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.
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
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