Back to: BUSINESS ETHICS
What are two dominant theoretical approaches to ethics?
- Formalism and Consequentialism.
–Theories in the study of ethics.
- They are not mutually exclusive and people adopt elements of both systems in making ethical choices.
What is Formalism?
- A particular act is, in itself, either right or wrong (it is not dependent on the situation).
–To be ethical, you have a duty, or moral obligation, not to commit an act deemed unethical.
–It deals with absolute values without reference to their situational context.
- The Bill of Rights contains examples of formalism.
–Individuals have rights, and these rights should not be infringed, even at the expense of society as a whole, because they have an intrinsic moral value to them.
- Kant and his Categorical Imperative.
–To be ethical you have to act with good intent – which means acting in ways that are ethically consistent.
–You act in a way that you believe everyone should act (i.e., you never act in a way that you aren’t willing to have everyone else act.)
- Example of how formalism raises ethical questions for businesses.
–You are willing to lie about your company’s product quality, then you have to be okay with a buyer, supplier, etc., lying to you.
–Formalism is still a fresh source for business ethics.
- The “Social Contract Theory” of John Rawls.
–How to construct a just society – taking into consideration life’s inequities
- It focuses on Agreement.
–In deciding on the values of the social contract, one places oneself behind a “veil of ignorance.”
- Entitlement to certain basic rights and equal opportunity are basic values of the social contract.
- Social and economic inequalities must be based on what a person does, not on who a person is.
What is Consequentialism?
- Deals with the consequences of actions rather than with their absolute morality.
–Formalism focuses on individual rights, where consequentialism focuses on the common good.
- The dominant form of consequentialism is utilitarianism
–Judges actions by usefulness, whether they serve to increase the common good.
–Only after you consider all reasonable courses of action can you know whether a particular one has the greatest utility.
- Consequentialism provides the framework for much business ethics.
–Attributable to the decline of the Protestant ethic.
–The Protestant ethic viewed certain traits as absolute moral values.
- Vestiges of the ethic remain in business belief in hard work, rational planning, and bureaucratic hierarchies.