Ethical Theory and Its Application to

Contemporary Business Practice

March 15, 2013Academic writing (Business, health, technology and education related topics),
Business related issuesDeontological ethics, Ethics, Immanuel Kant, Jeremy Bentham, John
Stuart Mill, Kantianism, Negative and positive rights, Rawl






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Introduction
When it comes to determining a set of rules, guidelines or principles to follow in the business
industry, many will agree that it is difficult for everybody to agree on one due to the
complexities of dealing with human nature. Therefore, to a certain extent, the field of
business ethics tries to come up with solutions to handle problems that arise within the
business environment. On the contrary belief, one should not be confused with the meaning
of morality and ethical theory. Morality has got to do with principles or rules that are used by
people to decide between wrong and right (Jennings, 2008). Meanwhile, ethical theory tends
to provide guidelines that justify an action to be right or wrong when settling human conflicts
(Jennings, 2008). This paper is going to discuss five different ethical theories. They consist of
the utilitarianism, Kantian deontology, justice, rights and ethical relativism theories. After
that, these ethical concepts will be used to identify some of the ethical issues that are
presented in the article entitled News of the World: What was it like on the inside? Finally,
this paper is also going to come to a conclusion regarding the effectiveness of business
theories and practices.
Ethical theories
Utilitarianism
The utilitarian theory insists that an action is considered to be right or wrong based on the
consequences of the action and its effects on majority of the people (West, 2004). This means
that an action or practice is ethically correct when it produces more positive consequences in
comparison to negative ones to those who are involved. The forerunners for this school of
thought are Jeremy Bentham and John Stuart Mill (west, 2004). Therefore, utilitarianism goes
by the rule that an action is evaluated to be ethical based on a set of rules or principles that
can bring the greatest usefulness to the greatest amount of people (Mill, 2006). This is the
total opposite to deontological ethics whereby utilitarian believes that there should not be any
compromising when it comes to determining the stand point of morality. Tools such as cost
benefit analysis and risk assessment are often depended on by utilitarian for decision making
purposes. However, there are some arguments regarding the greatest happiness principle
that is set forth by utilitarianism. This is due to the difficulty in measuring unit of happiness
or in order to determine an action that will bring the most benefit comparing to other actions
(Mill, 2006).
Kantian deontology
Kantian deontology stresses that an action is considered to be ethical if it can be accepted as a
universal law by every individual (Makkreel & Luft, 2010). It is first introduced by a
philosopher from Germany named Immanuel Kant. He believes that morality must follow a
set of rules without any exceptions. Therefore, this school of thought looks at categorical
principles whereby they are imperatives and instructions are given on the way one must act
(Holzhey & Mudroch, 2005). Besides that, Kantianism also emphasizes on treating each
other with respect. A person should not be used as a mean to get to an end (Holzhey &
Mudroch, 2005). This means that an individual is bound or obligated to their duty to follow a
set of maxim in order to determine whether their actions are ethically right. However, there
have been arguments on Kantian deontology mostly due to the narrowness and inadequacy of
this theory to handle various moral problems or dilemmas (Makkreel & Luft, 2010). For
example, there is no moral guidance or solution when an individuals rights and duties
crosses path.
Justice
Justice can be defined as the importance of getting fair treatments, equality and having rights
(Rawl, 1999). In order to grasp a better understanding on the theories of justice, this section is
going to look at Nozicks libertarianism and Rawls justice as fairness. According to Nozick,
every individual has the right to own a piece of property as long as it is acquired fairly
without going against other peoples rights (Paul, Miller & Paul, 2005). In the world of
economy and business, libertarian believes in a free market where it is no influenced by
government policies or public services. When an organization or individual is taxed by the
government for their property which they have obtained fairly, this action is considered to be
unjust even if the money is distributed to public schools, prisons or fire departments (Paul,
Miller & Paul, 2005). However, many argue that absolute power that is encouraged by
Nozick can bring about negative consequences such as oppression. For example, it is justified
for a country to export all its food produce to another country in order to gain better profits
and ignore the starvation experienced by its people.
Meanwhile, Rawls theory of justice is called Justice as Fairness. There are two main
principles in this theory. The first principle advocates that every individual should have equal
rights to a fair distribution of social goods such as education, food and housing (Rawl, 1999).
The second principle stresses if there is any existence of social and economic inequalities,
they should benefit members of society who are at the most disadvantage (Rawl, 1999).
Therefore, unlike Nozicks libertarianism, Rawl supports the redistribution of wealth and
taxes to those who are socially and economically disadvantage. He believes that this action is
just and promotes productive behavior. Many people argue Rawls theory of justice is too
restrictive and pro-communism.

