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Ethics and Governance Essay Sample

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Ethics and Governance Essay Sample

1.Ethical Theories are useful in guiding company decisions. Based on your research, which ethical theory is the most useful in guiding company decisions and why?


In this essay, We will start off with a detailed analysis of the five normative theories used as guiding principles. Then after, a case will be thrown in with debate on the most useful ethical theory. The essay will then be finally summed up with a conclusion.

What is ethics?

Ethics is the study of what ought to be done (Kerridge, Lowe and McPhee 2005). It focuses on the notions of right and wrong, and is categorized into two main moral perspectives, namely teleological and deontological approach.

Teleological approaches are also known as result based systems; Judgment on whether an action is right or wrong is determined by the consequences the action reaps and not by principles (Rae 2009). Deontology as Carreira, Guedes and Aleixo (2008) describes, is ‘the science that sets the guiding norms of professional activities under the sign of morality and honesty’. Unlike teleology, deontological approaches are bind by moral principles which have no regards for the consequences (Trevino and Nelson 2007).


Debeljak and Krcac (2008) terms egoism as the exclusivity of addressing concerns in satisfying one’s own desires and wants. It is the act in accordance with one’s own desires for self-preservation, self-interest, or preference for satisfaction.


Egoism is based on the view that each individual or corporation has their own wants and needs. It empowers employees to feel that they are important, and adds value to their own their self- interest and importance.


As egoism is centered upon one’s self, the needs of others, as to the user/agent may not be evaluated, thus, individuals may have no intentions to pursue the needs of others (Rachels 1986). Analysis

In terms of guiding company decisions, egoism can be seen as an offensive act of play as it may cause resentment between co-workers within the affected department or by the shareholders. As egoism centralizes benefit for self, it is wise to exercise certain amounts of egoism. However, Debeljak and krcac (2008) mentions that with respects of business dealings, companies do not speak of egoism and self-interests; instead, a seemingly rational approach where the egoist should use the interests of others as a instrumental path way for business ends. If sustainability of the business depends on this company decision that is to be made, egoism may be used to protect the company from harm. However, if egoism is often used and becomes a habitual practice in making decisions, stakeholders and the environment may be affected badly. The company may in turn be disadvantaged if viewed at unethical.


Trevino and Nelson (2007) terms utilitarianism to be the most well known consequentialist theory which, in accordance to the utility principle maximizes the net societal benefits through the minimization of damages to it.


Few advantages that utilitarianism provides are that the theory provides for simplicity in decision making. At the same time, it provides the user a set of objectives which in a way evaluates the matter to self-interest. And also, the user is challenged to make intuitive ethical decisions based benefits of the greater community.

Limitations and challenges

However, there are limitations and challenges to the utilitarianism approach. Trevino and Nelson (2007) mentions that there is difficulty obtaining information for evaluation in consequences of those affected by a particular decision.

It is difficult to evaluate the final outcomes or consequences as every decision made should not only be based on the code of ethics, but also involve moral considerations. For example, Trevino and Nelson (2007) argues about the fact that the utilitarian approach may sacrifice minority rights for the benefit of others. And that the approach is biased and leans towards popular outcome rather than one that is justifiable (Harrison and Rooney 2012).

At the same time, the utilitarian approach does not consider culture, morality and demographics of a society.


When using the utilitarian approach, it is effective in decision making as compared to the other approaches. At the same time, it is logical as majority of the population will not be affected by a decision by the company if made.

When taking the utilitarian approach in guiding company decisions, for the good of the company, few will be affected by the change. However, those in the lack of power positions might suffer because their views are not brought up, and even if they are brought up, it might not be considered.

Virtue Ethics

The virtue ethics approach is centered and focused on the individual’s morals and intentions rather than on the morality of the act (Trevino and Nelson 2007). Foundational virtue ethics talk about moral virtues of the individual, which revolves around values such as ‘honesty, integrity, empathy, good judgment’ and having embedded a good sense of social responsibility (Harrison and Rooney 2012). Although there may be similarities and common ideas talking about virtue ethics, Jonsson (2011) warned readers that the set of virtues depicted by writers are often different due to differences in time and cultures; thus relevancy of virtues should always be considered.


One of the advantages is that it is useful in determining individual ethics within a well-developed professional community with set standards (Trevino and Nelson 2007). At the same time, motives can determine how the community the individual is in plays an importance on his/actions. Then again, standards which are created will be able to shape an individuals motives based on the company’s values and standards.


One disadvantage is that even though there may be established standards, individual virtues may not agree with it. Thus agreements upon the standards may be limited. Virtues of the company may not necessarily be good, resulting in fraudulent cases and bribery.


When using virtue ethics as a guideline for guiding company decisions, good virtues such as honesty, good judgment and having a sense of social responsibility may be useful as it allows growth in the proper direction.

