Business Ethics

Perspectives of Leaders & Subordinates


Business ethics examines the moral and ethical principles and dilemmas arising in the business environment. This article is concerned with the values and principles that govern the behaviour of individuals and organisations in the business world.
Business ethics examines the moral and ethical principles and dilemmas arising in the business environment. This article is concerned with the values and principles that govern the behaviour of individuals and organisations in the business world.
Here's an introduction to different schools of thought regarding intent, action, and consequences:

1. Deontological Ethics (Duty-Based Ethics)
  • Focus: Intent and Action.
  • Central Idea: Certain actions are inherently right or wrong, regardless of their consequences. The morality of an action is based on whether it conforms to a set of established rules or duties.
2. Consequentialism (Results-Based Ethics)
  • Focus: Consequences.
  • Central Idea: The morality of an action is determined solely by its consequences. The most well-known form is utilitarianism, which advocates for the greatest good for the greatest number.
3. Virtue Ethics
  • Focus: Intent, Action, and the Character of the Actor.
  • Central Idea: Emphasises the role of one's character and virtues in determining the rightness of actions, rather than rules or consequences. It's about being rather than doing.
4. Rights-Based Ethics
  • Focus: Intent and Action.
  • Central Idea: Every individual has inherent rights, and actions are considered ethical if they respect these rights, regardless of the outcome.
5. Relativist Ethics
  • Focus: Context.
  • Central Idea: Morality is relative to the cultural, social, and individual beliefs. What's considered ethical in one culture or situation might be unethical in another.
6. Egoism
  • Focus: Self-interest.
  • Central Idea: Actions are ethical if they promote the individual's best long-term interest.
In the context of business, these ethical theories can guide decision-making processes, corporate policies, and interpersonal relationships within and outside the organisation. Different businesses might align more with one school over another based on their corporate values, culture, and objectives.
BUSINESS ETHICS
Deontological Ethics
Deontological ethics, often referred to as duty-based or rule-based ethics, posits that certain actions are inherently right or wrong, regardless of their outcomes. It asserts that there are clear moral rules and duties that individuals must adhere to, and the morality of an action is judged based on its adherence to these rules, not its consequences.
DEONTOLOGICAL ETHICS
Leaders Perspective
  1. Decision Making: A leader with a deontological mindset will make decisions based on established principles, rules, and duties, rather than predicted outcomes. For example, they might reject a profitable business deal if it involves unethical practices, even if the negative consequences are unlikely to materialise.
  2. Setting Company Policies: Leaders who follow deontological ethics will create company policies that reflect clear moral rules. These policies won't be based on what's most profitable, but on what's ethically right.
  3. Handling Conflicts: When faced with ethical dilemmas, a deontological leader will adhere to moral rules rather than compromising for the sake of convenience or profit. They may face criticism for not being "pragmatic," but they prioritise ethical integrity over short-term gains.
  4. Leading by Example: Such leaders emphasise the importance of always doing the right thing, not just what's beneficial. They model this behaviour for their subordinates, fostering a culture of integrity.
DEONTOLOGICAL ETHICS
Subordinates Perspective
  1. Personal Integrity: Workers adhering to deontological ethics will perform their duties honestly and diligently, based on the belief that it's their moral obligation, regardless of potential outcomes.
  2. Whistleblowing: A deontological worker, when witnessing unethical practices within the organisation, may feel compelled to report or address them, even if it could lead to personal repercussions. Their commitment is to the ethical rule, not the potential consequence.
  3. Interpersonal Relations: Such workers will treat colleagues with respect and fairness, not because it's beneficial for their career, but because it's the morally right thing to do.
  4. Handling Tasks: If assigned a task that goes against their ethical principles, deontological workers might refuse or express concerns, prioritising moral duty over job security or promotions.
Deontological ethics focuses on the inherent morality of actions, irrespective of their consequences. Whether one is a leader or a subordinate, this ethical approach emphasises adherence to moral rules and duties as the primary determinant of right and wrong.
