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Business And Society Application Of Ethical Theories Commerce Essay

In daily life, concern state of affairss present decision-making chances that may impact peoples ‘ lives either negatively or positively. Working for companies frequently require attachment to ethical theoretical accounts in doing picks and determinations. There are two chief ethical theories that try to clarify on determination devising in concern. This paper is traveling to utilize the utilitarianism theory, and the ethical theory to clarify on the determinations that can be made in a instance survey affecting a concern house and an employee.

Crane and Matten ( 2007, p. 102 ) write that consequentialism theory is a theoretical account that is used to judge the rightness or inappropriateness of determinations and actions establishing on its effects. Under the consequentialism theory, the most outstanding illustration is utilitarianism, which asserts that an action is good if it produces the best consequences for the greatest figure of people ( Beauchamp, Bowie, & A ; Arnold, 2009, p. 95 ) .

This essay will seek to look into the options that the stakeholders in the instance have in managing the state of affairs to come up with solutions that will go forth the greatest figure of people happy. It will use the ethical theories, utilitarianism, and virtuousness moralss theory to the instance in clarifying the pick of action for each of the stakeholders. Utilitarianism theory asserts that a determination is morally right if the amount of the people to profit from it is more than those who are likely to be saddened by the pick. It relies on the rule of the greatest felicity in supplying judgement. The impression of public-service corporation is the cardinal footing of judgement. The quandary that the house faces is whether the determination is ethical or unethical. Sam is the member of the house who is largely affected by the state of affairs because he owes commitment to the house, and has to be sincere to his sister, and other kids and female parents elsewhere.

Designation of Stakeholders and ethical issues in the instance ; aims and duties

There are assorted stakeholders in the instance who have to do determinations, or whom the determinations made by a few will impact either positively or negatively. Establishing on the ethical theories, one can sum up that short-run negative effects to the consumer side warrants short term and long term benefits for the company side due to the pick of action that the house stakeholders are likely to do. Each stakeholder faces different ethical issues in the instance and has different aims and duties. The nonsubjective and duties will be unethical if they favor a little figure of people, and morally ethical if they favor the largest figure of stakeholders harmonizing to the utilitarianism theory of moralss. The major stakeholders in the instance are Sam, the executives, the house, Michael, Baby Mobile Shareholders, Project Team, Parents, Babies/Users, and Suppliers.

Sam is one of the chief stakeholders who face the most ambitious ethical issue. He owes commitment to the house, but he is morally witting that the determination that the house makes is non right.

Michael is another stakeholder who has an ethical quandary. He has the duty of guaranting that the house makes a net income with the least disbursals. Additionally, he the mission of guaranting that the organisation achieves its ends, but will this go on at the disbursal of guiltless consumers ; hence he faces this ethical issue.

Baby nomadic stockholders are besides stakeholders who have to hold ethical considerations in coming to the determinations to put to death the merchandise merchandising. Therefore, this presents an ethical state of affairs.

Employees are parents, or would be parents who have the responsibility of protecting the consumers by advancing the sale of high quality merchandises by the house. By the way, they are duty bound to protect the involvements of the house because by the terminal of the twenty-four hours, they would necessitate salary.

The company executives besides face ethical issues, for case, they have to advance the involvement of the house and do net incomes. However, they have to continue the image of the house by showing high quality merchandises to the clients.

The providers have an ethical quandary in that they have to retain a affable relationship with the house by supplying the best merchandises on clip. They besides aim at doing net incomes.

The house faces several ethical issues, including keeping its image to the consumers, prolonging its market for good, fulfilling its clients, and doing a net income.





