Business Ethics Midterm Exam

The Endeavor of Rule Utilitarianism

The endeavor of rule utilitarianism to further act utilitarianism is successful. According to act utilitarianism, a deed is moral if it results in the greatest good for the largest number of individuals. Justice and promises are moral ideas that do not allow for post-action judgment. The parties involved in justice must assess the impact of their decisions before acting (Barrow 4). In this case, the maxim "the greatest good for the greatest number of people" rarely applies. As an illustration, three persons could plan to harm one person. Application of justice means that the three people have to be punished to make the victim happy. In this case, the action has not produced the greatest good for the greatest number of people. From act utilitarianism perspective, the action of punishing a large number of people to make one happy does not qualify as ethical. Fulfilment of promises may not always prove ethical from the perspective of act utilitarianism. Promissory obligations cannot be justified in a society that strictly follows act utilitarianism. The change of contextually of moral evaluation from the individual acts to the rules that govern them. Utility focuses on the practices and rules that are behind the acts rather than the individual acts (Barrow 39). The best rules and practices are those that produce overall-best consequences. The shift from act to rule provides an explanation for moral intuitions that regard promise-keeping at the individual level. In a society where morals are based on rule utilitarianism, making promises and trusting each other is given a lot of priority. Promises are assured that once promisors are bound by the promises that they make and are not likely to use local utility calculations in order to determine whether to keep the promises or not.

Freeman's Defense of the Doctrine of Fair Contracts

In order to meet their own interests and targets, stakeholders have a duty to first maximize the interests of other parties. Freeman’s argument is based on the notions of fairness, solidarity and autonomy. The need for autonomy is what activates corporation in the operations of the stakeholders. An automatic contract is usually created among the employees, financiers, suppliers, customers and the general society. Freeman creates the ‘Doctrine of Fair Contracts’ on the basis that the parties have the ability to mutually choose ground rules. He makes the assumption that each party has knowledge of the existing and potential corporate arrangements, various social institutions that exist and are relevant to the business deal and understands how various corporate designs influence success and failure (Friedman and Miles 58).

Friedman's Ground Rules for Fair Contracts

Friedman outlines the six most common ground rules that apply to the doctrine of fair contracts. He explains that the contract between stakeholders should clarify on the processes of entry and exit and the criteria for negotiations at these stages. Governance is key in management of relations within the stake-holder theory. Friedman emphasizes on the need to unanimously agree on the procedure for changing rules. They should also agree on the basis of including other parties affected by the costs and the criteria of sharing the costs that emerge in the course of implementing the deal. Freeman defends the stakeholder theory on the basis that the stakeholders serve the interests of each other through time as a way of meeting their own (Friedman and Miles 58). The argument is very bold and can be used to reinvent the management theory on the basis that knowledge of the goals of all stakeholders and implementation of effective means of achieving them motivate one’s counterparts in any business deal. This ends up creating autonomy and promoting the realization of the liberal ideal of solidarity.

Virtue Theoretic Approaches to Business Ethics

Virtue ethics are centered on the concept of character. The theory of right conduct precedes ethics of virtue because normative notions in virtue ethics are grounded in the conduct of individuals performing the acts (Linda and Nelson n.p). Contemporary business entities insist on the importance to create a certain culture. This means that the actions of the employees and the management within the organization are guided by certain virtues that are instilled in them in the course of their stay. Virtues are instilled in employees through organizational culture. Right conduct by the employees is that which meets the moral standards required as per the organizational culture. Utilitarians and deontologists believe that there should be a decision procedure that can be evaluated to determine whether the action is right or wrong in any particular case (Linda and Nelson n.p). Evaluation of an action from the perspective of virtue ethics does not place a lot of emphasis on the procedure. This means that business organizations applying virtue ethics do not have a basis of evaluating a procedure and determining whether it is right or wrong. The subjective nature of decisions made at the individual level compromises the ability of the management to dismiss or accept actions as having been guided by the right virtues. Virtue ethicists cannot come up with codifiable principles that can provide a defined action-guidance. Despite the existence of these arguments, virtue ethics remain an important underlying principle to justify the use of organizational culture to guide employees’ operations. A strong organizational culture imparts virtues in employees and they act in the interest of the whole entity.

Works Cited

Barrow, Robin. Utilitarianism: A contemporary statement. Routledge, 2015.

Friedman, Andrew L., and Samantha Miles. Stakeholders: Theory and practice. Oxford University Press on Demand, 2006.

Trevino, Linda K., and Katherine A. Nelson. Managing business ethics: Straight talk about how to do it right. John Wiley & Sons, 2016.

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