BUSINESS ETHICS
Consequentialist Ethics
Consequentialism, often referred to as results-based ethics, posits that the morality of an action is determined solely by its consequences. The rightness or wrongness of an action is judged based on the outcomes it produces, rather than the action itself. The most well-known form of consequentialism is utilitarianism, which advocates for actions that lead to the greatest good for the greatest number.
CONSEQUENTIALIST ETHICS
Leaders Perspective
  1. Decision Making: A consequentialist leader evaluates potential decisions based on the outcomes they will produce. They might accept a business deal not solely on its ethical premise, but on the benefits it will bring to stakeholders.
  2. Setting Company Policies: Policies are crafted to produce the best possible outcomes for the company, its employees, and its stakeholders. This could include prioritising sustainability if it leads to long-term gains or improving public relations.
  3. Handling Conflicts: Leaders with this mindset will seek resolutions that result in the best possible outcome for the company, even if it means making morally ambiguous decisions. The end result is the primary focus.
  4. Risk Management: Consequentialist leaders often weigh the potential risks of an action against its benefits. If an action might harm the company's reputation but brings substantial profit, the leader will consider which outcome is more significant.
CONSEQUENTIALIST ETHICS
Subordinates Perspective
  1. Task Execution: Workers adhering to consequentialism will approach tasks with the end goal in mind, focusing on achieving the best results, even if it means deviating from traditional methods.
  2. Whistleblowing: A consequentialist worker will weigh the potential outcomes before reporting unethical practices. They might consider the broader impact on the company, their colleagues, and their own career.
  3. Interpersonal Relations: Such workers might base interactions with colleagues on the potential benefits or drawbacks those relationships could bring about, rather than on inherent moral duties.
  4. Handling Ethical Dilemmas: When faced with moral challenges, a consequentialist worker evaluates the potential outcomes of their choices. They might choose an action that's ethically questionable if it leads to a better overall result for them or the company.
Consequentialism places emphasis on the results of actions. Whether one is a leader or a subordinate, this ethical approach evaluates the moral worth of an action based on the outcomes it produces, often striving for the greatest overall benefit.
BUSINESS ETHICS
Virtue Ethics
Virtue ethics shifts the focus from the act itself or its consequences to the character of the moral agent. It emphasises the virtues, or moral character, rather than rules or outcomes. Virtue ethics argues that if an individual has good character traits (virtues), they will make the right decision, and consequently, the right actions will follow.
VIRTUE ETHICS
Leaders Perspective
  1. Decision Making: A leader who adheres to virtue ethics will make decisions based on what a virtuous person would do. They consider the kind of character traits they wish to embody and promote within the company.
  2. Setting Company Culture: Virtue ethics leaders place a strong emphasis on cultivating a company culture that values virtues such as honesty, courage, and compassion. They believe that a virtuous organisation will naturally make ethical decisions.
  3. Mentoring and Training: Such leaders often see their role as mentors, guiding their subordinates in developing virtuous character traits. Training programs might focus on character development as much as skill acquisition.
  4. Handling Conflicts: A leader with a virtue ethics mindset will approach conflicts by considering what actions align with virtuous character traits, seeking resolutions that uphold the company's core virtues.
VERTUE ETHICS
Subordinates Perspective
  1. Personal Development: Workers adhering to virtue ethics focus on cultivating their own virtuous traits, believing that by becoming a better person, they will naturally make better decisions in their professional lives.
  2. Interactions with Colleagues: Such workers value genuine relationships built on mutual respect and trust. They interact with colleagues in a way that reflects their core virtues, rather than for potential personal gain.
  3. Handling Tasks: When assigned tasks, these workers approach them by considering what a person with virtuous traits would do. They strive for excellence, not just because it's required, but because it's in line with their character.
  4. Facing Ethical Dilemmas: In situations of moral ambiguity, a virtue ethics worker will reflect on their virtues to guide their actions, rather than rigid rules or potential outcomes.
Virtue ethics emphasises the importance of moral character. Whether one is a leader or a subordinate, this ethical approach encourages individuals to cultivate virtuous traits, believing that right actions will naturally follow from a virtuous character.
