The main aim of this report is to discuss, between utilitarianism and deontology, what is best for a business. These are two of the major ethical philosophies that are applied to businesses worldwide (Shaw, 2013). The discussion is done by investigating and analyzing the different ideas put forward in the area through existing literature and an argument is based upon the conclusions drawn from these literatures. This is done by first analysing each of the theories separately and their applications in real time businesses and the advantages and disadvantages of applying them to a business. Based on the conclusions, an attempt is made to arrive at an answer as to which of the two ethical philosophies is best for business.
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Utilitarianism states that the morality of an action is determined by its consequences. For example, in utilitarianism it is acceptable if others are harmed but the consequence of the action is the well-being of a greater number of people. Deontology (Kant, 1788), on the other hand implies that the morality of any action basically depends upon intrinsic nature of the action (Conway & Gawronski, 2013). That is, regardless of whatever the consequence of the action may be, harming others is not acceptable.
In Utilitarianism, the act does not matter. Preference is only given to the outcome. There are two versions of utilitarianism; act utilitarianism (Brandt, 1972) and rule utilitarianism. The former version concerns with the notion that, a particular action is recommended and acceptable if it consequently increases happiness. And this is the default version of the theory. The action here is most important and the action is analysed on the lines of good consequences it produces. For example, if we consider a pharmaceutical company, the release of an officially approved medicine with a few side effects can be justified based on act utilitarianism (Brusseau, 2014). In this case the pharmaceutical company is operating on the principle that though the medicine causes side effects in a few patients, it helps increased number of patients in recovering from a particular disease. Therefore, the overall good is sufficiently greater than the bad.
The Rule utilitarianism concerns with the notion that any action if it is based on a rule that, it increases the general happiness when applied uniformly to everyone is morally right. This rules aims at maximizing the overall utility. The focus here is on the rule for acting and not on the action itself. For example, in case of airline industry, it has tiered pricing for the same service to different customers. The pricing is different for economy, business and first class airline customers. Now, all the customers travel to the same destination for the same amount of time but the business class and first class customers pay much more than the economy customers and they also get more amenities for their price. The price difference can be justified on the basis of rule utilitarianism on the argument that it helps the airline industries in easing of the finance to accommodate the economy class.
The 1972 Ford Pinto case is a classic example of utilitarianism in business (Velasquez, 2001). Because of the increasing gas prices, the then president of Ford, Lee Iaccoca modelled the Ford Pinto and wanted to rush it into production to compete with the Japanese manufacturers in producing fuel efficient smaller cars. This car was slated to cost two thousand US Dollars and was rushed into early testing and production. During the testing, it was noted that the positioning of the gas tank in the rump of the car left it vulnerable to collisions in rear-end of the car. Especially collisions at a speed greater than twenty miles per hour might cause the tank to break and result in serious burning repercussions.
When it was debated whether or not to go ahead with the production of the vehicle, on utilitarian terms it was decided to send the pinto out. According to estimates from Ford, over the next ten years nearly sixty people died in fiery accidents and around one hundred and twenty people got seriously injured after which the pinto was phased out. The cost came lesser than it would have taken for Ford to remodel the gas tank and increase the price of the vehicle. On the basis of utilitarian argument Ford’s decision was justified since the overall good was higher. The car was beneficial to a broader number of people. The theory is based on the focus on ultimate happiness even if an action or decision caused pain to certain people. How right the decision was isn’t taken into account. The decision sure did increase the profits for Ford but it cost human lives. Can human lives be quoted a price? There lies the danger in applying utilitarianism to businesses.
There are other utilitarian versions. Monetized utilitarianism denotes the measuring of overall happiness on the basis of monetary benefits. A classic example of this would be the above mentioned Ford Pinto case. The decision here is purely objective and is advantageous when applied to complex situations involving lot of people. The Hedonistic Utilitarianism or traditional utilitarianism was proposed by Jeremy Bentham. According to him [Bentham] pleasure and happiness are synonymous. This approach seeks to increase pleasure while idealistic utilitarianism as described John Stuart Mill agreed with Bentham’s theory and also distinguished low and high brow sensations.
