Moral philosophy: core concepts and theories

Moral decisions in business are best served by adhering to the ethical code of rule ultilitarianism. Rule utilitarianism provides a workable code for businesses, especially in the wake of the Enron and WorldCom financial scandals. By adopting rule utilitarianism, businesses can help to prevent serious damage caused by decisions based solely on the consequences of a single act, and instead allow businesses to focus on ethical rules that ensure the best long-term benefit for society.

Utilitarianism is a type of normative ethics, and as such is interested in the practical standards that deal with right and wrong actions. In many ways, normative ethics acts as a "search for an ideal litmus test of proper behavior" (The Internet Encyclopedia of Philosophy). Further, utilitarianism is a consequentialist theory of ethics, and as such determines ethical conduct by looking at the consequences of actions (The Internet Encyclopedia of Philosophy).

In essence, ultitarianism argues that an action is morally correct if the consequences of the action have a more favorable than unfavorable impact on everyone involved. Jeremy Bentham is commonly known as the father of utilitarianism, and perhaps known for his description of act utilitarianism. In act utilitarianism, it is morally wrong to commit any act that will result in consequences that are more negative than positive. However, act utilitarianism can lead to some serious moral quandaries, including a seeming over permissiveness of many seemingly morally abhorrent acts. For example, act utilitarianism would allow specific acts of torture to be morally acceptable if the specific outcome of these acts were more good than bad.

In the business world, act utilitarianism could allow executives to falsify profits and reduce debt on balance sheets in order to increase share prices, since this act would increase shareholders investments, solidify jobs for employees, and even improve the job security and pay of the executives. In this scenario, act utilitarianism rules the doctoring of company finances as a morally good act since it results in consequences that are more positive than negative.

However, it can easily be argued that act utilitarianism applied in this business setting results in morally dubious acts of lying, cheating, and misleading. Further, while this specific act of financial irregularities may result in more good than harm, it is equally obvious that allowing such behavior is ultimately damaging in a larger societal construct.

Rule utilitarianism allows for business decisions to be made that consider long-term societal good. In rule utilitarianism, "a behavioral code or rule is morally right if the consequences of adopting that rule are more favorable than unfavorable to everyone" (The Internet Encyclopedia of Philosophy). As such, rule utilitarianism allows for the creation of rules that are considered to be morally right. There may be specific acts where these rules do not produce the most good for everyone involved, but over time, the rule over time has more favorable than unfavorable consequences. In rule utilitarianism, "actions are justified to the extent that conform to a rule which would maximize utility for everyone who followed it" (Buschert).

As such, rule utilitarianism would see the action of executives in falsifying profits and reducing debt on balance sheets to be a morally wrong action. This action would be morally wrong since it would violate the moral rule against falsifying financial information in business. Overall, a rule against falsifying financial information produces more good for everyone than bad.