However, cultural clashes may be present as per corporation basis. Take for example countries with high context cultures. Business dealings may be done through a series of talks and gifts or ‘samples’ may seem to be inevitable. But this gesture of goodwill may be seen as bribery and seen as unethical.

Thus, when using virtue ethics as a guiding principle for company decisions, one must be cautious not to cross the line of good faith. In some cases, as the best decision may not be ethical and clash with individual or company virtues, it is best to evaluate the situations separately and individually.

Another analysis is that as virtue ethics is based on the individuals character, it should be under deontological roots instead of being theological.


Kantianism is a duty based approach where actions of an individual are independent of the consequences. As Kantianism is dependent on duties, what
is of significance is the motive in its ethical worth rather than consequences due to the fact that a role was being carried out (Jacquie 1992).

As Goethals, Burns and Sorenson (2004) suggests, Kantianism focuses on universal right through exercising free will of the individual rather than obliging to do good for the maximization of societal welfare. At the same time, Kantianism is also is also based on comfort levels of the individual carrying the act out.


An advantage of using Kantianism ethics in business is that it produces universal guidelines in an organization. This allows for rules and standards to be created by the organisation.


However, Kantianism focuses on motives as an important cue rather than the outcomes. This is questionable as what is actually wrong may be turned into the truth to mislead.


The Kantianism approach may be deemed useful in company decisions due to its nature of higher ethical grounds. It commands for respect for others in an organisation.

At the same time, it is of a motive based approach. Which is important in ethical issues and allows for comparative assessments and awarding in accordance to merit.

However, the values of the individual using a Kantian approach might not be feasible in an organisation as there might be conflicts to business protocols. Bribery may be used, but it might not be seen as ethical in the eyes of the orgnisation, and to competitors in the field.

Then again, the approach is flawed due to its usage of emotions play.

Justice Ethics

Justice ethics is based on the theory of fairness, with rewards in accordance to ethical or legal standards. Harrison and Rooney (2012) mentions that besides being a concept of not only doing what is right through the acts of justice in mind, fairness, equity, respecting the interests of all parties should be done. There are three kinds of justice, namely distributive, procedural and interaction. Wooten (2009) states that the three kinds of justice came in batches. The first wave was called distributive justice, which involved evaluation of fairness on outcomes and based on works from. The second was known as procedural justice, which it focused on decision making and thirdly, interaction justice or interpersonal justice, which is based on communication based evaluation.


As compared to the utilitarian approach where it benefits the majority, Gilliland (1993) suggested that the views of the minority could be aired with justice ethics. This is in accordance with interaction justice, where there is communication between stakeholders and the company. Disadvantages

However, Sen (2009) mentions that the ethical theory of distributive justice is based on assumptions that there is equality among individuals to carry out evaluations. However, we cannot undermine the fact that each individuals have unequal capacities in exercising justice. At the same time, there is no hard and fast rule which is equally the same for any two companies. Analysis

In terms of guiding company decisions, justice can be seen as the approach feasible in terms of fair play. It allows the company to treat its stakeholders with fairness through means such as evaluation. One good example will be promotion of staffs, fair treatment is given when the promotion is not subjected to favoritism and gender, but by the level of capability accessed through the evaluation process. However, its flaw may be due to the fact that every individual is of unequal capabilities of exercising justice due to various factors. One such factor is favoritism, which may often lead to a lapse of judgment.

Which Theory is the Most useful?

The utilitarian approach would be most useful in guiding company decisions as it is based on maximum utilization of good for the biggest amount of people. Firstly, Egoism is a theory based on self interests. It may be useful in making short term decisions, but not in the long run. This is because unethical issues such as bribery or back door benefits to the user may be used. Secondly, Virtue ethics are centered onto the individuals moral intentions, character and motivation to do the job. The theory of good for bad reasons may be incurred in the course of actions. Which in turn cause greater harm for the company. Lastly, the Kantianism approach may seem to be of usage in guiding principles due to its ‘all good’ universal law. However, this approach may be flawed due to its play of emotions.

However, I feel that although the utilitarian approach may seem to be the best theory in guiding company decisions, it is also flawed as researches were usually based in the states and that means cultural difference between the East and the West may cause a variant in results of these studies. Justice assumes equal standards among people in a population. At the same time, feedback and interaction will foster a better relationship between the stakeholders in the organisation. It is also wise to actually put a few theories together when guiding to ensure fairness and an ethical company decision as there is no theory that allows for the saying ’one size fits all’. In my stand, I would stand forth for the combination of the justice and utilitarian approach as there will be fair play, and as the population is concerned, there will be a maximized benefit for the majority.


I have learnt about the five normative theories in approaching, namely utilitarianism, egoism, virtue ethics, Kantianism and justice ethics. It has taught me that not only one theory should be applied when it comes to business practices. And at the same time, it challenges us to think, and rethink about what is ethical and what are the motivations that we are inclined towards.

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