In deontology, the decision or action is basically focussed on whether the action is right or wrong. For example, if we consider the same Ford Pinto case, a business operating on the deontological principle would definitely have decided to stop with the production or remodel the gas tank. This approach is based on a set of moral values and individual rights. A deontologist would not send the car into production unless he/she is absolutely sure that no harm would come from the design defects of the car to anybody who purchases it and even if only a small number of people are being harmed, it is still unacceptable.
For example, consider a citizen following the law. He/she is a deontologist considering the he/she follows the law because he/she is supposed to do it and that it is his/her duty. The consequences don’t matter. And an employee who follows rules in firm also follows deontology because he follows rules because he agreed to follow them. Just because he agreed, it is his duty to follow it and this action is of the highest virtue. Consider a customer service manager. If he is a follower of deontology and has strong duty based ethics, he will adhere firmly to the company policies and not make any provisions for the customer, because as far as he is considered, adhering to company policies is a part of her job and deviating would mean deviating from morals. This may be a disadvantage as it may sometimes result in dissatisfaction of customers. A utilitarian in this case would allow exceptions for customers because he is more concerned about the consequence, which is keeping his customers happy.
Thus deontological theories insist that even if morally favourable ends are obtained, some actions are never right. The act is here is independent of the outcome. Immanuel Kant developed the most known theory of deontology according to which emotions, inclinations and consequences has no role when it comes to performing moral duties. One of the biggest drawbacks of the deontological theory is that it doesn’t consider the outcome at all. And it is not advisable to discount outcome of an action altogether. For example, deontology forbids lying universally. But lying for a good cause is permissible especially when saying the truth can be destructive.
For instance, let us consider Sheryl Weinstein in the Bernie Madoff Case (Velasquez, 2001). Bernie Madoff’s Ponzi scheme was a disaster. His original idea was to manoeuvre complicated financial businesses and he sought money from investors with this in mind. After a few early losses when his business wasn’t growing, he started borrowing money from new investors and channelling them to the old investors claiming that it was through the success of his manoeuvre. In this case he temporarily lied for the overall good of everybody. His intention was to succeed and get all the money back but it didn’t happen and he had to eventually go to jail. In a utilitarian point of view this was justified. But if he had followed deontology and said only the truth, it could have saved him from going to jail even though he would have been left with nothing.
This is where categorical imperative comes into the picture and acts on the rule that the actions of a person should be in such a way that it can be universalized. Considering the universal rule that lying is not acceptable, Sheryl Weinstein should not lie about her twenty year affair with Madoff. But the best action in this case would be to either lie or hide the truth either of which is not acceptable according to deontology. The truth in this case causes only defamation. The problem with this theory basically is that it sounds good in theory but it is really difficult when it comes to applying it for practical purposes.
For instance, in case of Eddy Lepp, medical marijuana grower in Northern California, he had license from the California regulators but the Federal agencies forbid the growth of the drug. This drug has soothing effects for nausea and remedied vomiting in case of cancer patients undergoing chemotherapy (Brusseau, 2014). On the negative side, his action was breaking the law but the positive outcome was a large number of patients benefitted from the drug. If according to deontology the means justify the ends, the moral thing to do is to accept the truth and not lie. If ends should justify the means, then the morals change.
In the debate between utilitarian versus deontological moral actions and judgements, sometimes, actions leading to maximum utility are morally impermissible (like the Ford Pinto case). Sometimes, adhering to moral values to do the right thing instead of making a mistake is morally required while sometimes it is necessary to consider the result of a morally right action. Therefore, there is no one business ethics. But when applying these ethics to business it is to be noted that it is important to perform only those actions that will result positively for the business. Doing something because it is morally right even though you know that it will reflect badly on the business is stupidity.
In concluding, both deontology and utilitarianism have crucial implications when it comes to business. Both the theories can be applied in businesses. The cost-benefit analysis of utilitarianism is the most favourable way to evaluate whether a business decision is moral and is very important. Similarly, according to the categorical imperative in deontological theories rules out certain universalized practices such as theft, fraud, corruption etc. in business and form the basic elements of business ethics. But considering the practical feasibility of both the theories, deontology is very difficult when it comes to practising and requires value ethics to make it feasible (Van Staveren, 2007). Further, the main objective of any business is to gain profits and since the fundamental crux of utilitarianism is to maximize utility and focus on the overall good consequences, it may be said that utilitarianism is better for business comparatively.
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