Summary Of Deontology: A Better Ethical Theory In Business World

Ziyin Zhou
PHL 248
4/19/2015
Deontology ----- A Better Ethical Theory in Business World When it comes to talk about the ethical theories applying to the business world, deontology and utilitarianism are the two most debatable ethical theories that people may discuss. A majority of people may think that utilitarianism is more useful for understanding and addressing ethical issues in business since it focuses on the outcomes of every action. However, for me, I am a big supporter of deontology. I think deontology is more persuasive theory than utilitarian. In this article, I would reveal the differences between deontology and utilitarianism and use Enron as an example to discuss why deontology is more applicable in a business world.
Deontology can be referred to Immanuel Kant’s theory, which believe that people should have free choices to make their moral decisions. That is, people have positive freedom to do things that they ought to do. And there are three important features of deontology. First of all, “act only on maxims which you can will to be universal laws of nature”(Bowie, 4), which means a moral principle should be universalized and it must be applicable for everyone who is in the same moral situation. Second, “always treat the humanity in a person as an end, and never as a means merely”(Bowie, 4). In another words, people should be treated with dignity and as a object of intrinsic value. Last but not least, “so act as if you were a member of an ideal kingdom of ends in which you were both subject and sovereign at the same time”(Bowie, 4), that is, people should only act in ways that contribute to the realization on a moral reality. Indeed, deontology emphasizes more on the purity of our intention in acting morally instead of the consequences that the action brings. On the contrary, utilitarianism is a consequentialist ethical theory and focuses on the “Greatest Happiness Principle” ----- maximize the pleasure and minimize the pain. And utilitarianism implies that there is no moral acts is intrinsically right or wrong. Rather, “an act’s rightness or wrongness is determined solely by the act’s consequences and not by any feature of the act itself”(Humber,Snoeyenbos,17). Therefore, we cannot determine whether the action is good or not from the intentions behind the actions but only consider that whether the actions can or cannot bring about the best consequences. After knowing the differences between deontology and utilitarianism, we should discuss the reasons why deontology is more practical than utilitarianism.
Indeed, the most significant argument for the people who believe in utilitarianism is that the determination of “universal moral truth” is subjective and the advantages and the disadvantages of an action are much easier to be calculated. However, they failed to take into account that, in the reality, it is difficult to predict the outcomes of every action. It is true that analysts could use historical data, key statistics or various financial modules to predict the consequences of every decision in a business but who could make sure the predictions will be correct? How can you ensure the outcomes are under your estimations? And if the outcomes do go beyond your prediction, for example, resulting in a huge loss, then, the prior “moral decisions” the utilitarians make would become a immoral one at the end. Therefore, since it is impossible to make sure the outcomes of actions, the only thing we could do is to make sure our actions are intentionally ethical. Another reason is that applying utilitarian theories would allow the people justify their “unethical” actions on the grounds that their outcomes are beneficial. For instance, in business world, senior managers may agree to lie to their partners about their financial conditions in order to get a contract. And they will say, as their excuse, “it will be beneficial to
both companies if you successfully make an contract”. Furthermore, applying utilitarianism ignores the minorities’ benefits. But in the reality, how could you determine that the minorities’ benefits are less valuable than the majorities’? Only because of the quantity? Indeed, deontology is much more reliable than utilitarianism for understanding and addressing the ethical problems in the business world, and in the following paragraph, I will use the Enron scandal as an example to analyze this issue. Enron was an energy, commodity and service company based in Houston, Texas.
Before it went bankrupt in 2001, it was one of the biggest energy companies in the world with claimed revenue of $111 billion in 2000. The senior managers at Enron as well as the outsiders auditors at Arthur Andersen, one of the five largest public accounting firm in the world, manipulated the financial statements to hide the true financial conditions from public. Therefore, in 2001, when it was found that its public financial statements was sustained substantially by an institutionalized and creatively planned accounting fraud, its stock prices dropped dramatically and it went to bankrupt immediately. And I think it is the utilitarian theory that lead Enron to its tragedy. Indeed, the senior executives at Enron agreed to deceive the public about their true financial situation because they thought is was ethical and they were just trying to maximize the stockholders’ benefits. Using the utilitarianism as an approach, the executive would argue that speaking the truth about its financial conditions would hurt the company by depressing the stock vale and their investors would be forced to sell the stock and endure the financial “hit”, not to mention that many employees would lose their jobs. In contrast, keeping their financial situations secrete kept people investing the company and increased the stock value of the employees. Thus, the executives at Enron may refuse to reveal the truths and hope
that thing would turn out well. According to the utilitarianism and its “maximum pleasure principle”, all those look well and ethical, because they do consider the benefits for others. Unfortunately, in the reality, things did not go according to their hope, and when the fraud was being revealed in 2001, the loss was unprecedented ----- major executives were arrested; thousands of people lost their jobs; uncountable investors lost their money. Imagine that if Enron uses deontology approach, this tragedy may be avoided. Regarding to the categorical imperative of deontology, because coercing and deceiving others is the action that cannot be universalized, thus, this is an immoral action. Therefore, in Enron’s case, the accountants and the auditors should have disclosed all the significant data to public. Also, if every employee at Enron could have acted morally, even though the senior managers wanted to do the accounting fraud in their self-interests, employees could choose to voice their concern when they found that the company is behaving unethically. Actually, both of those would have avoided this largest accounting fraud that had happened up to that point. In conclusion, after all I have discussed above, I think when encounter with the business situation, deontology is a better approach to deal with the business issues. It is true that in the business world, we should consider the benefits of the shareholders, but why can’t we see the profits as a consequence of good business practice rather than as the goal of the business?
Works Cited
Bowies, Norman. “A Kantian approach to business ethics”, 1999. Printed
Humber, James and Snoeyenbos Miltion. “Utilitarianism and business ethics. Printed.