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Damian Purdue

Business Ethics Essay

Kantian ethics is the best approach to the issues surrounding business. Discuss. In recent years ethical practice in the business environment has become increasingly important. However is there a single ethical approach which is the best for applying to business ethics? One may argue the case for Kantian ethics; Kantian ethics are deontological and so provide very clear strict rules about how one should behave in a situation. The basis of Kantian ethics is to have a good will, if this is to be applied to business it means that every business decision we make should be made with a good motive. An example of this could be to pay employees a fair wage because you know it is the right thing to do, rather than pay them less, in order to reduce costs and maximise profit. Therefore it can be considered an Advantage of Kantian ethics is that by making decisions based upon a good will, should lead to good business practice. However, surely businesses are started up with the intention of making as much profit as possible. Milton Friedman famously proposed the shareholder theory, which is that a businesss only duty is to maximise profit as much as possible without breaking the law. So a disadvantage of Kantian ethics could be that because all decision must be based on a good will, it stands in the way of a businesss primary focus of maximising profit. Perhaps Utilitarianism is a better approach, as it is built around the principle to achieve the greatest good for the greatest number. Perhaps this could provide a balance whereby a business can maximise its profit but no harm is done to employees or consumers. On the other hand a Utilitarian approach could be considered too subjective; how are we supposed to know what is the greatest good for the greatest number? Kants principle of universalizability provides us with a way of producing clear rules that everybody can follow, these are known as categorical imperatives. For example an employee of a company is experiencing financial difficulties, should they steal from the company this one occasion to help themselves? Kant would say no; this cant be universally applied because if every employee stole from the company the business would not function properly. Therefore it is a categorical imperative that an employee should not steal from their company. A drawback of this could be that universalizability could prevent a business from taking drastic one off measures to ensure its survival. Kant would not universalise making employees redundant because if every business did it people would be unable to earn a living and feed their families. However what if a business was in serious debt and needed to make redundancies in order to reduce costs and ensure its survival? If Utilitarianism is applied to the situation, Benthams hedonic calculus could provide a solution. Part of the hedonic calculus is the duration, arguably the duration of pain caused by making employees redundant will be shorter than that if the company was to struggle financially and eventual close. Therefor through the hedonic calculus, necessary business decisions can be made in extreme circumstances. Kantian ethics argues that people should not be used as a means to an ends, when applied to business it means that we should treat stakeholders as people in themselves. A stakeholder is any person who has an interest in a business or is affected by a business in any way. Therefore Kant would argue that a business should consider the impact a business decision will have on all its stakeholders. This surely is an advantage as it would prevent the exploitation of workers and consumers. For example a business that controls a monopoly in a certain market could choose to

Damian Purdue charge extortionate prices as they are the only business that can supply a certain quality product. Kant would strongly disagree with this as it is treating consumers as a means to maximise profit, rather than considering them as people in themselves. Again a similar argument can be applied against this principle, in that it prevents a business from achieving their primary focus, profit. Surely a business has the right to choose whatever price they sell their product at; the consumer is still free to choose whether or not to buy that product. Another part of the hedonic calculus is the extent of the pleasure. If a business can please the majority of its stakeholders, then surely the extent of the pleasure is much greater than that of the pain caused by a business decision. This way doing wrong to customers can be qualified by pleasing all the other stakeholders. In my opinion Kantian ethics is not the best ethical approach when making ethical decisions because it is too rigid, due to its deontological nature and would prevent many businesses from achieving their main objective of profit. I do not think a single ethical approach can be used when making any business decision; however I do feel that Utilitarianism is a more effective approach than Kantian ethics. This is because it would make a business owner think about the consequences of what their decision will be but at the same time is not too rigid that it will prevent them from striving for profit and success.