Making net income,

accomplishing organisation ‘s ends, good repute for the house, A

Meet deadline, net income,

continuing the repute, promote consumer safety, introducing the design,

run intoing the deadline within design restraints


devising net income for the house,

accomplishing organisation ‘s ends, keeping the repute of the house,

manage clip and design frame

be clear to team about outlooks,

communicating to stockholders, run intoing deadline, doing net income,

continuing the company repute,

safety of consumers, publicity of invention

Baby nomadic stockholders

Geting dividends,

return on investing,

sharing monetary value,

profitableness of the house, continuing the repute for the house

Investing in the house and guaranting profitableness

Undertaking squad

doing net income,

accomplishing organisation ‘s ends, Continuing the house repute, run intoing the deadline,

minimizing costs

Meeting the deadline,

Making net income,

Continuing the repute, guaranting the safety of the consumers,


and pass oning with other sections

Other employees

Procuring loans,

keeping good repute of the firmA

Delivering of good work/ quality,

Communication with other employees and sections, working together to accomplish the companies ends and aims

The house

Sustainability in the market, doing net income,

Continuing repute

Environmental consciousness, client satisfaction and safety

The executives

fulfilling stockholders wants and demands,

doing net income,

continuing good repute

Safety of clients,

payment to employees,

paying stockholders


Safety of their kids, Quality merchandises for their kids, A

take attention of kids


safety from injury


Making net income,

Keeping good relationship with the house

Seasonably bringing of goods,

good quality,

high safety criterions, A

Sam is at the helm of doing a determination that could gain the company and injury the consumers or harm the company and salvage the consumer. The job is the timing of the determination. This is because the company has limited clip to affect the stockholders at the disbursal of the consumer. The executives have the duty of client safety and, hence, should non disregard their duty as they try to pull off their aim. Crane and Matten ( 2007, p. 104 ) argue that there is a symbiotic relation linking moralss and concern, whereby moralss of course materialize from a profit-oriented concern. However, Crane and Matten ( 2007, p. 105 ) point out that there are two attacks to the statement, a weak and strong statement. The weak statement illustrates that good concern is frequently a consequence of good moralss. This means that moral and sound concern patterns are a warrant to good concern or net income as a consequence of decreased merchandise liability cases. Sam should see “ the long-run benefits of a concern are gained by seeking a swearing association with the consumers ” ( Soares, 2008, p. 554 ) .

The strong version of net income motivation ( Soares, 2008, 545 ) attack argues, in a competitory and free market, for illustration, a capitalist market in this instance, the net income motor brings about a morally appropriate concern environment. The company initial object of funding the research and design squad was to run into client demands. If the company can run into the client demands ; including safety, so the concern can last ; nevertheless, if the concern does non mind to the client demand, it will certainly neglect. Sam should see which topographic point he wants to be in the hereafter. The company he works for would be in the thick of future failure in instance he opts for silence. However, if Sam speaks out, the safety of the consumer will be guaranteed, and his calling will be in hazard.

Sam determination to move as a whistle blower would impact all the stakeholder of the issue in different ways. Whichever determination Sam makes he would move as a hero. For illustration, if he goes soundless, he would be a hero for the company, and if he speaks out, he would stop up as a hero for the consumer.

Impact of supporter


If he takes action

If he does non take action


Will non run into the deadline,

The company will keep its repute.

Will go a hero to everyone except the company they work for.

Might lose his occupation

Get particular acknowledgment from executives,

Base at calling executing in the hereafter.

Keeping quiet for Sam is unethical and is punishable by jurisprudence and professional organic structures

He will be self-guilt


Not achieve organisational ends and net incomes,

Maintain good repute, Job loss because he was non able to run into deadline and control Sam.

Get publicity because he was heading the design squad and was able to affect the stockholders, he might acquire acknowledgment through awards, salary increase and publicity.

Undertaking squad

Get demotion and kicked out of the design squad.

The direction would set fault on the research section,

Get acknowledgment and more resources to break their invention.

The direction would be willing to back up a squad that they can ‘trust ‘


The house

Lose client base,

Possible jurisprudence suit for sham merchandises,

Make losingss

Maintain repute,

do net incomes.

Safe merchandises for consumers

Will retain good client base

The executives

Get sued

will lose repute


Safety for kids guaranteed,

Save money that could be used to manage the hazard and bask value of their hard currency.

