Business Ethics Theories to Know for Intro to Business

Business ethics theories guide how companies make decisions that impact people and society. Understanding these theories helps us see the balance between profit and responsibility, shaping a more ethical approach in the world of business.

1. Utilitarianism

   • Focuses on the consequences of actions, aiming to maximize overall happiness or utility.
   • Decisions are evaluated based on their outcomes for the greatest number of people.
   • Often used in business to justify actions that benefit the majority, even if they harm a minority.

2. Deontological Ethics

   • Emphasizes duties and rules over consequences, asserting that some actions are inherently right or wrong.
   • Actions are judged based on adherence to moral principles, regardless of the outcome.
   • Important in business for establishing ethical guidelines and corporate policies.

3. Virtue Ethics

   • Centers on the character and virtues of the individual making decisions rather than on rules or consequences.
   • Encourages the development of moral character traits, such as honesty and integrity.
   • In business, it promotes ethical leadership and a culture of integrity within organizations.

4. Social Contract Theory

   • Suggests that moral and political obligations arise from an implicit agreement among individuals to form a society.
   • In business, it highlights the responsibilities companies have to their employees, customers, and the community.
   • Encourages businesses to operate in a way that respects societal norms and expectations.

5. Stakeholder Theory

   • Argues that businesses should consider the interests of all stakeholders, not just shareholders.
   • Stakeholders include employees, customers, suppliers, and the community, each with a vested interest in the company's actions.
   • Promotes a more inclusive approach to decision-making in business ethics.

6. Corporate Social Responsibility (CSR)

   • Refers to the ethical obligation of businesses to contribute positively to society and the environment.
   • Involves practices that go beyond profit-making, such as sustainable practices and community engagement.
   • Enhances a company's reputation and builds trust with consumers and stakeholders.

7. Rights Theory

   • Focuses on the rights of individuals and the moral entitlements that must be respected in business practices.
   • Emphasizes the importance of protecting fundamental human rights, such as privacy and freedom of expression.
   • Guides businesses in creating policies that uphold and respect the rights of all stakeholders.

8. Justice Theory

   • Concerned with fairness and the equitable distribution of benefits and burdens in society.
   • Advocates for just treatment of individuals and groups, addressing issues of inequality and discrimination.
   • In business, it informs practices related to hiring, promotions, and resource allocation.

9. Ethical Egoism

   • Proposes that individuals should act in their own self-interest, as long as it does not harm others.
   • Suggests that pursuing one's own good can lead to positive outcomes for society as a whole.
   • Raises questions about the balance between self-interest and ethical responsibilities in business.

10. Care Ethics

    • Emphasizes the importance of interpersonal relationships and the moral significance of care and empathy.
    • Focuses on the context of relationships and the needs of others in ethical decision-making.
    • Encourages businesses to foster a caring culture that prioritizes employee well-being and community support.