Business Ethics: Resolving Ethical Dilemmas - Essay Example

Business Ethics Business Ethics Introduction Ethical dilemmas can be challenging for businesses in the contemporary world. Jay McGuane, the CEO of an ethical bank found himself in an ethical dilemma when he receive two requests from a company that was involved in fracking and another that manufactured guns (Marquis, Christopher and Juan 2014, 123). The bank focussed on environmental sustainability and approved loans given to companies based on their values. The members of the board were faced with ethical dilemmas on whether to approve this loan or not and were sharply divided on the issue. This essay gives a brief description of the ethical dilemmas in the case study and compares and contrasts the ethical theories that apply to them. Finally, it gives the ethical perspective that would work for the scenario. Briefly explain the main ethical dilemma(s) in the case study To start with, there are two ethical dilemmas that are discussed in the article. One focuses on the approval of a loan to a fracking company while the other relates to a loan that has be requested by a gun manufacturing company. The ethical dilemmas arise from the fact that Rocky Mountain Green Bank was established to promote environmental sustainability (Marquis, Christopher and Juan 2014, 124). The basis of accepting or rejecting loan was the company’s “values”. Jay McGuane who was the founder was worried that lack of clear ethical guidelines could results to increased divisions among the board of directors could have negative impacts including pull-outs by major investors, resignations and negative publicity in the media. Fracking is believed to have positive and negative impacts on society. This is owing to the fact that it results in the generation of an alternative source of energy and creates employment. On the other hand, there are immense risks that are associated with it such as the seismic and environmental risks and the progressive contamination of underground water. The diagram below shows the likelihood of fracking in causing water contamination. It can be concluded that the fracking issue is concerned about its benefits and demerits to the population. (Kimball, 2011). The gun issue is somewhat different since the ethical dilemma is based on whether the move to grant a loan to a gun manufacturing company is right or wrong. Bearing this in it is important to consider that the major reason why the bank was set up is to ensure increased profitability and environmental sustainability is its main objective. However, it is clear that only a mere 1.8 percent of the company’s business are ‘green’ (Marquis, Christopher and Juan 2014, 125). This further complicates the ethical dilemma facing the bank whether to issue these loans or not. Compare and contrast the utilitarian, libertarian, deontological and virtue ethics perspectives on the dilemma(s) you have identified Based on the utilitarianism theory the bank should not approve the loan in both cases owing to the fact that it does not lead to happiness to the greatest number of individuals. This theory states that a given action is right if it conforms the concept of utility (Harris 2008, 379). The concept was founded by Jeremy Bentham who stated the importance for society to be guided by logic in place of metaphysics. The theory believes that the people are rational and self-interested. This is evidenced from the fact that some of the board members are interested in increasing the company’s profitability thereby support the decision to grant the two companies loans. This would be immoral because the decision does not results to the happiness of the highest number of individuals who are the members of the public that would be negatively affected by improved activities in the gun manufacturing company as well as in fracking. Green bank’s objectives are based on improving environmental sustainability resulting to the maximum benefits to the members of the public and thereby should not authorize loans in both situations (Marquis, Christopher and Juan 2014, 126). Deontology goes against utilitarianism since it is more concerned with the idea of duty (Harris 2008, 383). Furthermore, the theory focusses on fulfilment of a moral duty regardless of the fact that it makes the members of the public happy or otherwise. Since the banks has clearly understood its duty that is maintaining environmental sustainability, it should undertake what it views to be right regardless of the consequences. In the case of the two ethical dilemmas that are discussed in the case study the bank should deny them loans since it has a duty to give loans to companies that have well-established values that promote the well-being of the society. One of the most important contributors to deontology is Immanuel Kant who stated that actions are viewed to be right when based entirely on a sense of duty and not based on the happiness for the greatest number of individuals as stipulated by the utilitarian theory. The theory states that individuals are rational and need to learn how to make moral decisions. Ethics are related with making out moral rules and giving rational basis on why they should stick to them. The basic aspect about Kantian ethics is the perspective that moral action are those that are not prompted by desires and impulses but those are motivate by practical reasons (Néron 2008, 25). Right actions are taken on based on humanity that should never be used as a means to an end. This means that the entity should practice humanity by bearing in mind the negative impact that approving these loans would have on the environment and the security of the citizens. From the above discussion it is clear that deontology and utilitarianism have varying views with regards to the ethical dilemmas discussed in the case study. For deontology doing the right thing is based on duty while utilitarianism states that doing the right thing is based on maximizing happiness for the greatest number of individuals. In spite of the clear differences between the two theories, they agree on the fact that the bank should do the right thing by sticking to its duty and aiming to maximize utility for the highest number of individuals. On the other hand, the virtue ethics theory is based on the fact that virtuous individuals are likely to undertake moral actions. This theory pays more attention to the moral character of the individual undertaking a given decision instead of looking at the duty or consequences of a given action as stated by the utilitarian and deontological theories. The theory not only looks at the morality of an action but also evaluates the character of individuals undertaking the action. This therefore means that the theory is concerned with all aspects of the life of an individuals instead of specific episodes or actions. The theory is based on the virtues of temperance, prudence, justice and bravery. It can be observed that the members of the board were virtuous individuals and this meant that they were bound to make moral decisions in instances of ethical dilemmas. Finally, the libertarian theory states that individuals are capable judging what is right or wrong (Néron 2008, 15). Additionally, it states that human beings are rational and guides them in telling the difference between what is right or wrong. In relation to this point, the press should not withhold any information that can results to improved decision-making. One of the major believers of this theory was the third president of America, Thomas Jefferson. The theory states that human beings can make the appropriate decisions if they make the best use of their reasoning capacity. This theory believes that the board members can make a sound decision with regards to the issue of granting a loan to the gun manufacturing company and the fracking company. The board directors can make a sound decision based on fact that they can make a rational decision in the ethical dilemmas. The theory compares to the other ethical theories discussed in the paper since it focuses towards making the morally right decision. However, it is different from utilitarianism that focuses on the greatest advantage for the highest number of individuals. On the other hand, it different from deontology that focusses on duty and virtue ethics concentrates on the character of the individuals (Micewski 2007: 17). Identify, explain and justify an ethical perspective that you think will work There are two ethical perspectives that are practical for the ethical dilemmas presented in the case study. These are utilitarianism and deontology (Hackley 2008, 110). To start with the bank’s major objective is to improve environmental sustainability therefore should undertake actions that promote this. Environmental sustainability issues affect all members of the population and by revoking the loan application by the fracking company the bank will be improving the well-being of the members of society. Secondly, the company will be resulting in improved security by disapproving the loan application by the gun manufacturing company. The deontological perspective applies to the company since it has the duty of ensuring improved environmental sustainability (Rorty 2006, 365). Actions are deemed to be right based on this perspective if they are stipulated by duty. These are the two major ethical perspectives that are practical for the ethical dilemmas discussed in the case study. Conclusion The above discussion presents the ethical dilemmas facing the Green Bank in terms of approving loans to company that do not practice ‘values’ that are required by the loan requirements in the company. There are various ethical perspectives that can be used to explain the dilemmas including utilitarianism that focuses on maximum utility on the greatest number of people, deontology that concentrates on duty, virtue ethics that emphasizes on character and libertarian that focuses on rationality. It can be concluded that utilitarianism and virtue ethics are the most applicable theories for the ethical dilemmas. 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