Get less value for their money,

Expose their childs to hazards.

Will lose money on wellness issues and sham merchandises


Safety guaranteed

Exposed to safety hazards

Consequentialism/Utilitarianism Theory

The doctrine in this ethical theory considers the thought that an action or a determination is morally right if it positively affects the greatest figure of people. Therefore, this theory implies the rule of the greatest felicity, and emphasizes on the effects of the action by weighing the good against the bad effects. In kernel, the theory encourages the action that consequences in the greatest sum of good effects and discourages the 1 that consequences in the least sum of good.

The underlying position in this theory is the economic rule of public-service corporation, which is likely the ultimate aim in human life. The intent of adult male is to maximise their pleasances and minimise the hurting at the same clip ; hence, mensurating public-service corporation in footings of hurting poetries pleasance. The suitableness of an action being done depends on the pleasance to be derived from the action. This is the basic definition of utilitarianism in item ( Mendola, 2006, p. 2 ) .

For illustration, the instance presents Sam, who has to do a determination establishing on the consequences of the determination by the house. He has the moral duty to protect his sister ‘s girl and other kids. He is besides obliged to protect the involvements of the house, where he is a member of staff. The decency of his determination will establish on the figure of people who will profit from his action. If the figure of donees is than the figure of more, those affected negatively, so Sam has to continue to denounce the company determination. If otherwise, so he can maintain quiet and allow the company sell the merchandise.

Michael besides has options that will impact several people either positively or negatively. First, he can make up one’s mind to discourage the executives from continuing with the selling program, or he can make up one’s mind to take no action and allow the executives proceed with the program. Both ways, the action will profit some participants, and some participants will lose. This is where the utilitarianism theory has to use. He as to weigh the figure of those to profit poetries the figure of those to lose.

Weight of Benefit and Harm In Regard To Whistle blowing

The stakeholders in the instance have assorted options that will impact others either positively or negatively. First, Sam can make up one’s mind to take the action of admonishing the company against marketing the merchandise, or he can make up one’s mind to take no action. If he decides to take action, the benefits will be legion. First, the populace will see him as ethical and honest ; hence he will be branded as a hero. Further, he will salvage the kids from injury due to the defected merchandises, particularly his niece. The company will non lose prestigiousness for selling defected merchandises and above all, he will non walk around with guilt scruples. Other benefits that will accrue from Sam taking an action include long-run net incomes for the house since it will retain its consumer base and will continue its image in the populace. The employees will retain their unity for availing quality merchandises to consumers. To the parents, they will maintain their kids safe from hurts and will salvage money from purchasing faulty merchandises. The above are some of the benefits that all the stakeholders will achieve if Sam takes an action. However, there will be several injuries in instance he takes the action. These will include the fact that he stands a high opportunity losing his occupation as an employee of the house, the organisational ends will non be attained, and hence, Michael is likely to lose his occupation every bit good. The company and the stockholders will decidedly do losingss, although this might be short term because the merchandises will non be marketed. Establishing on the fact that the employees will non run into the deadline and the stockholders are non likely to acquire their dividends, the other employees of the company will lose their occupations. The undertaking squad will neglect to run into the deadline and the company will incur a short-run loss. The providers will decidedly lose their market and they will do losingss.

On the other manus, should Sam make up one’s mind non to take an action, there will be benefits like retaining his occupation and assisting his Michael and the squad to run into the deadline. Michael will be recognized by the company executives as a good squad leader, and is likely to acquire a publicity. Further, the company will do short-run net incomes and the stockholders will acquire their satisfaction and dividends. The difficult work of the squad will pull wage and the company will gain from the sale of the merchandises.

