What Are the Different Types of Business Ethics Theories?

Helen Akers

Business ethics theories form the foundations for acceptable behaviors and decisions in the work environment. For some professionals, their business values may run parallel to their religious codes of conduct. The majority of professional ethics are based on the idea of doing what is best for the group and focusing on the moral aptitude of the action, rather than the result. The three main business ethics theories are deontological theory, utilitarianism, and norm theory. One of the largest influences of modern business ethical principles is Kantian theory, which is a type of norm theory.

Some business ethics models are built on Immanuel Kant's philosophy.
Some business ethics models are built on Immanuel Kant's philosophy.

Deontological theory states that ethical behavior should follow an established set of rules or principles in all types of situations. Even though the actual outcome of following established moral principles may differ, the result does not determine whether the action is ethical. For example, according to deontological theory, it would always be unethical to lie even if lying would prevent an unfavorable consequence, such as death.

The majority of professional ethics are based on doing what is best for the group.
The majority of professional ethics are based on doing what is best for the group.

Utilitarianism is the idea that business conduct should take into account the consequence that would benefit the largest amount of people. As far as business ethics theories are concerned, it is one that is probably open to a great amount of interpretive differences. For example, in international commerce, the consequences of the decision to impose tariffs might be more beneficial to the group of people on one particular side of the transaction. In addition, it could be argued that the decision's consequences might benefit the largest amount of people in the short-term, but harm a greater amount in the long run.

Norm theory states that certain standards of moral conduct should be followed by the entire group. The acceptable forms of conduct are typically defined for a variety of probable situations. A prime example of norm theory in the business world is the idea of employee handbooks or corporate codes of conduct. These usually provide a framework for how employees should respond and behave in given circumstances, with deviation from the code resulting in disciplinary action.

Business ethics theories related to norm theory include Kantian ethical principles. These principles were developed by a Russian philosopher and theorist who proposed that ethical guidelines should speak to humanity as a collaborative group. Business ethics theories based on Kant's philosophy should treat humans as ends rather than as means. In other words, when developing a code of conduct, an individual should not use others to serve his own purpose or advantage.

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Discussion Comments


@stoneMason-- I agree with you. Especially utilitarianism seems like an adaptation of ethics so that people can continue to make money and protect themselves in the global market. It's difficult to justify tariffs and embargoes with the classic ethics theories.

Ethics are so difficult in general though. Because many times, business have to choose the greater of two goods or the lesser of two evils. Decisions are not always black and white. What's best and most ethical is not always apparent.

But I believe that this area of thought and study needs to be expanded upon. We have a growing need for ethics in business, trade, national and global economies. Because the decisions that are made by corporates and governments impact the lives of millions of people in the world. So we can't ignore this topic.


@stoneMason-- I think deontological theory would say that that's unethical. Because based on this theory, the outcome doesn't matter, it's the action that's important. Paying employees a lower rate than the norm, or making them work too much are unethical actions. It doesn't matter if the result is good.


Business sense and ethics seems contradictory sometimes. Because the major indispensable goal of any business is to make money. And in order to increase profits, certain decisions have to be made. Sometimes those decisions are not entirely ethical.

For example, in order to make money and prevent downfall, a business may shift its factory to another country. In order to reduce cost, the business may pay less to the local employees there or have them work overtime. If the business doesn't do this, it will have to shut down and those people will lose their livelihood altogether. So is this ethical or not?

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