls every individual to consider immediate impacts of our actions. Since it includes benefits and harms to all people, it entails decisions to be made that look beyond the needs of individuals and thus consider being impartial to the interest of everybody. Rachels & Rachels (2012) suggest that the utilitarian standard is made up of the happiness of everybody involved. Since companies are made of numerous employees and other stakeholders, the principle of utilitarianism may lead to all inclusive standards and decisions that do not overlook the interest of even the lowest member of the company. Employee satisfaction can be created in this manner and be translated to more benefits to the company. Today’s world is an era of self- interest and the principal of utilitarianism is a good cue that reminds everybody that ethics and morality requires consideration of others and engaging in actions that result or benefit all (Bazelon, 2005). In reference to Bentham’s (2009) principles of pleasure and pain, he applies a specific criterion which entails intensity, certainty, duration and nearness. This strategy may be of great significance when making company decisions especially in regards to long term and short term policy consequences. It is prudent to consider short and long term consequences when making certain company decisions. Thus, the utilitarian theory helps decision makers to determine whether a certain behavior or course of action may be moral over a long period of time even if the situation or the people present currently may change. For instance, a company may consider to layoff a certain number of workers if the condition of the remaining workers and the economic position of the company may not be affected as the number of workers who will be dismissed. Therefore, the utilitarian principles may lead the decision makers towards choosing the right path to follow in regards to certain company principles (Eldon, 2009). According to Gay (2002), the utilitarianism approach can be very practical and very supportive when a company is experiencing ethical dilemmas. This is because of its consequential nature. The theory considers the consequences of own actions verses those of others in an attempt to decide what is right. It also considers the intensity of benefits and harms to various people with the aim that the society benefits much. For instance, if society benefits outweigh the harm caused to individuals dismissed, then the utilitarian theory becomes applicable. Therefore, wherever nerve racking issues arise in a company, the utilitarian theory may be in handy to break the dilemma and determine the best and most beneficial cause of action. The approach further calls for the involved parties to step out and strive towards making the best ethical decision. Therefore, the step defines and guarantees a company the best decisions by widening its scope in regards to decision making policies followed by the company. Basically, they take into account all the consequences, harms and benefits that otherwise could be overlooked in case other theoretical approaches were used. The theory gives some light on values and how a company can prioritize what is important and that gives rise to maximum benefits (Hooker, 2002). Problems with utilitarianism as an ethical theory to guide company decisions Harwood (2003) argues that utilitarianism is the most popular ethical theory although some problems may arise if companies rely on it as the sole method of determining moral decision making. For instance, the utilitarian calculation entails assigning values to harms and benefits arising from specific actions and then comparing them before settling down on the most beneficial course of action. It is often very difficult to measure or rather assign value to certain benefits and costs such as life or something like art. Moreover, it is impossible to compare the value of money with, for instance, the value of time, life and human dignity. Besides, it is not easy to be certain about certain outcomes or consequences of our actions. It is often not an easy task to search for information about all the affected stakeholders and determine the consequences of a certain course of action that may befall them either directly or indirectly. Therefore, it is advisable for companies to rely on the utilitarian principal to make ethical decisions since human beings are not endowed with the ability to ascertain benefits and harms that come with certain actions and moral rules (Khurana & Nohria, 2008). According to Rawls (2005), another greatest difficult with utilitarianism is the fact that it does not consider the ethical value of justice. For example, certain actions may be of great value by offering the greatest benefits for the company; however, they may be unmerited. As long as a certain course of action produces significant benefits for everybody, as an ethical theory, utilitarianism does not take into account if the benefits are as a result of deception, manipulation or intimidation and any other unfair means. If moral decisions lack the aspect of justice, then utilitarianism is not good as a measure of company guiding principles which lead to decision making (Harwood, 2003). The utilitarian approach exposes the minority in that their rights may not be protected. It is very easy to sacrifice them for the better of the majority group. It is clear that an individual may lose property of be harmed in whatever manner, as long as the benefit covers the society as a whole. For instance, a company with a diverse work force may make decisions or set policies that overlook the rights of a minority group working in the company as long as the policy benefits majority of the workers. Human rights are important just like personal needs and interest. Infringing on the rights of somebody contradicts the strengths of the utilitarian principle which calls for all inclusive standards and decisions that do not overlook the interests of others (Popper, 2002). Conclusion Conclusively, the utilitarian theory is very significant in making moral decisions especially in business organizations and companies. Firstly, the theory of utility accommodates much of business and economic literature that is very vital for the success of many similar ventures. Secondly, the theory principles consider the consequences of one’s course of action to the society and to other individuals. In my own opinion, this is a very vital aspect of ethical decision making not only to companies, but also to daily life activities. This is for the reason that the utilitarian principle uses the entire society as the guide. In reference to Rosen (2003), the approach can be very practical and very supportive when a company is experiencing ethical dilemmas, when a company considers short and long term consequences when making certain decisions and it offers clear cut way of making decisions regarding the course of action to take when faced with certain decisions. Moreover, ethics and morality requires consideration of others and engaging in actions that result or benefit all hence the suitability of utilitarianism as a sole ethical theory used to determine decision making in a company. On the other hand, many business managers make decisions based on utilitarian approach although it is prudent to consider other theoretical approaches. As indicated, sometimes it may be very difficult to measure or rather assign value to certain benefits and costs. Besides, the utilitarian theory does not consider the ethical value of justice and may also overlook the rights of the minority. It is therefore advisable to use a multi-theory approach when making company decisions since each theory has weak and strong points. It is good to consider a multi-disciplinary strategy for the best decisions. (Eldon, 2009) References Bazelon, E 2005, ‘Sentencing by the Numbers,’ New York Times Magazine, 2 January, p 18. 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