Various Theories in Business Ethics

1. Ethics Case Study 1: Do Not Let Your Friends
Suffer - YouTube
• John, a newly promoted audit partner in a mid-sized audit firm is
having a meeting with Mr Tan, the Chairman of KS Pte Ltd, one of his
major clients. During the meeting, a disagreement over the
accounting treatment of KS Pte Ltd’s accounts arose, invariably posing
an ethical dilemma for John. How would he be able to handle the
situation ethically? Watch the video to find out.
Ethics Case Study: Do Not Let Your Friends Suffer – YouTube
• 1. If you are John, what would be your view in this ethical dilemma?
• 2. What would be your action or alternative actions if you were John
after the meeting with Mr Tan in the video clip?

2. Ethics Case Study 2: It was Just a Careless
Mistake - YouTube
• Click the above link or copy and paste the link below on the browser
• Ethics Case Study: It was Just a Careless Mistake – YouTube
• David, the Finance Director of a company was alerted to the fact that major
customer, Super Pte Ltd, had returned most of the goods shipped to them near
the end of the last year. While David is proposing adjustments to the financial
statements in order to reflect the return, his proposal is faced with stiff
opposition from within his company. Would he be able to handle the situation
ethically? Watch the video to find out.
• After watching the video, reflect on this mini video case and and answer the
question below:
• 1. If you are David, what would be your view in this ethical dilemma?
• 2. What would be your action or alternative actions if you were David after the
teleconversation in the video clip?

3. Breakout session – class activities

7. Utilitarianism
According to the theory of utilitarianism,
people choose their actions based on how their decisions will benefit the most
people. You make a decision that will be best for everyone involved. There
are two sides to this theory. Act utilitarianism says you will make decisions
based on helping others, while rule utilitarianism says you will act out of
fairness.
Those who don’t agree with this theory believe that nobody can predict
outcomes, so we can’t know what the benefits of our actions will be.
Comparing consequences can be hard, so some philosophers say that we
can’t truly make utilitarian decisions.

8. Rights
The rights theory of ethics says that people make decisions based on the rights that their society
agrees to.
What the majority of people in that society believes is important will drive decisions. For example,
the rights we Americans have in our Constitution should be factors in our decision-making
according to this theory. Our rights, such as freedom of speech and freedom of religion, should
help us decide how to behave.
People who don’t agree with this theory believe that a society’s rights are too complicated to figure
out. They say it’s too hard to tell what most people think is important to the whole society, so it’s a
messy idea to base decisions on. Societies that don’t have written laws like our Constitution make
this theory less believable, according to some philosophers.

10. ETHICAL EGOISM
An example of ethical egoism would be a person
who owes money to a friend and decides to pay the
friend back not because that person owes money,
but because it is in his best interest to pay his
friend back so that he does not lose his friend.
Another example of ethical egoism would be a person
who invites a friend to a movie that she wants to see
because she does not want to go alone and is thinking
of her own self-interests first.

12. The basic prisoners’ dilemma is an imaginary situation in
which two prisoners are accused of a crime. If one confesses and the other does not, the
prisoner who confesses will be released immediately and the prisoner who does not will
be jailed for 20 years. If neither confesses, each will be held for a few months and then
released. And if both confess, each will be jailed for 15 years. It is further stipulated that
the prisoners cannot communicate with each other. If each of them decides what to do
purely on the basis of self-interest, each will realize that it is better for him or her to
confess than not to confess, no matter what the other prisoner does. Paradoxically,
when each prisoner acts selfishly—i.e., as an ethical egoist—the result is that both are
worse off than they would have been if each had acted cooperatively.

13. Consider the dilemma of the
commuter. Suppose that each commuter finds a
private car a little more convenient than a bus, but when
each commuter drives a car, the traffic becomes extremely
congested. So everyone is better off in the situation where
everyone takes the bus than in the situation where
everyone drives a car. Because private cars are somewhat
more convenient than buses, however, and because the
overall volume of traffic is not appreciably affected by one
more car on the road, it is in the interests of each
commuter to continue driving. At least on
the collective level, therefore, egoism is self-defeating—a
conclusion well brought out by the English
philosopher Derek Parfit in Reasons and Persons (1984).
The fact that ethical egoism is collectively self-defeating
does not mean that it is wrong. An ethical egoist might
still maintain that it is right for each person to pursue his
or her own interests, even if this would bring about worse
consequences for everyone.
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16. The justice ethical principle states that decision makers should focus on
actions that are fair to those involved. This means that ethical decisions
should be consistent with the ethical theory unless extenuating circumstances
that can be justified exist in the case.
What is justice theory in business ethics?
The justice theory is one of the business ethics theories that are critical to mistreatment and injustice
treatments of persons especially in organizations. Justice as an ethical approach in the leadership and
business practices is where individuals receive equal treatment in the society regardless of their
creed,...
A Theory of Justice holds that every individual has an equal right to basic liberties, and that they
should have the right to opportunities and an equal chance as other individuals of similar ability.

18. UTILITARIAN THEORY

36. This Photo by Unknown Author is licensed under CC BY-NC-ND