Rights
The rights theory finds that the best method to deal with ethical issues is to form a basis of
obligations in order to justify every individuals entitlement to human rights (Shaw, 2010).
Besides that, the rights theory also insists that human rights should be independent from the
influence of other factors. Human right is simply the natural rights belonging to every person
by virtue of being a human being (Shaw, 2010). There are two types of human rights; positive
and negative rights. Positive rights are obligations put open people to provide goods and
services to other people (Jennings, 2008). On the other hand, negative rights are obligations
imposed on people to stop them from interfering with other peoples freedom of action
(Jennings, 2008). One of the major arguments pertaining to the rights theory is the lack of
hierarchy to determine which rights has more value than the rest.
Ethical relativism
Ethical relativism is a theory that decides whether an action is right or wrong solely based on
the moral norms that adheres to the culture of ones society (Shomali, 2001). Therefore, an
action can be seen as ethically right in one society does not mean it will be in another. Unlike
Kantian deontology, ethical relativist believes that there is no such thing as a universal law
when it comes to determining a set of maxim (Jhingran, 2001). Any sort of moral problems or
disputes should be judged and handled within the members of a society by coming to an
agreement (Jhingran, 2001). However, there are many people who argue against the theory of
ethical relativism. Although moral practices may differ from one society to another but the
underlying principles of these practices are the same (Shomali, 2001). As a result, skeptics
consider the possibility of the universalization of ethical values to be conceivable. For
example, every society acknowledges that certain actions are deemed wrong such as the act
of torture and slavery. Besides that, individuals from the same cultural background can hold
different moral beliefs as well as practices and decide that these actions are right or wrong
(Shomali, 2001). Despite being widely accepted by the Nazi society, the genocide of Jews is
considered to be ethically wrong by many Germans. This is proven when some of them try to
help Jews to escape from their country.
Ethical issues in the article News of the World: What was it like on the inside?
The article News of the World: What was it like on the inside? portrays the vicious
competition among journalists and newspaper companies. When this situation happens, many
individuals resort to unethical business practices in order to get ahead from the competitors
(Ferrell & Fraedrich, 2012). There are many reasons that can lead to unethical business
behavior. Therefore, this section is going to identify various ethical issues that happen in a
newspaper company called News of the World or NoW through the eyes of one of their
journalists named Dan Arnold.
One of the most obvious ethical issues is the pressure from the supervisors to get a story no
matter what cost it takes (George, 2009). Journalists for this newspaper are pushed to obtain
newsworthy material by hook or by crook. Since the competition between NoW with Sunday
Mirror and People are tight, the company uses their journalists as a mean to get ahead and of
course, to obtain a larger profit margin. Journalists from this newspaper have to work extra
hard and are moved from one project to another without any consideration for their health.
This action is considered to be unethical if it is based on Kantian deontology. He stresses that
every individual should be treated with respect and should not be used as mean to reach an
end.
Besides that, the way NoW runs its company creates fear and paranoia in every journalists
(Geroge, 2009). Their employees often have to work throughout the week and sometimes late
into the evening. Apart from that, they also have to be on the pager 24 hours a day and they
are expected to travel around the globe in a short period notice so that, they can catch the next
big story. As a result of living in fear of getting terminated from the best newspaper
company, journalists are often stressful and resort to drinking in order to curb with the
pressure. Aside from that, the amount of time spend in offices also means they have
neglected their families back home. This is considered to be unethical based on utilitarianism
as the companys action of pushing their journalists to work harder does not bring the greatest
benefit to the greatest number of people. It only serves to bring larger profit for the
companys shareholders while sacrificing the happiness of their employees.
Not just that, people outside of NoW are scared of the journalists from this company and
more often not, give in to interviews and provide information that are required although they
may feel reluctant to do so (Ferrell & Fraedrich, 2012). This action is considered to be
unethical based on the rights theory. These individuals or organizations have the freedom to
say no to the journalists from NoW without any negative consequences that may be
inflicted upon them by the massive influence of a successful company. Besides that, the
action of firing journalists just because their stories are not publish in the newspaper is also
against human rights. It is not the journalists faults if their stories are pushed aside by the
newspaper committee for another piece that seems to be trendier due to a sudden change in
circumstantial events. These journalists have also worked hard just like the others and
deserve some sort of job security and protection from the newspaper company.
In addition, there seems to be an unequal distribution of wealth between the profit gain by the
newspaper company with their employees as well as between the journalists (Ferrell &
Fraedrich, 2012). For instance, journalists who successfully get their stories published are
paid more in terms of salary and are also secure from termination. Based on Rawls theory of
justice, this action is considered to be unethical. Every journalists in NoW has worked hard in
order for the newspaper company to succeed in the industry. Therefore, to be fair, salary
should be equally distributed among the journalists.
Furthermore, in NoW, journalists are awarded base on their success to get a juicy story for
publication. There are instances whereby the company is willing to do anything in order to
obtain the most current news. Sometimes, journalists are asked by NoW to offer cash and
other bonuses such as cars as well as housing property to informants. This act of bribery can
be seen as unethical based on the ethical relativism theory (George, 2009). In many societies
around the world, bribing is against their moral norms. Although the company may view this
action as a mean to get their hands on precious information, it may be conflicting to certain
employees who do not support bribery. However, they will have to push their norms aside to
avoid being fired from their jobs.
Conclusion
This paper has discussed the different ethical theories that are relevant to the business
industry such as utilitarianisms pursuit of happiness, Kantian deontology in coming up with
a universal law, Rawls and Nozicks definition of justice, human rights as well as ethical
relativisms belief in conforming to societys cultural norms (Shaw, 2010). Various academic
literature provided by these philosophers can be used as guidance when it comes to practicing
business ethics. However, there is no one discipline that can stand on its own. This is because
the theory that is presented by one school of thoughts is not sufficient or practical enough in
overcoming a multitude of moral problems which exist in real life situation. Currently, many
businesses choose to adopt interdisciplinary theories in order to achieve better outcomes in
handling ethical issues (Shaw, 2010).
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