There will besides be legion injuries should Sam make up one’s mind non to take action. First, he will populate and work with guilt scruples. There will be concerns of safety issues from the consumers and the house is likely to be sued for that. Due to this, the house will lose its image and prestigiousness to the populace. This will take to withdrawal of stockholders and loss of consumer base to other companies. The house will do long-run losingss, which will take to loss of occupations for Michael and employees. The parents will hold to incur disbursals in the intervention of their kids and buying of defected Mobiles. Finally, the house and the providers will hold to confront legal suit from parents for availing faulty merchandises.


Take action: benefit: 22 injury: 11

Does non take action: benefits: 12 injury: 26

These consequences are indicants that there will be more harm if he does non take action and less benefit. More benefits will accrue from him taking an action. This implies that Sam will be justified to take an action against his company.

Elementss of Virtue moralss

Griseri and Seppala ( 2010, p. 54 ) , the virtuousness theory uses the position of looking at a good life as the footing of understanding moral actions, instead than establishing on the judgement of right or incorrect. Judgment of one ‘s life as good is based on the person ‘s character by sing the characteristics of their personality. This theory considers the fact that a good personality is what makes an person ‘s life to be good. The personality facet introduces the thought of virtuousness. By virtuousness, philosophers mean a good moral character that prompts persons to move in a certain manner, for case, kindness, and niceness, among others. This theory asserts that virtuousnesss do non oblige people to act in a certain manner, but instead it increases the chance of them acting in that manner. Virtues can be implemented in concerns in the day-to-day lives. In disposal and decision-making, virtuousnesss are the basic boundaries that distinguish success and failures.

In the instance at manus, the determination that Sam takes can be driven by the impulse for justness, truthfulness honestness, and generousness to make the right thing by blowing the whistling. The determination is ethically right, because despite blowing the company secrets, he would be assisting bulk of the stakeholders. Majority of the stakeholders would profit from the determination to blow the whistling. The elements in the consumer side would profit entirely from the determination. This is a non-consequentialist theory at drama.

Personal moral qualities that would be relevant in this instance include truthfulness, unity, equity and bravery. Integrity and bravery are necessary for Sam to talk the whole truth about the scenario of how the company harms the flourishing and wellbeing of the consumer. This manner, the company will non be honest with the clients for selling hapless quality merchandises. Further, it will miss the facet of equity and its clients will lose trust in it. Tom should besides be brave plenty to halt the selling of the faulty Mobiles, although the company will see him a liability.

Personal contemplation

In most instances, working in deceitful companies may be disputing if one is ethically moral. This is because being moral implies that one represents the populace more than they represent the company in most instances. Whistle blowing is “ the revelation of organisational member ‘s ( former or current ) revelation of illegal, immoral, or illegitimate patterns under the control of their employers to individuals or organisations that may be able to consequence action ” ( Koehn, 1999, p. 71-73 ) . In the instance of Sam, he would hold taken the right way that meets equal and just activities. The way is non dependent on ethical theories but instead on personal rules and the moral duty of employees to the company and the clients as good. The employee has the moral duties to safeguard the company hereafter and to supply the client with their value of money. Business is conducted because of offering the value of money. In the instance of Sam, the executives can non claim that the defect on the baby bearer is a choice issue. This is because the baby carries are subjected to flexibleness in usage, safety, and convenience. If the quality issue was something like attenuation of colourss, he would hold gone soundless. However, the quality issue at manus is really critical as it would straight impact and harms the client. Therefore, it is merely moral and wise to protect the client from the injury.


Understanding the ethical theories is one of the indispensable facets while covering with concern decision-making procedures. As in the above instance, utilitarianism theory attempts to clarify the actions taken by persons in quandary state of affairss ( Mendola, 2006, p. 2 ) , which do non supply positive feedbacks from all waies. It applies the impression that an action is morally right if the greatest Numberss of people are positively affected. At the same clip, the virtuousness theory contradicts by asseverating that the quality of life of an person is the footing of judgement of what should be moral and what should be immoral. This theory bases on the impression that a individual lives a good life because of the virtuousnesss they possess. Examples of virtuousnesss include honestness, truthfulness, among others.

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