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What Is the Relationship Between Business Ethics and Decision Making?

In some cases, decision makers are called upon to make business decisions that run contrary to their personal ethics.
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  • Written By: Daniel Liden
  • Edited By: John Allen
  • Last Modified Date: 18 September 2014
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Business ethics is an application of ethics to behavior and decision-making in a business setting. The connection between business ethics and decision making ideally arises as decision makers consider business ethics before making decisions. When business ethics and decision making go hand-in-hand, decision makers strive to avoid making unethical decisions, even when making the ethical decision may result in a loss of profit. There are many different approaches to ethics, and the specific nature of business ethics and decision making can vary dramatically based on which approach to ethics the decision-maker takes.

One common approach to business ethics and decision making is utilitarianism, which is based largely in examining the consequences of a decision rather than the ethics of the decision in itself. The goal of utilitarian thought is, in most cases, to bring about the most good for the most people. While the end result of decision making based on utilitarian principles is often good, this ethical system can be used to justify unethical practices. Lying or corporate espionage, for instance, could be considered justifiable business decisions if the end result is favorable for most people.

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Another common approach to business ethics and decision making is based in rights. Decision-makers who adhere to this ethical system must examine the rights of everyone affected by their decisions and ensure that their decisions do not infringe upon anyone's rights. This can often be difficult because many people have different conceptions of rights based in personal opinions, culture, religion, and other factors. Complicated issues that may arise in such decision making include animal rights and the rights of unborn babies.

An ethical approach that some consider to be relatively extreme is that which holds the "common good" as the highest principle. The relationship between business ethics and decision making in such a system involves evaluating each decision based on whether or not it contributes to the common good. A profitable decision which is neutral or harmful to humankind in general may be considered unethical. A less profitable decision that contributes significantly to the common good, on the other hand, may be considered better and more ethical.

There are many more approaches to business ethics and decision making, but all are based on the same general idea: the application of an ethical code to business decisions. The ethical code may be based in philosophy, politics, religion, or other systems. In some cases, decision makers are called upon to make business decisions that run contrary to their personal ethics because of the ethical stance of their employers. A solid and explicitly stated ethical code can help businesses to avoid the temptation of profitable but ethically unsound decision making.

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SarahGen
Post 3

@fBoyle-- I don't think it's that difficult. The common good principle is relatively straightforward. If something benefits everyone, then it's fine. But if it harms one party, then refrain.

fBoyle
Post 2

@turquoise-- You have a good argument, but I on't think that the relationship between business ethics and decision making is that simple. Decision-making as a business is difficult. Sometimes, the options in front of the decision-maker are not clear-cut. Sometimes, both options are good to different degrees or bad to do different degrees. So a business has to take the decision that is best both for itself and for others. It has to go with the best option.

It's easy to say that businesses act unethically sometimes. But in the competitive business world where survival depends on profits, it's not always for decision-makers to understand what is most ethical or most beneficial for a business in a certain situation.

turquoise
Post 1

I think that the theory of utilitarianism has been developed to give businesses the right to act unethically if they can justify it with a positive outcome. I actually refuse to accept utilitarianism as a theory of ethics. Ethics is not about the outcome, at least not according to mainstream classical theories like that of Kant. True ethics is universal and does not change. And it requires that the act itself be ethical, regardless of what the outcome is.

So, for example, if it's wrong to lie, it's wrong to lie under all circumstances, even if the lie will result in a positive outcome. And if it's wrong to steal, it's wrong to steal in all circumstances. Utilitarianism is too flexible of a theory and allows people to come up with excuses to make unethical decisions.

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