For years most businesses were focused only on “the bottom line.” Managers were rewarded according to profits and nothing else. Our society is starting to see the flaw in this reasoning as companies such as Enron, WorldCom, and Tyco have literally done whatever it takes to reach profit goals. Philosophers, governmental agencies, and business leaders are now interested in the world of business ethics.

Can Business Ethics Be Taught?

Some experts argue that ethics cannot be taught and that people will always act in their own self interest. Although these claims to have their place, recent studies have shown that ethics can be taught, and more importantly, learned. These studies show that the biggest gains can be made for those in between the ages of 20-25. Teaching ethics at school has shown dramatic results.

Obviously teachers can’t explain what to do in every situation. In fact, most teachers will agree that they don’t know what to do in every situation. To combat this problem, most business ethics teachers will teach decision making models that use ethics. Some of the more popular ethical decision making models are consequentialism, deontology, and virtue based.

Consequentialism

This model for ethical decision making focuses only on the consequences of the decision. Basically an ethical decision is one that brings the greatest amount of good to the greatest number of people. For a business this means that they have to consider more than just their shareholders, but all stakeholders. Stakeholders could be defined as anyone who is affected by the businesses decision. This kind of thinking has led businesses to be more aware of the overall effect their decisions have on all mankind.

A major problem with this theory is that is very hard to mathematically quantify good. How does a business know what will bring the greatest amount of good to the greatest number of people? Another weakness of consequentialism is that the rights of the minorities may be compromised. For example torturing a man for information may bring the greatest amount of overall good, but at what cost? Even with its limitations, consequentialism helps businesses to think about remaining profitable without harming other stakeholders.

Deontology

Many refer to this type of decision making model as a duty or obligation based model. Immanuel Kant’s thought process most clearly reflects deontological thought. Kant taught that when faced with an ethical decision humans should act as if the principles guiding your decision were to become a universal law. Let’s take the example of whether or not to tell a lie so as to clarify Kant’s position. Kant would say that lying is part of the greater whole of communication. He would then ask, is lying better for communication or worse? Kant would answer that lying makes communication worse and so it humans should in all cases avoid lying. Kant’s standards were very high due to his absolutist nature. For him, there was no in between.

A major criticism of deontology is that it sets too high a standard and it doesn’t take into consideration the extreme cases when it may be better to violate the principal. Even with its weaknesses, the use of this model should help businesses become more ethical.

Virtue Based Ethics

While deontology and consequentialism focus on the end results of decisions, the virtue based ethics model focuses on the thought process and situation leading up to the decision. In legal terms this difference is explained as the difference between actus reus (guilty act) and mens reus (guilty mind). Virtue based ethics focuses on the mind. Let’s return to our example of lying. As was mentioned, in extreme cases lying may be hard to avoid. This model would look at all of the facts leading up to the situation and then, with the facts in hand, evaluate whether lying was an unethical decision.

Virtue based ethics is sometimes misunderstood and used as rationalization for lying in situations in which it wouldn’t be warranted. People who use it this way are abusing it and weakening their character.

The truth is that all three models are needed to be able to make an ethical decision. Where deontology and consequentialism fail, virtue based ethics succeeds. When used in harmony, businesses should be able to make ethical decisions.