BUSINESS ETHICS
Rights-Based Ethics
Rights-based ethics, also known as deontological ethics, centres on the belief that individuals have inherent rights that should be respected and protected. This approach argues that certain actions, regardless of their outcomes, are morally right or wrong based on the rights they respect or violate.
RIGHTS-BASED ETHICS
Leaders Perspective
  1. Decision Making: Leaders who follow rights-based ethics make decisions that respect and protect the rights of all stakeholders, prioritising these rights over potential benefits or outcomes.
  2. Setting Company Policies: Such leaders create policies that safeguard the rights of employees, customers, and other stakeholders. This could include strict privacy policies or practices that ensure fair treatment of all employees.
  3. Handling Conflicts: Leaders with a rights-based mindset will approach conflicts by considering the rights of all involved parties. They'll aim for resolutions that respect these rights, even if it means sacrificing potential benefits.
  4. Risk Management: In situations where company actions might infringe on individual rights, leaders will act cautiously, prioritising rights over potential gains. This could mean avoiding certain business deals or partnerships.
RIGHTS-BASED ETHICS
Subordinates Perspective
  1. Task Execution: Workers adhering to rights-based ethics will approach tasks with a focus on respecting the rights of others. They'll be cautious about actions that might infringe on the rights of colleagues, clients, or the public.
  2. Whistleblowing: A rights-based worker will likely report unethical practices that violate the rights of individuals, valuing these rights over potential repercussions or company loyalty.
  3. Interpersonal Relations: Such workers will prioritise the rights of their colleagues in interactions, ensuring they don't infringe on their rights to privacy, dignity, or fair treatment.
  4. Handling Ethical Dilemmas: When facing moral challenges, a rights-based worker will evaluate their options based on the rights involved. They'll choose actions that respect and protect these rights, even if it means facing personal or professional disadvantages.
Rights-based ethics focuses on the inherent rights of individuals. Whether one is a leader or a subordinate, this ethical approach emphasises the importance of respecting and protecting these rights in all actions and decisions.
BUSINESS ETHICS
Relativist Ethics
Relativist ethics posits that there are no absolute moral truths or universal principles that can be applied consistently in all situations. Instead, what's deemed moral or ethical varies depending on cultural, societal, historical, or individual perspectives. Relativist ethics suggests that actions should be judged based on the context in which they occur.
RELATIVIST ETHICS
Leaders Perspective
  1. Decision Making: A leader adhering to relativist ethics will consider the cultural and societal norms of the regions or groups they're working with. Decisions will be moulded to fit the accepted practices and values of those groups.
  2. Setting Company Policies: Such leaders might adapt company policies to different regions or departments, reflecting the diverse values and norms of each. A policy that works in one country might be adjusted for another to respect local customs and values.
  3. Handling Conflicts: Leaders with a relativist perspective will approach conflicts with an understanding of the cultural or societal backgrounds of the parties involved. Resolutions might vary based on the specific context.
  4. Ethical Guidelines: Instead of having a fixed set of ethical guidelines, relativist leaders might have flexible frameworks that can be adapted depending on the situation or cultural context.
RELATIVIST ETHICS
Subordinates Perspective
  1. Task Execution: Workers following relativist ethics might approach tasks differently depending on the cultural or societal norms of the clients or stakeholders they're dealing with.
  2. Interactions with Colleagues: Such workers will be open to understanding and respecting the diverse backgrounds and values of their colleagues. They'll be more adaptable in collaborations with team members from different cultures.
  3. Facing Ethical Dilemmas: When confronted with moral challenges, a relativist worker will weigh the cultural and societal norms relevant to the situation. They might make decisions that seem unconventional from one perspective but are appropriate in a specific context.
  4. Feedback and Collaboration: Understanding that what's considered effective or appropriate can vary, these workers might seek feedback from diverse sources or collaborate closely with local teams when working in different regions.
Relativist ethics emphasises the importance of context in ethical decision-making. Whether one is a leader or a subordinate, this ethical approach promotes adaptability and understanding, recognising that moral values can differ across cultures, societies, and individuals.
