Ethical theories are critical to organisational transformation. Ethical theory is generally based upon moral philosophy and may be classified on many different dimensions; however, there are several core moral philosophies which are used in business ethics. They are egoism, utilitarianism, deontology, rights and relativism (Bartlett, 2003). All of which can be used to guide company in decision-making process. This paper agrees that utilitarianism is the most useful ethical theory to guide company decisions but only to a certain extent.
Theory of Utilitarianism
Historically, the foundations of utilitarianism diverged into two paths. One path was taken by John Stuart Mill, who saw utilitarianism as providing guidance to human beings by regarding higher and lower preferences. The other path was taken by Jeremy Bentham, whose hedonistic calculus made no comparative judgments about the worth of preferences but simply took them as a given (Brady, 1999). Utilitarianism is derived from the word “utility”. Utility can be defined as what is best in a specific case or as what is generally preferred in most contexts (Johnson, 2007). Both of which basically describe the two versions of utilitarianism, Act Utilitarianism and Rule Utilitarianism, respectively. Utilitarianism holds that actions and plans should be judged by their consequences (Sidgwick, 1874; Smart, 1973). In its classical formulation, utilitarianism claims that behaviours that are moral produce the greatest good for the greatest number (Mill, 1863). Decision makers are required to estimate the effect and consequences of each alternative on all the parties affected and to select the one that optimises the benefits for the greatest number (Cavanagh et al, 1981). From utilitarianism, we are encouraged to focus on the results or the consequences of decisions made, not the motives behind the decisions or the decisions themselves. Theoretically, utilitarians would choose to remove basic freedoms, rights or justice from a minority if it would produce greater happiness for society as a whole.
Evaluation of the General Strengths and Weaknesses of Utilitarianism The advantages and weaknesses of Utilitarianism are different between the two versions of the theory – Act Utilitarianism and Rule Utilitarianism. One of the pros of Act Utilitarianism is that it considers the happiness and consequences which result from actions taken (Greblikaite & Navickaite, 2012); on the surface, this looks like a logical approach to ethics which would find much support in today’s society. The theory is also straight-forward and flexible; it provides a simple and easy method for decision making since it does not prescribe many strict rules (Falkenberg, 1998). The theory also helps tough decision making through its relativism, in other words, it would allow us to sacrifice individuals if it is for the greater good of the society. However, the issue with Act Utilitarianism is that it is truly relativistic, which means any conceivable action could be justifiable. It also allows the suffering of innocent individuals that fall under the minority group, despite obvious injustice. It even further allows inhumane or cruel pleasure, since Bentham regarded all pleasure as equal. Mill’s Rule Utilitarianism offers many advantages which address the issues of Bentham’s Act Utilitarianism. Mill eradicated the possibility of sadism or cruel pleasure by drawing clear boundaries between the qualities of pleasures (Johnson, 2007). Rule Utilitarianism also clearly states that certain actions are explicitly prohibited because they have the tendencies to create or promote pain. However, Rule Utilitarianism lacks the flexibility of Act Utilitarianism, which means that reasonable rule breaking is no longer a possibility (Brady, 1985). For example, one could not tell white lies, even if the intention is to...