Three Major Ethical Principles Impacting Business Ethics

In a society with a diverse value system and increased judgment publicly by groups with varying values and interests, there seems to be more demands on business people to make stronger ethical decisions. According to McShane and Von Glinow (2010), “ethics refers to the study of moral principles or values that determine whether actions are right or wrong and outcomes are good or bad” (p. 15). In our day-to-day activities, we rely on our ethical values to guide us in the right direction and do the right things. The foundation of any successful and sustained organization is they share a common ethical theme focusing on providing and creating value along with sharing their corporate values with the people they interact with on a daily basis.

There are three distinct types of ethical principles that McShane and Von Glinow (2010) discuss including utilitarianism, individual rights, and distributive justice (p.53). Although one principle may be more suitable to one’s own personal values, it is important to consider each one when addressing ethical dilemmas.

1. Utilitarianism – This principle offers a rather clear-cut process for deciding the morally correct course of action, despite the fastidious circumstance we may discover ourselves facing or in the middle of. According to Bentham, the ethical theory of utilitarianism focuses on the proper course of action that maximizes the overall “happiness”. The bottom-line goal is achieving the greatest good for the greatest number of people in order to drive satisfaction from those involved. McShane and Von Glinow (2010) referred to this satisfaction as a “consequential principle” because of the focus on the consequences of the action rather than how the consequences were achieve...

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...ompanies exposing workers to hazardous working conditions, and preferential treatment in hiring and promotional practices. Although these issues occur throughout the world today, it is a common challenge that faces organizations.

In order effectively to manage ethical issues, organizations must ensure their managers and employees understand how to handle ethical issues that arise in their everyday work lives. Consequently, employees must first understand some of the primary reasons for the occurrence of unethical practices in order to avoid them. In business, it is easy to talk about ethics, but sometimes can be a challenge to ‘walk the talk’, which makes it critically important to ensure the establishment of the organization’s Code of Ethics and focus on providing and creating value along with sharing corporate values in the daily interactions with people.