Business Ethics Key Terms
Understanding the theories that contribute to differing business ethicsBusiness ethics has become an important issue since the fall of Enron several years ago. However, the priorities of individuals differ from the priorities of a business, therefore the ethics upheld vary from company to company. There are four major ethical theories that explain the manner in which some companies may conduct business. While there are standards, such as honesty, that many feel businesses should uphold, these theories may shed light on the motivations behind businesses not always conducting themselves in a manner appealing to the general public.
Stanford Encyclopedia of Philosophy provides an in-depth explanation and analysis of business ethics.
PrinciplesPrinciples aren't necessarily standards, but absolute truths that serve as a goal for the outcome of business ethics. Basically, business principles are guides that steer employees toward the correct result.
DeontologyDeontological ethics means that a business prioritizes society or the consumer over everything else. In deontology, the business has a duty to uphold and will, therefore, always follow through with its commitments and abide by the law.
Davidson College in North Carolina compiled information on ethical theories, including deontology, covering the theory's benefits and flaws. To see it, scroll down to Ethical Theories.
UtilitarianismThe utilitarian approach to ethics is one in which the actions a company takes are those that will have the most positive results and benefit the most people in the end. It is an analysis of consequences and choosing the action that has the least amount of negative results. The flaw with this ethical approach is that a business may find the benefits to its company and employees outweigh the benefits to the consumer.
Markkula Center for Applied Ethics at Santa Clara University.
RelativismEthical relativism is the position that every individual has an equally valid point of view, and the determination of morals depends upon the cultural norms for that individual. In regard to business, relativism provides that the CEO's concept of right and wrong can differ from the receptionist's or consumer's concept of right and wrong.
Ethical egoismEthical egoism is the position that it is moral for the individual to promote his or her own welfare over that of others.
The Internet Encyclopedia of Philosophy for more information on ethical egoism.
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