BUSINESS ETHICS
Ego Ethics (Egoism)
Egoism is an ethical theory that posits that individuals should act in their own self-interest. It is based on the belief that self-interest is the foundation of morality and that individuals inherently act to benefit themselves. Egoism can be divided into two main types: psychological egoism (the belief that people always act in their own self-interest) and ethical egoism (the belief that people ought to act in their own self-interest).
VIRTUE ETHICS
Leaders Perspective
  1. Decision Making: A leader adhering to egoism will make decisions that primarily benefit themselves or the organisation they lead, viewing the success of the company as aligned with their personal success.
  2. Setting Company Policies: Policies might be geared towards maximising company profits and market dominance, even if it means being aggressive or competitive.
  3. Handling Conflicts: Egoist leaders might approach conflicts by considering what resolution is most beneficial for them or the company, potentially overlooking the interests of others.
  4. Stakeholder Relations: While they might engage with stakeholders, the primary motivation would be to further the company's interests, viewing positive stakeholder relations as a means to that end.
VERTUE ETHICS
Subordinates Perspective
  1. Task Execution: Workers following egoism will approach tasks with an eye on how they can benefit personally. This could mean seeking tasks that offer better visibility, rewards, or opportunities for advancement.
  2. Interactions with Colleagues: Such workers might be competitive, always looking for ways to outperform their peers or highlight their own achievements.
  3. Facing Ethical Dilemmas: An egoist worker, when confronted with moral challenges, will weigh the potential benefits to themselves. Decisions might be based on what offers the best personal outcome, even if it's at the expense of others.
  4. Feedback and Collaboration: While they might collaborate with others, the underlying motive would be to further their own interests. They might seek feedback that elevates their work or positions them favourably.
Egoism places the individual's self-interest at the centre of ethical decision-making. Whether one is a leader or a subordinate, this ethical approach prioritises personal benefits and outcomes, often overlooking the broader impacts on others or the community. It's worth noting that while egoism can drive ambition and achievement, it can also lead to conflicts and ethical quandaries if unchecked.
BUSINESS ETHICS
Prominent Thinkers
Here's a summary of prominent thinkers associated with each of the ethical schools:

1. Deontological Ethics (Duty-Based Ethics)
  • Immanuel Kant (1724-1804): Arguably the most influential figure in the development of deontological ethics. He believed in an absolute moral law known as the "Categorical Imperative", which dictates an action's morality based on its universality.
2. Consequentialism (Results-Based Ethics)
  • Jeremy Bentham (1748-1832): Founder of modern utilitarianism, he introduced the principle of "the greatest good for the greatest number," emphasising the calculation of pleasure and pain as a measure of goodness.
  • John Stuart Mill (1806-1873): Built upon Bentham's utilitarianism, placing value on the quality of pleasures and advocating for individual rights and liberties.
3. Virtue Ethics
  • Aristotle (384-322 BCE): The foundational figure in virtue ethics. In his work "Nicomachean Ethics", he outlined the concept of the 'Golden Mean' and emphasised the development of good character through the cultivation of virtues.
4. Rights-Based Ethics
  • John Locke (1632-1704): An influential thinker in the realm of natural rights, he argued in his "Two Treatises of Government" that individuals have natural rights to life, liberty, and property.
  • Thomas Paine (1737-1809): In "Rights of Man", Paine defended the idea of human rights and their importance in the context of civil society.
5. Relativist Ethics
  • Ruth Benedict (1887-1948): An anthropologist who, in her work "Patterns of Culture", discussed the variability of moral practices across cultures, suggesting that morality is culturally relative.
  • William Graham Sumner (1840-1910): A sociologist who argued that what is deemed ethical is merely a reflection of the norms and mores of a particular society.
6. Egoism
  • Max Stirner (1806-1856): In "The Ego and Its Own", Stirner presents a radical form of egoism, arguing for the primacy of individual interest over all external or societal constraints.
  • Ayn Rand (1905-1982): A philosopher and novelist who championed a form of ethical egoism known as Objectivism, asserting the moral virtue of selfishness and the role of rational self-interest in ethics.
These thinkers have significantly shaped the discourse in their respective areas of ethical thought. Their works remain foundational texts for students and scholars of ethics.
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